My partner and I are thinking of buying or leasing a shop which is either a fish & chips , post office or a newsagents. I have a few questions which I hope you folks out there would be able to answer:
1. Which business would be the most profitable? We are inclined to go with the fish and chips because we have a family friend who has worked in a chippie for the past 5 years and has 'contacts'.
2. Is it better to buy or lease?
3. My partner and I are thinking of having a hands off approach to this, because we have our 9 to 5 jobs. We are thinking of employing other staff to set up and run the shop. Do you think it is a bit of a risk?
4. Finally, where can I get further advice regarding buying/leasing a shop?
I would say that post office and newsagents wouldn't be a good prospect as you have the supermarkets taking over where the newsagents are, if you look at Tesco express and Coop they are springing up all over the place in residential areas and are almost forcing small bussiness's to close through loss of trade as you just can't compete.
Chip shop would be better as long as there isn't as much compotition and the food you sell is of good quality don't scrimp on buying the product as it just won't sell and you will then struggle to re gain customers that may have been put off.
One of the biggest things to consider is that customers don't just buy quality they buy service and unless you can give good or better great service again you will lose customers quickly, and that's where having a hands off approach could cause you some issues as if you aren't there to over see what happens then it's very difficult to manage anything unless you can get a very good manager to take it on for you.
I would look myself at maybe trying to buy a going concern, something that is establiched, it doesn't need to have a great reputation as long as you market it really well as "under new managment" and have a big open day to promote the re start, have some good deals to draw people in and maybe link it with a local event, with christmas markets and street fairs coming up that would be something to look at.
As said my biggest concern would be not having hands on management as this can lead to lots of issues and I speak from experience on this.
Drop me a Private message and I'll discuss it with you further if you like.
Many thanks for your reply, and many thanks for giving the idea of buying a going concern and having an open day etc. However, I don't know much about running a chippie - a very good friend of mine has been working at a chippie and is always telling me how much profit his boss is making!! This friend wants to become partners with myself and said we could run it together.
However, I have a few more questions which I would be most grateful if you would be kind enough to give advice:
1. What machinery is required in the shop? Where would I go if something became faulty?
2. Where would I get to buy raw materials from i.e the fish, potatoes, stuff for the kebabs etc?
3. Is it a good idea to look at the accounts of a shop that I am thinking of buying/leasing? I have heard that some accounts can be 'dressed over; in order to make sales look good? So would they represent a true figure?
actd wrote: I can't give advice on this as I have no experience, except to say that absolutely on point 3 - get an accountant to look over the figures. If you get it wrong, you could be well and truly stuffed.
I would say that although this would be important, as long as taking on a going concern doesn't tie you up with any debt that the current business has, then actually it wouldn't be any worse than starting a fresh shop with no history, if a business is doing well then that's great, but a new owner could lose the existing trade in a blink of an eye with minor changes and the same in reverse, if a businesss is struggling, then a new owner could turn this around with a few changes.
Even a struggling business would have all the equiptment in place to make starting a new shop cheaper to start, which would leave money for a really strong advertising budget ready for the re open.
I would be more concerned about location, how long it's traded and passing trade.
That's not to say that the history of the business should be ignored, but just don't get too tied up on it.
Even a struggling business would have all the equiptment in place to make starting a new shop cheaper to start, which would leave money for a really strong advertising budget ready for the re open...?????