Has anyone set up a delicatessen from scratch?

[BusinessDeli]

I'm looking into starting a new deli from scratch. I have no idea of the costs involved but aside from stock I'm assuming you need some specialist kit (such as slicers).
I've so far looked at some potential locations as I consider that to be a key factor and also am trying to find a building that has a bit of character to it.
It's really the internal workings and set up costs that I'm truly hazy on, the building will be comparitively straight forward in renting and making sure it has the correct business use.
Has anyone got any pointers on pitfalls etc?

 

[blackberry1]

Hi

I have known a couple different people who had or have a delicatessen.

Depends on location, but what do the customers want and what they going pay for it.

From the deli owners i know took a bit of time to get the mix right and they added other products as they went along from customer feedback.

don't buy any expensive kit, might not need it.

Also keep your business head on at all times when starting this new venture

Apart from that you need advice from deli owners who have made the mistakes and know what is really needed at this start up stage.

 

[vvaannmmaann]

There are 203 for sale here,do your financial homework before you go much further.
http://uk.businessesforsale.com/uk/search/Delicatessens-for-sale

 

[BusinessDeli]

Thanks chaps, all good pointers. I'm very particular about the location as I know if the location / access / parking for the shop is bad then nothing will help you! So far there's a shortlist of 2 places but neither are 'perfect' if that exists.
I thought in the early days I'd take it slow and build the product lines along whatever the customers demand. At least then I know they want it.

Good reminder on keeping the business head on! I can get carried away at times...

I took a look at the deli's for sale and have to admit very few look like an actual deli, most appear to be coffee houses or restaurants. There's a lot of tat in there too which I don;t want this venture to be but it was good to see the other offerings on the market.

 

[ThePublisher]

One of my customers is a deli who started 5 years ago so they must have found the right formula for their success by now. They started up only as a deli, but have morphed into a deli come coffee shop. They have taken on board what the local area will support (plus we have no chain coffee shops locally) and adjusted their plan accordingly. Hopefully they will be able to survive if the supermarket trying to get in on the same parade manage to get permission to do so.

 

[Talay]

What can you drive out from a deli ?

Obviously sandwiches and coffee but also take away lunch in a bag, toasted things, breakfast menus, etc. Hot soups are a gold mine and the branch out to small scale corporate lunchtime hospitality is there for the taking.

Developing multiple income streams should bolster the chance of success.

 

[ThePublisher]

Good point Talay, my customer do sandwiches and corporate lunches, they also do things like pizzas at a couple of local outdoor annual events (they're making dough for weeks in advance and freeze it).

 

[playhard]

I think there could be a very worth while business, if in the right location

 

[BusinessDeli]

All good suggestions!

I'm hoping to keep it as a strictly delicatessen store though (I have no idea if this is realistic or not), shying away from making sarnies or catering. I'm possibly going to have a coffee bar but nothing big.

This is helping me form the ideas of how to move forward.

Does anyone have direct experience of the setting up or have any horror stories for me?

 

[hughescw]

Hi

I'm doing ecaxtly the same thing in my area

What I have worked out is thati must do the catering with good quality local ingredients otherwise I doubt I will survive

 

[BusinessDeli]

Where are you based Hugh? I'm currently working through the business plan to get the funding and it's a very dull period for me! One thing I've noticed is that you have to act fast to get the really good locations as they get snapped up quickly

 

This is making me hungry

 

[Chris Ashdown]

I'm currently working through the business plan to get the funding

This sentence raises the major problem, you do know that most banks will only give you about 40-50% of what you want and expect you to have enough to cover the rest and keep going for the first year when sales are bad which they will be

Do you have enough for this

 

[BusinessDeli]

OK, I'll re-phrase - I'm currently working through the business plan to complete the funding and investment.

I'm yet to finalise the maths but if I can't make it balance then I won;t go ahead.

 

[hughescw]

North Wales, think you will struggle to get funding from the bank, I think the maximum they will lend is 75% on a very good business/ business plan

 

[PDRD]

75% who do you bank with as I want their number.

Back to the post, I would struggle to see how you will bring in enough trade with just a deli. I would imagine the reason that so many deli's have a coffee shop or other sideline is to balance the books.

Good luck though, just remember to keep an open mind to all ideas.

 

[antoine82]

75% who do you bank with as I want their number.

Back to the post, I would struggle to see how you will bring in enough trade with just a deli. I would imagine the reason that so many deli's have a coffee shop or other sideline is to balance the books.

Good luck though, just remember to keep an open mind to all ideas.

This is very true. You'll never make a good profit with just a deli. You'll make money with transformed food (this is where the margin is).
Or you really need to specialize in a niche market and be very good at it (and also make sure you've got customers to buy your niche product!)

 

[mpen]

To open a deli you will really need to know your stuff, or your going to sink like a stone. Profitable delis make most of their money by the things they produce themselves, Cured meats and fish, home cooked meats, pate's, terrine's, compound salads, etc etc, you have to get a name for the products you sell and produce.

Your going to need to know how to care for foods, how to move products that are sticking. If your just going to buy all your products in your going to have a tough time.

 

[BusinessDeli]

Lots of good producers in Wales Hugh so best of luck!

I've had a chat with Mr Bank mgr and he was interested but non-committal, as expected. The business plan is everything so I'll be taking my time over it to give me the best chances. If I need further investment, and it's likely, then I have a few people I can approach but again, after the plan is created.

I'm fully intending that I'll be making some of my own produce and will be retailing coffee. I've noted the point that there's a reason for deli's to serve sarnies and completely agree! It's not my preferred option but I'll keep my mind open to it.
Other thoughts are doing the catering or even hampers.

One of the things no-one can seem to provide me with is the applicable VAT rates for everything, standard, zero, reduced etc?!

 

[BusinessDeli]

Your going to need to know how to care for foods, how to move products that are sticking. If your just going to buy all your products in your going to have a tough time.

I have a course I'm eying up from the Guild of Fine Food and I'll be spending time with my suppliers before selling their items so I can see first hand the best methods of storage and handling