Off Licence

irishufc

Hi Everyone,

I have a business idea, partial business plan that looks good so far and my own market research for two off licences in different areas.

One of the businesses is a convenience store that comes with a full off licence, is quite profitable and im hoping to expand the off licence in it and remove some items i feel dont sell too well in the particular area. The owner is moving country and is selling the store with full stock, shelving, refrigeration units, tills and security so it is turn key. The price of taking it over is very reasonable and i have an accountant and a start up professional from a franchise looking at the accounts at the moment. The rent is very low and there is a take away beside it as well as having a massive student market due to its proximity to a rather large college.

The other unit is a small unit

(rent is very low as jewelers and clothes shops and the likes keep going bust in there... there appears to be no market for those stores as there is a shopping center 5 minutes away with the likes of Dunnes stores, pennys etc in it)

in an area of 400+ houses without a proper off licence in the area.. not even a small shop. From talking to locals on the street they tell me they have to drive 10 minutes away to the nearest one in any direction, there is an off licence nearby that you cannot walk into... the alcohol is sold through a window in a cramped room

So i have been trying to get information together but there are a few things i cant find.. If any of you could help that would be brilliant.

1. What is the legal procedure for taking over an existing off licence that comes with a store?

2. When purchasing a full off licence for a premises i recognise that two have to be extinguished...You have to do it through the district court in the area. There are bars and convenience stores going out of business to beat the bandwagon so extinguishing two probably is not a problem.
Does anyone have an idea of the full costs involved?

2. Fitting out a store is not a problem for me as i come from a QS & estimating background so i will probably do it myself hiring subbies. What i am not aware of is the Legal requirements for putting a new off licence into an existing retail unit. Can anyone advise?

3. The first store is going to cost circa €75k to walk into including stock, paying wages, rent & rates for the first month. The second unit is going to cost circa €90k+ (my estimations but could be less) to fit out, pay rent, rates, staff. I have circa €15k+ capital so far so i am looking to start one store at a time depending on which one is more profitable in the beginning. Can someone tell me my financing options as the bank is probably the last place that would give me any help!

I come from a convenience store background and my family owned a chain of bars and stores many years ago so there is experience there in running these stores.

Im trying to get one or both open mid summer time and definitely the convenience store/off licence open before the second week in September.

Any help is appreciated guys and gals!

DubTony

I think you've confused anyone who might attempt to answer this by telling us that your family has been involved in these type of businesses before. But here's my 2c worth anyway.

Off licence - I've never heard of having to extinguish 2 to get 1. But I heard that last year the price of a licence had dropped to just over 100K. There are legal fees on top. Get in touch with a solicitor; you'll need one for the lease / rent agreement anyway.

The first store looks like a bargain, if, as you say, it's very profitable. 75K is buttons. Are you sure it's so profitable? Is the guy working 90 hours a week? Lot of questions here imo. If your 75K includes stock, rent, rates and wages for a month, it seems like a ludicrously low figure to me.

But if you don't know what you're doing in a c-store, stay away, or hire a very good manager. It's a cut-throat business. You'll need to be at the top of your game to make it work. WARNING: The guy from the franchisor will tell you anything he thinks you want to hear to get you to sign on the line. Believe me, I know. I can't stress this enough.

As for the off-licence in the area that you get served through a window ? Well, that screams of shop-lifting and maybe even hold-ups. Get somebody who knows the place to talk to you about the area. The off-licence in the 2nd store would need planning permission.

As for financing options ... the bank is the 1st place to go. Failing that, you could ask the guy selling to finance you. This is done all the time in America where banks won't lend based on the good-will of a business.

I'd be curious to know what the turnover is in the c-store. You can PM me if you want with that info if you don't want to put it up in public, and I can make a better judgement, but something, to me, doesn't seem right.

That's all I've got.

Teferi

I work in an offo myself and apparently in general the owner won't start taking a profit on an off-licence for 5+ years and this could be even more true in the current market...Just something to keep in mind.

irishufc

@Dubtony
Its been about 15 years since my family sold up so thats what i meant by family experience.

As for the profitability i have an accountant looking over it and another friend who is running a shop.

In terms of the off licence with the glazed area theres two in the area like that (about a 15 minute walk apart) and it is a rough area but there are rougher areas nearby with normal layouts and i have never heard of a major incident.

As for asking the guy whose selling it to finance it.. ive never heard about that kind of arrangement. I assume its a thing where i pay it off with interest over an agreed time with a loan agreement in place between the two of us? Am i right/wrong on that one?

@Tefery
That could be true but everyone has to start somewhere

Thanks for the past and future replies lads, every little bit helps

DubTony

irishufc wrote: »

As for asking the guy whose selling it to finance it.. ive never heard about that kind of arrangement. I assume its a thing where i pay it off with interest over an agreed time with a loan agreement in place between the two of us? Am i right/wrong on that one?

Yeah, that's it exactly. I have a feeling this will become more popular here in the coming years. Another area for the legal eagles to benefit from ... :rolleyes:

With such a small upfront amount, it would be fairly easy to work out with the guy. Based on the 75K figure I assume he's not holding a lot of debt - if any at all.

antoinolachtnai

A trip to the solicitor is certainly in order. It seems like a terribly low price for a profitable business with a low rent. You'd need to look at the lease for sure. As for profitability, I wouldn't be surprised if the takings and VAT returns have been rising steadily over the last 18 months?

I'd say there is a possiblity you would need planning for the new off-licence.

Bambergfan

Did you ever set up the off licence and if so how is it going?

Would like to do something similar in Dublin.