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How to start up a newsagent

Remember that offering newspaper delivery is still very popular if you are considering opening newsagents. You can find help for starting and running your own business in our practical guide.

  • Do your research on your target market
  • And decide what you want to sell
  • Create a customer profile
  • Select your services
  • To be delivered to your home
  • Through the lottery
  • Purchase an existing business

Do your research on your target market

How to estimate demand

You must first determine whether the local market will support your planned newsagents business. Identify your competitors first. Consider the number of outlets that are already selling newspapers, magazines, and the products you will offer, such as tobacco and confectionery. Keep a list of outlets like WH Smith, large supermarkets, multiple-owned convenience stores like Tesco Express, and petrol stations.

Areas covered by the program

If you are planning to build your business in a certain area, it can be useful to identify and note down the different types of customers that live and work there. Making a list of the products and services you will offer will help you decide what type of business you want to create. You should consider locating your business in or very close to a residential area or in an area that has a concentration of offices and other workplaces. If you are located near a crowded bus stop or taxi rank, or inside a bustling shopping arcade, you can expect a lot of passing traffic. There may be an opportunity for your business to open late at night due to the trend towards a 24-hour lifestyle in larger towns and cities.

You don’t want to have to deal with excessive levels of shoplifting, break-ins, or theft. Check out the local crime rates as well.

Customers will choose your store because of these reasons

In order to succeed in your shop, you need to ensure that enough customers choose your store over existing ones. Examine the competition to find out:

  • They offer a wide range of products
  • As well as services
  • At different prices
  • And hours of operation
  • Based on the type of customer they are attracting
  • Attractive; are the facilities and fittings are modern and stylish

You may see that there is a void in the market for your business right away. Perhaps a new housing development has been built that does not have newsagents.

View upcoming developments

Ensure that there are no immediate plans to open a supermarket or supermarket-owned convenience store in your proposed area, or to build new road systems that mean local traffic will bypass your shop.

Discover what people want

In order for small independent outlets to compete, they must stay open longer. It is a fact of life that independent outlets are having difficulty surviving. It is very good to speak to as many local people as possible (after all, they will be the ones using your store) to find out:

  • The types of products they would like you to stock
  • And the best opening hours to accommodate them
  • What services they would support, such as delivering newsagents or groceries to their homes
  • If you offer services such as dry cleaning and shoe repairs, would they consider using you as a drop-off point?
  • In general, how do they view your proposal?
  • If there’s anything they dislike about their current local shops, tell us about it

A recent survey found that the most important reason given for choosing a local shop was the friendliness of the staff. Several of the customers are single people, couples with children, and retired people.

Following the friendliness of the staff, reasons given for using local shops included the long opening hours, wanting to support the local business, product availability, and speedy service.

Experience in the field

It may be possible for you to work part-time in an existing newsagents shop before you take the plunge and open your own business. The answer to this question will help you to decide whether you can handle the long hours and seven-day trading typical of the sector. Moreover, it will give you an idea of how many customers you are likely to have each day and how much they are likely to spend. You can then calculate an average per-customer ‘spend’ that will assist in estimating your monthly sales.

Legal and tax issues, plus current trends

  • Newsagents shopping
  • In the legal sphere
  • And the VAT rules

And decide what you want to sell

In large part, your product selection will be determined by how big your business is. From a kiosk, you will only be able to sell a limited selection of newspapers, tobacco products, and confectionery lines, such as chewing gum.

The display of newsagents and magazines may be possible along one wall of your premises if your premises are sufficiently spacious. Although newspapers and magazines are available in convenience stores, you will be establishing yourself as a specialist newsagents, so it is important to be able to offer a variety of publications to attract customers.

In addition, you should be able to display a large number of magazines without overlapping too much. The process is called full-facing magazines. Your customers will not be able to see clearly what is inside, which will hurt your sales since most magazines are impulse purchases.

You will probably also carry confectionery and tobacco products in addition to newsagents, magazines, and comics. Today, many newsagents sell a variety of items, including:

  • Greeting cards, stationery, and stamps
  • As well as toys
  • Books
  • Frozen treats
  • Bread, milk, and other grocery items
  • Such as sandwiches and snacks
  • That contain sugar
  • And alcoholic beverages
  • Holiday products such as fireworks and Hallowe’en products
  • Are available on mobile phones, pay-phones, and travel cards
  • There are a variety of items such as tights, DVDs, computer games, etc.

The demand for some of your product lines will be especially strong at certain times of the year. You will sell a lot of greeting cards during Valentine’s Day, Mother’s Day, Father’s Day, Easter, Christmas, and other important celebrations, such as Eid and Diwali. You will sell a lot of chocolate during Easter and Christmas. Be sure to order enough stock to meet the increased demand during these times.

Ideally, your customers will visit your shop very frequently even if they only spend a little money.

Create a customer profile

Based on your target audience

You may have a few different types of customers, such as:

  • The working-class and commuters. The people you serve may not live in the area but will buy their daily paper from your shop, as well as their lunch items, drinks, snacks, and tobacco products.
  • Residents, such as young families, elderly people or unemployed people, who live in the area most of the time. Children will be among these customers, buying sweets and comics with pocket money
  • Local residents who work elsewhere and return home in the evenings and on weekends. While they may buy their weekday papers elsewhere, they will come to you for weekend papers, magazines, and, if you are open late, for things like confectionery, cigarettes, and essentials like milk and bread.
  • Newspapers and trade journals that are regularly ordered by local businesses
  • Will be delivered to you, provided you have access to parking
  • For the trade customers, you supply with discounted newsagents
  • If you are located near a tourist attraction

Different categories of customers may buy different types of goods and services. The majority of your customers will be regulars, with whom you will build up a personal relationship. Some of your customers might be interested in a delivery service to their homes or offices.

Describe the payment methods.

Customers can pay you by:

  • Most of your customers are likely to pay in cash as they spend only a small amount each time they visit you
  • With a debit or credit card. Even for small purchases, customers prefer this method of payment, particularly since ‘contactless’ payment is becoming more widespread – starting in 2020, all retailers who accept Visa payments will have to use contactless terminals
  • In the case of a newsagents delivery service, your customers will pay you weekly by check. Your trade customers may also pay by check.
  • Discounts and special offers are available.

Some lines might be discounted or you may offer ‘two for the price of one’ promotions. By doing so, you might attract more customers and make more sales – or, on the other hand, you might not receive any extra income as a result! Look at the local opposition for ideas and be sure to watch your special offers closely to make sure they are working.

Select your services

According to quality standards.

Since consumers have become used to the standards set by supermarkets and other multiple chain retailers, it is crucial that you:

  • Check that the shop is clean, tidy, and professionally designed (don’t forget to look at the outside of the shop – smart paintwork is important).
  • It should have well-stocked shelves.
  • Do not display outdated newsagents and magazines.
  • Make sure the products are of good quality. Fresh items, such as fruit, vegetables, bread, and milk, should be prioritized. Any items past their expiration date should be thrown away.
  • Staffed by knowledgeable and smart individuals – remember how highly customers rate friendly service when asked why they use local businesses
  • With a high level of customer service

Among the services to consider

It is ideal for your business to offer local customers as many of the goods and services they need as possible. It will be your goal to increase foot traffic all the time by appealing to as many potential customers as possible. Someone who just pops in for newsagents or a lottery ticket might end up buying a lot of things. Perhaps you could offer:

  • Newspapers delivered to their homes
  • Tickets to the lottery and scratch cards
  • Collection and delivery of dry cleaning or a shoe repair
  • The demand for DVD rental remains in some areas even though shop-based DVD rental is much less common than it once was due to the rise of rent-by-mail and online streaming subscription services.
  • Copying/photocopying
  • A kiosk is also an option.
  • Utility bills can also be paid there.
  • ATMs can also be used.
  • Top-ups can also be made for mobile phones.

Also, you may want to offer your customers an ordering facility for any magazines you don’t stock regularly.

Consider how you can organize your shop to convince people to purchase more than they had originally intended. The placement of everyday items such as milk at the back of the shop, for example, means that customers who frequent the shop regularly must walk past other products as they approach the register.

Additionally, you may wish to consider becoming a local Post Office or the main Post Office. To learn more, visit the US Post Office website.

Promote your business

Your potential customers must be aware of you and your product ranges, no matter what services or products you provide.

You can make it obvious outside your store if you are going to feature long opening hours or 24-hour opening. It’s important to make it clear that you sell newsagents and magazines if your displays aren’t easily visible from your door or window.

Also, you can use your shop window to advertise any special offers or promotions you will be running, or to promote any new services or product lines you are introducing.

Have a leaflet printed that describes some of the unique features of your business and hand it out to local residents and employers.

When possible, keep the door of your shop open to welcome customers.

To be delivered to your home

How to start up a newsagent

Several of your customers may be interested in getting their newspapers delivered to their homes. It is important to note that local council bylaws regulate the employment of young people, so you should be aware of this if you plan to employ schoolchildren to deliver newsagents. Generally, these specify that employees must be 13 years or older and limit the number of hours a child can work each day. You are responsible for ensuring that any child you employ is registered with your local authority and has a work permit (most councils require businesses to obtain a child employment permit before they can employ school-aged children).

It is crucial that you arrive at the premises very early in the morning to:

  • Receive the papers that have been delivered
  • Delivered, and make sure all the deliveries have been made

Ensure that each of your deliverers has a bag or trolley. Vans and drivers may be needed if you plan on offering delivery services further afield.

During the week, you will keep a record of each customer’s daily orders, and at the end of the week, you will prepare the customer’s account to give them a bill. It will be important to charge the customer the right price every day – newspaper price wars can sometimes cause paper prices to be reduced at very short notice.

Along with your delivery personnel, you will also need someone you can trust to collect the weekly payments from householders.

What should you charge?

In an ideal scenario, the amount of money you charge each week to your delivery clients should cover the cost of providing the service; otherwise, the cost will eat into your margins on paper sales. It is likely that you will have to subsidize the costs to some extent to maintain customer loyalty.)

When estimating the cost of the service, be as accurate as possible by estimating the following:

  • The wages of the delivery personnel
  • And insurance costs
  • Associated with trolleys and bags
  • As well as motoring expenses (if applicable).
  • Invoices, receipts, and round book (if applicable).

In an ideal world, the charges would also contribute to your administrative and overhead costs. Someone will need to set up the paper rounds in the mornings and prepare the bills at the end of the week.

Calculate the total cost of the service, then divide this by the number of customers you expect to serve. Calculate the fee per customer per week by dividing this number by 52. On the next paper invoice, include this charge.

A number of newsagents provide home delivery as a service without trying to recoup their costs. Check with different newsagents to see what the average charge is in your area and then compare it to the figure you calculated. Depending on the difference between the two figures, you will need to decide whether to:

  • charge your customers for the difference
  • between the two figures; or reduce the charge
  • It depends on your ability to provide the service for less than what it costs you

A great deal of information is available on the National Federation of Retail Newsagents (NFRN) website about running a successful home delivery service.

Through the lottery

Consider applying for a National Lottery terminal so that you can sell National Lottery tickets and scratch cards to your customers in exchange for a commission. The terminal is free of charge.

The main advantage of having a National Lottery terminal is that it brings people into your shop, and while they are there they are more likely to buy something else.

There are a few things that can be a drawback, such as:

  • On draw days, when the jackpot is particularly large, large queues may put off other customers who do not want to wait.
  • There may be a queue for National Lottery tickets that blocks the path to magazines, confectionery, and other products, so customers look elsewhere
  • Shoplifters can more easily steal from a queue because all the staff is busy and they cannot see the shelves clearly
  • It can be problematic if a lot of people visit your shop the morning after a draw to claim their prize money

When selling National Lottery tickets, you should treat the commission as ‘Cash sales’.

The health lottery commission is the same.

As an alternative, you can sell tickets for the unrelated Health Lottery, for which you’ll need to install an e-payment terminal. Visit the Health Lottery website for more details.

Purchase an existing business

Instead of starting a newsagents shop from scratch, you might decide to buy an existing store. The benefits of buying an existing store include:

  • You already have a store and equipment
  • As well as established customers
  • So you can start earning money immediately
  • Once suppliers have been identified and relationships established
  • If you are seeking financing, the business has a track record that can help
  • Secure financing

Look critically at any business that you are interested in to make sure you are negotiating a fair price with the seller. Determine why the business is for sale – for instance, is the owner eager to retire, or is there another personal reason behind the sale.

Market research into the sector and the locality will help you determine whether the owner is selling because he or she cannot generate enough income from the business. Many business people are confident that they can turn around a failing business, so you may not be deterred. It is important to establish the current position so that the price you pay for the business is not too high.

You should also consider:

  • How the building and equipment are maintained. If you need to refurbish or replace assets, how much will you spend?
  • If you are purchasing stock, what is its condition? Examine it carefully before agreeing on a price. Ensure that all tobacco products comply with current packaging laws and are authentic.
  • Respect existing employee rights.
  • Maintain key personnel once you have taken over.
  • Is there money owed to the business that will be your responsibility?
  • To what extent is goodwill influenced by the seller’s skills or personality if you are paying for it

The accountant should examine the business accounts for the past three years and discuss the selling price in light of what the accounts reveal. You should budget for other professional fees, such as legal fees and valuation and survey costs.

Related:

Buying a business: Newsagents

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