There is a considerable risk in selling or buying a newsagency using a regular real estate agent. They often do not understand the specialist requirements for managing the change of ownership of a newsagency. I have seen serious mistakes made which have cost one of the parties a sizeable sum.
Buying a newsagency is a complex transaction which can be easily mishandled. It requires good industry knowledge, supplier connections and an attention to detail.
While I am not about to recommend one broker over another, I do recommend that newsagents selling and prospective newsagents buying do so from an experienced specialist newsagency broker.
There is also a danger with an informed broker. I nearly bought a newsagent business based on numbers the broker told me were right which turned out to be misleading. Sure a broker who knows how to deal with newsagent suppliers is helpful but he has to be ethical as well.
We are keen to buy a small residence/shop- the current couple are retiring and selling the lot. We have the option to close the business and lease the space, or continue with the newsagency. They are asking $55k for the business but we are unsure how to value it. They said stock only worth $7k (mostly magazines), but want $5k for old computers. The whole place is pretty old/run down but in great location. We’d like to continue to the newsagency, plus sell coffee..only we’d like to get a true valuation of the business and try to negotiate it. Any hints on how to value the business would be most welcome. How much would the software be worth?
Sarah, Look at the P&L for the business. Its profitability will guide you on price. As for the software, if it is the current version then the software company could guide you on a price. If it is not the current version then it has no value.
Regardless of the above, a business is only worth what someone is willing to pay for it.
In SA Nasa services has closed so if we want to sell we have to go “outside” the industry and that is a problem because as Mark has stated, it is a complex issue dealing with the sale/purchase of a newsagency.
The fact that the Advertiser has had all the delivery round customers “migrated” back to the Advertiser and newsagents no longer “own” the customer is probably the reason NASA has closed their doors – nothing left to sell as in SA 93% of newsagents are distribution only (no retail involved) Beware other States as this is surely coming to your town too.
Thanks for the advice. This is what I thought about computers/software- no matter what they paid for the computers- my guess is that they have devalued rapidly.
The current owners said it is necessary to have an interview with Fairfax/Telegraph to be able to become a newspaper seller. Where can I find this information on the internet?
I wasn’t sure where to put this so instead of hijacking a current thread i bumped this one in the hope someone can answer my question.
We’re actually in the process of selling our shop and i remember the subject came up not so long ago (which i couldn’t find) of a reimbursment that we may be entitled to from the magazine companies that we paid them when we purchased our shop.
Unfortunately around 6 years ago we copped pretty bad flood damage and we lost all our records for the shop from the years before that so we have no documentation on how much we actually paid and what we’d be entitled to (if anything)
So if Mark or anyone else could give us an answer and how we’d go about it we’d greatly appreciate it.
None with Gotch, however the major newspapers and Network hold deposits.
Just off the top of my head…
🙂
Steph,
I am in Victoria so other states might be different.
We had to pay an estimated 1 month’s sales to Network as either cash or bank guarantee. We also had to pay a bond to Wrapaway. They were the only one’s.