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Issue 6
| Buying a Newsagency 5 |
BUYING A NEWSAGENCY – 5
Following on from the last newsletter we covered getting the lease checked, the exchange of contracts (no turning back now) completion of the business plan and initial training with Lotto & Post Office.
Now for the real fun begins!
If you have exchanged a standard newsagency style contract – (make sure you check yours if not dealing through a specialist newsagency broker) – then it will have in it a provision for the minimum amount of training that the owner must give you BEFORE you take over and afterwards.
Please note that the times can be varied by agreement and you should always aim to get as much training as possible before you take over (sometimes the old owner may “forget” to explain things fully after settlement because their mind may be on having a holiday or such).
With us we always aim to have a minimum of 3 weeks this gives the new owner at least two goes at everything before it’s theirs.
Perhaps it’s a bit late to put this in but remember when you were negotiating Goodwill? Guess what? Now is the time that it will either pay off or pay out. What do we mean I hear you ask?
If you negotiated reasonably and paid a fair price for the goodwill then the owner may be encouraged to give better than normal training and may even allow you access after exchange of contracts for intermittent training.
On the other hand, if you were over aggressive with the negotiations and forced the owner to accept much less than warranted, then you may find that the training is very scant and limited to the agreement.
This could cost you far more than the money you “saved” by reducing the goodwill. Think about it. Would you really feel inclined to help someone that you believe has taken advantage of you? Would you really?
Suppose that in the “excitement” of the handover the old owner neglected to explain fully the way and timing of magazine returns – you may not be aware of the importance of this at the time and with the tremendous learning curve that you are now on you may not recognise how this can dramatically impact on your cash flow especially at startup time.
If you do not return the magazines by the return date you are not entitled to the credits – which means that you have just lost money. If you keep on doing this each week because you were not aware of it, it can end up costing you far more than the money you saved on the goodwill.
Goodwill is what it says it is – Goodwill.
Many old owners are happy to stay on hand for a month or so and may even be happy to give you holiday breaks – this is very important as you need to get a break from the front line of running your very own business.
This concludes the series on Buying a Newsagency. Next we will turn to other topics - in the meantime there are numerous things to consider when buying, that’s why you should deal with a reputable specialist broker such as ourselves.
Contact us and we will happily answer your questions.
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