Property Advice zone
1. Before starting your property search consult your bank or a specialist finance broker who will advise you on the sort of price bracket you should be looking in. As a rule of thumb, a minimum of 30% of the purchase price will be required for most freehold businesses.
2. Be sure of the type of business you want to buy and are capable of operating. Are you extrovert enough to make a success of a busy pub? If not, will you need to employ expensive specialist staff such as chefs or bar managers?
3. If you are new to the industry, try to get some practical "hands-on" experience, even if unpaid, before proceeding further. You will also need to be conversant with a number of laws and regulations such as health and safety, the Disability Discrimination Act and provisions of the Weights and Measures Act.
4. Don't settle on the first property you see. Study the sale particulars and visit as many properties of the style you intend to buy as possible. Don't fall into the trap of buying a property just because you fall in love with the area or the owner's accommodation.
5. Seek help to prepare a realistic and workable business plan, both for your bank and as a blueprint for the first few years of operation. Err on the side of pessimism rather than optimism, and pay special attention to issues like gross profit, wage costs and the level of profit you expect to make.
6. Retain a reserve of funds as working capital for unexpected eventualities and to support the business until it is established. And remember that you will have to acquire the stock in trade in addition to paying the purchase price on the day of completion.
7. Always look to increase trade and profit, as that will provide your capital gain on sale. Make sure that any large capital sums you spend on the business will be more than paid for by the increase in business they bring.
8. Lastly, remember that whatever you intend buying, whether a hotel, pub or B&B, it should be mentally, physically and - most importantly - financially rewarding.
