# Anyone in business? Could you explain this in layman's terms ?



## Sony (Oct 31, 2010)

http://uk.businessesforsale.com/uk/News-Sweets-Tobacco-Business-For-Sale.aspx

I've got £10k in the whole wide world. Say I was to "buy" the newsagent's business above. What does this £10k get me?


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## Ian D (Mar 16, 2006)

I 'think'

It would let your purchase the leashold, or tenenacy for the building. You will still be required to pay monthly rent, and purchase stock, rates, wages etc


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## Estoril-5 (Mar 8, 2007)

i think it buys you the actual business and maybe shop fittings and stock.

rent, insurance, wages all that stuff will be out of your own pocket.

at that price its guaranteed leasehold


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## R7KY D (Feb 16, 2010)

I'd want to see the books claiming that turnover 

That looks like a very small shop to be pulling in £39k a month


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## justina3 (Jan 11, 2008)

very poor write up to say the least but 10k for a 89k pa gross profit return ??? any dragon would snap there hands off for that cant see running costs being high unless its a prime site with rates through the roof. 

all in all still a nice return but as my great great granny once said if its to good to be true it often is.


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## R7KY D (Feb 16, 2010)

justina3 said:


> if its to good to be true it often is.


That's the bit I forgot to add :thumb:


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## Sony (Oct 31, 2010)

News Sweets & Tobacco Business For Sale
Sheffield , South Yorkshire
£10,000

Turnover:£395,807
Net profit:Available on request
Contact Seller

1/1



Business description
Upon Instructions From GT News Limited - Sheffield City Centre. Prime trading location compact lock up well appointed air conditioned sales unit. Sales excluding Lottery June 2009 £395,807 with g.p. £82,288 plus lottery/pay point making total g.p. £113,000. Excellent net earnings.


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## Sony (Oct 31, 2010)

This GT news is on the busiest shopping street in Sheffield- and always busy!


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## Shiny (Apr 23, 2007)

Busy shopping street = massive rates/rent

You need to find out the net profit. Newsagents are often big turnover and small profit, but can make money if done right.


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## RP84 (Sep 3, 2007)

I think they have missed some 0's

I think its prob 100k


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## The Cueball (Feb 8, 2007)

Sony said:


> http://uk.businessesforsale.com/uk/News-Sweets-Tobacco-Business-For-Sale.aspx
> 
> I've got £10k in the whole wide world. Say I was to "buy" the newsagent's business above. What does this £10k get me?


It would get the lease changed into your name (I am guessing they do not own the building), plus all stock and fixtures and fittings...plus any goodwill the business has..

That is in General...but the advert is very poor and doesn't really say much...

I would also ask for a set of accounts and see what their true profit is, as well as their balance sheet...

For a purchase price of that value, I would expect their net profit to be in the region of £2k per year....based on the types of business I purchase...

:thumb:


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## Sony (Oct 31, 2010)

The Cueball said:


> It would get the lease changed into your name (I am guessing they do not own the building), plus all stock and fixtures and fittings...plus any goodwill the business has..
> 
> That is in General...but the advert is very poor and doesn't really say much...
> 
> ...


So basically £10k buys you nothing worth it?


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## The Cueball (Feb 8, 2007)

Sony said:


> So basically £10k buys you nothing worth it?


No, not really...

The lease _could_ be worth something...

The stock could be £5000 worth

The fixtures and fittings could be worth lots... without a balance sheet, I have no idea!

Goodwill is also worth something... if it's good...but this depends...it's a grey area!

The net profit could be artificially low, and a new owner could make more money.....

:thumb:


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## justina3 (Jan 11, 2008)

first question i would be asking is why are they selling. We had a very small newsagents shop for sale on our street not so long ago been there years seemed to take very good money then all of a suddern up for sale someone snapped it up only to find at the end of the year tesco put an express 5 doors up the newsagents now takes a 1/3 of what it used to.


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## PaulN (Jan 17, 2008)

The Cueball said:


> No, not really...
> 
> The lease _could_ be worth something...
> 
> ...


The OP should be talking to the shop owner and getting a feel for things, defo the accounts will give you a good idea but all this gross profit means nothing if the running costs is higher....

The fact the net profit is not stated would say to me its pretty low. Saying that, if running by the OP wages might be different and it could do ok.


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## The Cueball (Feb 8, 2007)

justina3 said:


> first question i would be asking is why are they selling. We had a very small newsagents shop for sale on our street not so long ago been there years seemed to take very good money then all of a suddern up for sale someone snapped it up only to find at the end of the year tesco put an express 5 doors up the newsagents now takes a 1/3 of what it used to.


I never ask a general question like that....There is no point as no-one is going to give you the real answer...they will say health, wanting to do something different... blah, blah, blah...

In the example above, so you really think the people selling the shop would have told the owners that Tesco was moving in!?!?

I normally do my homework, then ask the specific question, face to face: Are you selling because of Tesco moving in?

:thumb:



PaulN said:


> The fact the net profit is not stated would say to me its pretty low. Saying that, if running by the OP wages might be different and it could do ok.


Not really, most people do not disclose net profit... you never know who is looking! :lol:

As I said though, I would think the NP is about £2k a year...

:thumb:


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## justina3 (Jan 11, 2008)

The Cueball said:


> I never ask a general question like that..
> 
> then ask the specific question,
> 
> ...


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## The Cueball (Feb 8, 2007)

Wow, how can you quote someone and still miss the point....

:wall:

can't work out the difference between the two questions and that they really mean eh....

:thumb:


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## Rob_Quads (Jul 17, 2006)

Contact him for the net profit. When he tells you that hes made £10k net profit this year with him taking a small wage you will soon realise why its only up for £10K. 

Also worth finding out when the lease etc is up. I know someone who bought into a business and did not realise they took over a 5 year lease that was only a year in. The lease was way over priced but after buying in there was nothing he could do.


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## slim_boy_fat (Jun 23, 2006)

The purchaser will also be buying LONG hours for [probably] not a lot in £ per hour net profit.


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## organgrinder (Jan 20, 2008)

£113,000 gross profit with lottery money.

How long is it open, how much are rent and rates, would you need to employ any other staff?

A busy shop on the main street could easily cost £25,000 p.a. in rent and rates are about 50% of that again. If you needed say 2 other staff to cover weekends, early mornings etc, that might cost another £30,000 and there may also be paperboys if there are deliveries. There will also be heat and light, repairs and common charges plus telephone, stationery, accountancy/book-keeping costs to add.

The final "negative" is what happens to the lease - are you being sub-let the property or are you going to be asked to take on the head lease? If the existing lease is say a 25 year lease and they are only 5 years into it, you might be taking on a 20 year liability for the rent. You have to be confident enough that you can cope with such a liability.

However the figures might stack up for you if you are prepared to put in the hard graft.

The shop is currently run by a larger operation and it may be that after paying a manager's salary and staff and coping with the inevitable theft you get in a shop when the owner is not there, there wasn't enough profit for a larger business. Without the need for a manager and long hours you could find that you make a good living.

You would need the figures though and you would have to buy the stock and fixtures and fittings.

I think it is quite possible that they have got their figures wrong though and are looking for £100,000.


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