Newsagents for sale

P

pureirish

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I've been looking at buying an established newsagents in a good location. However based on the figures I've been provided with I think the sale price is way too high (by 30 - 40%) and want to negotiate a better price. However as I have no basis to put my calculations against I could be wrong.

Does anyone know the usual net profit (after tax) multiplier that should be applied to arrive at a realistic sale price? Or is there any other calculation that I could use?
 
In fact any advice at all from someone who has gone through the process of buying an existing retail business would be much appreciated.
 
A lot of people think that it is easy to run a shop. They lose a lot of money in the process.

If you have not managed a similar shop and if you have not had responsibility for the profitability, then you should walk away from this.

Brendan
 
Brendan - Well put for a Good answer. Running a cash business you need eyes in the back of your head. And a newsagent is not a highly profitable business unless in an area near a college where there is a constant trade for approx 7 months.
 
This particular newsagents is in one of the largest shopping centres outside of dublin and has a high footfall. It wouldn't be a very highly profitable business, but does look on paper to be a good investment that will turn a reasonable yrly profit if I can negotiate a decent purchase price.

I do take your advice on board though Brendan, thanks.
 
Having owned and run a newsagent in the past (for 8 years) i would take time to seriously consider your next move. Wouldn't recommend it ! ever decreasing margins, ever increasing competition . Independents are sadly a thing of the past. I knew of a guy in Fairview who had the misfortune of a new centra setting up from scratch beside his long established newsagent ,and within 6 months he was shut down,even though he fought back by pricing more competitively than centra he still lost his business. Good staff are a nightmare to find in this business. constant turnover of staff re-interviewing etc very laborious and time consuming. Easons and newspread are terrible to deal with and tally up with .thieves and junkies constantly looking for an opportunity. long hours ,early mornings. the list goes on .while there are alot of very profitable newsagents around my advice would be to approach spar/centra with a view to becoming a shop owner.they are always looking for owner /managers with "up and go" and cash of course.This would be the safest and most prudent option if you feel you really want to go into this field.I went from newsagent to coffee shop/café and have never looked back ! while cafés have hassles too I think newsagents have alot more. Good Luck and remember Don't jump in too quickly the seller may know something you don't.
 
Thanks Gobstopper. The current owner warned me about Eason and Newspread alright. Good staff are in place, but I agree, in a business like this they up and leave all the time which would be a complete pain in the ass.

If I'm honest, running a newsagents isn't something I've ever considered before. This opportunity just presented itself and has made me think.
 
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