Buying a Post Office case study


The largest retail network in Europe is not Tesco, or Carrefour, or Marks and Spencer, as many might guess. It is, in fact, the trustworthy British institution of the Post Office.

There are around 17,000 local post offices within the UK, meaning that 94% of the population lives within one mile of a branch – the sort of coverage that a multinational company would envy.
The scope of services offered by post offices are about to grow enormously, and many are beginning to see the opportunities the network might offer those with the energy, ideas and enthusiasm.

Around 500 offices in the network are “Crown Offices”, run by people directly employed by the Post Office. The remainder, however, are run as sub-post offices by sub-postmasters – private
business people who often also run a retail business, such as a stationers or newsagents, on the same premises.

The Post Office pays the sub-postmaster a fixed payment together with a supplement according to how many transactions pass over the counter.

However, although it is quite easy to buy a post office business, prospective owners must apply for the post of sub-postmaster by filling in an official application form and producing a business plan.

This might all sound daunting, but the combination of a guaranteed payment from the post office and an income from your own business offers owners a lot more stability than most private ventures.

You may have read a lot of bad news in the press about post offices. Last year, the closure of some 3,000 unviable rural sub-post offices was endorsed by the government. Meanwhile, this year, the government has started paying state benefits and pensions directly into accounts, reducing the amount of counter business at many branches.

To soften the closures, the government allocated £450m over three years to allow rural post offices to develop new systems and services and to support sub-postmasters’ salary.

Meanwhile, the £15m Deprived Urban Post Office fund offers £15,000 grants to make branches in the poorest areas of the country bigger, brighter and more attractive.

But, in reality, the business in changing – and to many, it is offering opportunities rather than threats.

The government wants the network to provide more help to customers in dealing with administration – and also provide a wealth of new products and services, particularly in areas where there may be few other outlets.

There are new banking, insurance and travel services available in addition to the mainstays of bill payment, licensing, postage and the National Lottery.

This year, for example, the Post Office has started selling unsecured personal loans ranging from £1,000 to £25,000 through 200 Midlands branches. Meanwhile, thirty-one new currencies have been made available at branches, making the network the largest supplier of foreign money in the country.

One in six basic bank accounts are now available at post offices, and the government is considering setting up a special account – “Universal Banking Services” – for those in receipt of benefits without access to a bank. The restrictions currently in place on what a sub-post office can provide are currently being reviewed. And most importantly, other organisations are beginning to see the advantages of using Europe’s largest and most extensive retail network to deliver their services.

All of which strengthens both the comfort of government support and the potential for entrepreneurship – an ideal for many. But not everyone is suited to the job.

Most sub-postmasters have had a background in a customer-facing industry and are more than happy to deal with and explain complicated matters to the general public. People with experience in other retail areas, particularly banking, make up a high proportion of buyer – but some knowledge of running a business is also vital. Computers and technology are also becoming more important within the job.

The post office prefers applicants who are both stable and mature. Running a sub-post office carries more responsibilities than most businesses as you are legally responsible for the delivery of registered letters and giros – and, perhaps most importantly, vulnerable local people are dependent on your services. In very rural areas the branch can be the bedrock of the community.

Nevertheless potential sub-postmasters are provided with training before taking on the job. This takes the form of workbooks together with one or two days in the classroom. This will be followed by a day with an experienced sub-postmaster and a couple of weeks of on-site training.

Given the right combination of responsibility, reliability and business acumen, a buyer could then take advantage of all the opportunities that the government and the largest retail network in Europe are about to support and unlock.

According to, a prospective sub-postmasters’ business plan should include:

    • How the premises will be run
    • Competitors
    • Business Hours
    • Cost Projections
    • General Business Objectives
    • Marketing and Advertising
    • Customer Base
    • Use of technology
    • Role in local community
    • Accounts
    • Staffing
    • Finances
    • Profit Budget
    • Cash Flow Forecasts

More information on becoming a sub-postmaster can be found at