How to Sell my Cafe?
SELLING A CAFE
Cafes and coffee shops have certainly become the flavour of the month around the world and especially in Australia in the last 10 years. Empty shops along the Main Street are soon turned into cafes, with proprietors realising that you don’t necessarily need prime position to grab your own piece of the market. So what makes your coffee shop sought after and what will make it sell for more than the average cafe business? These days, it comes down to the “vibe”. You can see two coffee shops side-by-side, one is doing all the business and the other one is empty. That can come down to the coffee, the food, the service or the “vibe”, or a combination of all. The “vibe” can come from the design and look of the cafe. It needs to be built to have a “look and feel” that meets the current needs of the cafe customer. After all, that is what is going to attract your customers first. The coffee and the food and the service come later.
Now let’s look at profitability. Also think about whether you would be better in a shopping centre or on Main Street and also whether you would be better served in a franchise business or non-franchise business. This article might help you in determining whether it should be franchise or non-franchise. Some of the points made in that article suggest that a non-franchise operator has more flexibility. The same may apply to the owner of a Main Street cafe who doesn’t have to abide by the rules and restrictions created by shopping centre owner.
Before you sell your cafe you need to set it up to be as profitable as possible. After profitability will come maintainability and transferability of income. The way to boost profits is set out below
- Eliminate low margin items
- Retool your menu to focus on the most profitable products sold. These are usually coffee and drinks. They don’t take too much time to make and the ingredients are cheap
- Increase your Prices/ Margins to make more profit
- Introduce systems so that you can eliminate theft and waste
- Be careful about opening hours. Shorter hours of trade could make your business more valuable
- Host Events, even if it is breakeven. Every new person you get to your venue is a bonus
- Start Social Networking Accounts and grow following of your business. The social media trends change from time to time so make sure you change with them
- Know your costs and eliminate meals that have high cost items.
- Keep your regulars and look for new customers.
Time to Sell
When you have decided the time is right to sell your cafe, the process is a journey that can be made all the easier by:
- Assess your business through the eyes of a potential buyer. By changing your perspective you will be able to identify not only what needs to be physically improved, but also the strengths and weaknesses of the business. Ask yourself, “Would I buy this business”? Or why not?
- Capitalise on the cafes strengths to improve the appeal of the cafe.
- Develop a database of customers that you regularly communicate with about specials or what is happening at the cafe. Along with your social media, build a community.
- Formalise all systems and procedures re the day to day operations of the cafe. This is invaluable for the incoming owner as they only have to follow the formula.
- Proactively ensure that your lease has been negotiated on the best possible terms and has as long as possible to run.
- Presentation. A well presented cafe gives the impression of profitability, similarly, if the cafe is run down it gives potential buyers the impression that there is an underlying issue with profitability.
- Online presentation. A professional website can significantly increase sales.
- Know your brand and what it promises your customers. Your brand is encapsulated in your offering, service and your team delivery.
- Financials. Buyers expect to see a history of profitability. Well kept accountant figures are a must. Many owners of cash businesses have been known to “hide” income, making it difficult for a buyer to get finance. Also a buyer must find some way of verifying turnover other than through the official figures of the business.
- Keep up. Watch your competition and watch trends. You can have a successful cafe one minute and lose customers the next. You must change with the times. You can’t be refurbishing every month, I understand that. However you can innovate as far as your menu and activities around the Café are concerned.
- Engage a licenced Business Broker to handle the selling process
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They opted for BCI:
Founder and M.D. - Jump Start
" I sold my business for the price, terms and hand-over that I wanted, and it was all because of Tony. His decades of experience and excellent people skills gave me confidence, reassurance and guidance throughout the entire process. He had ... "
M.D. - Sherlock Consulting
"For 20 years plus I have seen the results of Tony’s business and the professional way he handles his clients….. He is a man of action and stands behind his words….. It’s nice to see and meet a person who is courteous, honest and willing to go the ... "
Director - Fields of Beauty
" Tony, Thank you, for your commitment, professionalism, and dedication to selling my business . I could not have asked for a better broker to sell it! ... "
Director - PALMERBIZ
" If you are considering selling your business, don’t waste your time shopping around for a broker that doesn’t even understand business. Go straight to BCI Brokers and get the professional service that you deserve ... "
Director, Franchise Systems Grp
"Tony puts the interests of his clients at the forefront. He takes a proactive approach to each project and helps his clients understand the reality of the situation. He knows what is required to get a positive result and has proved to be a longstanding colleague ... "
Pro. Services Franchisor
" I have worked with Tony over a number of years in different capacities, firstly as a Franchisor with Tony brokering the sale of a franchisee in our system and then as an advisor to our system. On all occasions I have found Tony to be well informed and ... "