How does anyone afford shop rents?!

T-Sil

Hi all

I currently work as a retail buyer in the fashion industry, and for a while now I have wanted to set up my own shop. I have all of the skills, experience and knowledge to do this after working in the field for 10 years, but the one thing that stops me is the shop rents!

I am in Surrey and granted its an expensive area to be in, but to get even a fairly decent location and size the rent is £35-£45k plus a year! How do start ups do it??

I saw a lovely little shops, it was a florist that closed down...about 2 months later it has reopened and is called, literally 'Light bulb shop'. How on earth does a light bulk shop afford the rent and sell so many lightbulbs in that location i will never know lol.

Am I missing something??

x

paddyrg

I'm in Bath, there are properties on one street which seem to change every year, every single year. You never know how well a shop is doing, could be that the owner is taking a punt with a 1 year lease, or even sublet a year from the previous (but near bankrupt) lessee. What you see on the surface doesn't mean a lot!

Pennywise

Not all shops will have rent of £35-45k pa. Some landlords in the best locations will ask and hold out for crazy amounts - that's their choice. But there'll also be plenty of landlords happy to accept far smaller amounts, especially for non prime locations and shops blighted for one reason or another. You'll have to compromise on location, size, layout, condition, etc.

You'll just need to be persistent and keep your eyes open for more affordable options, make sure the local business property agents know you're on the look out.

C_Mababejive

It is one of the things i have often pondered. Theres the rent then business rates..how can that be viable with what is seemingly low level footfall and what you might think is lowish turnover? Maybe some landlords rent out cheaply so that they dont have to front the business rates??

johnweir123

The simple answer is that many can't afford the costs.

The landlords will position the rental costs right at the cusp where they know from experience what people will and won't pay.

As a result many towns have large numbers of empty shops as the downturn in our economy has meant many businesses have gone bust and there is trouble starting new ones.

What can happen with a shop sometimes is that the person who is running the business based there received a lot of money as an inheritance as a result of an elderly relative having keeled over. So their home was sold and they have 250k in the bank following the sale of that property. So they'd be under no pressure at all to make a light bulb shop successful enough to be able to pay it's own way. Granted that does not make much business sense but between this and large corporates opening shops on high streets the landlords scrape by.

With the costs being as they are it is pretty unrealistic to open a shop with the expectation of paying wages or making profits.

Property which had been used as a shop gets converted to office use or residential use as the land owners can make more money like this.

It's a shame but basically the country has so much debt as a consequence of heavy government that the costs for all things in this country are very high.

oldoakey

You can negotiate a new lease deal with the landlord, the deal would possibly depend on how long you sign the lease for.

I have known some business getting the first year free of rent but they had to sign for 10 years to get that deal.

But be very careful of this as you are personally liable (unless your a limited company) if the business does not work out and they can chase you for the rent even after you have left.