Find the right business for you

Modern technology means that anyone can access businesses and properties for sale…any time, any place, anywhere. However, the sheer number of opportunities can be bewildering. So, which one is right for you?

Freehold

With a freehold purchase, you can enjoy the freedom of operating your business on your own terms and in your own style, with the added bonus of having equity to fall back on (in terms of bricks and mortar). The ability to negotiate discounts on stock and manage outgoing costs can mean that any increase in turnover increases profitability and, in turn, increases the value of your asset.

An owner selling a freehold will have the choice of disposing of the entire freehold or engaging Sidney Phillips to create a new free-of-tie lease or tenancy. The latter approach means the owner will receive both a lump sum (paid by a purchaser of the leasehold business) as well as an ongoing rental income (from the new lessee). Furthermore, the owner retains the freehold interest which can be sold at a later date, if required.

Sidney Phillips works closely with a number of major investment companies and private individuals who seek to acquire top class licensed premises in order to expand their investment portfolios. At present, there is high demand for freehold premises with tenants of lease agreements already in place and generating a rental income. To see our investment opportunities for sale. To see our investment opportunities for sale, click here.

Tied & Partial Tie Leasehold

Many leases for sale will be subject to trade ties from a nominated supplier (in most cases a brewery or pub company acting as the landlord), meaning that you have to buy certain stock from them. Buying outside of this agreement can land you in hot water! The lease will govern, to an extent, the basis on which you operate the business and, more often than not, will stipulate your obligation to maintain fully the entire premises and insure against all property and trading risks at your own cost. The fundamentals of a tied lease are that you pay a premium for the lease upon acquisition and a rent for the duration of the lease.

Leasehold businesses are often acquired on an assignment of an existing lease, when a purchaser acquires the remaining period of the lease from an existing lessee. Under the Landlord & Tenant Act 1954, the lease will normally be automatically renewable which should provide the lessee with considerable security of tenure, providing the landlord does not want the property back for their own use or occupation, development, or because the lessee defaults on the lease terms.

To find leasehold premises for sale, click here.

Free-of-Tie Leasehold

A free-of-tie lease will come with similar, if not identical, terms to a tied lease, but with the caveat that you can purchase stock from wherever you desire. The ability to negotiate trade discounts will inevitably make the business more profitable, so expect to see a stronger demand and potentially higher premiums for such leases. As free-of-tie leases are more desirable, a purchaser will need to make sure they are ready to proceed with a purchase quickly; these leases often get snapped up.

To see a range of leasehold premises for sale, click here.

Do your research

Prior to viewing a business for sale, it is imperative to do your homework. All of the headline information you will need will be noted on Sidney Phillips's sales particulars (available online or to download) but, in addition, it is worth considering the information provided below:

- Does the location suit you? Is the business close enough to your required amenities such as schools, nurseries, rail connections etc?

- What is the local economy like? Are there plenty of high disposable income families in the area? Do the demographics provide you with sufficient opportunities to draw in custom? Are new houses being built in the area?

- What is the nature of the competition? Think outside the box, as many businesses have diversified in recent years with. For example, a greater number of public houses now offer rooms to let and compete with hotels and guest houses.

- What are the Unique Selling Points of the business? Can you maintain or expand on these USP to add value to your asset?

- Does the asking price fall within your budget?

Assess affordability

The cost of buying a business is not just the asking price, you will need to consider other initial costs such as purchase of stock, legal fees, surveyor’s fees, accountancy fees and licensing fees. In addition, you must ensure you have enough in reserve as working capital. If you are purchasing a leasehold business, you will need to demonstrate to the landlord that all of the above are covered in addition to the purchase price.

If you do not have these funds available in cash, you will need to raise finance. You should do this well in advance of starting your business search to prevent wasted effort in looking at businesses you simply cannot afford to buy. Specialist business mortgage brokers such as Sidney Phillips Business Mortgages have access to High Street banks at favourable rates as well as specialist lenders.

Our team will provide you with initial advice as to whether or not that dream business opportunity is within your potential budget and will guide you through the entire application process.

Making an offer

Having done your research, viewed the business or property for sale and ensured you have the necessary financial resources to proceed, you are ready to make an offer.

Assuming Sidney Phillips is the acting agent, we will request your offer in writing/email and discuss it with our client who will accept, decline or ask us to negotiate accordingly.

At this stage, you will need to provide proof of finance, illustrating your ability to purchase the business. This can be in the form of a bank/building society statement, a letter from your solicitor confirming total funds, an official bank letter or a finance loan offer.

Legalities

Once an offer has been accepted, Sidney Phillips will request details of your solicitor and details of the purchase vehicle (ie. Limited Company, Sole Proprietor or Partnership). If you do not have a solicitor to hand that specialises in licensed property and business transactions, we can recommend tried and tested firms. Heads of Terms, outlining the agreed terms of sale, will then be issued.

Your solicitor will undertake various due diligence tasks on your behalf, including financial, commercial and property enquiries, to ensure you know what you are buying.

In parallel with all the above, you will need (with the help of your solicitor/business advisor and accountant) to prepare and organise your business affairs, including but not limited to the following:

- Registering your trading entity: Sole Trader, Partnership, Limited Liability Partnership or Limited Company;

- Register with HMRC for Corporation Tax and VAT purposes, as well as staff PAYE;

- Secure supply agreements;

- Decide on changes to branding, marketing and promotional material;

- Set up your business banking;

- Organise your technology - EPOS, phones, PDQs etc;

- Organise suitable insurances – Sidney Phillips Insurance can assist in finding suitable packages at competitive rates;

- Check your utility suppliers – Utility Helpline can assist in identifying or sourcing a supplier and lowering your future outgoings

Once the above have been done and contracts agreed, you are ready to exchange contracts and complete on the sale.