Cost of Bricks and Mortar

Hudson1984

Morning all, hope you are all well.

I'm running a little webshop in my spare time and it's going ok, bringing in a little profit (all of which is being reinvested into the company) But i'd like to increase and eventually make this a full time thing. In order to do that I need a shop, staff, and a huge increase in turnover.

With the turnover in mind i'm trying to take it slow and not just jump into a money pit - especially as i'm funding this myself and will not be looking at loans etc as it's a cost I just don't need.

What i'm curious about is the costs of an actual shop, i've approached estate agents but they seem very reluctant to give advice unless it's about a property they have on the market.

I just would like to know the actual costs of having a shop, I don't mean "how much will it cost" as i'm sure that's a how long is a piece of string type statement. No, what I mean is what bills are shops subject to? Business rates? Electricity? etc etc and how are these paid, is it an annual bill or can you split into monthly etc.

I'm thinking of buying a shop in my local town that has living accomodation above, i'll then increase my online sales from that base and lease the shop out below to increase my own income, once online sales are bringing in larger profits i'll look to move into the shop myself (dependent on current tenant etc) whereby I can increase income by running games nights, tournaments etc.

Anyway, back to the original query - Costs involved with having a shop.

I am also considering staff, if the store is running at profit but not large enough to give me a salary I want I may consider employing someone to run the shop while I oversee the business but this is a long way off, for now it's all just considerations for my long term plan

motorguy

Hudson1984 wrote: »

Morning all, hope you are all well.

I'm running a little webshop in my spare time and it's going ok, bringing in a little profit (all of which is being reinvested into the company) But i'd like to increase and eventually make this a full time thing. In order to do that I need a shop, staff, and a huge increase in turnover.

With the turnover in mind i'm trying to take it slow and not just jump into a money pit - especially as i'm funding this myself and will not be looking at loans etc as it's a cost I just don't need.

What i'm curious about is the costs of an actual shop, i've approached estate agents but they seem very reluctant to give advice unless it's about a property they have on the market.

I just would like to know the actual costs of having a shop, I don't mean "how much will it cost" as i'm sure that's a how long is a piece of string type statement. No, what I mean is what bills are shops subject to? Business rates? Electricity? etc etc and how are these paid, is it an annual bill or can you split into monthly etc.

I'm thinking of buying a shop in my local town that has living accomodation above, i'll then increase my online sales from that base and lease the shop out below to increase my own income, once online sales are bringing in larger profits i'll look to move into the shop myself (dependent on current tenant etc) whereby I can increase income by running games nights, tournaments etc.

Anyway, back to the original query - Costs involved with having a shop.

I am also considering staff, if the store is running at profit but not large enough to give me a salary I want I may consider employing someone to run the shop while I oversee the business but this is a long way off, for now it's all just considerations for my long term plan

Finger in the air stuff, but based on my own experience :-

Per month....

Rent £600
Rates £200
Electric £100
Heating £75
Phone £50
Advertising £50

Also bear in mind most shops open 6 days a week, 09:00 -> 17:30, so you will need to factor in being there and also at least some part time help.

So say, £1500 a month for talks sake.

If your margin is 20%, then you need to be generating £72,000 a year from the shop for it to break even. You're then into the realms of VAT, so you'll be losing 1/6th of all your profit to the vat man.

Hudson1984

yeah, it's finger in the air stuff i'm after at this stage though so thanks

I still don't get VAT really!!

Savvy_Sue

cross posted, but ...

Just for starters:
business rates
electricity / gas
water
refuse collection

probably window and signage cleaning too, although you may be able to do this yourself, but doing it regularly must be on your agenda.

And find yourself a good solicitor NOW, one you can build a relationshipship with, one who deals with commercial property, because you will SO need one when you draw up the lease with any shop tenant, or if you decide to lease yourself. Do NOT go into such arrangements without proper legal advice, ever ever ever ...