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Buying a Licensed Premises

The licensed trade industry is the third largest employer in the UK, generating millions of pounds each year in turnover and taxation duty.
By Tony French, Forum Manager

Buying a public house, club or restaurant can lead to one of the most rewarding professions. It is also one which deals with some of the most loss-intensive merchandise known to man: alcohol and cash.

Sound advice can save you considerable expense and effort at the time of purchasing a business and throughout the business year.

As with other businesses, careful attention must be paid to legal contracts, trading accounts, property values, stock control and other highly specialist areas.

An accountant will help you to understand a trading account as well as the various tax and financial implications of buying a business such as VAT rules. They will provide help and advice throughout the business's life on accounting systems and bookkeeping practice.

A surveyor will be able to advise on the correct price and suitability of your business premises. A building survey to check the physical condition of the property before buying is essential. More information can be found on the Royal Institution of Chartered Surveyor's site.

It will be necessary to obtain an accurate price for the stock in trade on the day of completion. A stocktaker will ensure the correct price is agreed for the stock in trade at the time of purchase and act as arbitrator if a problem occurs. Regular stock takes will

You may need to employ staff and you certainly will need to negotiate the purchase of the business and understand the legal contracts involved. A good solicitor will provide advice that is invaluable in understanding all these matters as well as assist in obtaining a Justice's License.

An insurance broker will also be needed. They will be able to offer advise and guidelines for the physical security of your business and obtain the best insurance for your circumstances. Some information on insurance is available on the Association of British Insurers' site.

Finally, a business banking account with suitable services will be necessary and a good working relationship with your bank manager will serve you well.

Remember, don't dispense with these professionals as soon as you are installed in your new business. The advice they can offer in relation to annual accounts, valuations, trading, tax and legal implications will be helpful in your everyday business life.

Tony French previously managed The Microsoft Network's UK Business & Finance forum, and is the Managing Director of AF Stocktaking.

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