What running costs should I check before buying a convenience store?

The price of a convenience store is only the start. What you will live with is the monthly cost of keeping it open. Sellers’ summaries often show sales and a profit line, and some of the ordinary costs sit quietly in between. Go through the cost lines one by one with the seller and your accountant, and ask for the records behind each.

The lines that are easy to miss

Start with rent and the other costs of the premises, then power for coolers and freezers, which run all day. Add card-processing fees, insurance, security and equipment repair. Ask for a year of actual bills rather than a summary, and ask whether anything has changed since, such as a lease renewal or a new processing contract.

Shrink and theft

Stock that is stolen, spoiled or expired never turns into sales. Ask how the seller tracks it, whether counts are done regularly, and what is written off. A store with no record of losses is not a store with no losses. Read how to check the numbers behind the sales alongside this.

Whose labour is missing?

Many small stores run on the owner’s long hours and on family members who are not on the payroll. If the numbers show no wage for that work, you will either have to do it or pay someone. Ask who works which shifts, then ask your accountant to adjust the picture so it shows what a paid manager would cost.

A short list to bring to the seller

• Twelve months of bills for premises, power, insurance and processing.
• A schedule of who works each shift and how each person is paid.
• Records of stock losses and how they are counted.
• Repair history and the age of the main equipment.