Chapter 4

"I see. Then you should try Trevor Defreitas, CEO of Rehome Deliveries. He has recently become chairman of the Circle, so should know what's what, and where the bodies are buried."

Taking that on board, Esme phoned Rehome Deliveries and asked for him, as Chair of Metropolis Business Circle. He was soon on the line.

"What can we of the Business Circle do for you, Ma'am?"

She said carefully, "We of the Bank of Rehome are considering a loan request from Mr Thomas Carson, a local businessman. Can you tell us anything about him and his business activities, sir?"

"Carson? Carson?" He paused as he thought. "Oh, yes, I remember. He has recently taken over another business, as well as his own, a completely different retail operation. Because of that circumstance, I suspect his cash flow is somewhat stretched at present." He had a suspicious thought. "I thought one could not get a commercial loan from the Bank, ma'am?"

"Quite correct, Mr Defreitas. This is a loan to build a house for his brother."

"Oh? Carson with a brother? He must be holding out on us. I didn't know he had a brother, but I am still relatively new to the business community. Why does he want to build a house? Surely there are enough empty houses in Metropolis without wanting to build new ones? And where would he build it? It would have to be beyond the city boundary, to obtain a building site. The whole thing sounds odd."

"It does, indeed, sir. Thank you for your input. It has been most helpful."

Esme set down her discoveries in her written report, adding that she would suggest obtaining the brother's name and address from Mr Carson, as "I am sure you feel that the brother would have to be a guarantor of the loan, and so would have to come in and sign the loan deeds." She suggested that identification of the site for the house would also be a useful indicator in this case.

Charles was pleased with her report and the ideas appended to it. "I will call in our Mr Carson first thing tomorrow, to," he scribed quote marks in the air, with a grin, "finalise the details!"

Thomas Carson duly arrived, expecting to get the loan approved. He was taken aback by the request for his brother's name and address and the demand for the gentleman to act as a guarantor. He looked aghast as Charles suavely said, "This is standard banking practice, Tom. We always have a guarantor as the fall-back position, should the grantee of the loan default – not that we are expecting you to default. We always do this, for everyone's protection."

"Oh." Carson thought rapidly for a way out of this, and came up with, "As it happens, my dear fellow, a businessman friend has offered me a similar loan, with a more flexible pay-back period, so I am afraid I have to tell you that a loan from the Bank will no longer be required."

"Dear, oh, dear. I am sorry to hear that, Tom. I was looking forward to doing business with you. There is a small charge you will unfortunately have to pay, to cover the Bank's staff costs in considering your loan request, as you have decided to withdraw it. I am sure you will be happy to clear that, in the fortunate circumstances you now find yourself."

"Yes, Yes, I shall do that, Charles. Thank you for your consideration of my request. I look forward to doing business with you in the future."

After Carson had left, Charles turned to Esme.

"You were exactly right in your assessment, Esme. He has backed out because his plans were unravelling. He clearly has no brother, and no building site. The whole thing was a scam to get a business loan under another guise. I bet he couldn't service a loan, anyway. Well done, Esme."

"Thank you, Charles. This is the sort of thing the Bank wanted me to do, I understand."

"It is, indeed, Esme. I shall leave you to tidy up for going home. I must personally thank Mr Defreitas for his assistance, as we are fellow members in the Business Circle."

Once Esme had left, Charles placed the call, and got hold of Trevor.

"Trevor, my friend. It is Charles, at the bank. I wanted to thank you for your input today. For your private information, Mr Carson's loan request was withdrawn, so he may now be somewhat desperate for finance. Your own backers might perhaps find it useful to consider taking over one of his businesses at an advantageous price, before he goes broke."

"Charles, what a friendly suggestion! I had some ideas along these lines, but your advice is most encouraging. I shall expedite some enquiries in that direction. Bye, and thanks again."

Trevor sat for a few minutes, cogitating, then phoned Pam Humbert.

"Pam? Trevor here. Would you be interested in buying a business in Metropolis, at an advantageous price? I have heard of such a possibility coming onto the market in the very near future. If you and Mary Kempe are interested, I can speak to the present owner and suss out the price that could get you the business. Shall I investigate that for you?

She promised to phone him back with a decision.

Within ten minutes, he was called back, but this time it was Mary Kempe, with a question.

"Trevor, I trust your judgment in this matter, but what type of business is it? I would prefer it to be something that would fit easily into our portfolio."

Trevor explained, "A local businessman, Tom Carson, tried to expand by buying over another business, but he has got himself into a bad cash flow situation. He can't run both businesses without more investment – which he doesn't have. My reckoning is that he will have to sell one or the other business smartish, in order not to go under entirely.

You have the investment capital to support either business, so buying one of them would be a low-risk option for you. One is a grocery shop – mostly fruit and veg, and the other is a stationer, selling office products to companies all over Rehome. Both have the capability of expansion in the future, as the population grows."

"Thanks, Trevor. Go ahead with your enquiries, please, see what we can get for as little as possible. Don't make us seem too eager, Trevor. Make the owner sweat a little, so he will drop his asking price. Tell him it is not you who is enquiring, but someone who has the investment capital, but is in no rush to invest it!"

Trevor waited until the next morning, then phoned from his office to Carson.

"Tom, I am phoning as Chairman of Metropolis Business Circle. As a member of our Circle, you are entitled to advice from the organisation, and I, as Chairman, am told by one of our other members that you might be in need of good advice. Is that so?"

"Who told you... ?? No, forget that. You wouldn't tell me anyway, but I suspect the Bank was the little bird in your ear. They don't like businesses going under. I suppose the word will get around before long. I am in a bind, Trevor. You recall I took over the stationer's business last month?"

"Oh, yes, I do. I was surprised, as you are in the grocery business."

"Well, it was only after I took over that I found that their business was at a plateau in sales, and the only means of improving matters was a major investment programme. I just don't have the capital to embark on that, and I don 't think they had, either. I am not surprised that they wanted to sell."

"Oh, I see. You must have cash flow problems as a result. That can't help either of your businesses, Tom."

"Yeah. I see you understand. It was bad judgment on my part. I should have delved deeper into their business strategy before I took over the company. I was of the "bird in the hand" persuasion, whereas I should have been thinking "gift horse" instead."

"Well, Tom, as Chairman, I can offer advice, but can't get directly involved in your affairs. The way I see it, you have several options. One, find the finance for expansion; Two, sell one of the companies, to keep the other one solvent, and Three, sell both companies, take the cash, and start anew with some other business plan."

"Yeah. You put it so succinctly, Trevor. These are indeed my options. I have tried option one, but struck out on that, and I don't know who else I can approach for cash. Options two and three are the sensible ways to go forward. Currently, I am stuck between a rock and a hard place. I need to decide, and I just don't know what I should go for."

Trevor pointed out, "As I said before, I cannot become directly involved, Tom, but it strikes me that my own major investors are looking around for some new business venture to take on. Let me make it clear, Tom, they are not actively seeking a firm to purchase, so they may need to be persuaded, but they DO have the assets available. They would be in a position to support either of your companies' expansion, should they feel it warranted taking one or both on. They have large enough assets that they can afford to take their time over any decisions; time that YOU don't have.

You see, apart from being the major shareholders in Rehome Deliveries, they own the box making company and now the fertiliser company. They may feel that is enough for the present, or they may want to diversify again, to expand the group business. I am not sure whether either groceries or office equipment would be acceptable as a fit with their other companies, but I am only an employee. I don't know their plans, and don't want to become involved: I am busy enough as it is. You might have to let them know of the possibilities, Tom."

"Sounds like sage advice, Trevor. I am grateful for your input. You couldn't put in a word for me with your investors, could you?"

"Tom! You ought to realise that my position works in both directions. I cannot intervene directly with any possible investor or investment. I can only offer impartial advice as to the possibilities. If, for example, you had a figure in mind for the purchase of either of your companies, I can make sure it gets passed along, but I can only act as a conduit, and not offer any recommendations. Being Chairman of the Circle, my position must remain neutral when it comes to investment decisions involving fellow members."

"I see what you mean, and I agree, Trevor. Let me have a think and get back to you with what might be acceptable figures. O.K.?"

"Certainly, Tom. If I can do anything to help a member without direct involvement, I shall do so."

Tom was back on the phone to Trevor later that same day.

"That was quick, Tom," said Trevor.

"Well, I decided that ready cash was preferable to ready bankruptcy. I have a couple of figures to give you. The first is for the grocery business, and the second is for the stationery business." He quoted the two figures.

Trevor made no comment other than, "Right. I shall pass these figures on, and see what transpires. Do you want them to contact you direct, or through me, Tom?"

"Trevor, I don't think I could face an investor at the moment. I am worried enough as it is. They could rip me off, they way I feel at present."

"Okay. I'll pass on what reply I get." He rang off.

Trevor got Mary Kempe, and gave her the two figures, and what they related to. She asked him, "What do you think? Is he pitching it high, or what?"

"The rumours last month over what he paid, more or less matches what he is asking for the stationers. The figure for the grocery side – well I don't have a clue. I am guessing he is trying to be straight, as he wants out."

"I don't know if I want to go ahead with his asking price, Trevor. I'll speak with Pam, and we will come back with a counter offer. Give me an hour."

Three quarters of an hour later, Mary Kempe rang him back.

"Trevor, Pam and I are willing to take on both businesses, but at ten thousand less than his asking price for the two. Tell him the considerable additional investment required has prevented us accepting his original offer."

Trevor found his staff kept asking for his attention, and he was also kept busy on the phone. He eventually promised his staff that he was nearly finished, and would be there for them shortly.

He phoned Tom Carson again.

"Tom, there is good news and bad news."

"I'll play. What's the good news?"

"They are willing to take over both businesses."

"And the bad news? I suspect I know. The amount?"

"You got it. They are offering a total of ten thousand less than you are asking. I said you were not asking an excessive price, but they tell me the considerable amount they will need to invest in the stationers' business has prevented them accepting your original offer.

I can see their point, Tom. The actual investment they will need to put in will be a lot more than what they will be paying you."

"Yeah, I see the point. Okay, I can live with that. It will give me capital for starting another business venture. Tell them I accept. Get them to draw up the contract, and I will sign. No extras to be included, from either side. Got it?"

"A wise proviso, Tom. I will get that back to them, then maybe I can revert to my own business. My staff are starting to grouse at my Circle duties getting in the way of our business activities! Bye."

"Bye, Trevor. Thanks for your participation. Good chairing, I thought."

Trevor got back to Mary, passing on the terms of the agreement, and adding, "I was thinking that the grocery shop might be able to sell some of the exotic vegetables that Ebenezer and his farm are producing."

Mary was happy with that thought. "My own thoughts were turning towards the stationers as the local outlet for our boxes. At the minimum, it is a shop window for our range of boxes."

"True. And if Ebenezer sees the grocery shop in the same way, he may be able to allow you a discount for the store buying his produce. We have an expanding population here, so there are possibilities for expansion. Should you see it worthwhile opening another shop, that will be an extra outlet for his produce. Find more local growers able to supply you with regular supplies of other vegetables and fruits, and you may be able to make a reasonable profit from the store."

Mary was upbeat, but had a worry. "We still have to be sure we can staff the shop, or shops, with knowledgeable people who can sell quality produce, Trevor. Any ideas along these lines?"

He was quick to respond. "Mary, the first thing to explore is, what is the quality of staff already in place? Is there someone there who can step into Tom Carson's shoes and run the grocery shop? With him wanting to take on a new business, he must have had someone he could rely on, surely?

I would think that the stationers' is the one to worry about. A position of flat-lining is not encouraging, in a growing colony. I suspect you need someone there to kick ass and motivate the staff to sell more and find new markets for new products. Office products is a changing market all the time. Look for a sales-oriented person that you can encourage with a bonus for each percentage increase in turnover, instead of a simple annual salary."

Mary was impressed with his ideas.

"Trevor, I know you are busy with your Rehome deliveries, but I would like you to do the head-hunting for both shops. Will you do that for me? I can guarantee a bonus for you if the persons you find prove themselves within a year."

"Do I get a free hand, Mary? I would probably start with a trawl through the staff of our three companies, if that is all right with you?"

"I don't see why not, Trevor. Go ahead."

He began with a visit to the grocery store, to suss out the existing staff. Walking into the shop, he found a lady of about thirty checking over the vegetable displays, making certain that all the vegetables on view were top quality. There was a younger woman, around twenty, he guessed, at the till, ready to deal with any customers. There was no member of the public in the shop at this time.

The older woman noticed Trevor, and spoke to him.

"Good day, sir. Can I assist you with what you are looking for, or did your wife send you for something, that we can help with?"

"Oh, I am just browsing at present. What would you recommend today?"

"Are you familiar with roast parsnip, sir?"

When he shook his head, she went on, "Roast parsnips have a delicious taste, let me tell you. The raw parsnip is easily peeled with a potato peeler, but you must remember to discard the woody core if the parsnip is large. Small ones do fine left whole. You roast them just like potatoes, basting well. One can buy them in supermarkets, bagged and frozen, ready prepared for the oven, but starting with raw parsnips, you get a better result at less cost. Do you fancy trying them?"

Trevor was convinced. "I'll have a kilo to try them, please."

She weighed out a kilo, marked the price on the bag, and handed it to him. Take it over to Judy, and she will handle your purchase, sir. You will be back for more, I can guarantee it, sir."

After he had paid, he approached the sales lady again. "Are you the shop manager, my dear?"

"I am indeed, sir. My name is Gwen Travers. The owner, Mr Carson, is seldom in the shop these days, so I handle most of the operation of the shop."

"Wonderful. I think you will be fine to remain in that post, Mrs Travers, now that Mr Carson has sold the shop."

"Sold it? Are you the new owner, then, sir?"

"No. I am acting as agent for the new owners, who are two lady investors. Would you like to take full control of the shop operation, including the buying of stock, guided by the advice of the investors?"

"That I could sir!"

Trevor explained to her, "Mr Carson has passed over the company records, including staff remuneration, and I have had sight of them. My principals believe in rewards for good performance, so let us start with a five per cent increase in all staff salaries, and for yourself, a bonus scheme for increases in sales and profits. I will send you full details of that scheme shortly, Mrs Travers, but I shall leave you to consider what additional products the shop could profitably sell, and what might be dropped as unprofitable.