In 1982 I bought a closed down 24 cover Restaurant in Norfolk for £80,000 called Green Farm Hotel, Which was bought with a 100% Overdraft for the Purchase and my £20,000 worth of capital painted and decorated the property and put food in the Kitchen and wine and beer in the Bar
After 30 Years this had developed into a Hotel with 20 En Suite Rooms, Banqueting Facilities for 180 people and 80 cover restaurant with 21 Full Time Staff turning over £600,000 per anum.
Green Farm Hotel was valued at 2 million Pounds with bank borrowings of 1 million and www found a buyer.
It was time to move on so we bought Felbrigg Lodge a Small B&B in seven acres of Grounds with 4 rooms. We borrowed £1.1 Million which we would pay off once Green Farm sold and we would be living Mortgage Free at 50 years of age.
We had a buyer but then the financial collapse of 2008 happened and our buyer lost his Mortgage.
Other people wanted to buy but none of the banks would lend.
Green Farms Cash flow was always horrendous in January each year so we had an overdraft to see us through until May when we would move back into a positive cash situation.
January-March 2009 was hell, we had creditors constantly demanding money but the bank would not offer us any extra funds on our overdraft.
We survived but I knew mentally I could not go through this again.
In January 2010 we owed the tax man £7,000 the roads were full of snow we had no guests and no cash flow, but the one person who called at the door was Mr Green the tax collector.
He wanted his money and I explained look I have £60,000 of forward room bookings and £60,000 of forward wedding bookings, can we come to some arrangement for me to catch up.
His reply was that if he left without the money he would file for my bankruptcy.
He left, a switch went in my head, and I called the accountant and told her I would be closing the door for good on the Sunday evening.
We appointed an Administrator from an internationally recognised firm of accountants.
The Administrators quoted £10,000 to contact all creditors and advise them of the situation that we were in administration until a buyer could be found.
After the first 5 weeks we received a bill from the Administrator for £23,000.
In December 2010, still without a buyer, and both stressed out beyond belief I filed for bankruptcy.
With the bank crash property values fell and Felbrigg was very quickly in £500,000 pounds of negative equity. This proved to be the saving grace because it meant the banks did not want Felbrigg and allowed DeeDee to buy out my interest in the business for £1,000.00
We also took the decision at this time to replace the lost income from Green Farm by moving out of our house into a caravan.
We could let our house out as a Holiday Let. We survived for two years through the coldest two winters of the last 20 years with temperatures down to -18.
The extra revenue that this created allowed us to survive and our occupancy grew.
One January morning I had a phone call from a guest asking if I realised the restaurant at the hotel was on fire. Our fragile recovery and nerves were ripped apart.
Insurance claims and 6 months of building work later I heard about the Entrepreneurs Circle.
DeeDee and I discussed the possibility of joining, and after a long discussion agreed we should join spending £99.00 per month.
I promised her that for every penny spent on subscriptions I would take what we now know as a ‘nugget’ and implement to improve sales at the Hotel and hence see a return on our investment.
We still apply this principle to every penny we spend with EC whether it’s a trip to a National Conference or investment in training courses, say.
We owe so much to Nigel and his team at EC. In January 20013 I had a visit from one of the EC team. She asked me what my goals were for personal & business. I replied that if I could add £100,000 to the turnover (which was then £360,000) I could afford to employ a head chef (I had been doing all the cooking since we bought the Hotel) and DeeDee and I could take more than 1 weeks holiday a year.
We got out the calculator and decided if we raised guest spend by £10 per night we would generate a further £50,000.
If we increased occupancy by 5 room nights per week at the new average spend a further £50,000 would be generated. Light Bulb Moment!
We immediately raised prices by £10.00 and implemented more of Nigel’s marketing teaching at the end of 12 months we had grown sales by over £50.0000. Half our target.
Empowered, we treated ourselves to a chef for 20 hours per week.
In 2015, we added a further £10.00 per night to room prices, and tweaked our food, bar, and wine prices. As a result, we added a further £60,000 this year to turnover reaching £520,000. Occupancy is76% year round and we have just been offered funding through the Funding Circle to add 2 more rooms.
It has been one heck of struggle but we have prevailed and the EC has been an integral part of our ‘bounce back’.
Philip Lomax – Felbrigg Lodge Hotel