Retail stores - small shops

Discussion in 'General Business Forum' started by bright21, Jun 16, 2012.

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  1. bright21

    bright21 UKBF Newcomer

    6 0
    Who here has their own retail store, such as in a busy high-street, and if we were to look at setting one up in the near future, how much should we expect to spend? - Obviously there's the cost of 'rent' as such for that space, but are there any other costs that we would need to factor in, such as any kind of additional taxes (other than standard business hmrc/vat etc), or is it literally just the rent cost?

    It would be for a 'small' location to start with, if anyone could give an indication of how much to expect to pay for something like this then that would be a great help, (I know every area of the country will vary, but just as a kind of rough figure to give some kind of indication of what we're in for.. any help/advice/info much appreciated,

    Regards,

    bright21
     
    Posted: Jun 16, 2012 By: bright21 Member since: Jun 14, 2012
    #1
  2. kelvin1950

    kelvin1950 Contributor

    1,226 398
    Business rates, but ask the local council about small business rates relief.

    Building insurance, either directly or the landlord will arrange and invoice you.
     
    Posted: Jun 16, 2012 By: kelvin1950 Member since: Jul 19, 2011
    #2
    • Thanks Thanks x 1
  3. PrestonLad

    PrestonLad Contributor

    648 278
    For a start, rather than ask for cost of rent, rates etc, it is far easier to google to find a local commercial estate agent website, and find the particulars for some shops similar to those you want to rent. This will give you a lot more information than you might have imagined... for example, an idea of rent for the type of shop you want, in your chosen town... but also there should be quoted the rates payable (sometimes alternatively quoted as rateable value - say value 8000..... and a current payable rate of, say 50p in the pound, meaning you pay 4000 per year). Rent and rates can vary massively - even over a distance of 200m - depending on where the retail hot spots are.

    You need to pay professional fees at the outset, for drawing up contracts (and ongoing accountancy fees etc)
    You'll probably have a lease where you are liable for upkeep and building insurance. In which case you should almost certainly get a survey done at the outset to agree on current condition. It is common for people to take on a shop.... spend money on it... but at the end of lease, find that the landlord insists on certain repairs doing to the roof or something - and you might be liable -so having a good survey at the outset... and keeping up a dialogue with the landlord throughout, can help avoid a lot of problems later.
    Depending on whether your shop is in a shopping centre, you might need to pay a share of security / energy costs etc.
    You will need a music licence if you want to play the radio/ music ... I think this is about 200 quid but depends on shop size.
    You'll need insurance... including public liability.... perhaps to cover stock, or your illness etc... and as already mentioned, the building.
    Probably a few other things I've forgotten! Hope that's a good start.

    ps... this is adapted from a post I've done somewhere else... You can use the search function to find threads like the one you've started. Good luck
     
    Posted: Jun 17, 2012 By: PrestonLad Member since: May 3, 2012
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  4. kelvin1950

    kelvin1950 Contributor

    1,226 398
    Building on Preston Lad's post, try to get an internal only lease as opposed to a full repairing one. Landlords will nearly always ask for the latter and you should be bucking for the former.
     
    Posted: Jun 17, 2012 By: kelvin1950 Member since: Jul 19, 2011
    #4
  5. Chris Ashdown

    Chris Ashdown Contributor

    12,356 2,590
    Dont forget insurance public liability, employees, glass window, building,
     
    Posted: Jun 17, 2012 By: Chris Ashdown Member since: Dec 7, 2003
    #5
  6. jberlin

    jberlin UKBF Newcomer

    19 4
    Preston,

    Your biggest overheads are most likely to be Rents and Rates. There are a number of tricks, particualy with rates you can use to reduce your expense.

    I would suggest you select the location you would like to move into. Select also your budget in terms of rent. If you instruct a professional surveyor and advise them of these details they should be able to find you a property that best meets your requirements. A letting agent may just try and talk you into taking on any property they have on their books just to get rid of it. They may not be able to advise you on matters such as business rates. Also, by instucting a surveyor they should be able to get you the best possible lease terms including rent free periods and break clauses should things not work out.

    The above is easy for me to say as i am a commercial property surveyor but in the long run it will save you money.

    James
    James Berlin & Associates
     
    Posted: Jun 17, 2012 By: jberlin Member since: Jun 17, 2012
    #6
  7. PrestonLad

    PrestonLad Contributor

    648 278
    Thanks James,
    Of course, the service comes at a price! But it is something I've been mulling over for my shop. I do see possible value.
     
    Posted: Jun 17, 2012 By: PrestonLad Member since: May 3, 2012
    #7
  8. jberlin

    jberlin UKBF Newcomer

    19 4
    no problem,

    One further tip to save you some surveyors fees. Obviously some are better than others and may therefore be more expensive. That being said if you can get a cheaper quote from another company and take it to them they will most likely match!
     
    Posted: Jun 17, 2012 By: jberlin Member since: Jun 17, 2012
    #8
  9. BristolBiz

    BristolBiz Contributor

    184 61
    Why are you looking for a small unit, may I ask - is this all you need, or are you planning a cautious start, with expansion coming later?
     
    Posted: Jun 18, 2012 By: BristolBiz Member since: Nov 5, 2008
    #9
  10. bright21

    bright21 UKBF Newcomer

    6 0
    Thanks to everyone who's posted so far for your informative posts, will definitely consider everyones comments. As with anything, there's a lot of planning and prior work that needs to be done before jumping into anything, so its very useful hearing what everyone here has to say.

    Of course expansion would be great in the future, but wouldn't want to jump into the deep end, or out of my depth should I say, so thought by going for a smaller unit, it would be ideal to test the water, and see how things go from there.

    Thanks again to everybody who has posted.
     
    Posted: Jun 18, 2012 By: bright21 Member since: Jun 14, 2012
    #10
  11. BristolBiz

    BristolBiz Contributor

    184 61
    Can you make enough money in a small unit? It can be difficult (& expensive) to relocate.
     
    Posted: Jun 18, 2012 By: BristolBiz Member since: Nov 5, 2008
    #11
  12. StratBee

    StratBee UKBF Newcomer

    50 7
    Not necessarily... There are low risk, affordable ways to test a retail store / shop format as, a small unit.
    For some businesses & business owners testing elements such as; the performance, management requirements and day to day encounters that come along with operating a retail unit, can provide a highly useful, insight before, they commit to long term decisions like longer lease aggreements.
     
    Posted: Jun 19, 2012 By: StratBee Member since: Jul 5, 2011
    #12
  13. Talay

    Talay Contributor

    3,986 876
    The cost for 100m2 is not 10 times the cost for 10m2. Also, the cost of prime location needs to be evaluated not in isolation but in comparison to the cost of near prime and then secondary locations. Where I am for instance, the decision to go sub prime is not clear cut.
     
    Posted: Jun 20, 2012 By: Talay Member since: Mar 12, 2012
    #13
  14. Crystal Maze

    Crystal Maze UKBF Newcomer

    1 0
    Even If you do qualify for rates relief, no matter what, you still have to pay for water rates L
     
    Posted: Jun 21, 2012 By: Crystal Maze Member since: Jun 21, 2012
    #14
  15. alsze

    alsze UKBF Newcomer

    23 0
    I know different areas have different rules.

    I want to share the some information here in Shenzhen, China.

    My elder sister opened a retail in Huaqiang metro shopping mall. where just near the exit of subway station, the retail shop located in a corner. while there still cloud of people wander here because there is the shopping mall. for the rent cost is about 2000 RMB/month, and the power charges, the water charges ,the manage charges,etc. total about 2500 RMB/month.

    If start a new retail, We have calculated the total cost, including the decorations, the pre-rents fees, the goods cost.. totally about 50,000 RMB/month...

    So the start money is a bit higher, I think, then the cost will much less...
     
    Posted: Jun 21, 2012 By: alsze Member since: Jun 20, 2012
    #15
  16. Stuart Bailey

    Stuart Bailey Contributor

    379 76
    1. rent
    2. rent deposit if you are a company
    3. landlord's building insurance
    4. if you are in a shopping centre, service charge which will include repair, lighting, security of the centre (and buildings insurance)
    5. business rates (although you may get small business rate relief)
    6. some cities have Business Improvement Districts which you have to pay for (again a small business relief may apply)
    7. public liability
    8. utilities
    9. shop signs
    10. the list goes on....
     
    Posted: Jun 21, 2012 By: Stuart Bailey Member since: Oct 29, 2010
    #16
  17. Brightpearl

    Brightpearl Contributor

    302 27
    I'd look to get some point of sale and inventory software to help you manage your stock, orders, accounts etc. this could save you valuable time in admin and help you keep on top of your stock control/stock-takes as well as provide helpful insights into your best performing products etc.

    There are lots of solutions out there to help you do this with both EPOS and inventory management capabilities too, plus if you get one that covers multiple channels you can always expand into the online world at a later stage, even if to offload unwanted stock onto eBay etc.

    Perhaps check out Brightpearl at some point? Obviously you've got bigger things to think about initially but probably worth thinking about to help you at some point?

    Good luck!
    Harriet
     
    Posted: Jun 27, 2012 By: Brightpearl Member since: Jan 23, 2008
    #17
  18. Kolypit

    Kolypit UKBF Newcomer

    1 0
    For a starter, I think you should calculate the promotion budget.....:)
     
    Posted: Jul 4, 2012 By: Kolypit Member since: Jul 4, 2012
    #18
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