I want to own a cafe and have an opportunity to buy a business that's been open for 7 years. Hours are breakfast and lunch hours, which works for me because I want to be a part-timer. Asking price is $135K including fixtures and equipment (not inventory of $2K), seller financing of half may be available. Seller will be landlord as she owns the building. She's offering a 15 year lease starting at $1200 plus 2% increase per year. Sales were $250,000 last year. Tax returns show everything written off however, and says net profit was $3K. Is this standard practice in the food business? She says net profit is $5-6K per month for her, but I would have a debt service of about $1000. This would be my first business, and I want to go for it, but am nervous about a good investment. It is definitely well established and popular, and I could extend hours if I wanted to. I want to learn from an established business so I can then open one from scratch in the future. Can I succeed without formal business training, but an aggressive desire to learn and be successful? I'd love to hear from anyone who can offer their story/experience/warning/encouragement. Thanks!

-- Sandra Currier (sandrarae2003@comcast.net), February 29, 2004

Answers

Sandra, this sounds like a great opportunity. My own experience:

I have worked as a Store Manager and Trainer for a major coffee company. There will be no PT that you're expecting. When an owner, you give 24/7 in many different ways. Also, from an Ops Mgr perspective helping small companies, you may want to confirm the status of A/R and A/P - if everything current? How updated are they? Also, is it possible to borrow from other than the owner, particularly when she is also the landlord - lots of room for continued control there. Only a few ideas to ponder. Best of luck, NFS.

-- Norma Floyd-Sayles (floydsayles@yahoo.com), March 03, 2004.

Sandra,

How about owning and operating your own MOBILE espresso/smoothie trailer. We help people get started for under $30,000 with a 20' custom built espresso trailer that has everything included to drive to a fair/festival and make thousands daily! Contact me if interested in details.

-- Gregory B. Comer (greg@thecoffeeconsultants.com), April 05, 2004.

In my opinion they are asking too much for the business. If you are not buying the building then you will have a mortgage and a lease. The equipment (though not listed) may be worth a total of 20-25K if they have more into it than that then they are huge or stupid. You should be able to find a good location somewhere to lease that does not require a lot of renovation/remodleing to be up to code. The equipment can be acquired new or used for 8-15K assuming a 2 group esp. mach., a reach-in cooler, an ice maker, a register and the sinks one for dump one for hand washing and either a tripple sink or dishwasher (cheap ones are $1,800ish) the stock is accurate at 2-3K dependent on what else you are offering. I will gladly offer tips to you as you are getting set up etc. to help you save money if you want. Trask

-- Trask (asktrask@yahoo.com), April 14, 2004.

Sandra,

The avrage rent on a coffee House in the US is $700 to $800 per month Your accountant should be able to give you some guidlines

al

-- Al Welker (OrangeRoaster@aol.com), May 29, 2004.