Buying a Fish and Chip shop business.

[Onyi]

I am currently in the process for buying an existing fish and chip shop business. Its has been running for 35years in the same location, and the current owner is selling due to retirement. She ran the business all this while, and is 75 years old hence her reason for selling.
The business is a leasehold and comes with a 3 bedroom flat above it.

Now the new least is going for 15years, at £14,000 per annum, and i have offered £25,000 for the business premuium which has been accepted. The business is currently earning £1,200 per week, with lots of room for improvements and the shop is closed more than it is actually opened and the customer and pretty much the regular customers.

Its located a few meters away from a chicken shop, a cafe, and a carribean takeaway. Also on the same street is a school, a college, a PCT hospital and is a residential area.

I need some advice please as i am new to this and will like to know if this is a good investment or not. The lady is happy to stay behind for 1/2 months to teach me how to run the business.

Many Thanks.

 

[Scott-Copywriter]

We really need to know the profit. £1,200 per week could either be a fairly good return or a very poor one depending on how much profit is left after expenses.

Unless, by "earning", you mean £1200 profit per week?

 

[KeithP]

Scott is right - without knowing more info regarding the business costs, it's impossible to say if it's a good deal or not.

How much are business rates for example? And insurance, employee costs, produce costs, utilities, etc, etc.

I know it's a cliché but it's still relevant - "Turnover is vanity, profit is sanity".

 

[bozzie123]

Find out the actual profit rather than turnover, then we will be able to judge better, I would imagine it having a lot of regular customers, how many staff does she have? what hours is it open ?

 

[Lentinus]

Don't forget that when you take on the shop you also inherit the staff under TUPE, so if any of the staff are the reason the shop is not performing you could be looking at a lot of expense to change if they have long service and the wages have crept up and the hours gone down.

 

[Talay]

Way more due diligence needed before making offers on a business.

 

[My Owl 1]

I would want to see the last years accounts for the business, before making any decisions. If you have a friendly solicitor and accountant get them to go over the lease and the accounts. You dont want to find yourself stuck with a long lease and forfeits if you close earlier than the lease finishes,for any reason. I would ask for break clauses in the lease at both parties agreement, but the projections,plus the past picture of the business are key to making your final decision and it's future success. Best of luck with it.

Avril.
Helping businesses lower their costs.

 

[vvaannmmaann]

I'll have mine done in beef dripping please!

 

[greengecko]

I would strongly advise against it, unless you have sat down and have exact figures to work out takings. Personally I was put off ever doing anything in catering from it, when I ran/worked part-time in our local chippy 2-3 years ago.

It is a very demanding job, with long hours and a lot of time spent on your feet - plus that grease gets absolutely everywhere! The margins are very slim, on pretty much everything other than the chips - speaking to the owner who had run fish and chip shops around the country for 40 odd years, he said exactly the same that margins were decreasing and it was getting harder and harder to turn a decent profit.

You could always go and work a couple of days with the owner, just to see if you think you could manage it.

 

[simon field]

I'm still wondering what a 'chicken shop' is? :|

 

[Psl]

This site could be of use to you, as I would think you would need some form of training? http://www.federationoffishfriers.co.uk/

Nothing worse than badly cooked fish and chips

 

[vvaannmmaann]

I'm still wondering what a 'chicken shop' is? :|

KFC or similar?

 

[simon field]

No worries there then, it's hard to see how KFC could make their 'chips' any worse.

Even the hormone-pumped, salt-caked chicken doesn't get rid of the 'flavour'