The right location for your business will depend on the type of shop you want to run, the clientele you’ll want to attract and the percentage of total revenues that will be dependent on passing trade. If there are no businesses of your kind in a given village, town or city, it may be that you have spotted a gap in the market, or it may be that there isn’t sufficient demand for a business of this type in the area. If in doubt, research the local market as thoroughly as you can. Try to find areas of a comparable size and population density where a business such as yours has succeeded or failed, and identify the reasons in either case.
When you have decided on the area, it’s important to pick the right premises. If you can do so discreetly, try and get a sense of the volumes of people passing by on the side of the street where the premises is for sale. If you are happy with this, ask yourself, “how easy is it to see this shop from either side of the street in either direction?” Once you have addressed both the footfall and shop frontage in this manner, you’ll also need to take logistical concerns such as available parking space and delivery bays into account. These might seem like small concerns that can be overcome if your shop is good enough, but you need to give yourself the best possible chance of success from the outset.
Once you feel like you have found the perfect business, perform due diligence as thoroughly as you can before preparing your offer. Be clear on whether you are buying the business as a whole, or just the assets (stock etc.), and the implications of both. If you are buying the business as a whole, you will need to see employment contracts of existing staff, as well as documents relating to any outstanding debts that the business might have. If you are just buying the assets, you will need to see proof of ownership of these assets, whether that’s a domain name, premises or vehicle.
There may be planning or health & safety requirements that you will need to bear in mind. If so, can the seller provide you with certificates that meet all the necessary regulatory requirements? If the seller can’t offer you these, you will need to make sure you factor the costs of meeting these requirements into your projections.
If you are buying a company, it is critical that you get a copy of the company formation documents. You will need these to establish whether the seller has the right to sell the business, or whether there are other parties involved.
Once you are satisfied with your due diligence, you will then be ready to prepare an offer. Consider the asking price of similar shops for sale as a guide and consult the selling agent for their opinion of what the business owner will sell for, but also bear in mind the costs of taking on this business. If the business requires a shopfitting or redesign, if the lease is likely to come to an end in the near future or if you are taking on any debts of any kind, factor these into your offer and explain the reasons for arriving at this value to the seller.