you're planning to buy or possibly start a cafe what are some of the things
you'll need to know to help you make that decision
here they are here are five things to consider when buying or starting a cafe
research the area where the cafe will be situated is it in
a busy town center may be close to a university or near an industrial or
Business Park somewhere where there's a lot of foot
traffic cafes are reliant mostly on walk in trade or else they need plenty of
street parking so you need to ensure you're in an area that sees lots of
people pass by on a daily basis a good location is going to be the key to the
success of the cafe your business needs to be visible to passing trade so your
customers are drawn in as they pass by now if you're not on the main walkway or
street you need to look at boards and signage to draw in your customers the
wrong location could be the difference between success and failure
with a cafe there is no specific design that
you need to work with a cafe can be run from a tiny area to a large 200 square
meter space well quite successfully what you need to look at is if you can cater
to your customers needs whether it's a takeaway coffee or a much larger
sit-down cafe maybe for upmarket dining if you are offering a catering service
you'll need a much larger premises than if you're looking to operate a small
kiosk to dispense coffee and sandwiches so look at the type of service you are
offering the area you are in before deciding on the size and design of the
cafe in an existing cafe you can always renovate and change the current design
and decor but it's not always possible to expand the premises should the
business require it in the future
whether you were
buying an existing cafe or starting up a new one
you will need to look at the equipment required small appliances such as coffee
makers microwaves to large appliances such as refrigerators ovens and
dishwashers may need to form part of your asset list in an existing business
you may need to replace old or add-on new equipment so you need to investigate
this thoroughly and make sure it fits within your current budget as new
equipment can be very expensive a new business would need to allocate funds
adequately for the appliances and equipment check on the warranties on the
product so you can allow for future replacement if necessary in an existing
cafe you will also need to ensure that all equipment is fully owned and part of
the cafe sale there may be items on hire purchase agreement and these may not
necessarily be sold with the business check on whether you need to insure
items and the costs for this insurance you'll also need to take into account
storage containers cutlery crockery and so forth all dependent on the size
and type of cafe
are you buying the premises with the cafe is
a freehold going concern or is the cafe in rented premises most cafes are
operated from rental premises and you would need to have permission to rent
the premises from the existing landlord before you take over the business now
this is usually called landlord's consent and has done as part of the sale
process cafes that are on rented property should be sold with the right
to lease the premises already arranged so make sure your lawyer checks that
check on the length of the lease are you taking a new lease or being assigned the
current one now a longer lease period is preferable usually around eight years in
New Zealand especially if you are purchasing the business using a bank
loan as this shows long-term commitment
when it comes to the crunch the bottom line is what matters when you're looking at
buying a cafe or any business for that matter you want to know how much profit
the business is likely to make you must check the information given in the
business for sale advertisement the best practice would be to examine at least
two to three years financials to ensure that you know exactly what you're
getting if the books do not appear to reflect what you see make sure you ask
detailed questions perhaps watch the business in operation for a period of
time and speak to your broker and your accountant about other ways of
determining whether the figures presented are authentic or not there are
many other aspects you would need to look into such as ensuring all
permissions and licenses are in place that the business is in good standing
with their suppliers and customers now you can do that with Google online
reviews those kind of things that the premises is registered correctly does
the business utilize and embrace online marketing and so forth before taking
ownership you need to ask as many questions as you can and bring in
professionals as required to ensure you are getting exactly what you are paying
for once you've taken ownership the success or failure of the business
becomes your responsibility so ensure that you are buying a thriving operation
and not a sinking ship thanks for watching if you want to know more about
business sales tips on growing and improving your business start right now
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