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things to ask when looking at a retail unit

Discussion in 'General Business Forum' started by morby, Sep 13, 2020.

  1. morby

    morby UKBF Contributor Free Member

    83 3
    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,
     
    Posted: Sep 13, 2020 By: morby Member since: Jun 17, 2011
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    16,390 3,466
    Hire a lawyer to look over the lease agreement and a surveyor to check the condition of the building.

    Be prepared to walk away.
     
    Posted: Sep 13, 2020 By: Scalloway Member since: Jun 6, 2010
    #2
  3. Alison Moore

    Alison Moore UKBF Enthusiast Full Member

    535 94
    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...
     
    Posted: Sep 14, 2020 at 11:39 AM By: Alison Moore Member since: Aug 4, 2016
    #3
  4. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    4,802 1,815
    As others have said, do take professional legal advice before you commit to anything.
     
    Posted: Sep 14, 2020 at 12:10 PM By: Mark T Jones Member since: Nov 4, 2015
    #4
  5. MBE2017

    MBE2017 UKBF Ace Free Member

    1,937 699
    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.
     
    Posted: Sep 14, 2020 at 1:33 PM By: MBE2017 Member since: Feb 16, 2017
    #5
  6. morby

    morby UKBF Contributor Free Member

    83 3
    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?
     
    Posted: Sep 14, 2020 at 6:58 PM By: morby Member since: Jun 17, 2011
    #6
  7. James Johnson

    James Johnson UKBF Regular Free Member

    350 79
    Get a option to leave at end of every 12 months with two months notice. Seriously.
     
    Posted: Sep 14, 2020 at 8:03 PM By: James Johnson Member since: Sep 23, 2018
    #7
  8. Bob Morgan

    Bob Morgan UKBF Enthusiast Free Member

    940 251
    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?
     
    Posted: Sep 15, 2020 at 8:26 AM By: Bob Morgan Member since: Apr 15, 2018
    #8
  9. iDigLocal

    iDigLocal UKBF Regular Full Member

    142 27
    Break Clauses!!! - make sure you can get out if you need to.
     
    Posted: Sep 15, 2020 at 8:52 AM By: iDigLocal Member since: May 9, 2018
    #9
  10. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,861 2,465
    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
     
    Posted: Sep 15, 2020 at 9:54 AM By: Chris Ashdown Member since: Dec 7, 2003
    #10
  11. consultant

    consultant Your Business Community Staff Member

    5,664 797
    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.
     
    Posted: Sep 15, 2020 at 10:29 AM By: consultant Member since: Jan 21, 2008
    #11
  12. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Full Member

    5,605 1,317
    Something to ask yourself: Why am I doing this now?
     
    Posted: Sep 15, 2020 at 1:20 PM By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #12
  13. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,861 2,465
    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
     
    Posted: Sep 15, 2020 at 8:30 PM By: Chris Ashdown Member since: Dec 7, 2003
    #13
  14. Mr D

    Mr D UKBF Legend Free Member

    24,306 2,949
    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.
     
    Posted: Sep 15, 2020 at 9:01 PM By: Mr D Member since: Feb 12, 2017
    #14