Six important things to consider whether buying or selling a coffee shop:
1. Location- many things can be done to improve a business but as they say: location, location, location! Most good coffee shop are located in areas that have good foot traffic and people passing by. If your considering buying a coffee shop that has weak foot traffic be prepared to spend significant money continually advertising the business to remind patron where you are.
2. Rent- Whether you buying or selling, your rent shouldn't be more that 10% to 15% of your monthly gross sales. If it is it has to be renegotiated or you'll be working to pay the landlord. If, as a seller, you've been given a temporary rent reduction due to the economy, then you or your broker has to speak to the landlord to make sure it can and will be permanently passed on to the new buyer.
3. Menu- Does the shop serve any food items? My coffee shop listing had doubled their numbers by adding food items, ie; sandwiches, salads, breakfast and even burgers, all without a hood! Adding food items can be a great idea just make sure there are no restrictions in your lease that would be in conflict with another tenants lease exclusive right to sell. Also you have to work with the health inspector to see what is permitted in your area especially when working with limited equipment.
4. Prepare to be bought or sold- I tell all my sellers, the more organized you are the less time you'll have to spend explaining everything to a buyer and this doesn't just include the financial information. You might know to add dash of this and a spoonful on that but buyer wants the clients to be just as happy with the whatever their buying as they were when the seller was there. The fact is the more you document the easier the training will go when you sell. So start writing things down and creating your own SOP manual for your little shop, otherwise you can expect many phones even after the sale is over.
5. Deciding to get in the business- Buying an existing business can can be a goldmine or it can be fatal. Knowing what and who your dealing with is key. Go to as many coffee shops as you can and sit there a while and observe while trying the coffee. Ask questions like, "do you roast your own beans here?" Note the machines they are using. Gauge the the prices they are charging and the area your in. The secret to most independent coffee shops is the local feeling when you go in and the experience you have when you're there.
Coffee shops have a special place in our culture, we meet our friends there, we treat ourselves to something a little decadent, we even have meetings there. The question is whether or not you see yourself understanding and catering the culture. If the answer is, "yes" then it's the right type of business for you!
About The Author: Christina Lazuric, CBI is a Principle and Broker at My Restaurant Brokers. Christina has brokered hundreds of Restaurants, Bars, Food Franchises and food related businesses. MRB has the experience and buyer database to find the perfect buyer for your Restaurant or Bar. Serving Orange County & L.A. County, Christina can be reached direct at 949-257-7823 for any questions or having a consulation regarding buying or selling a restaurant.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Michael Davidson, Business Broker - Southern California
Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.
|William Park, Business Broker - Southern California
Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.
|Ryan Clark, Business Broker: Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.
|Joe Ranieri, Business Broker: Orange, LA County Areas
Having owned retail/restaurant businesses for over 20 years, my interest turned to listing and selling businesses rather than owning them. I specialize tend to specialize in high volume restaurants, fast food independents and chains, bars, and liquor stores. Call me direct Or Text 714-292-5448 Cell.
|Rick Carlson, Business Broker - Southern California
You Will Never Feel Lost In The Shuffle. Many Brokers Simply Send Out An NDA And That's The End Of Communication. All Buyers Receive A Personal Meeting With An Ace Acquisition Specialist So They Can Recommend The Perfect Business For You. Phone Rick direct at 800-985-4939.
|Mike Brewer: Liquor License Broker, ABC Consulting Service
Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.
|Jack Oh, Business Broker: LA, Orange Counties
Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.
|Bob Baumgarten, Business Broker: Southern California
National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-588-8727.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|Upgrading Liquor License: An Increase In Price When I Sell My Restaurant?
My restaurant recently upgraded its beer with wine license to a full-service liquor license, and if I sell, how much can that increase my selling price? Joe Ranieri, Southern California restaurant broker specialist initiates this discussion and other advisors, business brokers, agents weigh in.
|Buying A Restaurant Can Be Challenging: 3 Key Tips For Restaurant Buyers
People always need to eat; there should be plenty of business. Some restaurant buyers think there is prestige to owning a popular eating establishment. But it isn't an easy business purchase. Peter Siegel, MBA (BizBen Founder, ProBuy & ProSell Program Director at 925-785-3118) reviews this topic.
|What Are Some Of The Best Tips On Buying An Existing Bakery Small Business?
Bakeries service all occasions from weddings, birthdays, retirement, and a whole host of other special occasions. Many bakeries do a brisk retail business, but really make their money in catering. Joe Ranieri a Southern California Business Broker looks at the top tips when trying to sell a bakery.
|What Are Some Tips In Ensuring A Smooth Transition When Buying A Business?
Changing hands of ownership can seem both exciting & daunting to all parties involved, but it's important that a smooth transition occurs to maintain or achieve success of the business. Joe Ranieri (Orange And LA County Business Broker - Restaurant Specialist) shares some tips with business buyers.
|Buying A Restaurant With Financing: 5 Options For Restaurant Business Buyers
In this Discussion, Peter Siegel MBA (Business Purchase Financing Advisor at 925-785-3118) discusses financing of purchasing a small to mid-sized restaurant business (with or without real estate). When it comes to financing a restaurant, potential restaurant buyers have many options to choose from.
|Selling Buying Used Restaurant Equipment-Tips For Restaurant Buyers, Sellers
The restaurant business is a tough business to be in, no one can dispute that, and so it's imperative that an owner's equipment is in good working condition. A new owner should make sure that the restaurant's equipment is in good working order before they close escrow. Joe Ranieri gives his tips.
|Is Your First Offer Received Usually The Best Offer When Selling A Business?
Should you accept that first offer when selling a business? Brokers and agents agree that the first 30 days are probably the most critical when selling a small business - but should you take that first offer? Joe Ranieri (Orange and LA County Business Broker) starts this great Discussion on BizBen.
|Why Restaurant Buyers Typically Fail: Best Pro Tips For Buying A Restaurant
Buying a restaurant (no matter what type) can have many pitfalls, and potential restaurant buyers should know how to avoid getting burned! Several restaurant intermediaries and advisors weigh in on this BizBen Discussion about the best way to find, purchase and run a restaurant successfully!