Guide The Complete Guide to Buying a Cafe

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  1. The Complete Guide to Buying a Restaurant - EBook (PDF)
  2. The Complete Guide to Buying a Restaurant - EBook (PDF) - The Cafe Ninja
  3. Practical Advice to Get it Right
  4. How to Run a Cafe: 11 Tips For Success

Organic is another one of those fuzzy words used to sell products for a higher price. But when you see the USDA Organic label on a bag of coffee, it means the coffee is produced under the following conditions :. The main focus of the USDA organic label is to ensure farmers are doing everything they can to maintain local biodiversity and soil health without turning to conventional chemicals. That does not mean all organic products are chemical free, though the list of chemicals approved for use in organic farming is short.

It is? What else would it be?

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The Complete Guide to Buying a Restaurant - EBook (PDF)

And just what on earth is pure coffee anyway? So just keep that in mind. When you stumble on a store with walls lined with clear plastic bins displaying a variety of beans, turn right around and leave. Buying in bulk might be a money-saving strategy, but it will not get you the best cup of coffee. Think about buying coffee like buying a fresh loaf of bread. You might get it once a week or every other week as you need it. If you buy too much at one time, you run the risk of subjecting yourself to stale coffee, or worse, wasting it altogether.

Coffee you find at the grocery store is much more likely to have a use-by date rather than a roast date. The use-by date is often a year beyond the roast date, so the most it can tell you is not to buy that coffee. Your first step is to skip the trip to your regular grocer—unless that grocer is unique to your area or has a good deal with a local roaster.

When on your search for the best coffee beans, the best place to start is a small, independent coffee shop. Specialty grocers—especially ones who are focused on local sources or high-quality imports—may also lead to some delicious coffee beans. If you get the chance, buying directly from the roaster is our favorite option. You cut out the middleman, which means more money goes directly to the roaster to help them stay in business, and keep you stocked with fresh coffee beans. To get the freshest beans, ask them about their roasting schedule, and make plans to be there when the next fresh batch goes on sale.

The best part? You can usually find someone who genuinely cares about the coffee beans and can give you great recommendations as you explore new flavors and styles. You can even find that deliver new roasts right to your door every month, every other week, or even once a week. Many roasters also roast and ship to order. Now you know how to read a label and ferret out the best local coffee supplier. But what type of coffee beans should you actually get?

The flavor of your coffee all comes down to the variety of bean, and you only need to care about two of them: arabica and robusta. When it comes to a good cup of coffee, arabica, or Coffea arabica , is king. With less flavor and chemical complexity than the arabica coffee bean, robusta, or Coffea canephora trades flavor for easier maintenance as a plant.

This usually means less expensive coffee for you. The canephora plant grows well in low-altitude environments and is naturally pest resistant. It also has a much higher caffeine content than arabica coffee. There is no industry standard for roasting coffee beans, but generally, roasts fall into one of the following categories: light, medium, medium-dark, and dark roasts.

Light roasts are lighter brown hence the name and are roasted for a shorter duration. Common names include light city, half city, and cinnamon. The beans have a medium-brown hue, stronger flavor, and a non-oily surface. Other medium roast terms include breakfast and city.

Medium-dark roasts have a richer, darker color, as well as a little oil on the surface. Full city is a popular medium dark roast. Dark roasts are those shiny black beans that look great on camera. They have a shimmering, oily surface and are bitter when brewed. Not only does this allow for the business to transfer and operate with minimal disruption and immediate earning capacity, but also offers leverage in the form of day to day operational insight, ground level understanding of the business and its history, as well as ideas for improvement.

By opting to start your own hospitality business, you have the ability to explore, consider, research and develop your own logo and brand. You can incorporate your personality and style and have a completely blank canvas to work from. With a vision in place, you can choose individuals to bring on board and create a culture consistent with your mission.

Whichever path you choose to go down, it is important to do your due diligence in terms of research and consultation with appropriate advisors such as lawyers and accountants. The biggest trap lies in entering the market without having your eyes wide open. He can be reached via email: pjurcic the5argroup.

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Not a member? Join today for free. Reset your password. Reset password. Hi Pete, Thanks for your quick response and as expected a perfectly executed answer. Ok, so now I am in the midst of negotiations for a coffe shop in a major shopping centre not a franchise just a ma -n- pop sort of deal with breaky and light lunch options. Sat there on a couple of occasions and quite impressed with the customer service, coffee and position. What was revealed to me was that they are happy to proceed without a broker.

When I used your formula, it seems that this is a good buy even before negotiations as if these numbers are correct, I could pay off business initial investment in 2 yaers and then begin to profit. I have contacted the lease manager and asked about the possibility of re-negotiating a lease prior to locking myself in. This leads me to my questions: What is a standard lease in a shopping centre? Should I be weary of big centres such as this? If I can negotiate a new lease, what do you think is a good and reasonable offer for this business given that I have reveiwed all the financials and the numbers add up to be what they claim?

Would very much appreciate your advice on this matter and thanks for the advice on Barista courses. I have found a place that ticks all the boxes. Peace and prosperity, Layla.

The Complete Guide to Buying a Restaurant - EBook (PDF) - The Cafe Ninja

Hi pete great article im currently in the process of purchasing a cafe in wollongong current owners are happy for a vendors loan with down payment plus trial and full trainning period this may sound like a silly question but am i able to change the buisness name i currentky operate a birthday cake baking service from home and wish to use the name of that buisness in my new venture. Hi Matt, Not a silly question at all. You can most definitely change the name of the business. This in mind be aware that changing the name of the business can affect goodwill.

When i say goodwill, i mean the customers that the business previously had. Hope this helps Matt. Best of luck. The broker said this is the norm. I personally think it would make great sense to work with the current owners n watch what they do n how they operate than going in blind is this a reasonable ask starting in the cafe on their last week thanks for the awesome blog appreciate your generosity Thank you Gloria.

Hi Pete, I am in the UK looking at a cafe in a tourist spot, the cafe has been running for many years approx The building is part of the sale and no passing business as its at the end of a viewing point. The business runs from April to October with a turnover of k the problem is the how to value the business, its main serving is cream teas and light snacks to holiday makers.

What are your thoughts on this sort of business, my involvement would largely be financing the purchase and my daughter would run it. Thanks Mike. Hi Mike, I suppose there are pros and cons about running a business that only operates for half the year. Let me know if you need any more guidance.

Hi Pete — thank you for this informative article. My partner and I are looking into buying a very small cafe, that can be run by one person. While it is an established cafe that has created a clientele base, I feel the ambiance or decor is quite outdated and needs some sprucing. When would be a good time to commence the remodeling? I fear that doing it all at once would be too much of a shocker for existing customers.

This is just in my opinion. Hi Citlali, This is a great question, I was actually discussing this exact question with a client today. WOW is one of the most beautiful moments in hospitality. Look forward to hearing how your business progresses. Hi Pete, I have no experience but want to buy a cafe. Can a ask the owner not to hire existed employees for a certain period to provide smooth operation?

Hi Daniel, You can and you should. I am Czech living in Manchester sorry English is my third language: and thinking stand on my own feet. I have got lots of experience as a manager of a high street cafe. I would like to know your opinion about a cafe located in business centre with people inside and other business outside. I am pretty confident to raise sales, bring better economy and improve service but do not know how much to offer for the cafe. From the way you describe this business i think you would be right to offer market value for the plant and equipment. If you really think this is the ideal location you may need to consider how keen the current operator is to sell, whether or not you can renegotiate a new lease and how long the business has been on the market also.

This will help you assess how far above or below the plant and equipment valuation you would be happy to offer. Good luck and keep in touch. Looking too get out of the retail business industry and into the hospitality one. Having virtually no experience in the industry except for a few management and book keeping courses which type of cafe would you recommend investing into? The merits of a franchise are that you can walk into them with no knowledge and someone will be there to hold your hand through the learning process, but this can also be a downside, as you will be taught a system that may already be dated and in relying on this system it can make you very complaisant.

I honestly believe in getting some work experience before entering into this industry, this will give you a great idea about what kind of cafe you will be happy developing. You may find after working in the industry a little that there are no franchises in the market that you would be happy being a part of. Thank you for the article found it very interesting! As what I can gather from it, it looks like is better to buy an existing precinct. Although where do you search?

We are a team of three people thinking of opening a coffee shop in GC. We have no much experience in terms of legal and licenses rights, but we are passionate about coffee. We want to bring the latin vibe into the GC but not sure of where to start in terms of location, as I mentioned before where do you start your search?

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How do you think is the best way to search for a location? Hi Luz, Purchasing a cafe in an established area can be both good and bad. This blog post suggest an exercise you absolutely must do! Please start here. Need a guide What do I need to check? Broker advise the current Owen is not active in the biz and the staff are not pro active as well. Hi Veer, I have a cafe of my own in a Tafe so i know this market exceptionally well. Make sure you get a look at the annual numbers and not just the March, April, May, June profit and losses when the students get back in force and turnover looks sensational.

The school holidays and waning numbers at the end of the year can really destroy turnover and profitability in this kind of business. You need to ask if the lease will specify that you have to remain open all of November December January and February and also if rent will be adjusted or payable in full over these periods where your trade will be severely limited.

Never take the brokers word for anything, so make sure you spend some time in the business observing staff and the absence of the owner. This will help you confirm rough numbers on daily turnover. How much have you got left on the lease? Would the tafe and i doubt this be open to issuing a new lease with a full lease period? Will the lease be in the sellers name or is it a franchise where the head franchisor has the lease and charges you a franchise fee or licensing fee to occupy?

What is the condition of the plant and equipment like? Is the business currently profitable? It may be the layout of the store, over staffing, quiet periods creating difficulty in sustaining staff. I hope some of these questions help get you thinking. I am considering to purchase a cafe 5.

Located inside of a big building, inside of the building: Pivate Hospital plastic surgery,cosmetic,dental,etc , offices, medical suites, residential, woolworths and the cafe. Need a guide because this is my first business. They generally allow you a regular flow of new customers as well as the regulars who work in the building and surrounding areas.

The first thing i would want to check is their profit and loss statement. Ultimately you are buying an investment, so you need to see if the business is an investment or a liability. From there you need to check that the profit that is shown on the profit and loss is a true profit. Once you know that a business is making a profit you can then assess the cost of the business. Given the limited trade your food menu will be very important, as you want to maximise the average spend on every transaction.

Before committing to buy this business spend a day there counting customers and calculating the average customer spend. This will identify weather or not the profit and loss reports are a true reflection of sales numbers. The other bit of advice i would offer is that given that you would have regulars in this building i would make a point of asking working staff in this building what they think of the cafe. This may give you clues as to what areas require improvement to gain valuable local customers. Hope this information helps. Hi Pete I am planning to buy a cafe shop from franchise in brand new sqf medical surgy center with 5 acres land, it has parking spot with come in 3 levels parking and all come with the bridge go right in to the clinic.

It has 6 operation rooms in second level, 50 doctors and employees from all kind of medical. They will aproximately patients coming daily. You think it is good idea to purchase it and by the number of what they give me how long you think I will pay my shop and start profit. Thanks ver much. I am brand new in this business. To assess the true value, there are many factors which need to be considered. Firstly the term of the lease, as this will dictate how long you have to pay off your investment and start making money.

What kind of franchise fees are involved, do you have any historical trading numbers or is it a new franchise? What hours will the business be operating? This sometimes makes some franchise models difficult. Please make sure you reach out other franchisees and ask them about their experience with this particular franchise.

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Thank you for your reply. My mistake of typing. They are patients come daily. The building have outpatient surgy and eye surgy everyday. They also have urgeant care center. They have cancer care and 6 operating theatres. All patients are appointments for specialists.

Practical Advice to Get it Right

My lease are 10 years x 10 years later. My franchise system have 78 outlets national and 6 international outlets. I am only the food vendors that sell coffee, breakfast and lunch wrap, burito, sandwich, panini soup, salad, smoothie, yogurt, fresh squeeze orange juice and sodas.

The shop will be open 5. Thanks for your advice and wait to hear from you soon. Hi Pete, this is Linda for the post on May I found your comment ia ver helpful! I already post some information back and waiting for your advise. Tx Pete. I am also considering buying my first business. It is a suburban deli. I live in the area and know the suburb well. I know this business has potential in terms of location and foot traffic locals if open exteneded hours as done previously. There is very little risk involved given the cost is based on deli assets and no goodwill included.

Hi Hana, AUD11, is cheap, but it also depends on the quality of the equipment you are being left with. If it is in disrepair, you may be better off not paying anything fitting out a new business. At that point be clear that you are only buying the equipment at this price and not a business. Awesome blog! Great advice. I am looking at purchasing an existing cafe down the street from my house. My husband is earning over k doing a job he absolutely hates and is away from home for about 12 — 14 hours per day.

He would be working in the business full time. The owner works 4 days per week. When asking for the financials and I have been told that they do not reflect the true earnings of the business. It has several tabled areas inside and out and seats I was told by the broker to get a real understanding of the business set time with the owner working in the business. We have set up a meeting for this Saturday. To gain copies of invoices, wages, insurance, rent, lease documents etc. There is a coffee bean shop opening 2 doors up and a deli soon and a coffee eatery across the road.

At the moment to business is a morning and lunch venue with no real theme. We hope to turn it into a Burger bar and doing some slow modern hip touches. The nearest similar type of business is McDonald if that counts or 20 kms away. What do you think and what should i be asking to get a real picture of the actual situation?

Hi Kim, Glad you enjoy the blog, it can sometimes feel that it goes unread so its always nice to hear some kind words. Burger shops are currently popular so done well you can expect success, but they do trade differently from cafes, both operationally and with regards to trading hours and clientele. Please let me know how you go. I stumbled across your blog and am using it to educate myself before venturing back into the hospitality trade.

I will come back to you with more specific requests as things mature but I wanted to thank you for being so generous and diligent with your advice. Your blog is great!! My wife and I have been looking to buy a small cafe. The lease goes up to March and we were told by the owner that we should hire a solicitor to negotiate the extension of the current lease in case we decide to buy the cafe. Hi Sergio, The price you buy it for will strongly depend on the duration of the lease you can negotiate. Make sure the profit they declare includes the owners wages or what their time is worth if they work in the business as this is often left out, and makes many businesses unprofitable.

So after assessing the accuracy of the profit and loss you should make time to speak with the landlord about the possibility of giving you a new lease if you purchase the business and what the terms of that lease may be. Let me know if this helps. We are looking at buying a cafe but it seems that all the profits are undeclared cash…. We have put forward an offer but I think we should work in the business for a few weeks.

Also our offer has a vendor finance portion, maybe we should include a clause that says if the cash intake is less than stipulated by them, our payments will be reduced? Do you have any thoughts on this to keep them honest. Honestly Sharee, the best way to authenticate turnover is to sit in the cafe for a whole day at least. While you sit there you can count customers and allocate an average spend to each. Best advice i can honestly offer is always spend time in a business counting customers before buying it.

Hi Pete, you are amazing. I found your blog last night and kept reading through this topic almost every comment and your reply. And sure going to read all other topics. I and my friend looking for a coffee shop in Melbourne, wish you are here to help with picking one as we are new to this industry. We both dreaming of owning a coffee shop such a long time. We are Asian but yes both love Western coffee, food and desserts.

I studied Marketing and cant wait to run tons of promotions for our coffee shop, I love to see happy and satisfied customers, not only come for our coffee, food but our services. People come to people. My friend is passionate about food and desserts. Just started looking for a shop yesterday, so definitely need your wisely advices and experiences to guide us. Thank you so much, May. Hi May, Thank you for the kind words, Sounds like both you and your friend have a lot to offer your new business. Keep in touch will be happy to share my thoughts.

In the meantime I would strongly recommend you read my last article on the very first step to setting up a cafe. Thank you Pete, May. Are you in the UK? Your advice is very useful as we are first time buyers and quite new to all this. Hi Pete I have been your blogs and found what you have to say to others really good. I was wondering if you could give me some advice. I was wondering what sort of questions should we be asking?

Is the price reasonable? It has equipment — coffeee machine, grinder, 1 fridge, 2 smaller fridges and some other basic stuff. We have never bought a business before and was a little nervous. Also as we are not sure what the right questions would be to ask. Thanks Shelley. If you know the make and model of the coffee machine i can tell you how close you are to market value on the equipment.

To answer your questions — Is the price reasonable? You should be speaking with the landlord about the lease and if you can get it extended. I hope this is enough to get you thinking further. Hi Pete, love your experience and kindly sharing with everyone which is great! Kind regards, Michael. Thank you for the kind words Michael, I live in South Australia. Hello THC, many thanks for hosting this site, it seems to be tailor-made for the industry. We started a coffee shop 11 yrs ago in the Riverina NSW , about an hour north of Wagga, and are now looking to sell.

The location might be a neg. I read with interest your business valuation in a previous post, and we are asking nowhere near that. Are we asking a fair price? Lease is pretty much open-ended. Do you know if this is a good time to sell in Oz, with Christmas coming up soon? Many thanks for your reply! Hi Kris, The rent does seem reasonable, but this would be relative to your turnover, as would your sale price.

I come across many regional businesses that do better than alot of city based businesses. They can be very lucrative. The channels you can use for the sale of the business can be local realestate agents who often dabble in business sales, or online channels like gumtree, linked in industry specific pages and facebook groups with a focus on hospitality and business. So join these pages and post details of the business there. Let me know if you have any further questions. Happy to help. Many thanks for your reply and suggestions Pete. I may have to get my kids involved with the social media thing.

My wife was keen on advertising on shop window, but I think you make some very good points against doing so. Thanks again! Hi Pete I got a lot of information on this forum which has given me some understanding of cafe business. Is open from 8am to 3pm 7 days. These percentages are quite favorable. What you need to be careful of in this instance is that the wages account for super and workcover and any accrued annual leave also.

Also ensure that the business is definitely totally under management and that the owner has not been productive in the business in any way, accounting for productive work the owner has undertaken is will increase this percentage. It would be good for you not to consider at all what the owner paid for the business as the business is only worth what it is able to generate and is only as good as its latest profit and loss statement.

The deal could still be good, but a good analysis of the profit and loss should be done, and time within the business to confirm turnover and labour costs should be done. I hope this information helps. If you have any further questions please let me know. Hi I am looking to buy cafe in Melbourne I have questions about buying price difference between five and seven days open cafe. Hi Dharmesh, Happy to answer any questions you may have, you can email me at info thehospitalitycoach. Hi Lucky, The rent seems reasonable, but i think it would be important to have an accountant look over the profit and loss to confirm actual figures.

With regards to the buy price, i feel this should be dependent on the the remaining or available lease period. This would see a payback period of about 3. My loose numbers are purely my conjecture so you definitely want to have some solid profit and loss statements in front of you to establish actual profit. The coffee volume per week loosely correlates and seems true to the turnover in my mind.

Great site and professional advise. I want to buy less headache easy to run business. Business hrs 10a — 12 midnight 5. Asking price k. Lease remaining 2yrs plus 5yrs option. I truly need your advise. Hi Alex, I feel your circumstances are quite unique by way of businesses i comment on. Shusha to the best of my knowledge are those large pipes with flavoured tobacco, is that correct? Electricity gas internet, insurance,etc not accounted for. The sell price would take you way too long to recoup costs. I would spend some time there and count customers and also assess staffing costs and see if you can perhaps confirm some of these numbers.

I hope this helps Alex. I think less than two years means a lot of risk involved to recover business cost k.

How to Run a Cafe: 11 Tips For Success

I requested available account records, profit loss statement, monthly expenses apart from monitoring daily real business transactions and dealings. Again appreciated you advise. Thanks Pete. A small cafe only open for 6 months running at a loss is available to buy.

What Is The Key to Running a Successful Cafe?

Lease has 18 months with an option to take on another 3 years. What advice could you give me as I really would like to take up this opportunity. Have the profit and loss statements looked at by an accountant to assess if better management of labour and materials may turn things around. Ask yourself when you walk into the business if you would ever meet up in a place like this with friends. If the answer is no, then you also know you need to do alot of work to the place aesthetically to make it work and this will come at a greater cost.

You absolutely should be speaking with the landlord to try to establish a new lease if possible. Worth investigating further. I hope this helps. Hi Pete, Love your blog. I would love to buy this business but Is this business too good to be true? Hey Chris, Too good to be true?

I would definitely want to see the profit and loss, and then have my accountant look over in case i missed anything glaringly obvious. A business this good warrants you sitting in it for a day tallying up average transactional spend, and counting staff to approximate staff costs. I would really want verification of the above numbers before moving further. You should also look further into the lease and the remaining term, or ability to draw up a new lease for an extended period. Hope this helps, keep in touch. The owner is working the floor and books roster etc and her husband is the head chef and their wages are not included.

Hey Chris, I would account for all the working time the owner works on the floor and all the time the head chef spends at the cafe. Would love to know more about these types of leases if anyone has had experience with councils and leases. At face value the opportunity sounds great. But due diligence is the key. Spend some time verifying the numbers so that you can feel confident moving forward. Hi Marie, Some of the basic opening questions i would ask are the following: How many Kilos of coffee do you use per week this can be confirmed by the supply of invoices What do you pay in rent?

Does it include any outgoings? How many years are remaining on the current lease? Is this a gross or net figure? The review of a supplied profit and loss may reveal further questions. I would also suggest spending some time in the cafe yourself, counting customers, calculating average customer spend, studying clientele and staff interaction.

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These questions are definitely only a place to start, but i hope this assists you.