things to ask when looking at a retail unit

[morby]

Hi all,

this week i should be looking at viewing my first unit for a barber shop.

i was just wondering if anyone could give me any advice on what questions i need to ask?

also is there any funding of loans i can look into in starting this new venture?

Many thanks,

 

[Scalloway]

Hire a lawyer to look over the lease agreement and a surveyor to check the condition of the building.

Be prepared to walk away.

 

[Alison Moore]

It depends on the lease, but a lot of commercial properties are fully repairing, so you're totally responsible for it throughout the term of the lease. A lot are long leases too, so make sure there are break clauses. Definitely get legal advice on it though...

 

[Mark T Jones]

Hi all,

this week i should be looking at viewing my first unit for a barber shop.

i was just wondering if anyone could give me any advice on what questions i need to ask? There are lots of questions, but the best way to evaluate what they should be is to ask for standard heads of terms, read them and address each point specifically.

also is there any funding of loans i can look into in starting this new venture? Start Up Loans. My affiliate link - or drop me a message.

Many thanks,

As others have said, do take professional legal advice before you commit to anything.

 

[MBE2017]

OP might wish to read a few threads where other barbers are suffering very badly at the moment, maybe permanently.

One to find out yourself, not ask, is the true footfall. Ignore what anyone tells you, sit outside and start counting for a week.

 

[morby]

not to muddy the waters too much but there will be 1 or 2 extra income sources from getting this one premises.

a couple of things ive got so far
-5 year term
-tenant break after three years

does this mean if after 2 years ill be liable for 1yr worth of rent?

 

[Forgot password]

Get a option to leave at end of every 12 months with two months notice. Seriously.

 

[Bob Morgan]

OP might wish to read a few threads where other barbers are suffering very badly at the moment, maybe permanently.

One to find out yourself, not ask, is the true footfall. Ignore what anyone tells you, sit outside and start counting for a week.

FIRSTLY 'Footfall' is grossly overvalued as a Metric. Whilst counting the 'Footfall' also identify 'Conversions!' - Those Shoppers who have actually bought something, and are carrying a Branded Bag, from other shops! Both Metrics can also vary dramatically during the course of a day too!

SECONDLY Get out a Tape Measure, and confirm the Areas quoted by the Agent! I will guarantee that the areas measured will be less than those quoted. This is important as Service Charges, Heating, A/C and other Services will be based upon the Agent's measurement. The RICS has a Code of Measurement Practice.

THIRDLY Appoint a Lawyer who is experienced in Commercial Property Leases - Especially if it is Full Repairing and Full Insuring! There could also be 'Refurbishment' Clauses included too. Often Fines and Penalties can be hidden away - Not opening at precisely 10:00 and not having Clean Windows, etc. Sometimes this documentation is 'Referred' to in the Lease Document, but NOT Included with the Legal Bundle!

FOURTHLY Lease Break Points and Notice Periods! - How do you extract yourself and walk away?

 

[iDigLocal]

Break Clauses!!! - make sure you can get out if you need to.

 

[Chris Ashdown]

Both sexes are quite loyal to their hairdresser so can be quite hard to start with i guess,

Options may be to hire a chair to start with and build up a customer base

 

[Paul Kelly ICHYB]

Make sure you prepare a basic business plan before you do anything, especially to understand the numbers. Always include your wages in the costs.

Count the number of clients the closest competitor has in a similar location on a slow day. Use that as the basis for your footfall/conversion rate. Calculate turnover from this. If more then your costs, you have somewhere to start.

Funding e.g. grants, are very unlikely. If you cant fund this business yourself, don't start it. You could look at a Startup Loan.

 

[MOIC]

Something to ask yourself: Why am I doing this now?

 

[Chris Ashdown]

Make sure you prepare a basic business plan before you do anything, especially to understand the numbers. Always include your wages in the costs.

Count the number of clients the closest competitor has in a similar location on a slow day. Use that as the basis for your footfall/conversion rate. Calculate turnover from this. If more then your costs, you have somewhere to start.

Funding e.g. grants, are very unlikely. If you cant fund this business yourself, don't start it. You could look at a Startup Loan.

Its not footfall that counts with Barbers, they have spent years building up a business

The footfall in a barbers will be all its regular customers and maybe the odd new person, how on earth can you calculate what percentage you would get

The OP may be lucky and open in a area where the local barber has retired or shut up and get a full shop straight away, but more likely a very slow start-up

 

[Mr D]

Or find that there isn't enough local demand for another barbers shop. Way too often have seen businesses open a shop and have to shut it again the same year - simply not enough trade to pay the bills.

OP - its common for you to be on the hook for rent until the next break clause or end of the lease. Thats thousands, maybe tens of thousands of pounds worth of debt you could be potentially liable for.
Make very sure you can afford to rent.