Help needed - Failing coffee shop

STDFR33

Free Member
Aug 7, 2016
4,823
1,317
An indoor market with 6 cafes must have plenty of other shops also in the market. In total there must be at least 15 outlets?

An average footfall of less than 10 per hour just does not sound right. If it right, I have no idea how everyone in the market is still in business.

You must have the footfall wrong surely?
 
Upvote 0

Redd

Free Member
May 4, 2013
212
14
either cut losses OR and My preferred option is strip everything back and start again, the big investment has already been made, go back to basics, shouldn't be overly expensive, as previous poster said....Imagine that smell of coffee and fresh bread wafting its way through the market, the stronger smell the better! they would and will come! Don't give in on somebody else's failures I say. Good luck
 
Upvote 0

Chris Ashdown

Free Member
  • Dec 7, 2003
    13,399
    3,011
    Norfolk
    Are the other stall holders near or past retirement age and just running for something to do and not worried about making a living wage, many housewife's seem to like running a business as something to do and think to them selves the £25.00 they mad today is better than sitting at home earning nothing

    You need at least £7.50 to earn the living wage after all costs and from what you say that looks impossible. I would suggest you spend the next month looking for aa job whilst still running the stall with the expectation that you walk after a month and just take the hit unless you can sell privately for say £2000 or even less

    Maybe the stall next door would take it off your hands for a small sum but £4000 is unrealistic,

    Treat it as a cheap learning lesson to do better homework next venture

    Good luck and keep as much cash as you can, not worth investing any money unless you hire a lady who will wear vey low cut dresses which may get more customers (think 19 century carry on films)
     
    Upvote 0

    Clinton

    Free Member
  • Business Listing
    Jan 17, 2010
    5,748
    1
    3,068
    ukbusinessbrokers.com
    I have got it on the market privately (facebook etc) currently for just over what I paid for it as I have bought some new equipment and stock. Trouble is that people know I have only just bought it and probably guess why I am now trying to sell it.
    That's unlikely to be the reason why you aren't getting any buyers.

    As I said just before you made the above post, when small businesses like this go to market the owners will typically let it "languish there for months building up further losses in the hope that someone will come along one day to buy their business." That seems to be exactly what's happened in your case.

    ... just over what I paid for it ...

    Buyers don't value a business based on what you paid, how much you invested etc. I would suggest you don't think about how much you "need" to recover, but how much the market is willing to pay.
     
    Upvote 0

    ValleysGuy1975

    Free Member
    Apr 29, 2016
    39
    1
    An indoor market with 6 cafes must have plenty of other shops also in the market. In total there must be at least 15 outlets?

    An average footfall of less than 10 per hour just does not sound right. If it right, I have no idea how everyone in the market is still in business.

    You must have the footfall wrong surely?

    Yes I think I have got the footfall wrong !

    Not sure on the numbers but it aint busy !

    Am starting to introduce new ideas from next week. Picked up a soup kettle and going to make a larger batch of tomato soup and then going to also do a chilli con carne on market days. Hopefully they will go down well
     
    Upvote 0
    A

    Ally Maxwell

    Be very careful about portion control on things like chilli. Work out a consistent way of delivering a portion (like a ladle/platic pot or something). Don't undercharge ! take your total ingredient costs, serviing consumables costs etc, add up and multiply by 3.5 or 4.
     
    Upvote 0
    Cut your losses & shut up shop. If you start selling food you're still going to have the footfall issue & it's not worth investing any more. Even if you advertise, people aren't going to go very far out of their way for coffee (i wil not leave the house without morning coffee, total coffee nut)

    I would be interested to know why you thought the business was worth buying at £4k

    I've had an office in the centre of my city for 4 years, it's cost me around £30k & not done much for business....but it did allow me to move into a very large house & so next year i'll be able to work from home & drop the £9k office costs. Taking a step backwards doesn't always amount to defeat.

    Doesn't seem to make much sense for you to be working full days for less than £10 profit.

    I find it quite amusing people discussing portions etc & costs when there is such low footfall.
     
    Upvote 0

    silentjay

    Free Member
    Jun 7, 2014
    71
    10
    45
    6 cafes servicing 60-70 people a day? How do they all stay in business?

    Tax credits and family money. You'd be surprised at the amount of vanity businesses out there. I know a girl whose got a fancy coffee shop which is constantly dead in a fancy part of town so she can pretend she lives in some fairytale Amelie dreamworld. The rent she's paying would make your eyes water. Daddy is v well off and foots the huge shortfall every month. Been going on for years.

    Be better off just burning a grand or two each month in the garden, less hassle.
     
    Upvote 0

    japancool

    Free Member
  • Jul 11, 2013
    9,740
    1
    3,449
    Leeds
    japan-cool.uk
    Tax credits and family money. You'd be surprised at the amount of vanity businesses out there. I know a girl whose got a fancy coffee shop which is constantly dead in a fancy part of town so she can pretend she lives in some fairytale Amelie dreamworld. The rent she's paying would make your eyes water. Daddy is v well off and foots the huge shortfall every month. Been going on for years.

    Be better off just burning a grand or two each month in the garden, less hassle.

    In an indoor market?
     
    Upvote 0
    Other traders are saying Jan is always a bad month so wondering if I should just try and ride the storm.

    20 years ago I had a unit in The Pavilion in Torquay and in one week in January I made one sale for £1.99 and I wasn't the worst off as one retailer sold nothing but had to give someone a refund
     
    Upvote 0

    ValleysGuy1975

    Free Member
    Apr 29, 2016
    39
    1
    No it's on the high street. I'd expect the indoor market stalls would be good for tax credits though and getting your rent paid via housing benefit. Better than signing on every week.

    Am I right in thinking that Working Tax Credit is worked out on last year's income ?

    If so this will be my salaried job and wont therefore be eligible. Seems a bit silly as it's now that I need the help, not in a year's time, so a bit confused ??
     
    Upvote 0
    20 years ago I had a unit in The Pavilion in Torquay and in one week in January I made one sale for £1.99 and I wasn't the worst off as one retailer sold nothing but had to give someone a refund

    I know it well, probably met you a time or two. The place could be just about reasonable in high season, January you did well to take a couple of quid, it was probably off me!
     
    • Like
    Reactions: Ian J
    Upvote 0

    Anton Oliver

    Free Member
    Jul 10, 2015
    4
    0
    73
    Leicestershire
    You can turn this around doing one thing. OFFER BETTER VALUE. let me give you an example.
    Hard cost for a latte is +/- £0.25. Cost for a sausage, or bacon or egg sandwich is no more that £0.50. Total cost £0.75.

    This is your offer. FREE LATTE< COFFEE< TEA when you get you sandwish today £2.00.
    Cost £0.75 RRP £2.00= Profit £1.25. You can also flip it around and say get a free sandwish with every Coffee, Latte, ect you buy. profit is still the same.

    Important: OFFER MORE VALUE and you will win every time
     
    Upvote 0
    You can turn this around doing one thing. OFFER BETTER VALUE. let me give you an example.
    Hard cost for a latte is +/- £0.25. Cost for a sausage, or bacon or egg sandwich is no more that £0.50. Total cost £0.75.

    This is your offer. FREE LATTE< COFFEE< TEA when you get you sandwish today £2.00.
    Cost £0.75 RRP £2.00= Profit £1.25. You can also flip it around and say get a free sandwish with every Coffee, Latte, ect you buy. profit is still the same.

    Important: OFFER MORE VALUE and you will win every time

    The gross profit would be 92p (you forgot vat) which is a terrible margin and would after all other costs probably make a loss. To make this example work they would need to be doing your offer once every two minutes all day long.

    This cafe has low footfall, it needs high margin, and higher priced goods to survive. Messing about with 92p gross profit per sale isn't going to touch the sides.
     
    Last edited by a moderator:
    Upvote 0

    TylerJay

    Free Member
    Jan 19, 2017
    25
    3
    I think you need to think outside the box, i read your message and i think i have managed to understand you as person a little bit.

    If i was in your position i would forget about food and just concentrate on the coffee and tea.. (or products that involve the use of hot water because i know there going to be some donkey try and tell you that you can mate 5p more by selling it)

    If your going to invest anything then invest TIME. Time to go onto the internet, or time to read a book about how to sell shit! (things)

    Its not the product its the necessary skills to sell the product
     
    Upvote 0

    TylerJay

    Free Member
    Jan 19, 2017
    25
    3
    The gross profit would be 92p which is a terrible margin and would after all other costs probably make a loss. To make this example work they would need to be doing your offer once every two minutes all day long.

    This cafe has low footfall, it needs high margin, and higher priced goods to survive. Messing about with 92p gross profit per sale isn't going to touch the sides.
    Do you own a business?
     
    Upvote 0

    Newchodge

    Moderator
  • Business Listing
    Nov 8, 2012
    22,806
    8
    8,047
    Newcastle
    Good going my friend! I like your comment and would totally agree.
    Just a thought though because im a little confused now.. isn't 92p classed as profit?

    Of course it is. 92p profit is potentially a huge business. But not in an indoor market with a footfall of about 60-70 and 6 competitors. 92p profit on 10 customers per day is 9.20. Not many people can survive on that.
     
    • Like
    Reactions: Reba
    Upvote 0
    Upvote 0

    STDFR33

    Free Member
    Aug 7, 2016
    4,823
    1,317
    The gross profit would be 92p (you forgot vat) which is a terrible margin and would after all other costs probably make a loss. To make this example work they would need to be doing your offer once every two minutes all day long.

    This cafe has low footfall, it needs high margin, and higher priced goods to survive. Messing about with 92p gross profit per sale isn't going to touch the sides.

    A business struggling to turnover £15 per day is unlikely to VAT registered.
     
    Upvote 0

    Carl Mintern

    That Guy
    Free Member
    Sep 13, 2015
    237
    92
    48
    Do you have to be a coffee shop?

    I assume there are some stalls within the market which are doing well? What are they?

    If there are no stalls within the market that are doing well then I doubt you could find anyone to advocate anything other than cutting losses.

    If, however, there are stalls doing well, then lets take a look at them. What are they selling? Who are their customers?

    Another thing every business should ask itself is "Why am I going to use you?"

    One of the people I work with has a wife that paints nails, and he asked me to help as she doesnt get much business. I asked him, "why would my wife use her vs all the others on facebook offering the same service?" His reply was that, "she's really good." I asked him to come back to me with a list of all the competitors that said they were not really good.

    Why would I choose you?

    The answer can be anything.

    Sometimes we find ourselves so far down the rabbit hole we forgot where we started. A series of decisions may have lead us to a point where we consider our options within such a narrow field, because we are defining it by the situation we are in right now. But we can always start from scratch.

    At the moment it sounds like the only asset you have is the pitch, not a coffee stall, so lets look at what you could do if someone offered you a pitch in this market for free.

    Remember, your spending to this point is a sunk cost - you ain't getting it back just because you spent it. Forget it. Move on.
    It might sound hard, but you need to, at least for clarity of thought.

    You are saddled with a burden because of the lingering thought of your outlay. forget it.

    Now you have an opportunity.

    Someone has just given you a pitch in a market free of charge to do whatever you want with! Be excited! Get thinking, then get to work!
     
    • Like
    Reactions: Newchodge
    Upvote 0

    TylerJay

    Free Member
    Jan 19, 2017
    25
    3
    Do you have to be a coffee shop?

    I assume there are some stalls within the market which are doing well? What are they?

    If there are no stalls within the market that are doing well then I doubt you could find anyone to advocate anything other than cutting losses.

    If, however, there are stalls doing well, then lets take a look at them. What are they selling? Who are their customers?

    Another thing every business should ask itself is "Why am I going to use you?"

    One of the people I work with has a wife that paints nails, and he asked me to help as she doesnt get much business. I asked him, "why would my wife use her vs all the others on facebook offering the same service?" His reply was that, "she's really good." I asked him to come back to me with a list of all the competitors that said they were not really good.

    Why would I choose you?

    The answer can be anything.

    Sometimes we find ourselves so far down the rabbit hole we forgot where we started. A series of decisions may have lead us to a point where we consider our options within such a narrow field, because we are defining it by the situation we are in right now. But we can always start from scratch.

    At the moment it sounds like the only asset you have is the pitch, not a coffee stall, so lets look at what you could do if someone offered you a pitch in this market for free.

    Remember, your spending to this point is a sunk cost - you ain't getting it back just because you spent it. Forget it. Move on.
    It might sound hard, but you need to, at least for clarity of thought.

    You are saddled with a burden because of the lingering thought of your outlay. forget it.

    Now you have an opportunity.

    Someone has just given you a pitch in a market free of charge to do whatever you want with! Be excited! Get thinking, then get to work!
    More comments and people like this need to be in the chat!!
    People who just get on and do things!
     
    Upvote 0
    R

    Root 66 Woodshop

    60-70 people - you're fighting for a very small piece of the pie... as others have said, and Ian has pointed out... you need a box.

    Not to think out of, put to put your things into... seriously if you're struggling I'd just bite the bullet and walk away... don't be too disheartened though... you've given it a try, perhaps it just wasn't the right place for you... kudos for trying... seriously!

    The amount of times people I've met have said... "If only I'd tried... X" and hadn't even bothered astounds me, especially when all they do is moan about being employed rather than being self-employed... it's daft.

    Take it as a learning curve and not as a fail.
     
    Upvote 0
    £15 a day sounds great compared to Ian J who only sold 1 cup of coffee in a month.

    Mine wasn't a café as I sold a product. Actually the café in the Pavilion was the only retailer doing any business in January but that was because Saga bussed down loads of old dears in January and a cuppa was all they wanted (or could afford)
     
    Upvote 0

    Green Housekeeper

    Free Member
    Jan 20, 2017
    2
    0
    Hello,

    This is my first post so please be kind. Firstly may I say that I am sorry that you are struggling, I hope whatever decision you make on the future of the business is a good one for you.

    You have received a lot of super advice but ultimately it is your business and only you will have the answers. Why did you think this would be a good investment? I do not mean this to be taken in a negative way - I mean what made you part with that money, what expectations did you have?

    Many people have a dream of running a catering outlet, I know from first hand experience it takes a LOT of hard work, it is not an easy option if you want to make a living from it and success is rarely overnight.

    Just my opinion, I would immediately get rid of the coffee machine that you have, please do not pretend to be something that you are not - I may buy a coffee from you (believing it to be fresh ground from your machine) I wouldn't like it (I am a dreadful coffee snob) I wouldn't tell you that I didn't like it (so British) but I would never buy another one. I would be able to tell it was instant coffee and it would leave a bitter taste (couldn't resist, sorry).

    Before you make any decisions on spending more money firstly look at your customers (I do really hope that you have underestimated the footfall figures I am sure visitor figures would be available). What do they come to the market looking for? How long do they spend there? Look at the bags they carry, what are they buying? Do they shop there regularly, do they live locally? Is the market open all year, is it everyday, what hours? Is there a busiest time during these hours, is there a busiest day?

    The area the market is in, are there seasonal fluctuations? I imagine the market is busier when the children are off school but is tourism a factor where you are? What kind of businesses are around you, where do their staff buy lunch?

    How does your stall look? Is it perfectly clear what you have on offer?

    Without being personal how do you look, I realise it is difficult but you have to put aside the struggles and 'happy face it' or people will just walk on by.

    Products - can you bake? Traybakes are easy flapjack, tiffin, shortbread etc. They don't require huge skill to make, keep well in an airtight container for a few days and taste delicious, far better than mass produced ones. Scones! I have an absolutely foolproof recipe for scones, cream tea on the go!

    I use a triple certified coffee in my cafe (organic, fair trade and rain forest alliance certified) and I do have a machine but I have regular outside catering events where I use the same coffee (ground and kept in foil sachets) but in cafetieres. I admit there is a wait (3-4 minutes) for the coffee to be ready in the cafetiere but the result is super and I get a lot of positive feedback on the coffee. Cafetieres are not expensive and whilst you are waiting for the coffee to brew you can sell your other wares, have a chat, take money - this could be a way to get a super coffee and build up relationships with customers. You need them to return to you, people buy from people. The coffee is expensive but for me it is worth it, at least this way you could trial it relatively inexpensively.

    Anyway I am blethering on, as I do, sorry I hope at least a little of this is useful information.

    I do wish you the very best of luck, the first two years of the cafe were incredibly difficult - but rewarding too!

    Gill
     
    Upvote 0

    STDFR33

    Free Member
    Aug 7, 2016
    4,823
    1,317
    +1 - I hate these banal, meaningless business speak terms !

    I think UKBF needs a brainstorming sesh so we can identify the blue sky thinkers. They bring nothing to the table!

    We should do it by close of play Sunday?

    Going forward, we shouldn't see this on UKBF again. Some would say a game changer?
     
    Upvote 0

    Dimo

    Free Member
    Jul 23, 2007
    119
    21
    To the OP, I understand your dilemma. There's been some good advice offered on here and I think that unless you can come up with a USP you're flogging a dead 'un judging by the small market footfall. As you bought this coffee stall as an existing business did you not examine the turnover and visit the market regularly to get a feel for the place and gauge potential before parting with 4k?

    Well, yea or nay, that's history now. Retailing in any sphere isn't plain sailing as I know from personal experience having once had a shop myself. My instinct here would be to walk away unless you are really dedicated to it, in which case you will need to battle out the lean times and come up with what people want which will sell at a profit.

    One last thing, can you negotiate the rent you are paying, say for 3 or 6 months?
     
    Upvote 0

    Karimbo

    Free Member
  • Nov 5, 2011
    2,704
    1
    363
    The problem with a indoor shopping centre stall is that people either want to shop OR they want to sit and relax.

    If they're shopping they want their hands free to inspect goods/carry shopping. If they want to take a break from shopping and grab a snack/drink they want to sit down. Which is why a stall is a really bad idea.

    For a stall coffee shop your best bet is to grab commuters, people on foot outdoors who want to keep warm and get a caffeine fix.

    A coffee cart situation between a football ground and nearest train station on a Saturday morning would be ideal.

    This thread is a lesson to all. Do you market research. When buying a business evaluate whether the business is genuine and the former owner is genuinely retiring or they can't make it work and trying to cut their losses.
     
    Upvote 0

    Latest Articles

    Join UK Business Forums for free business advice