Industry sector:

Ice cream parlour: Rent

Enter in your cash flow forecast the amount of rent you will have to pay for your premises in the months that you will have to pay it.

If you have not yet decided on a particular premises you could contact a local estate agent who handles commercial property to get an idea of how much the rent is likely to be. You should have already given some consideration to the type and location of the business premises that you will require, so they will be able to give you some guidance as to how much you will have to pay.

Location is generally very important for businesses like cafes and restaurants. Passing trade is usually essential, so you will probably need to find suitable premises where plenty of people will be passing. In tourist locations in particular even a few yards can make a huge difference - the sea-front cafe on the promenade might be full of people all day, while the cafe just around the corner in a side street is half empty. Of course, you'll have to pay a premium price for the best located premises.

Bear in mind your premises should be accessible to customers and staff who are disabled.

Your solicitor will help you with the lease agreement but make sure that you are clear about:

  • whether the premises can be used for the purposes you have in mind
  • how frequently the rent will be reviewed
  • how long the lease runs for
  • what you and the landlord are each responsible for
  • the position as regards sub-letting

Business usage classes

Commercial premises are allocated a usage class by the local planning authority. This specifies what type of business may be carried on at that premises. Planning usage classes covering cafe and restaurant activities are as follows:

  • A3 - restaurants and cafes (food and drink for consumption on the premises)
  • A4 - drinking establishments (pubs and wine bars, but not night clubs)
  • A5 - hot food takeaways (hot food for consumption off the premises)

Although it may be possible to change the usage classification, this requires planning consent. It is easier to change to some classifications than to others - for example it can be difficult to change from a cafe or restaurant serving food for consumption on the premises to a hot food takeaway. So it's often wise to look for premises that already have the appropriate usage classification.