Archive of Past ArticlesBusiness
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.
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
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
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.