, Retail
A woman signs a lease on a 780 square foot unit in a Yorkshire market town on the second of March, with a plan to open on the first of April. She has the stock ordered, the shopfitter booked and a sign designer waiting on a file.
She opens on the nineteenth of May. The two things that cost her seven weeks were an electrical supply that needed upgrading and an advertisement consent application she did not know existed. Neither of them was expensive. Both of them had a queue in front of them.
The lease commits you before anything else does
Signing is the point of no return, so the questions worth asking are the ones that come before it.
Term and break. A five year term with a tenant-only break at year three is a different business proposition from a straight five. Breaks are frequently conditional on vacant possession and on payment of all rent due, and those conditions are enforced literally.
Security of tenure. Business tenancies carry a statutory right to renew under sections 24 to 28 of the Landlord and Tenant Act 1954 unless the parties contract out, which requires the landlord to serve a prescribed warning notice and you to make a declaration or a statutory declaration before you commit. Most retail leases are contracted out. Whether yours is decides what you own at the end of it.
Repairing obligation. A full repairing and insuring lease on a Victorian unit means the roof is your problem. A schedule of condition annexed to the lease, agreed before you sign, is the cheapest insurance you will ever buy.
Rent deposit, personal guarantee, service charge cap, permitted use, alterations, and whether you can assign or sublet if it goes wrong. Planning use Class E, introduced on 1 September 2020 in England, covers shops, restaurants, offices, gyms and clinics in one class, which means many changes of use inside it no longer need planning permission. It also means your lease's permitted use clause, not the planning system, may be the thing restricting you.
The obligations that start the day you get the keys
Business rates begin on occupation and often on liability rather than trading. Look up your rateable value on the Valuation Office Agency website before you agree a rent. In England, small business rate relief gives 100% relief where the rateable value is below £12,000, tapering to nothing at £15,000, and it applies only where you occupy one property, with limited exceptions. Scotland runs the Small Business Bonus Scheme and Wales its own scheme, with different thresholds. These are set annually, so check the current year.
Insurance. Employers' liability cover is compulsory from your first employee under the Employers' Liability (Compulsory Insurance) Act 1969, with a minimum of £5 million, and the certificate must be available to employees and inspectors. Public liability is not compulsory but is effectively unavoidable in a shop the public walks into. Then stock, contents, glass, and business interruption, which is the one people cut and then need.
Utilities and connections. An electrical supply upgrade, a three-phase connection or a new meter runs on the distribution network operator's timescale, not yours. So does a business broadband installation if the unit has never had one. Start both the week you sign.
Fire safety. The Regulatory Reform (Fire Safety) Order 2005 applies to your shop. You are the responsible person, you must carry out a fire risk assessment, and since 1 October 2023 you must record it in full regardless of how few people you employ.
Signage. Most shop signs need advertisement consent under the Town and Country Planning (Control of Advertisements) (England) Regulations 2007, with equivalents in Scotland, Wales and Northern Ireland. Some fall under deemed consent, but illuminated signs, projecting signs and anything on a listed building or in a conservation area generally do not. The application takes weeks. Putting the sign up first and applying afterwards is how you meet your local planning enforcement officer.
Taking money is a project of its own
Card acceptance has two moving parts and both have lead times. The merchant account with an acquirer requires underwriting, identity checks and sometimes a look at your projected turnover. The terminal or the gateway has to be ordered, configured and tested with your till.
Read the terminal contract separately from the acquiring contract, because they are frequently with different companies. Terminal rental agreements commonly run for 36 or 48 months, are non-cancellable, and auto-renew. The headline transaction rate you were quoted is usually the smallest number on the statement.
Your electronic point of sale system needs to exist before opening day and needs its product file built, which is the task everybody underestimates. Every line needs a barcode, a description, a cost, a price and a VAT rate. Getting the VAT liability right at the till is what makes a retail scheme work later, and a shop selling a mix of standard rated, zero rated and reduced rate goods that guesses at the till will be guessing on its VAT return.
Add a bank account that exists, a merchant account that settles into it, and a float in actual coins, which somebody has to physically obtain.
The regulated bits nobody tells you about
A shop is a workplace and a public place at once, and the obligations stack up quickly.
- Consumer law: the Consumer Rights Act 2015 governs refunds and quality, the Price Marking Order 2004 requires selling prices and, for many goods, unit prices to be displayed, and Trading Standards enforce both. If you sell anything age restricted you need a refusals policy and till prompts before you sell the first one, not after the first test purchase.
- Everything else: waste duty of care under section 34 of the Environmental Protection Act 1990 with a registered carrier and transfer notes, a music licence from PPL PRS if you play anything audible to customers or staff, UK GDPR registration with the Information Commissioner's Office if you process personal data, a first aid provision and an accident record, and PAYE registered with HMRC before the first payday.
Staff need contracts, or at least a written statement of employment particulars, which since April 2020 must be given on or before the first day of work. If you are opening with three people and two of them are new to retail, they need to have used the till before a customer is standing in front of it.
Nobody plans the soft opening and everybody needs one
The last item on the list is a week you have not costed: trading quietly before you tell anyone.
Open the doors without announcing it. Serve real customers at the real till with the real card machine. You will find that the product file has forty lines that scan as unknown, that the card terminal loses connection when the door is open, that the queue forms across the doorway rather than along the counter, and that the stockroom layout means the thing everybody wants is at the back.
Fix that in a week where nobody is watching, then do the launch. A shop that opens loudly with a broken till trains its town to try it once.
Where this shows up in the game
Shops are part of Business Baron's full game, and e-commerce is one of the five business types in the free game. Fitting out a unit is a project rather than a purchase: works take months you can see in the cash flow, consents come from bodies with their own timetables, and rent and rates run on a unit that is not yet earning. The order you do things in decides when you open.