Big Fish Narrowboats

[keble]

I heard at Frampton Fair at the weekend that Big Fish are bust. Sure enough there's a notice in the London Gazette 19 August here

[mayalld]

I heard at Frampton Fair at the weekend that Big Fish are bust. Sure enough there's a notice in the London Gazette 19 August here

 

Yup, old news.

 

Phil Speight mentioned it here a few weeks ago.

[WJM]

Hands up anyone who is going to entrust £000s with a well known, established, trustworthy boatbuilder?!

 

And who wants to play boatyard sweep, just you against the administrator, armed with your BMF Contract?!

Edited September 16, 2009 by WJM

[Gary Peacock]

I think the trick is knowing when to call it quits.

 

And that without the help of a crystal ball is many builders downfall.

[WJM]

If I were in the business of building boats, I would not want to be wrapped up in this mess of stage payments and confused ownership. It is no surprise so many of them end up in a mess. I am involved in bespoke manufacturing and I keep things a lot simpler, though that does require me to fund my entire 'build' up front. That is the test of a business, being able to fund up front and collect after completion.

[robkg]

If I were in the business of building boats, I would not want to be wrapped up in this mess of stage payments and confused ownership. It is no surprise so many of them end up in a mess. I am involved in bespoke manufacturing and I keep things a lot simpler, though that does require me to fund my entire 'build' up front. That is the test of a business, being able to fund up front and collect after completion.

Aside from any ethical or moral considerations, why would a business choose to worsen it's cashflow situation and take serious risks that it's customer failed to pay at the end, leaving it with a bespoke boat that may be difficult to sell elsewhere. I can see that it would make a good selling point, but at what cost?

[Guest]

What I can't get my head around is wh it is not possible to use a staged payment system that guarantees 100% you own the bits you've paid for.

 

Ok - the builder going belly up will mean you still only have a partly built boat with the hassle of getting it moved but at least you'd own the ruddy thing.... why do buyers end up in a struggle with the administrators....

 

Grrrrr

Edited September 16, 2009 by MJG

[Yoda]

Problem with staged payments is if you don't get paid on time. If you have three more boats to build, you can hardly wait two or three months until you are paid.

[Guest]

Problem with staged payments is if you don't get paid on time. If you have three more boats to build, you can hardly wait two or three months until you are paid.

 

If a buyer has defaulted on the agreement (all traceable) then so be it, you lose title and ownership.

 

If you have paid on time and in line with the agreement you've signed with a builder then the title and the ownership of the boat being built passes to you at each stage.

 

It's not rocket science surely for somebody to be able to create such a legally binding agreement.

[international_boatbuilder]

What I can't get my head around is wh it is not possible to use a staged payment system that guarantees 100% you own the bits you've paid for.

 

Ok - the builder going belly up will mean you still only have a partly built boat with the hassle of getting it moved but at least you'd own the ruddy thing.... why do buyers end up in a struggle with the administrators....

 

Grrrrr

 

The usual culprits aside from the true criminals in this business are building 2 or 3 boats at a time when they don't have the business acumen to build a lego house, they think they are doing great with all this money pouring in from the 2 or 3 sources. When things start getting tight as they inevitably do ( usually because they are 1 working too cheap 2 are just incompetent in business) then they start spreading the funds around, quite easy when you have 2 or 3 boats in the workshop in various stages . The poor punters don't have a clue of who owns what.

 

We build one at a time, title is passed on at each stage payment so our customers own the boat not us, no confusion, just a quality product built by english craftsmen and always delivered on time.

Edited September 16, 2009 by international_boatbuilder

[mayalld]

If a buyer has defaulted on the agreement (all traceable) then so be it, you lose title and ownership.

 

If you have paid on time and in line with the agreement you've signed with a builder then the title and the ownership of the boat being built passes to you at each stage.

 

It's not rocket science surely for somebody to be able to create such a legally binding agreement.

 

Creating an apparently legally binding agreement isn't remotely difficult.

 

The difficulty comes in ensuring that the builder actually has title himself to what he purports to convey to you.

 

If the builder hasn't actually paid the shell builder for the shell, then you can have all the documentation you like, "proving" that you own the part finished boat, but the simple fact is that the builder can't give you good title to the shell if he doesn't have good title himself.

 

Even if the builder has paid the shell builder, where do you stand if the shell builder hasn't paid the steel stockholder.

[Athy]

Creating an apparently legally binding agreement isn't remotely difficult.

 

The difficulty comes in ensuring that the builder actually has title himself to what he purports to convey to you.

 

If the builder hasn't actually paid the shell builder for the shell, then you can have all the documentation you like, "proving" that you own the part finished boat, but the simple fact is that the builder can't give you good title to the shell if he doesn't have good title himself.

 

Even if the builder has paid the shell builder, where do you stand if the shell builder hasn't paid the steel stockholder.

You probably stand in a well known creek without a paddle.

[mayalld]

You probably stand in a well known creek without a paddle.

 

Indeed.

 

Which is why it is foolhardy to concentrate too much on a contract that transfers title, and believe that you are protected.

[WJM]

"why it is not possible to use a staged payment system that guarantees 100% you own the bits you've paid for."

 

 

Because standing in a yard with the administrator and pointing at a new engine on a pallet and waving your BMF contract in the air can sometimes be an experience shared with two or three other similar aspirant boat owners with the same contracts, not to mention the bailiff representing the unpaid engine supplier. The bailiff will probably win that one, bye-bye money!

 

In life you make your own luck. Putting your testicles in a vice and hoping it does not slam shut might be an acceptable risk for some people!

[NB Alnwick]

"why it is not possible to use a staged payment system that guarantees 100% you own the bits you've paid for."

 

 

Because standing in a yard with the administrator and pointing at a new engine on a pallet and waving your BMF contract in the air can sometimes be an experience shared with two or three other similar aspirant boat owners with the same contracts, not to mention the bailiff representing the unpaid engine supplier. The bailiff will probably win that one, bye-bye money!

 

In life you make your own luck. Putting your testicles in a vice and hoping it does not slam shut might be an acceptable risk for some people!

 

This really sums up the problem and most administrators have seen it all before - many times. It doesn't take them long to tell you that you have lost your money and have no chance of getting anything back.

 

What I find quite incredible, is that those businesses that appear to have always struggled to make ends meet now seem to be surviving rather better than those that were apparantly affluent. Perhaps thay are better at managing in a frugal manner and it is a case of the creaking gate that lasts longest . . .

[Athy]

I was discussing this staged payment scheme with Mrs. Athy, and we struggled to think of any other item for which people generally pay in stages. You don't do it with a car or a house, so why a boat?

That said, we've paid twice in this way (for boats built by Devizes Narrowboat Builders and Mel Davis) with no problems whatsoever.

[WJM]

Stage Payments: You often do if you are building a new house or adding an extension to an existing. The BIG difference is that the part complete work is always on your property and very clearly under your control. There is still an element of risk, but it is much less, you are always in possession of the work.

[Athy]

Stage Payments: You often do if you are building a new house or adding an extension to an existing. The BIG difference is that the part complete work is always on your property and very clearly under your control. There is still an element of risk, but it is much less, you are always in possession of the work.

 

I stand corrected; all the houses we have ever bought have been old ones, so we have not encountered this system. But surely if the builder had not paid the supplier for his bricks or timber the same problem would apply?

[mayalld]

I was discussing this staged payment scheme with Mrs. Athy, and we struggled to think of any other item for which people generally pay in stages. You don't do it with a car or a house, so why a boat?

That said, we've paid twice in this way (for boats built by Devizes Narrowboat Builders and Mel Davis) with no problems whatsoever.

 

I think that the issue here is that if the buyer pulls out of the contract,the builder may be left with a bespoke boat that he can't sell to another buyer for the same price.

 

What would work is an industry-wide escrow/insurance system.

 

In such a system, a central body (BMF???) would hold stage payments, and would insure against builders going under.

 

Builders would fund the system, via a membership fee, and buyers by a payment per boat (say £500).

 

Buyers would be required, immediately upon registration of a new build to pay the £500, plus an amount assessed at a level representing the difference in value between what the new build is to cost them as a bespoke boat, and what it might fetch as a "bespoke for somebody else" boat if they withdraw.

 

The scheme would provide protection for both sides;

 

For the builder. If the buyer reneges on the deal, the scheme will pay the builder the full original cost of the boat, and will sell it (at a reduced price)

 

For the buyer. If the builder folds, the scheme will buy the part completed boat from the administrators, and arrange for another builder to complete it.

[WJM]

"But surely if the builder had not paid the supplier for his bricks or timber the same problem would apply?"

 

There are still risks, but at least you have the bricks on your property, and because the build is happening under your direct supervision you can liaise with the supplier to check they have been paid. Nothing is risk free, just different levels of risk.

 

 

 

I do not believe there is such a thing as a truly bespoke boat. Any boat will always have a substantial residual value ie: the builder will always be able to sell it for a significant part of the original price. I manufacturer bespoke goods hat have an absolute zero value to anyone other than the first buyer. Boats are very different.

 

 

"What would work is an industry-wide escrow/insurance system."

 

An excellent idea, covers every base, and that would drive the cowboy builder out too, because they would be unable to raise the short term funding.

Edited September 17, 2009 by WJM

[mayalld]

"But surely if the builder had not paid the supplier for his bricks or timber the same problem would apply?"

 

There are still risks, but at least you have the bricks on your property, and because the build is happening under your direct supervision you can liaise with the supplier to check they have been paid. Nothing is risk free, just different levels of risk.

 

 

 

I do not believe there is such a thing as a truly bespoke boat. Any boat will always have a substantial residual value ie: the builder will always be able to sell it for a significant part of the original price. I manufacturer bespoke goods hat have an absolute zero value to anyone other than the first buyer. Boats are very different.

 

 

"What would work is an industry-wide escrow/insurance system."

 

An excellent idea, covers every base, and that would drive the cowboy builder too, because they would be unable to raise the short term funding.

 

Thank you!

 

It addresses the issue of builders using stage payments as working capital (sure sign of a business in trouble), whilst protecting them against fickle buyers.

[Batavia]

This concept does not need a special scheme - just require the builder to produce a Performance Bond and the purchaser to produce a Bank Guarantee, then both sides would be covered(ish).

 

The problem that would then arise is that in many situations either one, or both, of the parties would not be regarded as being sufficiently credit-worthy for a bank to issue such bonds/guarantees - which says something about the financial soundess of the industry as a whole!

 

Chris G

[lifes a ditch]

"What would work is an industry-wide escrow/insurance system."

 

Whole heartedly agree - and i'd sign up to a scheme tomorrow.

 

I've been designing & building bespoke inland craft from our canal side boat yard since 1994 (well, to be fair, my fantastic team of 'blokes' have been doing the building for the last 10 years...).

 

On numerous occasions we have also been asked to help out customers who have been badly let down by other 'boat builders & fitters', by way of negotiating with administrators, securing & removing part finished 'disasters' and then doing what we can to get these 'disasters' into some kind of compliant & finished state, on whatever budget the customer has left (or has scraped together...).

 

All very upsetting - for the customer for obvious reasons - for me, because it knocks my industry's already battered reputation, again (& again).

 

In all the cases that we have been involved with, the 'form' has been the same - the customer has been lured into parting with large amounts of cash, upfront, by way of some bullsh#t story like "we invest the money for you in our portfolio & you reap the benefits by getting a cheaper boat" (you really couldn't make it up....but they have!).

 

Most of the stuff we build is (very) bespoke. Disabled usage, passenger carrying, (unique roofs....). There wouldn't be a chance that i'd even contemplate designing these sorts of boats, without an agreed stage payment agreement & contract in place. It protects me and it protects my customer - and all my customers see it as prudent & sensible.

 

We have developed our own contract & payment system over the years. We are BMF/CBA members - so we also offer the BMF alternative as well - but it has never been used - it's 'loaded' in the builders favour, not the customers.

 

We take a nominal deposit, for the 'slot' - which also covers the design work. The 'build' is then broken down into 8 or 9 easily identifiable payments, which are always due only when the stage has been completed (or equipment delivered to site) and has been 'signed off' by the customer. The contract states the overall price as per the agreed specification and when the boat will be completed and handed over, and what the stage breaks are (& approximatley when they will be due).

 

When the payment has been made, our customer is given a detailed receipt, detailing the 'stage', which will include elements such as hull number, H.I. number (both welded into the shell when it arrives with us - 1st job!), engine/gearbox/equipment serial numbers etc. Stages where it's more labour than equipment (say the 'line-out') now include dated photographs on the receipt.

 

Each of our receipts also states that full title of any equipment/materials supplied/fitted has passed to the customer and that the original supplier has no lien over the goods, signed off by me as M.D..

 

(Now, I realise that because of our use of credit accounts with our suppliers, during the build, we may not have physically paid our supplier at that moment in time, but having taken advice on the matter, the wording of the receipt gives my customers the maximum protection, should disaster strike - and all our customers have been happy with this arrangement.)

 

The process is completed by way of 'Final Bill of Sale' once trials have been completed and all the relevant documentation has been handed over.

 

Any decent & honest builder (and there are still plenty of us left!) will be upfront & transparent when challenged. You want to bring in a surveyor - no problem (but please - suitably qualified & without 'ego issues'!). You want to see our accounts - feel free - we're a Limited Company - look on Companies House.

 

But, there is a flip side to that. I'll be asking some pretty direct questions about your financial situation as well, just for reassurance. I've returned 3 deposits over the years, because of nervousness on my part...it cuts both ways. I can't afford to have my guys standing idle for 10-12 weeks, because the wheels have fallen off your wagon...

 

To anyone that's ever had a boat built (or is contemplating one) - good for you, and thanks. You are keeping us in business and a true & unique UK industry alive. To have signed (or to consider signing) on the dotted line takes some nerve. As I am sure has been said before on this forum, it's down to homework, trust & prudence (why would anyone pay up front for a boat (or a 'stage' for that matter) that has not been started? Bloody beats me...).

 

At least this financial downturn has had the positive effect of 'sorting the chaff'. But we all know that they will be replaced when things pick up again. It's just a shame that some of the 'good guys' have been caught up as well - but they've done the decent thing, quietly locking the doors for the last time, AFTER they have honoured promises & agreements. Good for them.

 

So industry Escrow/Insurance scheme, with a strict vetting process? Dead right there should be. That's what the BMF should be pushing. And I know of 1 or 2 finance houses/insurance underwriters who should offer to get involved as well.

 

Fantastic forum by the way - it certainly influences our approach to our customers!

 

And if anyone wants to see an example of our 'paperwork' (without obligation), PM me.

[Gary Peacock]

It does go both ways two none paying customers went quite a long way towards helping finish off Ledgard Bridge, ultimately it was no further orders in a realistic time frame after cancellations that brought about the end but the money lost by those two customers actions might just have given a bit more breathing space.

 

It would have been better in reflection to have gas axed what they had part paid for into car boot sized lumps for the scrap value and telling them to come collect what remained. Instead it was stuck there for weeks delaying everything and costing money when they chose not to pay or answer the phone.

[Albion]

It does go both ways two none paying customers went quite a long way towards helping finish off Ledgard Bridge, ultimately it was no further orders in a realistic time frame after cancellations that brought about the end but the money lost by those two customers actions might just have given a bit more breathing space.

 

It would have been better in reflection to have gas axed what they had part paid for into car boot sized lumps for the scrap value and telling them to come collect what remained. Instead it was stuck there for weeks delaying everything and costing money when they chose not to pay or answer the phone.

 

I have to admit that I, a customer, have been surprised that some people are prepared to go out on a limb and put a deposit down on a slot, take the builder right to the wire of starting build and then admit that they can't afford it.........leaving the builder right in the lurch unless he has a following customer who is prepared, and financially able, to bring their build forwards. Personally, I would never even book a slot unless I had the finances in place to take it right through to the end.

I believe that the only way a customer has any confidence though, is to choose a builder who has a good, and long standing reputation. It's not bullet proof but it's better than nothing. As soon as I see a brand new builder advertising heavily and regularly (even full pages) in the waterways mags I immediately wonder how long they will last.........and often it isn't long even before the recession.

Roger