The Hotel Newsstand

QUESTION: Since I was a youngster, I’ve worked for my uncle who has a long-term lease on a newsstand in a large hotel. Now, he’s offered to sell me the lease and the business. I’ve always wanted to own my own business and I like this particular business but, frankly, I aspire to a higher standard of living than my uncle. Should I buy or look for a business with more financial potential?

ANSWER: The newsstand seems to have a lot of appeal. You like the business. You have years of experience in the business. You have established contacts and suppliers. You have your uncle as a mentor. And, let’s presume that your uncle is offering you the business at a favorable price and terms.
The problem is that you can’t achieve your financial objectives with this business alone. So, why not expand? The first thing you must do is to carefully review the lease your uncle has with the hotel. It will specifically list what you can do, what you can sell and what you can’t. This is all very important and if you have any questions, you must review them with a real estate attorney.

Can you adjust the product mix in the stand to bring a higher return? Is there a possibility of physically expanding the stand to accommodate more merchandise? Are there other complimentary businesses in the hotel that you could purchase and manage? Could you offer products such as foreign newspapers which might bring business to your stand from outside the hotel? Would the hotel allow you to offer additional products such as snacks, drinks, lottery?
As you continue your research and become an expert at newsstand economics, you may find opportunities to purchase and leaseback other newsstands in other hotels.

Is it possible to become a hotel newsstand tycoon?

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