Renting a shop additional costs

[bigbaddom]

Hi

I am considering renting a shop and I have never done this before.

I was looking for some advice on additional costs that I won't have thought about.

So far I have

Rent
Business rates
Insurance - what insurance do I need? What are the likely costs? Shop is only 50sqm
Surveyor to do a condition report - again likely costs?
Refit - how long is a piece of string but I get the idea
Conveyance - again likely cost?

Thanks!!

[zbc]

Utilities - electric, heat etc

[Rangeroverover]

Main thing is to work out an exit strategy if you want out, many commercial leases will keep you on the hook until you manage to assign the lease to someone else

[Wacky Racer]

Rangeroverover said:

Main thing is to work out an exit strategy if you want out, many commercial leases will keep you on the hook until you manage to assign the lease to someone else

This.


Very good advice. Try and negotiate a very short term lease to begin with...maybe six months and then if things do not work out, you can get out without too much grief.

Say (for example) you sign up for six years and after six months the business isn't viable, they have got you by the bks and could even come after you for your house.

It sounds harsh, but from their point of view you have agreed to pay them rent for six years come what may.

However, from the landlords point of view, they may not be agreeable to this, they want to tie someone down for the long term....(And who can blame them?)

You will almost certainly be tied to a full repairing and insuring lease which will mean if THEIR roof needs 10k of work doing to it YOU will have to pay for it.

Tread VERY carefully, and make sure you go into it with your eyes open.

Sorry to sound so negative, but that is the reality.

Always remember expenses DOWN profits UP.

Good luck...

[Frio3535]

EPOS, security/safe (if cash transactions), a good phone and broadband set-up

[22]

I once took on a lease for a shop thinking (as a noob/youngster) that it was a done deal. Paid to fit the shop out and then the landlord pulled the plug thanks to some small print I hadn't read/understood. He was a serial bellend (and his shop sits empty today), but cost me a few quid!

[rog007]

bigbaddom said:

Hi

I am considering renting a shop...

Why? What's the venture that requires a physical presence that presumably will require trained (read expensive) staff to operate?

[Ken Figenus]

Beware of stuff that the current tenant owns being removed. Had this with a shop but couldn't help tenant as the stuff (shutters and CCTV) weren't mine. Departing tenant will usually take an offer to leave them though, or if there doesn't seem to be any tenant make sure landlord tries to help you on this (although I wouldn't as its not my stuff to give you) - but a chat and understanding will do no harm.

[bigbaddom]

Thanks for all the answers

Roj - yep if I could avoid it I would. However it's a bathroom shop and the suppliers are insisting on it.
So I am keeping costs low although being is SW London that is all relative.

Thanks

[JQ]

You will be responsible for the ongoing maintenance of the building (roof, walls, windows, etc), either having to pay it yourself or via a service charge - a Full Repairing and Insuring Lease.

[soxboy]

bigbaddom said:

Hi

I am considering renting a shop and I have never done this before.

I was looking for some advice on additional costs that I won't have thought about.

So far I have

Rent
Business rates
Insurance - what insurance do I need? What are the likely costs? Shop is only 50sqm
Surveyor to do a condition report - again likely costs?
Refit - how long is a piece of string but I get the idea
Conveyance - again likely cost?

Thanks!!

Costs I can think of:
Insurance - landlord will insure the building and expect you to reimburse, probably looking at £600. You will have to sort out your own contents and third party liability insurance, plus you may have to insure the plate glass yourself.
Surveyor - at a guess about £500 for London rates for a brief look, however I am assuming that this is a shop that is part of a larger block? If so, there may be a limit as to what he can inspect (e.g. roof voids) and it may not foresee works which the landlord is intending on doing.
Conveyance - about £1,000 for a London/ SE lawyer.

You will be probably be on an effective Full Repairing and Insuring Lease, basically you are responsible for repairs to the inside of your space but for any external repairs the landlord is responsible and you will be liable to reimburse him on a proportionate basis by way of a service charge. The same goes for insurance. If you are concerned it is probably worth asking the letting agent if they can find out if any significant works are envisaged over the next few years.

Perhaps look at a 5 year lease with a break after 18 months, subject to 6 months notice - that way it gives a full year to see how it goes.

[singlecoil]

Consult a lawyer as to the best way to structure your company so that you personally are not as risk if market conditions or your own personal situation change.

[anonymous-user]

bigbaddom said:

Thanks for all the answers

Roj - yep if I could avoid it I would. However it's a bathroom shop and the suppliers are insisting on it.
So I am keeping costs low although being is SW London that is all relative.

Thanks

If your suppliers are insisting on you opening a retail shop then change your suppliers.

The only shop I would recommend is an online shop if you do it at all.

This way you do have a chance of it being a success as your outlay is a lot less.

Mention this to your current suppliers and see if they agree.

[MrJuice]

bigbaddom said:

Thanks for all the answers

Roj - yep if I could avoid it I would. However it's a bathroom shop and the suppliers are insisting on it.
So I am keeping costs low although being is SW London that is all relative.

Thanks

My accountant has some bathroom shops on his books and he says they all do well, except the ones who also do installations. Much better just to sell the hardware and let someone else deal with the installation.

[Red Leader]

Hi, with regards to insurance you must consider:

Stock
Tenant's Improvements
Contents
Public Liability
Employers Liability
Business Interruption
Goods In Transit

There are a few other sections and it may look scary but it is quite straight forward. This is what I do so PM me if you need anything advice

RL

[insurance_jon]

bigbaddom said:

Hi

I am considering renting a shop and I have never done this before.

I was looking for some advice on additional costs that I won't have thought about.

So far I have


Insurance - what insurance do I need? What are the likely costs? Shop is only 50sqm


Thanks!!

The easiest way to solve this one is to get an insurance broker to sort you a shop keepers insurance package.

These cover all your liabilities, material damage and business interruption in one policy. They start from £200 ish upwards depending on what sums insured you need, what you are selling, and where you are

Pm me if you need a hand

[insurance_jon]

bigbaddom said:

Hi

I am considering renting a shop and I have never done this before.

I was looking for some advice on additional costs that I won't have thought about.

So far I have


Insurance - what insurance do I need? What are the likely costs? Shop is only 50sqm


Thanks!!

The easiest way to solve this one is to get an insurance broker to sort you a shop keepers insurance package.

These cover all your liabilities, material damage and business interruption in one policy. They start from £200 ish upwards depending on what sums insured you need, what you are selling, and where you are

Pm me if you need a hand