Top Choices Of Coffee Shop Business

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Top Choices Of Coffee Shop Business

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There are a few things to know when considering getting into the coffee shop business. You can enter this business by one of three ways- start your own coffee shop from scratch, buy an existing independent business, or purchase a franchise. Each type of business has its pros and cons. – PowerPoint PPT presentation

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Title: Top Choices Of Coffee Shop Business


1
Top Choices Of Coffee Shop Business
  • There are a few things to know when considering
    getting into the coffee shop business. You can
    enter this business by one of three ways- start
    your own coffee shop from scratch, buy an
    existing independent business, or purchase a
    franchise. Each type of business has its pros and
    cons. For instance startups have more risk
    associated with them than buying an existing
    business or franchise. In my opinion, buying an
    existing business, either independent or
    franchise, is the easiest route and the more
    popular way to get into the business. If you plan
    on buying an existing coffee shop you will need
    to do your research. Check out the location, the
    atmosphere, the menu and the financials.
  • Atmosphere
  • Check to see if the establishment has a pleasant
    atmosphere. What is the decor like? Redecorating
    can be expensive. Are the employees friendly?
    Customers will be more apt to spend time in an
    inviting and comfortable environment. Will you
    keep the current employees? These are important
    factors to consider when negotiating the purchase
    price.

2
  • Location
  • It's not a bad idea to visit the coffee shop
    business you are interested in. You can act like
    a private investigator, after all nobody knows
    who you are. This will allow you to watch the
    business and its employees in action. It will
    also give you a real feel for the amount of
    traffic going in and out of the shop. The most
    successful coffee establishments are easily
    accessible to foot traffic. Great locations
    produce greater revenues but come with a price.
    High traffic equals high rent. High rents can eat
    up profits. Monthly rent should not be more than
    10-15 of gross sales. Look at the current lease
    agreement. See if it's possible to renegotiate
    the lease if the rent is too high. If the coffee
    shop is not accessible to foot traffic then more
    advertising dollars will need to be set aside in
    order to attract more customers.

3

Menu During your visit to the coffee shop for
sale check out the menu. Sample different types
of coffee and ask questions. Some coffee
businesses sell food items and some do not.
Adding food to the menu can boost profits. Cost
of goods sold should be around 28-32 of annual
sales. Financials Once you have
investigated the location, atmosphere and menu
you will need to look at the financials. Pre-tax
profits should be around 16-20 percent of annual
sales. If the shop is adhering to industry
standards and everything else seems to be in
order concerning the location, atmosphere, menu
and financials then all that's left to do is
close the deal.    
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