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julie001
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iridessa
- Original Poster
- #10
Be very careful if you do go ahead to agree the exact condition of the premises at the outset. When you eventually leave with a commercial lease you will usually be liable for dilaps.....which can be a VERY expensive cost of putting the shop back into the condition at the outset.
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Toby1968
- Original Poster
- #12
I said in on another thread recently (and got shot down by a few fools), and as others have said, if you need to ask such a basic question your not equipped to open a shop.
All the cost can be found out easily with the most basic of research, 95% of the cost involved will be unique to your business and the retail unit in question anyway. If you lack the initiative to find this out then forget it, or look at a franchise where you'll be hand-held throughout.
Oh, and the real hard work starts about 9 - 12 month in when start-up capital is all gone, your credit cards are maxed out and the shop HAS to make a living wage profit. You'll get over this stage after a further two years of grief and no personal money or life. By the start of year four, if your still going, you should actually start to make a living from the business, ironically by this time you've forgotten what a "life" is anyway
All the cost can be found out easily with the most basic of research, 95% of the cost involved will be unique to your business and the retail unit in question anyway. If you lack the initiative to find this out then forget it, or look at a franchise where you'll be hand-held throughout.
Oh, and the real hard work starts about 9 - 12 month in when start-up capital is all gone, your credit cards are maxed out and the shop HAS to make a living wage profit. You'll get over this stage after a further two years of grief and no personal money or life. By the start of year four, if your still going, you should actually start to make a living from the business, ironically by this time you've forgotten what a "life" is anyway
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Hmmm.......so I've still got another year to go before I can take a wage .... oh joyBy the start of year four, if your still going, you should actually start to make a living from the business, ironically by this time you've forgotten what a "life" is anyway
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Toby1968
- Original Poster
- #14
If your lucky, I did actually have a one month in year four where I had nearly £100 left in my bank account all month, then realised I had forgotten to pay my council tax so was £58 short again
I sure there are plenty of retailers that will come on and say they made a decent living from day one though.
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Ive never understood this. What is the point of working long hours unless you can take a wage, even if it is a small one at first ? And how can people afford to live like that ?
With a family to support, if my business couldn't have paid us a living wage from week 1, I would have had no choice but to stop being self-employed and go back to my previous employment.
To me, if a business can't support you,even to state benefit level, it simply isn't viable.
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Toby1968
- Original Poster
- #16
That's the difference between retail and working from home/on the road, you are committed from day one to a lengthy shop lease and simply have to stick with it, there is no easy way out after a week/month/year.
Also most independent retailers will change their business model numerous times until it's perfected, again this takes years, the general thinking is three years until you'll get it right and see a real profit.
This is why the faint hearted would probably be better of with franchise.
High Street retail isn't a get quick rich business, never has been.
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Toby1968
- Original Poster
- #18
Ha ha, many people presume you open a shop and customers flood in and you make loads of money from day one. That was my point, never said there was a "get rich quick" scheme, if I knew of one I wouldn't be in retail
Retail also has much, much higher start up costs than business such as marketing, web design, SEO, taxi, window cleaning etc, hence you have to be committed to the long game.
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I have one -
But i can't find a shop in which to execute my cunning plan....but that's another thread...
lol
On a serious note tho...I've found that my outgoings exceed 3k a month before wages...this is estimated as i haven't even found premises yet but 3k a month is what i'm lookin at for outgoings including rent etc...
It's a scary business...
But i can't find a shop in which to execute my cunning plan....but that's another thread...
lol
On a serious note tho...I've found that my outgoings exceed 3k a month before wages...this is estimated as i haven't even found premises yet but 3k a month is what i'm lookin at for outgoings including rent etc...
It's a scary business...
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Absolutely agree with you.My first business was a childrens art club, then a b&b, followed by an art gallery , then a gift shop and now handmade chocolates, crafts , cards , jewellery and design led gifts. Ive changed my business model often until this final combination, which has settled and worked well in its present location for the past 7 years. However - I tried replicating it at another location and trade was so abysmal , I shut within a year.No - retail certainly isnt for the faint hearted but its the most fun I've had with my clothes on....and pays for an ok lifestyle.
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I've been lurking about here reading the posts on opening a shop and to be honest even the "bad" comments are worth reading.
A comment most often made, and I think Toby mad eit, was do your research by people who know what they are talking about, lawyers, councils etc and get an idea of what's involved from there.
Taking all the comments on here with apinch of salt, but if the comments on how long you'll need to work without a wage put you off then you're better off not doing it as it seems to be the norm - and look at how many shops close. I wonder if they did their homework or were living in a fantasy of a get-rich-quick-scheme?
I'd love to open a shop, I think I've got the right location, looked into everything I can think of - and some of the things I didn't until I read the posts on here - but there are still things I'm not sure about. Mainly around stocking the shelves ie how much do I buy in so I'm not left with lots of stock that doesn't sell well. Maybe that'll be down to experience but its a cost I need to figure out first before I would take the plunge.
There are hundreds of questions to ask, and when you get the answers, they'll be another 100. I don't think even the guys on here have stopped learning about running a business.
Put the romance of running a shop to one side and do the sums first! It might be that it wasn't for you anyway.
A comment most often made, and I think Toby mad eit, was do your research by people who know what they are talking about, lawyers, councils etc and get an idea of what's involved from there.
Taking all the comments on here with apinch of salt, but if the comments on how long you'll need to work without a wage put you off then you're better off not doing it as it seems to be the norm - and look at how many shops close. I wonder if they did their homework or were living in a fantasy of a get-rich-quick-scheme?
I'd love to open a shop, I think I've got the right location, looked into everything I can think of - and some of the things I didn't until I read the posts on here - but there are still things I'm not sure about. Mainly around stocking the shelves ie how much do I buy in so I'm not left with lots of stock that doesn't sell well. Maybe that'll be down to experience but its a cost I need to figure out first before I would take the plunge.
There are hundreds of questions to ask, and when you get the answers, they'll be another 100. I don't think even the guys on here have stopped learning about running a business.
Put the romance of running a shop to one side and do the sums first! It might be that it wasn't for you anyway.
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trevorscott33
- Original Poster
- #26
there must be a living to be made eventually, otherwise why do you do it?
i've worked in other peoples shops and although they say they don't make much money they do pay the bills, they do go out to see shows, they do go out to eat, get new cars, cds, books etc.
it sounds a bit like the myth that the BBC pay peanuts to stars to be on their shows!
i've worked in other peoples shops and although they say they don't make much money they do pay the bills, they do go out to see shows, they do go out to eat, get new cars, cds, books etc.
it sounds a bit like the myth that the BBC pay peanuts to stars to be on their shows!
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Toby1968
- Original Poster
- #27
Nobody said there wasn't a living to be made, it just takes time - usually a good few years. You need to be prepared for a long slow start that's all. If you don't think you can manage for three or four years with minimal cash coming in, and your not prepared to work for a lot less than minimum wage during that period, then look at other options.
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Trevor - that is absolutely not what I said. I found myself a single parent of 4 children, literally overnight so had to make a basic living for all of us very quickly. In fact, if you read my post again, I said I could not understand why or indeed who could afford to work for anything less than the equivelant of state benefit. That was my goal in the first 3 years, to earn what I could have relied on for the government to provide, ploughing anything left back into my business in order to modify and grow that, eventually going into retail. It seems to take about 3 years before a business can pay anything halfway "decent" - and sometimes , things go horribly wrong and you can lose a lot of money very quickly,as I did last year with a 2nd shop.But the satisfaction of overcoming challenges, as well as being (largely) mistress of my own fate is worth far more to me than tons of cash in the bank. I suspect a lot of the retailers on this forum feel similar. It's not all about the money and Toby1968 is quite correct - retail is most definitely not a get rich quick scheme, particuarly now. Im sorry if peoples comments on here have offended you- they are busy people who occasionally have a brisk, no-nonsense atittude but I have found their advice invaluable at times and wish I had discovered the forum years ago - I believe it would have saved me time , worry and some of that hard earned cash.
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alligiftor
- Original Poster
- #33
With business rates the following will apply like us:
Example:
property rateable value £3200
Sole trader discount brings it £1600
Then business rate relief will bring it to about £800
Plus you get first year free from october to october, so if you get property now you'll only get it free until this oct 2011
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My advice is if leasing a bricks and mortar shop, or even a place that isn't a shop but where you are building up a viable business, particularly if a product business, rather than, e.g. consulting where you are selling your own expertise, beware of what i think of as sharp practices (legally okay in lassiez faire anything goes Britain but morally repugnant).
For example, (all real situations we know of) you rent a pitch for a burger business, the kind run out of a van, work the business for two years and get a good clientele and make a reasonable living. The owner of the land decides he/she wants more, after seeing how you have gone. At the end of two years they refuse to give you another lease and set up themselves on the very same pitch where you have just built up your business. Or they tell you they are putting it out to tender because they ahve a mate who would like the pitch, and he bids just £50 more than you have bid, i.e. the owner of the land tells their mate what to bid to be sure of winning the contract.
Or how about you get to the rent review date, which is also the lease break date and nothing happens. No letter from the landlord prior to the date of the review saying what the rent is going up to. You write and ask about the review but receive no reply. Why? Because they are waiting for the break date to pass. A few months on the rent is reviewed and backdated, only it isn't CPI, RPI or anything like it. It's a massive doubling of the rent because the landlord has seen how well you are doing, not to mention the improvements you have made to the shop (which may well not be his to keep eventually, but you have still put the shop on the map so to speak) and decides he wants a bigger share of the action.
Or you get to the end of your current lease (this is the worst one we have heard so far) have built up a viable business and the owner of the property decides to give you notice, and even, to add insult to injury, offers you peanuts on the pound for your fixtures, because he wants to take over the business. He doesn't want to buy it off you, mind you, just kick you out and take over.
The ONLYY way I would set up a business in a shop is if I owned the shop. Preferably outright.
For example, (all real situations we know of) you rent a pitch for a burger business, the kind run out of a van, work the business for two years and get a good clientele and make a reasonable living. The owner of the land decides he/she wants more, after seeing how you have gone. At the end of two years they refuse to give you another lease and set up themselves on the very same pitch where you have just built up your business. Or they tell you they are putting it out to tender because they ahve a mate who would like the pitch, and he bids just £50 more than you have bid, i.e. the owner of the land tells their mate what to bid to be sure of winning the contract.
Or how about you get to the rent review date, which is also the lease break date and nothing happens. No letter from the landlord prior to the date of the review saying what the rent is going up to. You write and ask about the review but receive no reply. Why? Because they are waiting for the break date to pass. A few months on the rent is reviewed and backdated, only it isn't CPI, RPI or anything like it. It's a massive doubling of the rent because the landlord has seen how well you are doing, not to mention the improvements you have made to the shop (which may well not be his to keep eventually, but you have still put the shop on the map so to speak) and decides he wants a bigger share of the action.
Or you get to the end of your current lease (this is the worst one we have heard so far) have built up a viable business and the owner of the property decides to give you notice, and even, to add insult to injury, offers you peanuts on the pound for your fixtures, because he wants to take over the business. He doesn't want to buy it off you, mind you, just kick you out and take over.
The ONLYY way I would set up a business in a shop is if I owned the shop. Preferably outright.
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