Thinking of buying a newsagent

[ibby]

Hi

Thinking of purchasing a newsagent, can someone please advise me on any pit holes and things to avoid.?

Thanks

 

[Photovision]

yeah.... don't do it near a supermarket

 

[Laurenpears]

Make sure its location is prime and as the user above said.... not near a supermarket or garage for that matter.
Ensure its got a good flow of business, even ask to spend a day in the shop to see how busy they get etc

 

[Stuart Bailey]

make sure its near a large school or business such as a factory

 

[ibby]

Thanks guys

Keep the ideas comming

 

[patientlady]

Dont buy near a supermarket, petrol station or any building that could be turned into a M&S Foods or Tesco. Check all plans submitted. They will destroy you over night...

Actually I think my concern would be that you can no longer have cigarettes on show, and the newspaper industry will be no more in say 5 to 10 years. Clinton cards have gone bust so I assume many are not buying birthday cards anymore and with the Kindle no books - Whoops are you sure

 

[trixyben]

My brother bought a newsagents about 2 years ago which at the time sold magazines, papers, books, sweets, general household items bread, milk etc, had a small hot food counter...

Its in a very good location close to 2 schools and good footfall. It had a decent profit year after year and was being sold as the ower was retiring after 30 odd years. He bought it and changed it abit. He put in a nice deli bar with hot and cold food which was a great success as the minute it opens people are in looking coffee, breakfasts, rolls etc, then the lunch trade with students, and with the good footfall and being in a good location trade throughout the day is steady.

 

[jane p]

I know two people with newsagents and business isnt good. To many people selling papers for a start.

 

[ScottishInvestments]

Location is EVERYTHING! I'm thinking of opening a store myself in the near future.

Have you agree with above, location, schools, factories, no other major rivals in the area (including Tesco, Co-op, Morrison's etc).

ScottishInvestments

 

[Talay]

Think carefully back to when you last went into one and why. I haven't been in one in years and the last one I used regularly was 2 minutes from my then house and had a bus stop outside where I could catch the bus to work. The newsagent 500m down the road without the bus stop did far less trade.

 

[Philip Hoyle]

Big newsrounds are also very important. I know of a few newsagents that are still prospering, despite being close to supermarkets, just because they have huge newspaper rounds - we're talking hundreds of papers per day being delivered, i.e. dense housing areas or wide countryside coverage. It's guaranteed sales because you still sell the papers even when it's raining or cold so you don't lose the customers who want to stay inside! Also, it drives them into you shop every week or two to pay for them, and many will buy other things when they're in, not to mention regular orders for magazines, etc.

As for the suggestion that papers will be no more in 5-10 years, I remember people saying that 20 years ago when I was helping to run our family newsagent!

 

[Talay]

... As for the suggestion that papers will be no more in 5-10 years, I remember people saying that 20 years ago when I was helping to run our family newsagent!

And are there more successful newsagents now than in 1992 ? Without reference to facts, I'd guess not.

In 1992, people did not have the internet. In 1992, you did not get a free paper at the bus, train or tube station. In 1992, you had to pay for the Evening Standard. In 1992, people did not have 24/7/365 news channels for free on their TV.

In 2012 we have all the above and almost every new phone sold can access news to some degree.

 

[TheJacko]

Good luck ibby.

 

[ibby]

Thanks for the information guys.

I think i have found the shop I will purchase,
Opens half day, takes around 4000£ per week.
Rent is around 7000£ Per Annum + Business rates.

I have looked into the area,

- Has got two other shops in the area.
- One is a premier, the other is a bargain booze shop.
- Shop has off road parking. - shared between the other retail shops.

No Other plans to introduce tescos etc.

It has a youth community centre next to it, with a Indian Resturant and takeaway.

Have I missed anything else?
(I have not been to see the shop yet)

Thanks guys.

 

[kulture]

Thanks for the information guys.

I think i have found the shop I will purchase,
...........
Have I missed anything else?
(I have not been to see the shop yet)

Thanks guys.

Try not to be too keen when you see the shop. Really think twice about it. Why are they selling?

 

[90DC]

I'd go and have a look at the shop. When you say it has a Premier Store and a Bargain Booze nearby, how close are they? How many homes are there in the area? Where is the nearest supermarket? Tesco Express? Garage?

How can you compete with Premier Stores and Bargain Booze? (Both will probably have flyers delivered in the local area weekly/fortnightly). What is the footfall like? What are you going to sell? Do the locals want these goods? Can they buy them from Premier/Bargain Booze? Can you open as early and late as your competition without running yourself into the ground?

This shop opens for half a day, takes £4k a week and rent is just £7k a year. I wouldn't get blinded by this. I'd sit outside and see how well it does, I'd ask the locals if they use it, I'd do everything I could to find a flaw with this shop and if I couldn't, I'd go for it. I'd also monitor the competition as well. How frequently does somebody walk through their doors, what are they purchasing, why aren't they getting it from this newsagent.

£200k turnover for £7k rent on a shop open half a day. I'm dubious. Go out there and prove me wrong.

RESEARCH.

 

[Philip Hoyle]

What happens if the Premier and Bargain Booze start selling newspapers?

As mentioned above, does it have good news delivery rounds? When you're competing against other shops, you need an edge.

Make sure you have a close inspection of their accounts. Get quotes to see if the overheads and costs of sales are sensible for you as a single shop, as they may be lower than you could get if the owner has other shops, i.e. bulk buying discounts from the cash & carry, a single insurance policy covering all three shops, etc - there could also be some manipulation in the accounts where some expenses are deliberately apportioned more to the other shops making the newsagents look more attractive. Also check copies of the submitted VAT returns to make sure that they match with the accounts you're given. Take all figures in the accounts with a pinch of salt until you've proved to yourself that they're right.

 

[Rhodes100]

So the shop takes £4k a week, which net of vat is turnover of c.£170k, gross profit margin is therefore around £35k.

Rent and Rates of around £10k, with other expenses Insurance, Electricity, Accountancy hitting another 5k.

So it is making £20k without any staff members employed.

I would guess that it would be on the market for around £10 - £20k then?

 

[ibby]

Try not to be too keen when you see the shop. Really think twice about it. Why are they selling?

Well I dont know...
It used to be a costcutter a while back now it has generic branding.
But the fixtures inside are from costcutter.

 

[ibby]

What happens if the Premier and Bargain Booze start selling newspapers?

As mentioned above, does it have good news delivery rounds? When you're competing against other shops, you need an edge.

Make sure you have a close inspection of their accounts. Get quotes to see if the overheads and costs of sales are sensible for you as a single shop, as they may be lower than you could get if the owner has other shops, i.e. bulk buying discounts from the cash & carry, a single insurance policy covering all three shops, etc - there could also be some manipulation in the accounts where some expenses are deliberately apportioned more to the other shops making the newsagents look more attractive. Also check copies of the submitted VAT returns to make sure that they match with the accounts you're given. Take all figures in the accounts with a pinch of salt until you've proved to yourself that they're right.

No News papers or mags. Nothing in the advert. I havent been an seen it.
But I plan to

 

[ibby]

So the shop takes £4k a week, which net of vat is turnover of c.£170k, gross profit margin is therefore around £35k.

Rent and Rates of around £10k, with other expenses Insurance, Electricity, Accountancy hitting another 5k.

So it is making £20k without any staff members employed.

I would guess that it would be on the market for around £10 - £20k then?

No actually its on the market for "double" the price.
But one think I dont understand is why it only opens half a day!

 

[KidsBeeHappy]

Because in that half of the day they take 70-80% of their turnover.

 

[ibby]

I'd go and have a look at the shop. When you say it has a Premier Store and a Bargain Booze nearby, how close are they? How many homes are there in the area? Where is the nearest supermarket? Tesco Express? Garage?

How can you compete with Premier Stores and Bargain Booze? (Both will probably have flyers delivered in the local area weekly/fortnightly). What is the footfall like? What are you going to sell? Do the locals want these goods? Can they buy them from Premier/Bargain Booze? Can you open as early and late as your competition without running yourself into the ground?

This shop opens for half a day, takes £4k a week and rent is just £7k a year. I wouldn't get blinded by this. I'd sit outside and see how well it does, I'd ask the locals if they use it, I'd do everything I could to find a flaw with this shop and if I couldn't, I'd go for it. I'd also monitor the competition as well. How frequently does somebody walk through their doors, what are they purchasing, why aren't they getting it from this newsagent.

£200k turnover for £7k rent on a shop open half a day. I'm dubious. Go out there and prove me wrong.

RESEARCH.

Your insight is great

in the cencus 2001 population was 9,189

 

[ibby]

Because in that half of the day they take 70-80% of their turnover.

Good point.
If I was to buy it,
I would look at increasing the hours.
5am starts and late finishes with the help of my wife.

 

[FirstView Marketing]

Like any other business which involves calculated risk taking. It will be ideal to have a good look at the newsagent account for the last 2 years at least to give you better clarity on the feasibility of its success.

 

[90DC]

Was my insight genuinely great?

So, based on the census results from 2001, we can safely assume like most other parts of the country, that figure has risen in the last 11 years, (Providing homes have been built)

Are there just the three shops in Crigglestone? Am I right in thinking that the nearest supermarket is in Wakefield and that being 12 miles away? Some distance.

Definately no plans for a Tesco Metro anywhere? Any other sites listed for development anywhere?

Did you know the Bargain Booze is apparently up for sale.

http://www.rightbiz.co.uk/buy_business/for_sale/70772_west_yorkshire.html

 

[ibby]

Was my insight genuinely great?

So, based on the census results from 2001, we can safely assume like most other parts of the country, that figure has risen in the last 11 years, (Providing homes have been built)

Are there just the three shops in Crigglestone? Am I right in thinking that the nearest supermarket is in Wakefield and that being 12 miles away? Some distance.

Definately no plans for a Tesco Metro anywhere? Any other sites listed for development anywhere?

Did you know the Bargain Booze is apparently up for sale.

http://www.rightbiz.co.uk/buy_business/for_sale/70772_west_yorkshire.html

Some homes have been built but not many.

The nearest supermarket is Asda, thats around 2 ish miles from the shop.
Only 3 retail shops exist.

I checked on the portal and cant find any planning for tescos or another supermarket

I am sure that bargain booze is not the same,
the one in the village is called "singh and Booze".

 

[Rhodes100]

Costcutter is what is known as a "symbol brand" just like Spar/Londis etc

If it used to be a symbol brand then it would seem that it has been dropped for some reason. Perhaps they failed to maintain standards or maybe the turnover fell to an unacceptable level meaning that it was uneconomical for costcutters to continue to supply the shop.

If the shop is on at £40k in IMHO it is overpriced based on the figures available and there needs to be a lot of negotiation before it would be worthwhile for you to buy.

 

[ibby]

Costcutter is what is known as a "symbol brand" just like Spar/Londis etc

If it used to be a symbol brand then it would seem that it has been dropped for some reason. Perhaps they failed to maintain standards or maybe the turnover fell to an unacceptable level meaning that it was uneconomical for costcutters to continue to supply the shop.

If the shop is on at £40k in IMHO it is overpriced based on the figures available and there needs to be a lot of negotiation before it would be worthwhile for you to buy.

do you think costcutter would disclose information why it got debranded.

 

[Talay]

do you think costcutter would disclose information why it got debranded.

No, not directly but if you were to find out the Costcutter Area Manager for that region and imply that you may be purchasing that business or even starting a new one from scratch and investigating whether to go under the Costcutter umbrella, he may be inclined to open up a little.

This would probably have to be face to face as on the phone he has no idea who he is speaking to.

 

[simonswords]

Best location for a newsagent is near a train station, ideally somewhere commuters have to walk past every morning. The markup on coffee is ridiculous

I'd echo all the other comments here, and having run a newsagent back when I was a bit younger it's a hard slog. Your biggest pain point will be finding good staff to look after the shop when you want a break.