How do small shops survive?

Uther

Uther

Uther

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Looking around at some of the businesses up for sale lately, I'm quite shocked that there is any profit to made at all in some of them!
Case in point: A gift shop for sale at £29,950, Sales of £147,533 were reported for the year ended 31 March 2013 which generated a particularly high gross profit of £103,113 (69.9%) and an abridged net profit of £22,511 for the year.
This place is open 7 days a week and the rent is 25k a year!

Seven days a week for 22k!
Why would they even bother, or am I missing something?
 
I think what was said^ people will try it for a few years thinking they can make it work where others couldn't it's the same with restaurants, I can't remember the percentage but I will guess 50%+ of new restaurants close within a year. You can google it.

Also the ones that do survive will have slick marketing strategies, maybe owe a few shops and work together with other small owners, buy cheap or out of date stock from big companies etc.
 
Shops in the center of Cambridge are forever changing hands. The lucrative pull of the town means there are rarely any plots vacant for long but equally, the huge rents charged by the Colleges means they're rarely there for long.

As above; those with more than one outlet may be able to take a hit in rent for the shop in the most prestigious location by using profit from the others to cover it. Sometimes, simply having a desirable postcode can do wonders for your small chain over and above the poor sales:rent ratio.
 
Most of the "haute couture" style shops round here seem to be owned by rich husbands and run by thier wives to give them something to do. TBH, I don't think them turning a profit is a requirement. There's even a shop called "on grandma's knee" where they give knitting lessons! Again, I don't think turning a profit is the aim of the business.
 
Uther said:
Looking around at some of the businesses up for sale lately, I'm quite shocked that there is any profit to made at all in some of them!
Case in point: A gift shop for sale at £29,950, Sales of £147,533 were reported for the year ended 31 March 2013 which generated a particularly high gross profit of £103,113 (69.9%) and an abridged net profit of £22,511 for the year.
This place is open 7 days a week and the rent is 25k a year!

Seven days a week for 22k!
Why would they even bother, or am I missing something?
Click to expand...

Depends if the owner paid himself £70k wages that year. But due to the low asking price I would say he didn't

In todays climate I would be asking 2.5xnet profit. And if I was buying I'd be looking at 1.5xNet profit so meet somewhere in the middle @2x

Does the purchase price inc fixtures, stock etc
 
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amigafan2003 said:
Most of the "haute couture" style shops round here seem to be owned by rich husbands and run by thier wives to give them something to do. TBH, I don't think them turning a profit is a requirement. There's even a shop called "on grandma's knee" where they give knitting lessons! Again, I don't think turning a profit is the aim of the business.
Click to expand...

I was going to post something like the above. This happens loads. Keeps them out of the milkman's bed I suppose!
 
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This one does very well
 
Its hard in the uk (and most other places), a member of my family lost half a million opening a shop that never worked for 7 years.
 
Most don't, they are a labour of love (the dream etc) that can very quickly wipe out the owners financially.

High street rent and business rates are enough to cripple most small businesses.
 
amigafan2003 said:
Most of the "haute couture" style shops round here seem to be owned by rich husbands and run by thier wives to give them something to do. TBH, I don't think them turning a profit is a requirement. There's even a shop called "on grandma's knee" where they give knitting lessons! Again, I don't think turning a profit is the aim of the business.
Click to expand...

yup, this is often the case. Sometimes the point of these shops is to actually lose money for tax purposes....
 
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