How much does it cost?
Your biggest initial cost is likely to be the lease or freehold and any stock or fixtures the previous owner is including. The price of the leasehold for Four Weddings and a Party in Northampton included the stock and good will.
Another Cambridgeshire business is on the market -- it is similarly inclusive of the fixtures and so on but is for the freehold - so the price will be much higher.
After this, there may be rent and rates to pay. And if you choose to advertise this can be costly too. A yellow pages advert will cost a few thousand a year. If you have an excellent location that is proven to attract enough passing trade then you may not need advertising but this is something you will have to weigh up when you start.
Contrary to what you might expect, however, insurance costs tend to be quite low. Although a stock of designer evening and wedding wear might be worth a lot to replace, thieves are not likely to be tempted by them. A big white wedding dress is not likely to sell well or quickly at the pub on a Friday night - and the premiums should reflect this.
Then there are staff wages. You will probably only need to employ one other during the week with perhaps extra help on Saturdays. And unless you are qualified to do the alterations yourself, you will need a seamstress - probably on a part time basis.
Profit and Costs
| Your biggest and most basic initial cost is the leasehold (or freehold). The bank will potentially lend you 60-70% for the bricks and mortar - although they are unlikely to lend you this much if the lease has less than 20 years to run. |
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Initial costs:
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| Leasehold (incl. goodwill, fittings and stock) |
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| Bank potential loan 60% |
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| You pay 40% |
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| Then what happens after the first year? Here is a rough idea of the profits you might make on a business costing the £70,000 outlined above: |
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Takings per year:
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Minus:
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| Stock (approx) |
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| One year's rent |
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| One year's rates (approx) |
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| Miscellaneous incl. staff wages |
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You could earn around 50% profit:
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