Food and Entertaining
How To Buy a Cafe
Buying a cafe can be a great way to make money.Your cafe could be a restaurant, coffee shop, pub or both.Should you buy a franchise or a solo operation?Scout out the location and talk to everyone involved in the deal, including the landlord, current owner, staff, and customers to see if the cafe is worth buying, or if you would do better to look elsewhere.Finalize the deal with help from a lawyer and pay attention to the contract details.
Step 1: Pick the kind of service you want to offer.
Each of the cafes has a different style.Teas and baked goods are some of the offerings at some cafes.Coffee is the focus of a lot of cafes.There are cafes that serve alcohol.The type of cafe you want to own will affect how you purchase it, where it should be located, the licenses you need, and the profit you will bring in.Think about the theme of your cafe in addition to the services offered.Is it a sleek cafe?Is it a bright sports-team theme?Different clientele will be attracted by the style of your cafe.
Step 2: Think about the importance of profit.
The ultimate goal of any business is to turn a profit.You don't need to be a slave to the profit motive.Don't let the potential lack of profit stop you from fulfilling your dream, if owning a cafe is just a goal of yours.If profit is important to you, you should look at the past financial returns of the cafe you are going to buy.If possible, you could look at financial data of similarly-sized cafes in the area.Your cafe's profit depends on a number of factors, including location, service quality, and quality of products.
Step 3: Do you want to be close to the cafe?
It's hard to make a long commute.Being close to the cafe will save you time and money.You will have to decide how far you want to go to purchase your cafe if you can't find a good location in your immediate vicinity.To make a decision, say to yourself, "I don't want to travel more than a few minutes to get to the cafe." This will help you eliminate cafes that are outside that range and focus on obtaining one of the cafes within it.
Step 4: Do you want to work at the cafe?
It can be difficult to work at a cafe.You can get to know the staff and analyze their strengths and weaknesses by working there.You will get a better idea of how workplace processes could be improved.You will be able to meet the customers and find out what they think about the cafe.A cafe is a place where people congregate.If you aren't a person, it's best to hire a manager to take care of the day-to-day operations.
Step 5: You can compare the franchises with the cafes.
There are two ways to buy a branch of a franchise.Both will have an existing customer base that you can continue to rely on, but buying a franchise is likely to be more expensive because you're paying for a more widespread and established brand.The franchise is likely to provide a lot of equipment, training, and advice that will help you get started in cafe ownership.If you manage the main location well, a cafe can always branch out.A cafe with more freedom to decide what can and can't be on the menu, how staff should be dressed, and how hiring decisions are made might be a good idea.
Step 6: The right location is chosen.
In any business, location is important.The cafe should be in a busy area.The area should be free of crime to make customers feel safe.The location should be visible.Cafes can be found in malls, shopping centers, downtown areas, business and industrial parks and many other places.If you want to buy a cafe in the right location, you need to consider all of the above factors.You shouldn't rush into a location.Take your time and scout out a couple spots.
Step 7: Inquire about prospective cafes.
You will want to see it for yourself before buying it.It's a good idea to look at several cafes for sale in your area before making a decision.The interior and exterior should be looked at.Is the parking lot collapsing?Is it possible for customers to feel comfortable in both the inside and outside of the cafe?Imagine how the space could be improved if necessary by getting a feel for it.
Step 8: Ask lots of questions.
You should learn as much as possible about buying a cafe.Go back over all your paperwork, licenses, financial data, and the contractual offer one more time before you sign the sales contract.Ensure that you are able to open your cafe after the sale is over.Try to find free advice.Talk to your friends who own food service businesses.You can connect with former and current cafe owners on networking sites.
Step 9: Look into the competition.
Your cafe isn't the only one in town.You can investigate local feelings about a competition by reading reviews online.If you want to see how a cafe stacks up against its competitors, visit other cafes in the area.If you want to capture some of your potential cafe customers, check out other places.You might be competing with fast-food places, small restaurants and even pubs.
Step 10: Financial data to check.
When a cafe is advertised for sale, the ad will usually state the most recent monthly or quarterly revenue.If you want to buy a cafe, find one that has decent earnings.If you want to buy a cafe, you need more information than the initial income statement can provide.If you want to know if the revenue is increasing, decreasing, or staying the same, you should get the last three years' worth of financial records from the owner.If you want to purchase the cafe, you need to sign a confidentiality agreement with the current owner.If the revenue stays the same, you have a good business on your hands.If the revenue is decreasing over time, you might want to wait to get into the cafe market or find another cafe to buy.If you like taking a challenge, buy the business, but prepare for an uphill battle as you make changes to the cafe that can turn it around.
Step 11: Speak to your customers.
Talk to the customers of any cafe you are thinking of buying.If they like the place, if they think it has gotten better or worse recently, and if their friends would recommend it.This will tell you if a place is popular.Ask the customers to rate the cafe on a scale of 0 to 100.Do they like the competition or the place you are interested in buying?Continue these conversations with customers after you buy the cafe.Customer feedback can help you decide which parts of the cafe should change and which should stay the same.
Step 12: The staff should be evaluated.
If you are given access to the cafe, it is a good idea to have a conversation with the staff.Get to know how competent and motivated they are.If you bought the place, ask them if they would like to stay.They would stay after you bought the cafe.If you decide not to buy the place, take this information into account.Cafes have high turnover rates.You will have to hire new staff and have a protocol in place.If you can retain staff that is already trained, you have one less thing to worry about when you buy a cafe.
Step 13: You should talk to suppliers.
Is the cafe able to pay its bills on time?How often does it ship new products?A cafe may be in financial trouble.
Step 14: Think about your expenses.
Rent is an obvious expense, but you might also have to pay for things like electricity, heating, and trash pickup.Cafes need to receive continuous shipments of coffee, tea, flour, sugar, and other baking essentials.When calculating the effort and expense that your cafe will take over the long-term, be sure to include these costs.You could also sell bottled beverages and other products that need replenishment frequently.wi-fi and phone are important.Most services used by the prior owner should be kept when you start out in cafe ownership.As you get a handle on what's working and what isn't, look into changing services or upgrading to better products.
Step 15: Talk to the landlord.
You will only have to deal with one person if the café is owned by someone who owns the actual building where it is located.If the café owner is renting a space from a commercial landlord, you will have to keep two people informed about what you want, and make sure all three of you are on the same page.Express your interest in buying the cafe to both the landlord and the owner.The landlord can kill your business if you don't keep him or her happy, and you only need to talk to the owner of the café to buy it.When talking to the landlord and owner, maintain a friendly tone.The landlord should be kept in the loop by the café owner.Stay in touch with the landlord by getting his contact information.You will want to build a good working relationship with them since you should be getting to know them now.If you buy the cafe, you will have to take on the rest of the owner's lease.If the café owner has been in the space for 10 years, you will be expected to take on a 5-year lease when you finalize the purchase.
Step 16: You can talk to a lawyer.
Talk to a business lawyer who has dealt with cafe sales before you sign any documents.Your lawyer will be able to give you guidance on how to obtain a cafe and what paperwork you need.A business lawyer can help make your purchase as painless as possible.
Step 17: Make sure to check the paperwork.
If you want to buy a cafe, you need to make sure it complies with all the current rules.The laws vary from state to state.Check with your local planning commission for more information.If your local health department needs to conduct an inspection prior to you getting the business, you should contact them.Small businesses can find a list of licenses and paperwork at the SBA's website.Make sure the seller gives any tax documents that were promised.The seller should show that the business is in good standing.There should be a letter from the Better Business Bureau.If you are buying both the right to operate the business and the actual cafe space, keep an eye on your agent.If they are under the impression that you are not in a rush to finalize the purchase, you will end up on the back burner.Your landlord or real estate agent should be in the loop at all times.
Step 18: There is a letter of intent to be submitted.
A pre-contract is a letter of intent.It is a non-binding document that lays out the terms and conditions under which you want to buy the cafe.The letter of intent will show that you are serious about the purchase.The letter of intent should be acknowledged by both the café owner and landlord.A lawyer or business person can help draft a letter of intent for you.
Step 19: You can get a bill of sale.
The previous owner sold the business to you in a bill of sale.The equipment, vehicles, and appliances that are staying with you when the sale is finalized should be listed in the bill of sale.As much as possible, keep as many essential appliances and fixtures.Without the bill of sale, you can't prove you bought the cafe.The sale price should be adjusted to the adjusted purchase price.The final purchase price includes any taxes, utilities, or other bills the previous owner hasn't paid for.It will result in a slight decrease in the final sale price for you.
Step 20: A non-compete agreement should be signed by the prior owner.
A non-compete agreement states that the previous owner will not open another cafe nearby.The customers who were faithful to your cafe might leave for a new business if he or she does that.
Step 21: Do not cancel the lease.
Canceling the lease will cost you money.Even if you want to stay in the same space, there will be a penalty for ending the lease early.Don't cancel the lease, wait it out.Commercial leases last between 10 and 15 years.
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