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What to Look for When Buying an Existing Retail Business
The retail industry is an exciting one with a lot of opportunities to expand. However, finding the right business to buy is an important part of being able to take advantage of them.
In this competitive sector, looking out for specific things when finding a business to buy will give you the advantage that you need to succeed. That’s why, in this article, we look at some of the things you should look out for!
The location of the business
When it comes to a retail business, location is a huge factor in its success. You need to carefully assess whether the location suits the products that are on sale and whether this is set to continue.
Check to see that there aren’t any large developments planned nearby that will take foot traffic away from where the business is. You also need to consider if there is space for your customers to park or if your business is visible to potential customers.
Operating online will, of course, play a role in generating business, however, a retail shop should also have a busy stream of customers passing through their doors if they are operating a brick and mortar store.
Be aware of retail trends
While there are a lot of opportunities for retail businesses, there are also a lot of businesses that are having to close their doors because of shifting trends. Keep an eye on markets and what competition there is in the surrounding areas.
You will need to find a business that you are passionate about and that you want to be at day in and day out. But you will also need to make sure that the business that you have will still have customers in the coming years.
Once you have taken over the business, staying on top of trends will become part of what it takes to run your business. Keeping up with trends doesn’t have to mean having a fickle approach to what you stock, it can be as simple as how you market and present your products to your customers.
Keep up to date with changes in marketing practices and social media so that you can keep appealing to your target audience. When you are looking for retail business to buy, find options that have an already existing online presence.
Check the lease
When you take over the business, make sure that the lease will be transferable and that you won’t be hit with the landlord suddenly raising the rent. Being hit with a higher rent when you are not prepared can cripple your business.
If you have carefully considered the location of the business, you don’t want to have to find a new one because you can’t agree on the terms of the lease with the landlord.
When you buy the business, what will you be getting? Do a thorough due diligence and be sure of what it is that comes with the sale. You need to take note of the existing stock and its value. You will need to find an independent stock taker to get an indication of stock level at the time of handover.
During your due diligence, get an in-depth look at the finances of the business over the last few years. And make sure that you will be able to take over the contracts with the suppliers!
By Matthew Hernon is an Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com.