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advice needed about buying takeaway business

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Found 15th Jul 2013
hi all.
i need some advice about buying a takeaway business.
my friend is selling it for £20,000,he bought it for £60,000 six years ago,hes now selling it as he another job.

the turnover is £1500 per week but can be better with this if i do leaflets,advertisements etc.

its in the main town centre and there are other businesses too.

so all advice appreceiated.
thanks
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27 Comments
You need to do some proper budgeting and look properly at the books

Look at your overheads, and consider how much you will need to take our of the business. From personal experience it is hard to see a return within the first year, so be prepared for a hard slog.

Look carefully at your competition too. Takeaway businesses tend to have loyal customers who enjoy the food/service/price. How are you going to attract them to your business?
thearbiter65

You need to do some proper budgeting and look properly at the books Look … You need to do some proper budgeting and look properly at the books Look at your overheads, and consider how much you will need to take our of the business. From personal experience it is hard to see a return within the first year, so be prepared for a hard slog. Look carefully at your competition too. Takeaway businesses tend to have loyal customers who enjoy the food/service/price. How are you going to attract them to your business?



it used to be a good turnover before but coz my friend didnt have the time to run the business and its seem to have gone down hill.
What sort of takeaway and whos the nearest competition
archer1204

What sort of takeaway and whos the nearest competition



its a pizza fish and chip shop and theres lots of the same shops too as its in the main town centre
Well if you go for it good luck but as previous theres alot of hard work ahead of you
archer1204

Well if you go for it good luck but as previous theres alot of hard work … Well if you go for it good luck but as previous theres alot of hard work ahead of you



you right as ive just rang one of my friends and he said its gonna be a 24 hour headache lol so considering yet

thanks for advice all
Hi. There will be a lot of hours involved. The preparation of food ie will it be fresh fish or frozen. Where will you buy your ingredients for the dough. Drinks you will be dealing with apt of different suppliers. And as a new customer they will probably deal as c.o.d cash on delivery.
steandzoe

Hi. There will be a lot of hours involved. The preparation of food ie … Hi. There will be a lot of hours involved. The preparation of food ie will it be fresh fish or frozen. Where will you buy your ingredients for the dough. Drinks you will be dealing with apt of different suppliers. And as a new customer they will probably deal as c.o.d cash on delivery.



all the food will be fresh.
i will put some money aside for suppliers backup etc.
i believe to give cash upfront and not be buried in dept lol.
You will have to find a local fish monger who can supply you without any problems. If it was me I would be looking at the types of food that isn't being sold. See if that would attract some new customers. Maybe do a promo offer like 10% off with a completed survy. Are there lots of takeaways near you who offer fish and chips.
Start selling these... Parmo
Yeah, buy it, you sound perfect for it.
theres mostly pizza and chicken shops
There are several factors you need to consider. What is the rent/ rates of the business. Are you buying the business as a going concern, and if so does your friend owe any taxes he hasn't told you about, as you would inherit those debts.

A takeaway to turnover £1500 is very very slow. I've owned takeaways in the past and that would be considered turnover for a slow day. If you have no experience in catering, don't think it'll be easy.
£20k sounds fairly cheap, is that for the remainder of the lease? and if so how long is left on the lease? how much is rent and what are the arrangements for rent increases?

you could buy the business and continue with his current customer base and work from there?
£210 is the rent per week.
ive worked in takeaways so got a little bit of experience.
the rent for the shop is £210,
ill be buying the full business im not sure about the lease.
amir

the rent for the shop is £210,ill be buying the full business im not sure … the rent for the shop is £210,ill be buying the full business im not sure about the lease.



You should probably speak to an accountant/business adviser. The books and the legal side needs to be looked at finely before undertaking any business. You risk losing everything if the business ends up going under and cannot turn a profit. Only you can make a decision on whether or not you will buy the business, but there is a lot you need to consider and it doesn't just include suppliers and what consumers need. The financial and legal side is the most important part of the business.

The main thing is, you should only enter a business if you believe you can make the business thrive and turn over a good profit. Not the fact your friend is selling for £40,000 less than he paid. You have to ask yourself why is he taking that £40,000 loss? If I sold my business, I'd be pretty gutted if I made a loss. A turn over of £1,500 a week isn't great. You have to pay rent, staff wages, bills, suppliers etc out of that.

I would really suggest speaking to a financial/business adviser.
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deleted568030
Get a feel for it first, work alongside him for a month and see how many hours you'll need to put into it on top of the hours you work now. Is there scope to extend the opening hours? Is it open lunchtimes and evening only or all day Saturdays, or Sundays? If you know how the business runs you'll be able to see where you could do more. Is this a area you already have expertise in ? And definitely look to a business adviser for the financial advice. Good luck, I would always chose working for yourself over working for someone else if you can, you will never be more motivated to succeed
Edited by: "deleted568030" 16th Jul 2013
you sure its not £1500 gross profit per week?

£1500 turnover is ridiculous and probably wouldnt cover wages after rent, business rates, utility bills, vat and cost of goods
I think the value your friend has put on the business is little too high.. I'd reconsider.
Madferrit

There are several factors you need to consider. What is the rent/ rates … There are several factors you need to consider. What is the rent/ rates of the business. Are you buying the business as a going concern, and if so does your friend owe any taxes he hasn't told you about, as you would inherit those debts..



You are unlikely to inherit the debt, is it a company or just a sole trade. Sounds like a solt trade so you dont need to inherit the debts. If its a company, go to companies house and download the accounts and have a look at his figures.

Ask to see his accounts that are supported by his tax return and see what level of profit is made.

If the turnover is actually £75,000, if it increased even marginally you will need to become VAT registered. Factor this in when looking at his figures as it will damage your margins.

What equipement are getting sold to you as part of this deal, he will be unable to sell anything which is still on HP etc. Are you just getting the name? When does the lease run too. Can the lease be transfered without renegotiation?

Also your will be investing alot of money and time into this venture so please find an accountant you know to be good and get his advice. Even if this costs a little bit it is well worth it. As a poster said above, your friend is taking a £40k loss on this deal. thats alarm bells for me.

Ignore any typo's, just rushing back to work.
ibblackberry1

You are unlikely to inherit the debt, is it a company or just a sole … You are unlikely to inherit the debt, is it a company or just a sole trade. Sounds like a solt trade so you dont need to inherit the debts. If its a company, go to companies house and download the accounts and have a look at his figures.Ask to see his accounts that are supported by his tax return and see what level of profit is made.If the turnover is actually £75,000, if it increased even marginally you will need to become VAT registered. Factor this in when looking at his figures as it will damage your margins.What equipement are getting sold to you as part of this deal, he will be unable to sell anything which is still on HP etc. Are you just getting the name? When does the lease run too. Can the lease be transfered without renegotiation?Also your will be investing alot of money and time into this venture so please find an accountant you know to be good and get his advice. Even if this costs a little bit it is well worth it. As a poster said above, your friend is taking a £40k loss on this deal. thats alarm bells for me.Ignore any typo's, just rushing back to work.


surely as it is a food outlet, then it must be VAT registered regardless....?
ibblackberry1

You are unlikely to inherit the debt, is it a company or just a sole … You are unlikely to inherit the debt, is it a company or just a sole trade. Sounds like a solt trade so you dont need to inherit the debts. If its a company, go to companies house and download the accounts and have a look at his figures.Ask to see his accounts that are supported by his tax return and see what level of profit is made.If the turnover is actually £75,000, if it increased even marginally you will need to become VAT registered. Factor this in when looking at his figures as it will damage your margins.What equipement are getting sold to you as part of this deal, he will be unable to sell anything which is still on HP etc. Are you just getting the name? When does the lease run too. Can the lease be transfered without renegotiation?Also your will be investing alot of money and time into this venture so please find an accountant you know to be good and get his advice. Even if this costs a little bit it is well worth it. As a poster said above, your friend is taking a £40k loss on this deal. thats alarm bells for me.Ignore any typo's, just rushing back to work.



Surely if it is a Ltd Company (just guessing it may be) he is purchasing he would inherit any asset/ liability as part of the purchase?
don't rely on leafleting. it doesn't pay off and it just a waste.

You have to be different to what everyone else is doing.

Market research helps, ask local people what they'd like.

If the business isn't doing that well anymore then change the name also when you takeover to show its a new owner and not just 'under new managament'. you don't want the negatives from the past ownership to affect yours.
the take away has had 66% of it's value in the last 6 years.... and you have to ask if to buy it, a fool and his money

it takes a lot to build a good reputation and this business seems to of lost it otherwise your friend would be selling for more than he bought it for
csiman

surely as it is a food outlet, then it must be VAT registered … surely as it is a food outlet, then it must be VAT registered regardless....?



no, it must be registered if its turnover is over the limits c.£80k, it is optional otherwise.
Madferrit

Surely if it is a Ltd Company (just guessing it may be) he is purchasing … Surely if it is a Ltd Company (just guessing it may be) he is purchasing he would inherit any asset/ liability as part of the purchase?



If I were to guess i'd say it was a sole trade or partnership. However if its a company which has liabilities you would not buy the company you would buy the assets and the right to the trading name and put this in the shell that suits the new owner.
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