After six years managing El Vino's, the Fleet Street wine-bar beloved of feisty lawyers and colourful journalists, Dan Lim could be described as a seasoned wine trade connoisseur. However, in his seventh year at the London bar/restaurant, he sought a new challenge and became a commercial investor instead.
Father-of-three Dan spotted a run down corner-shop with a "for sale" sign in St Margarets, a west London suburb next to Richmond-upon-Thames. His offer of £7,000 for the shop's business and 12-year lease was accepted and he spent £11,000 transforming the somewhat neglected site into an
upmarket wine shop.
"I had been left a small sum of money and I was determined to invest wisely. As I already knew about wine and vintnership I decided to put my cash into the industry and keep myself gainfully employed at the same time," says Dan, who ran several City wine bars and restaurants after leaving university.
Dan soon found that he had his work cut out, for the shop needed a complete refit. "It had certainly seen better times, but as it was in a busy street with steady passing trade I could see that it had great potential. I converted it from a local grocery store into a smart-looking wine-shop where people could enjoy regular tastings and buy the wines they really savoured," says Dan.
He named his new venture The Good Wine Shop and it opened just before Millennium Night: sales topped £1,100 that night as the locals celebrated, enabling Dan to replace many of his more everyday brands with French classics such as Languedocs and Roussillons.
The young vintner then recruited students from a nearby ballet school to work part-time and at weekends and trained up an assistant manager to help with the ordering and buying. Finally he used what he terms "a little wineupmanship" to buy jointly with other local wine-shop owners. Together they found a neat way to cut out the middlemen and buy directly from the key growers in the named regions from Portugal to South Africa.
"It meant I could buy better and more exclusive ranges at the same prices as the cheaper and more conventional high-street and supermarket ones," says Dan. Before long The Good Wine Shop's takings soared to £5,000-a-week. "West London is like a wine-drinker's paradise with thousands of starter couples who have young kids and need to spend their evenings at home sustained of course by an amusing bottle of wine," he says.
Although his working hours meant he couldn't always follow suit, Dan sometimes shared a glass or two with his regulars. "I got most of my customers from recommendations as the area's like a huge London village and word gets around very quickly," he says.
The tale of the shop that Dan built might have all ended there with the young vintner living and working happily ever after. But the dual needs of space and schools meant Dan and his wife had to sell their three-bedroom house and buy a larger one outside the area. Dan contacted a firm of London commercial estate agents to sell the business for him and waited for the right buyer to come along. It just so happened that one of his regulars who had been eyeing a career in vintnership for some time declared an interest. The pair discussed terms and Dan sold on his business and lease which was now eight years for £75,000. So not only had he made a sizeable killing on his investment, but he didn't have to forego agency fees.
It's a good lesson for would-be commercial investors. Rod Milne of commercial property specialists Milbourne Financial Services says: "If you have specialist knowledge of an industry it's a very good idea to put money into it. Dan Lim went one step further and ran his investment himself. With the recent six-month upturn in commercial property, he could well be setting a new trend of investor-businessmen who buy commercial and then build up the business themselves instead of using a tenant to do it for them.
"It's always best to buy your own premises if you can rather than pay a rent that's bound by three or five-year reviews, which will either hold or increase, even when interest rates fall. Buying commercial property means you not only have an appreciating asset, but one you can sell mid-term like Dan Lim did, particularly as mortgages have become more competitive and accessible."
Dan meanwhile is eyeing up another commercial asset himself a site for an upmarket wine-shop near the new family home in Tooting, south-west London.Reuse content