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In Britain there are quite a few hotel agents who cover the whole country, such as Robert Barry and Christies. Give them a ring and ask for their catalogue of hotels and guesthouses or pubs. This will give you a good general view of size and prices. If you see anything you like, ask for the sale particulars. Catering magazines like The Caterer, Licensee and Freehouse also publish advertisements placed by agents selling hotels.
There are many websites on the Internet that feature hotels/guesthouses for sale. Christies, Robert Barry, and Knight Frank, Buyahotel.co.uk are a few.
If you are looking specifically in your area there should be agents locally who will also deal with hotels and guesthouses. Look in The Yellow Pages and give them a ring.
Having found a few businesses that really appeal to you, then mess about with some figures first. Do your own cashflow forecast to make sure you can afford what you're looking at. The large agents will give some advice on this. You may be able to afford a bigger place than you imagine. It depends on turnover and profits. In our own case we underestimated the outgoings when we came into the business. It's amazing how much goes out compared with what comes in! We made 55% profit in our last year but that was only because we didn't spend much on the business; and if you want to keep in shape you have to put money back into refurbishment every year. You can generally only see the business books after the viewing.
VAT is a thorny problem. The current VAT threshold currently is £58,000 (2005). This is on turnover not profit - on a month-by-month basis; total twelve months back at the end of each month and if you hit the level then you have to register. VAT deserves an article all on its own. Take ADVICE but if you can only earn say £10,000 over VAT then maybe it's not worth it. Rather take a couple of months off! You will be fined if you go over without registering.
Your overheads could include: mortgage, food & bar, rates, insurance, repairs & replacements, heat & light, cleaning, TV license, stationery & post, advertising, telephone, car - traveling, subscriptions, legal & professional. - accounting, sundries, bank interest, loan interest, HP interest, leasing charges (phone, machines), depreciation - vehicles, depreciation - fixtures & fittings. Remember, you don't have to pay a stamp for staff if they earn less than around £90 a week (check with your local Tax Office) so it might pay to use a couple of part-timers if you don't want a lot of help.
Bear in mind that you'll have lived off this - e.g. food, electricity, loo rolls, everything in fact that you would have bought to keep a normal house going. You must add your own pension, Stamp, insurance and other private outgoings. You may have to spend quite a lot on refurbishment at first (but remember this is tax deductible).
Obviously tailoring your cashflow exactly at this stage would be impossible until you see the books of the place you would like to purchase. The takings are generally mentioned in the sale particulars.
Capital:I think you'll find that Building Societies don't give mortgages on hotels any more. Rather try one of the major banks. They are used to dealing with new small businesses and many offer business packs and have special small business advisors. I found Nat West particularly useful when I was enquiring about a different business to this. As a general rule a Bank will give up to two times your own investment, subject to a convincing cashflow forecast. If you're prepared to commit then they are too!
Business loans are flexible and each Bank will let you know how they prefer to deal with their repayments. Obviously if you have youth on your side, your loan can be for longer and your monthly repayments less. If you're too young of course then they may take more persuading. If you're too old they won't want to know! I can never work out what the best age is! Rates can be fixed, variable or at a monthly managed rate. Maybe your bank can arrange interest-free banking for the first year. Obviously you'll have to pay for it in the end but just to get you up and started it can be very handy.
Shop around for free banking. My Bank used to offer free banking for the first year of a new business. Bank charges can mount up - they even charge for putting cash in - so free banking makes a lot of sense. Go from bank to bank to assess how much 'clout' you have. Remember, you are the customer.
Banks are usually pleased to see new customers coming in their door and should welcome you. I had to bottle-feed my newborn infant during one bank interview but they were still happy to give me the money I wanted! Most have business guides. Above all be professional, or appear to be professional. Provide them with well thought-out cash forecasts, a copy for them and the sale particulars. Be conservative (moderation in all things!).
So, you've done your business plan/forecast. You can afford it. Fantastic! This is going to be a great journey. Give the agent a ring and make an appointment to go and inspect. The best way of doing this is actually staying at the place under review. I'm not sure if this is normal but we did it three times and were pleased we did. Even if we didn't buy the places! It gives you a better 'feel' for the area. Ask about schools, local services, where are the better areas - common sense sort of things really depending on what you are looking for. - if you're looking for a clientele of conservative over 50's then next to a pub in the high street is not the best place! Assess whether it is really the place for you - and don't forget that location (and intuition) is very important. Good luck! Buy the book
About the author: Carolyn started an hotel directory while running her own hotel business.Travel Accommodation UK She has over 3,000 hotels on this site. There is a wide selection of hotels from luxury hotels in Knightsbridge to quaint little guesthouses in the north of Scotland.