Looking for a mentor bricks & mortar leisure

[EBITDA]

Hello,

I am hoping to find a mentor, or even a few mentors that would be willing to help me with a new project I am about to start on. There appears to be many experienced folk around here so somebody to give a little guidance and feedback on ideas would be ideal.

About me

• I am 23 and graduated from university last year.
• Immediately after graduating I started my own online business, which began trading in October and deals in the retail and wholesale food markets. I started the business with £5,000 and hope to sell it after summer for the region of £10-£20,000, which will be used to fund my new project.
• I am financially competent, while in university I spent quite a lot of time in top investment banks and financial markets so I have a solid grasp on macroeconomics, cash flow ect…

About the project

• Total project budget is around £50k
• The business will be a bricks and mortar coffee/food/drinks business.
• The concept will be based on a successful proven concept from London in an affluent town in the South East.

What I really need help with the most

• Technicalities of obtaining and negotiating lease and the associated due diligence.
• Technicalities of obtaining a premises license to sell alcohol.
• Supplier procurement, particularly for alcohol, food and coffee.
• Other thing’s that I clearly will not have considered or budgeted for.
• Critical feedback on my business plan and 12m cash flow forecast.

I am looking for feedback from anybody who is willing to help. I don’t mind about location because we can talk on the phone or Skype. Ideally you have experience running a restaurant, café or bar.

If you want to know any more details about me or the business, please do write below or PM me. Evidently I am totally new to this business so am looking for all the guidance I can get.

Thanks in advance!

 

[NineteenPounds]

Hey,

Welcome to UKBF and great opening post, also great to see that your looking for a mentor, I am not personally able to help but you may be luck enough to find someone here who can or at least offer some great free advice.

Looking at your post the first thing that jumps out to me is your 50k budget?

That seems low, no? Shop-fit alone for something half decent is 10k, unless you have a location pretty much ready to go?

Best of luck.

Hello,

I am hoping to find a mentor, or even a few mentors that would be willing to help me with a new project I am about to start on. There appears to be many experienced folk around here so somebody to give a little guidance and feedback on ideas would be ideal.

About me

• I am 23 and graduated from university last year.
• Immediately after graduating I started my own online business, which began trading in October and deals in the retail and wholesale food markets. I started the business with £5,000 and hope to sell it after summer for the region of £10-£20,000, which will be used to fund my new project.
• I am financially competent, while in university I spent quite a lot of time in top investment banks and financial markets so I have a solid grasp on macroeconomics, cash flow ect…

About the project

• Total project budget is around £50k
• The business will be a bricks and mortar coffee/food/drinks business.
• The concept will be based on a successful proven concept from London in an affluent town in the South East.

What I really need help with the most

• Technicalities of obtaining and negotiating lease and the associated due diligence.
• Technicalities of obtaining a premises license to sell alcohol.
• Supplier procurement, particularly for alcohol, food and coffee.
• Other thing’s that I clearly will not have considered or budgeted for.
• Critical feedback on my business plan and 12m cash flow forecast.

I am looking for feedback from anybody who is willing to help. I don’t mind about location because we can talk on the phone or Skype. Ideally you have experience running a restaurant, café or bar.

If you want to know any more details about me or the business, please do write below or PM me. Evidently I am totally new to this business so am looking for all the guidance I can get.

Thanks in advance!

 

[EBITDA]

Hi NineteenPounds,

Thanks for your reply. Perhaps 50k is too low, although I am actually budgetting more for the fitting aiming for 10-15k.

A lot of the work will be done by myself with my father who won't provide any finance but is a very handy man and will act as a free consultant for the building work.

 

[hipwuk]

Sorry to put a dampener on this but, this a very very difficult area of business to be in.... In recent years, a lot of food vendors are going bust - rents, rates, food and utilities are all sky rocketing. The squeezed margins, increased competition, and long relentless hours makes the food industry increasingly unattractive these days. You simply don't make the kind of money you use to in the bricks and mortar food and beverage trade anymore.

 

[billybob99]

Hello,

I am hoping to find a mentor, or even a few mentors that would be willing to help me with a new project I am about to start on. There appears to be many experienced folk around here so somebody to give a little guidance and feedback on ideas would be ideal.

About me

• I am 23 and graduated from university last year.
• Immediately after graduating I started my own online business, which began trading in October and deals in the retail and wholesale food markets. I started the business with £5,000 and hope to sell it after summer for the region of £10-£20,000, which will be used to fund my new project.
• I am financially competent, while in university I spent quite a lot of time in top investment banks and financial markets so I have a solid grasp on macroeconomics, cash flow ect…

About the project

• Total project budget is around £50k
• The business will be a bricks and mortar coffee/food/drinks business.
• The concept will be based on a successful proven concept from London in an affluent town in the South East.

What I really need help with the most

• Technicalities of obtaining and negotiating lease and the associated due diligence.
• Technicalities of obtaining a premises license to sell alcohol.
• Supplier procurement, particularly for alcohol, food and coffee.
• Other thing's that I clearly will not have considered or budgeted for.
• Critical feedback on my business plan and 12m cash flow forecast.

I am looking for feedback from anybody who is willing to help. I don't mind about location because we can talk on the phone or Skype. Ideally you have experience running a restaurant, café or bar.

If you want to know any more details about me or the business, please do write below or PM me. Evidently I am totally new to this business so am looking for all the guidance I can get.

Thanks in advance!

Good on you son, assuming you are a son. 50k is not a lot, not from personal experience but a distant family member struggled with his coffee shop, £100k is more like it.

But as mentioned above the margins are smaller than a coffeebean, it is cut throat.

I would stick to online, something that isn't restricted to a certain area, if that area is dead, what would you do, if online is dead you can introduce new products and diversify.

If your online venture is doing well, can you not grow it.

 

[EBITDA]

Sorry to put a dampener on this but, this a very very difficult area of business to be in.... In recent years, a lot of food vendors are going bust - rents, rates, food and utilities are all sky rocketing. The squeezed margins, increased competition, and long relentless hours makes the food industry increasingly unattractive these days. You simply don't make the kind of money you use to in the bricks and mortar food and beverage trade anymore.

Thanks for the replies. I am aware that that margins in this area have come under pressure in recent years, however in the location I am interested in, there is not really any competition, just a difficult to access Costa and a few small dirty sandwich shops. I have accounted for the costs the mention, and "relentless" hours are normal to me.

Ultimately it is the numbers which are important, I guess initially I am looking for somebody to critically analyse the cash flow to spot large items I may have missed. As a worst case scenario, I still can't see the business loosing money.

But as mentioned above the margins are smaller than a coffeebean, it is cut throat.

I would stick to online, something that isn't restricted to a certain area, if that area is dead, what would you do, if online is dead you can introduce new products and diversify.

If your online venture is doing well, can you not grow it.

My online venture does not have much space to grow in the b2c area. I created a market in a very niche area. Perhaps there are some other thing's I could do in the B2B arena, but I detest sitting in my bedroom all day with no social interaction. I really want to move on...and make more money, the best case scenario for my online business is profits doubling from 20 to 40k. My base case scenario for this new project is about 120k in year 1.


Here are some of the costs I have thought about for starting up, hopefully you can come up with some things I have been forgotten as my number seems a little low. I also get 3 months free rent btw.

Total £44,685.00


Interior Building work £13,000.00
Legal fees (lease) £1,500.00
Legal Fees (equity) £2,000.00
Equipment £6,000.00
Security Outlay £1,000.00
Training £1,000.00
Premises licence fee's £750.00
Advertising £500.00
Sound £300.00
Outside sign £1,000.00
Security deposit £6,750.00
working capital £6,000.00
Opening Stock £2,000.00
architect fees £2,000.00
Planning application For building use £385.00
Own surveyor fees £500.00

 

[superdooper500]

Best of luck to you on your new venture, it sounds like you clearly have the drive and determination. I have literally just seen quite a snazzy little cafe run by a guy I know in a bustling small city centre fold, so I know how tough this game can be.

My 2p worth would be to consider some good insurance as I couldn't see that listed there, and I can't imagine retail and food based insurance is cheap. I'd also look at the working capital and see if you can't increase that, as I assume you won't be working there on your own and will in any case be working 'on' rather than 'in' the business, so you'll need staff, and you'll only really have enough working capital to pay 2 guys for 2 months, with nothing else whatsoever going wrong for you.

You also have 12% of your budget (£6k) spent on professional fees, depending on the scale of your project, I don't think you'll need to spend quite that much to get going to be honest, although I can see you're in better to be safe than sorry mode, which is fair enough.

Best of luck, it won't be easy, but if you want it enough then anything is possible!

 

[EBITDA]

Best of luck to you on your new venture, it sounds like you clearly have the drive and determination. I have literally just seen quite a snazzy little cafe run by a guy I know in a bustling small city centre fold, so I know how tough this game can be.

My 2p worth would be to consider some good insurance as I couldn't see that listed there, and I can't imagine retail and food based insurance is cheap. I'd also look at the working capital and see if you can't increase that, as I assume you won't be working there on your own and will in any case be working 'on' rather than 'in' the business, so you'll need staff, and you'll only really have enough working capital to pay 2 guys for 2 months, with nothing else whatsoever going wrong for you.

You also have 12% of your budget (£6k) spent on professional fees, depending on the scale of your project, I don't think you'll need to spend quite that much to get going to be honest, although I can see you're in better to be safe than sorry mode, which is fair enough.

Best of luck, it won't be easy, but if you want it enough then anything is possible!

superdooper,

Thanks for getting back to me and looking at the costs. I would assuming I raise exactly £50k, I would actually have more like £12 in working capital, I'm not really sure why I included that tbh.

Also regarding insurance, I have pulled a figure out of the sky of £1,200 p/a paid in 12 monthly instalments, which is in the cash flow. Is this figure too low? And would it have to be paid in one initial instalment?

 

[Root 66 Woodshop]

Security Outlay?

Are you talking about security to the premises such as an Alarm/access control/CCTV/overall security such as locks?

If it's an Alarm then you shouldn't need to pay anything in the region of £1000

If it's CCTV expect to pay a tad more than £1000 unless you go for a basic 4 channel system with low res cameras + installation.

If it's Access Control - there are lot's of choices here...

Locks - There are many different locking products out there, for a business I'd suggest a restricted key system, keyed alike or Master-suited pending on the size of the property.

by all means if you want to know more send me a PM and I'll give you some suggestions of products - totally free no charge at all.

Just thought I'd also best add - I'm a Manager for a Security Specialist company based in Bury Manchester.

www.authorized-access.co.uk

 

[EBITDA]

Security Outlay?

Are you talking about security to the premises such as an Alarm/access control/CCTV/overall security such as locks?

If it's an Alarm then you shouldn't need to pay anything in the region of £1000

If it's CCTV expect to pay a tad more than £1000 unless you go for a basic 4 channel system with low res cameras + installation.

If it's Access Control - there are lot's of choices here...

Locks - There are many different locking products out there, for a business I'd suggest a restricted key system, keyed alike or Master-suited pending on the size of the property.

by all means if you want to know more send me a PM and I'll give you some suggestions of products - totally free no charge at all.

Just thought I'd also best add - I'm a Manager for a Security Specialist company based in Bury Manchester.

Interesting options that I have not thought of or consulted people about. To be honest this is one stage beyond where I am at the moment, I am still trying to verify viability of my business plan so I only need ballpark figures. Thank you very much for the help though, if/when this project moves forward I will certainly come back to you to bounce ideas from.

 

[deniser]

I would also say to be cautious when it comes to building regulations.

From what you say it looks as though you are intending to change the use of the property?

Be aware that the fire safety regulations can be quite onerous, especially in catering premises.

I have a friend who was required to make £25K of alterations to his premises to comply with fire safety regulations and it nearly caused the whole business to go under.

 

[Chris Ashdown]

Dont forget you need to pay the landlords lawyers fees as well as your own and a minimum of 3-6 months deposit on the rent at the start

Telephone and also elec and gas will also require a deposit for a new business

Cafe need good seperate toilets

Food stands etc generally need to be in Stainless steel and cost a fortune and expresso coffee machines also very expensive, Some of this you may be able to hire or lease but still need a deposit

Point of sale need at least two to keep speed of service up to customers expectations

Tiles or floor covering is also expensive

What is the footfall and why has no other chain felt the need to compete, not a silly question as at saturation point in most viable area's

Check prices of hanging cealing if not fitted and lighting

Also free broadband for customers

Good luck but I do think you have totally underestimated the start up cost and need to do more research

 

[ethical PR]

You mention in your budget £500 for 'advertising'. What was your thinking around this in terms of how this budget would support your overall marketing needs for example brand, website, social media, advertising, PR etc?

You also mention planning permission. Have you checked to see whether the change of use you are looking for would be viable for the property you are interested in and how long this would take? I would imagine you wouldn't want to take on a property until you know it has appropriate planning permission.

 

[EBITDA]

Dont forget you need to pay the landlords lawyers fees as well as your own and a minimum of 3-6 months deposit on the rent at the start

Telephone and also elec and gas will also require a deposit for a new business

Cafe need good seperate toilets

Food stands etc generally need to be in Stainless steel and cost a fortune and expresso coffee machines also very expensive, Some of this you may be able to hire or lease but still need a deposit

Point of sale need at least two to keep speed of service up to customers expectations

Tiles or floor covering is also expensive

What is the footfall and why has no other chain felt the need to compete, not a silly question as at saturation point in most viable area's

Check prices of hanging cealing if not fitted and lighting

Also free broadband for customers

Good luck but I do think you have totally underestimated the start up cost and need to do more research

Broadband is only £60 p/m and will also host the phone line using VOIP. I use do this for my current business at a huge expense of £4.99 a month. Interesting about the elec and gas - can't be too much I imagine.

Floor will just be cheap plain concrete, tiles are expensive and not the style I'm going for. Most furniture will be found second hand from car boots ect..

Why do I need to have separate toilets? In London where space in tight, shared is common. One place that comes to the top of my head is shoryu near piccadilly circus.

Landlord pays his own fee's, this has already been agreed. 3 month deposit I have accounted in the previous post.

Given the footfall expected, one POS will be used initially, if it gets to the point where two are required, things will be great

Please keep this coming, I want something that I have not really thought about to come up.


Lighting, stainless steel tops and expresso machine all come into the 20k equipment and interior building budget. I will break this down later, but ultimately will need building plans approved before this can be properly estimated a previous poster mentioned.

 

[EBITDA]

You mention in your budget £500 for 'advertising'. What was your thinking around this in terms of how this budget would support your overall marketing needs for example brand, website, social media, advertising, PR etc?

You also mention planning permission. Have you checked to see whether the change of use you are looking for would be viable for the property you are interested in and how long this would take? I would imagine you wouldn't want to take on a property until you know it has appropriate planning permission.

Yep, £500 to pay good looking people to walk around town and give out flyers for the place. I am build a website and powerful online marketing campaign myself for free, it was the backbone of my last business.

I have discussed with the head of planning for council about what I would like to do, seems positive although a 5 week timeline was required. Obvs no lease would be finalised without plans being fully approved. The landlord is a big dog in the local town though, so should be able to push this through on my behalf - this was recommended by the head of planning.

 

[serendipitybusiness]

Yep, £500 to pay good looking people to walk around town and give out flyers for the place. I am build a website and powerful online marketing campaign myself for free, it was the backbone of my last business.

....and samples, don't forget the samples lol, the freebie tasters will be more of a draw than the pretty faces, put them together with a bubbly personality and your onto a winner.

I would also go onto the street you plan to situate yourself on (if you haven't done so already) during the week and weekend, speak to the locals on the street, ask them their feedback, if will give you an idea of footfall, give you some great market feedback and also help generate support for when you do open up.

I would also recommend trying to see if you can raise a bit more than you think you need, it doesn't matter how much you plan, unexpected expenses have a way of popping up in these situations, it is sods law and part of the bumpy road of entrepreneurship but it is this that can break many businesses before they even begin.

Your a smart cookie, you are doing things the right way and I think you have a lot of promise with this or any other venture you take on.

Good luck and I hope you do well. Keep us updated!!

 

[serendipitybusiness]

I would also go and speak to the other surrounding shop owners, tell them your plans ask them how business is for them. This way you can get an idea of the area, how other businesses are doing in the area as you will from the sounds of it be reliant on the maintenance of footfall. If you set up shop then they all start closing up you will be in trouble. It will also have the added benefit of rallying local support and open the door for collaboration and cross promotion with other local businesses in the area once you do open up. You may find they welcome you with open arms as your business may also help their business and actually help you on your journey, at the very least you may line up a few customers (again samples will help your cause!!).

 

[Chris Ashdown]

Broadband is only £60 p/m and will also host the phone line using VOIP. I use do this for my current business at a huge expense of £4.99 a month. Interesting about the elec and gas - can't be too much I imagine.

Floor will just be cheap plain concrete, tiles are expensive and not the style I'm going for. Most furniture will be found second hand from car boots ect..

Why do I need to have separate toilets? In London where space in tight, shared is common. One place that comes to the top of my head is shoryu near piccadilly circus.

Landlord pays his own fee's, this has already been agreed. 3 month deposit I have accounted in the previous post.

Given the footfall expected, one POS will be used initially, if it gets to the point where two are required, things will be great

Please keep this coming, I want something that I have not really thought about to come up.


Lighting, stainless steel tops and expresso machine all come into the 20k equipment and interior building budget. I will break this down later, but ultimately will need building plans approved before this can be properly estimated a previous poster mentioned.

Secondhand furniture and concrete floors, not a common marketing plan, I wonder why?

If you want the opposite sex to come in more than once you must have nice clean female only toilets, for some strange reason they don't like shareing with men who leave the seat down

It's very dangerous to wok down to a price when starting up to make it work rather than costing to get it done right at the lowest cost

 

[ethical PR]

I have discussed with the head of planning for council about what I would like to do, seems positive although a 5 week timeline was required. Obvs no lease would be finalised without plans being fully approved. The landlord is a big dog in the local town though, so should be able to push this through on my behalf - this was recommended by the head of planning.

So you are claiming the Head of Planning at a local authority recommended that your landlord could push through a planning application on your behalf? And that there would be a five week turnaround from submitting a change of use planning application and it being approved.

This is complete nonsense. Planning applications are decided upon by local councillors who sit on neighbourhood/area/planning committees. After council officers consider the applications and make a recommendation to the commitee. No 'head of planning' for a local authority would recommend your landlord could push through an application and it's highly unlikely the process would take five weeks.

Unfortunately you have lost all credibility for me.

 

[Root 66 Woodshop]

Secondhand furniture and concrete floors, not a common marketing plan, I wonder why?

If you want the opposite sex to come in more than once you must have nice clean female only toilets, for some strange reason they don't like shareing with men who leave the seat down

It's very dangerous to wok down to a price when starting up to make it work rather than costing to get it done right at the lowest cost

Chris, with all due respect there are plenty of companies including coffee shops,cafe's and restaurants out there buying secondhand furniture - it all depends on the look... Don't forget programmes that teach folk how to salvage furniture etc... Salvaging is the new rage.

Concrete floor - could cause issues, again though it all depends on how the place is dressed as to whether or not it's a good business plan.