About buying a retail business

You have decided to buy a business - but what type of business suits you?

There are 4 main types:
· Manufacturing
· Distribution
· Retail
· Services

Each has its own unique characteristics that may or may not suit your skills and strengths. In this article we look at buying a retail business.

Buying a Retail Business for Sale opportunity covers a lot - and is by far the largest category. It's the restaurants, bookshops, hairdressers, dairies, hotels, and motels to mention a few. Retail operates everywhere, attracting customers to come and buy, and generally relies on people through your door. This can be unpredictable at times, as you play with the selling mix of location, promotions, advertising, layouts etc. You rely on the customer coming in and making a purchase. In recent times there has been a move towards national chains and mall shopping, both of which operate large marketing budgets. Other retail business opportunities do exist, but tend to be in more speciality areas often offering higher levels of service.

If you like dealing with people (customers), and can display patience then maybe this is for you. Retailing is selling to people. It generates good cash flow and is generally more straight-forward than the other options; it can however be unpredictable due to buyer behaviours.

One key element of retailing is the building - if you don't own it, you'll be paying rent. This can sometimes be an edgy relationship as the landlord works to maximise his or her position - they have usually borrowed heavily and need to keep everything going - keen to collect the rent but not so keen to replace the roof. The higher the rents the greater the value of their property, and if it's a popular site there are others waiting to take your place. Popular sites usually also mean good traffic - unfortunately your success can become the landlords; with your rent increasing as the location becomes more valuable.

There are many successful retailers, but there are many more very average ones. Your location and lease are significant factors in the success of your business, it is important to understand these.

Also worth considering when buying a retail business is;
(1) How easy it is to target your customers to get or keep them coming through the door for your products. 

(2) Your market. Is it in a growth phase, if not, how will achieve your sales?

(3) Are there any factors that could have a negative impact on your business ie. Proposed shopping malls, town planning changes, competitors moving in?

(4) Most importantly the lease, make sure it's fair and that your business won't become hamstrung. Are there other, better retail shops for lease options?

By Richard O'Brien - nzbizbuysell

When purchasing any retail business for sale opportunity always seek professional advice. 

· Manufacturing Businesses for Sale
· Distribution Businesses for Sale
· Retail Businesses for Sale
· Service Businesses for Sale

 

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