What would you do? Soz its another coffee shop thread!

[dominict]

Hi,

Long time lurker here, I know there are lots of people looking into coffee shops etc and the market is tough, but a friend of a friend wants out of her business, due to health problems and quote "has just had enough", and mentioned it in passing to my friend who then told me.

She reckons shes earning just over 100k a year, I was told this was take home, but it seems quite high, and my friend could have got it wrong, could be turnover, and she wants 60k for the business.

Now I know the cafe and it does have good return customers, reputation and is lovely inside. She doesnt really do too much in there apart from hot drinks, panninis and cakes, yet it always seems busy.

Now I understand alot of this could be chinese whispers and I do plan on having an informal chat with the cafe owner this afternoon, but just a heads up before hand would be nice. So is it worth 60k? Do the figures sound about right? Obviously I am not going to do anything without looking at the books either.

Thank you to anyone taking the time to reply.

 

[kulture]

Running a coffee shop is hard work. Very hard work. I cannot comment on the price because, as you say, you have not seen the figures. £100K does sound more like turnover though, and it is not bad for a coffee shop. Points to watch out for are

How much is spent on maintenance of the equipment. In particular the coffee machine?
How much life has the coffee machine got left (a good machine is expensive)?
What time is left on the lease?
What kind of lease is it?

 

[Richie N]

Sounds like turnover to me as well.
A business is only worth what you are willing to pay for it.

I know a few coffee shops in our area that are up for sale for about £60k, they take less turnover than us and do not have the space that we have.
You need to find out what is left on the lease, what fixtures and fittings there are included, turnover etc

 

[littlebiz]

I would imagine that's turnover. So you'll need to find out the gross profit and the net profit.
A coffee shop / deli type would normally be making about 65% GP.
Out of that comes all the overheads.

I'd agree with Kulture, look carefully into the lease.
What's the rent? And rates?
And find out whether there are staff wages.

We have two coffee shop / delis, and maintenance for the machines is not much at all, with an individual person doing it. (Maybe more the owner is tied into some sort of contract with the supplier of the machine.)

Check out what other places are going for (google 'businesses for sale' or try Daltons.)