Business In The South West
Business is booming in South West England. With more than 1,218 private sector companies per 10,000 people, it’s plain to see that folks in this part of the country are willing to work hard to make their money.
A significant portion of these businesses belong to the agricultural, manufacturing, and construction industries. More than 5% of them are retail companies. This shows that there is a tremendous amount of potential for shops and stores to succeed in Bristol, Bath, and the surrounding area, and many have already taken their slice of the pie.
And now it’s your turn.
We’ve had the opportunity to work with a lot of new stores over the years. This experience has given us a unique insight into the difficulties retail business owners can face. We’ve decided to share this information to make your journey a lot smoother.
With Bristol’s busy Gloucester Road as a case study, we’re going to explore the costs and risks with come with a shop in this area. Along with some information to support you in your loan application.
It’s no secret that running a retail store in the South West isn’t a cheap business. The amount of shops that close within their first year is a testament to the struggle owners can face. We’ve broken down the costs a typical shop will have to incur to open on Gloucester Road, though this may cost more or less for you. There are a considerable number of factors that influence this.
The Commercial Space – £18,000/year
You won’t be able to open a retail store without a building. Most small business owners choose to rent the premises for their first store. At the time of writing, we’ve been able to find 1,100 sq ft on Cheltenham Road for £18,000 per year. This isn’t a hugely spacious unit, having been used as a book keeper’s store for many years. You’re likely to end up paying more than the advertised price by the end of your first year.
The Local Business Rates – £15750/year
Business rates are complicated, with a lot of companies struggling to understand why they have to pay so much. These rates act in a similar way to a tax and only apply to those using non-residential properties. They are usually based on the value of the building or space you occupy. Some costing far more than this unit, and others being a lot easier to stomach. The old business in this building was paying £15750 each year.
Business Formation – £100
You can choose to do all of the paperwork to get your business VAT-registered and set up as a limited company, but for £100 it makes sense to have someone else handle this for you.
Stock, Employees, & Store Fittings
This next area is harder to work out than the others, but you will still need to get your hands on stock, employees, and furniture for your business. This means that you have to factor all of this in. This will all be much cheaper if you plan to work on your own or make the goods for yourself. The size of your store and the type of products you sell will also influence these costs. Businesses that sell high-priced goods having to spend more at the outset.
There are plenty of other costs that come with opening a store. You will need to market the place, get a website and graphics ironed out. Then cover all of the other little pieces which form to make your store. This won’t be cheap, and many new business owners are shocked to find just how much this can all work out to.
The Overall Costs Per Year: at least £33850+
As you can see, taking on a store like this on Gloucester Road will set you back at least £33850. Once you’ve covered things like stock and the additional costs, you’ll probably be looking at something closer to £40,000 for your first year. This is far more than most people make from their regular job. This is why so many new businesses look for commercial loans to help them out.
The Risks & Challenges
Starting a business in the South West will always come with some risks. Even those who have experience with projects like this will be entering uncharted territory when they begin their retail journey. You must consider the risks and challenges you might face, and we’ve explored some of them below to give you an idea of what may lie ahead.
Not Enough Customers: When you forecast your potential earnings, most business owners will be relying on a set number of customers coming through their doors. Even in busy areas, like Gloucester Road, it’s impossible to guarantee that your retail venture will be popular.
Unexpected Transactions: Along with considering the number of customers you will have, your forecasting will also be based on the amount of money they spend. If you have a lot of customers spending small amounts, you could find yourself worse off than having fewer customers spending more.
Running Out Of Funding: Even with all of the work you’ve done to start your store, you can’t always ensure that you will be able to fund your way through the first year. Offering invoice finance, merchant cash advances, and commercial loans, Pinnacle Business Finance is here to help. If you run into this challenge get in touch.
Bills & Legal Issues: Bills and legal issues can often come as a costly surprise to retail business owners. There are a lot of things that can go wrong in this sort of business. You need to be prepared to face them as time ticks on.
Feuds & Arguments: You will have big ideas for your store when you’re first planning it out. Your local council might have different plans. Making changes to your building can be contested by local residents. Councils often reject applications with little basis. This could have a serious impact on your business, making it well worth considering.
The type of products you sell, the location you choose, and the way that your business operates will all influence the types of challenges and risks you might face. It’s always worth taking the time to consider this. The most prominent issues you might face being much easier to solve if you have prepared yourself for them.
Finding A Commercial Loan
Let’s face it; most people can’t afford to fork out more than £40,000 to start their retail business. Instead, it’s incredibly common for small store owners to look for funding to get them on the right path, and this is where Pinnacle Business Finance comes in.
Our expert team based in the South West has a wealth of experience. When it comes to brokering and securing loans for SMEs. We use this know-how to meet your financial needs. We offer free telephone consultations to get an idea of your requirements, working extremely hard to find business loans that work for your company.
Give us a call on 0117 2510048 or use our convenient contact form to get in touch; our friendly team is happy to help, no matter the size of your business or it’s financial needs.