Business advice

[ilovespmu]

Hi all

Hoping some of you more savvy business geeks may be able to answer a few questions for me.

I am really interested in acquiring my own premises and have been looking at some places locally however I'm totally new to all of that side of things and was wondering..

If you buy a business so say £12000 and then rent is £400 pm, that 12k is buying what exactly? The equipment, fixtures, equipment etc? Would you hope to keep some of the existing clients? In this instance the seller is emigrating so there would be no issue with them taking clients.

Also would landlord pay insurance for the building? Does rent usually cover utilities etc? And what about business rates?

Sorry for the thousand questions!! Xx

 

[Haylez250]

Hey. Hop I can answer a few queries... Buying a business basically buys you the name and the existing goodwill, so you'll basically be handed the business ready to go, existing clients, staff etc. it's not something I've done myself as I started from scratch but you'll end up paying as much to set one up so it's not really about cost. I would look at the reputation, staff, accounts and if it all looks great. If it's got a bad rep/bad staff/ bad accounts... You may find it a little harder to turn that around.
Your rent will still be on top of the price you pay for the business. A business lease almost always includes buildings cover but won't include contents/public liability/employers insurance. It won't include any of your utilities (and you have to pay water remember too) and any internal repairs/modifications are usually all on you too.
Business rates are based on the rateable value of the property which you can find on your local council website. If it's under 10000 a year (remember this is rateable value not the value if your lease) you may be eligible for 100% rates relief. Which basically means as long as you have no other commercial properties to your name you'll get it free. For larger more expensive premises there are % discounts that you would be eligible for but I'm not sure what they are (you can find out online). Rates are expensive if you are eligible to pay them... For example my lease is £4250 a year and my rates are £1800 (I don't have to pay them but you see it can increase your outlay massively) so look into this before budgeting.
Hope some of this helps xx

 

[ilovespmu]

Thank you that helps, it's all a bit confusing at the moment! Xx

 

[Haylez250]

Aw I know it's a minefield. Pm me if there's anything else and I'll try my best

 

[squidgernetball]

You're basically buying what they've got. If they've got a 10 year lease on a low rate with fixtures and fittings and a great business and turnover, it becomes yours.

You need to look carefully at the figures. They will want to show you the best, not the not so good.

Look carefully at the lease. Some are full repairing which means you're responsible for internal as well as external. Make sure there are break clauses in the lease. This means you can cancel the lease without penalty. This means if it all goes tits up, you have a get out, but so does the landlord. You could find yourself spending out a lot of money then given notice. Just to be aware!

Have a look at what they're paying bills wise. This will give you your outgoings. Try and check everything's covered including water and business rates, rubbish collection, WiFi, phone, card machine, music license, insurances and so on.

I personally think that if you're going to do it, take on board what has been said about the reputation of the place and don't for a minute think that their turnover will become your turnover. It will still be a new business and you have to prepare for a few tough years.

Good luck

Vic x

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[ilovespmu]

Thanks vic. Part of me wonders if it's worth the hassle really! I currently work from home and rent several rooms in other areas so I don't really have any over heads although the thought of having my own place does get me all over excited 😉 xx

 

[squidgernetball]

Thanks vic. Part of me wonders if it's worth the hassle really! I currently work from home and rent several rooms in other areas so I don't really have any over heads although the thought of having my own place does get me all over excited 😉 xx

I've lost count of how many times I've said it on here - the richest I was was working from home.

Yes my own place is fab but two years in and we're running fast to stand still. We've had to go vat registered so the money is coming in but it's going out really fast. I don't regret it for a minute but I'm on minimum salary and it's a relentless slog but I can see that we're getting there.
Only you know what's right for you but I would question buying a business. If you're established, rent a property that's empty if you can.

Vic x

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