How to buy a coffee shop
Coffee shops are everywhere, becoming a firm fixture not just on the UK’s high streets, but in places like supermarkets, universities, and motorway service stations. They’re big business, with consumers making coffee on the go part of their daily routines. If you’re a coffee lover who’s also interested in being your own boss, buying a coffee shop may be very appealing. After all, why wouldn’t you want to spend your days inhaling that heady scent of roasting coffee beans and listening to the sound of frothing milk? Read on to find out how to buy a coffee shop in seven simple steps.
Make sure you’re right for the role
Loving coffee doesn’t automatically qualify you for the role of coffee shop owner. You can expect the daily routine to be demanding, with early starts and long hours spent on your feet. You can anticipate lots of customer interaction too, so it is vital that you’re good with people. Repeat custom relies not just on great coffee, but your ability to make customers feel comfortable. If you still feel it’s the right role for you, you should then familiarise yourself with the different types of coffees and how to make them.
Choose your ideal location
Location is a vital factor when it comes to buying a coffee shop. Whilst foot traffic is important when you’re choosing a location for your coffee shop, you also need to consider whether those people are your target demographic. For example, if you want to open a hip and trendy coffee shop, this is likely to do better in a city centre location. Whereas a quaint and traditional coffee shop is probably more suited to a small town or even a village. Neighbouring businesses should also be considered when choosing a location, as they can impact your profitability, both negatively and positively.
Set your budget
Budget is likely to be a deciding factor when it comes to buying a coffee shop. You need to decide how much you can realistically afford to spend and then stick to that figure. Take into account the shop’s annual turnover and the cost of the assets, as well as the value of the property (if it’s owned by the business). Keep in mind that coffee shops which have the latest machines and equipment will have a higher price tag.
Begin your search
Once you’ve chosen a location and set your budget, you can then start searching the market for coffee shops. It’s a good idea to be openminded and consider a wide range of different options. When it comes to buying a coffee shop, it makes sense to visit the business and see for yourself how it operates. Sit down and try the food and drink on offer. Consider not just how the owners are coping, but what and how you would change and improve things. Are there lots of people coming through the door or does business seem slow? Visiting a coffee shop as a customer is so important if you’re thinking of putting in an offer.
Look at the business’s accounts
Once you’ve visited a coffee shop and you’re interested in making an offer, it’s time to move things to the next level and ask to see the business’s accounts. Do the numbers look healthy or are there some red flags? You don’t want any bad surprises, so make sure you study the accounts carefully. A seller will usually state a profit and turnover figure on their business listing; however, this isn’t enough to rely on. When it gets nearer to the purchasing stage, you really to scrutinize a minimum of three years’ accounts.
Arrange to view the premises
Once you’ve decided that a coffee shop presents a good business opportunity for you, it’s time to organise a viewing. This gives you a chance to take a closer look at the whole property, including the coffee preparation area, washroom facilities, and staff areas. You can also ask questions about the shop and find out things directly from the owners.
Make an offer and complete the sale
Once you’ve examined the accounts and viewed the coffee shop, you may want to put in an offer. The seller will then accept or decline your offer, or sometimes they will counter it. Whilst sometimes the negotiation process is quick and straightforward, often it can take some time. Both parties want to make sure they get the best deal, and so there may be lots of exchanging of offers. If your offer is accepted and an agreement made, you’ll both sign a letter of intent. This doesn’t mean you have bought the business yet and you can still walk away if you change your mind.
The final stage of buying a coffee shop is to complete the sale. Find a solicitor to handle the money, deal with contracts, and generally make sure everything is above board. You can expect this legal process to take several weeks or sometimes even months. Once complete, you can take over your new coffee shop business and start serving your first customers!