Opportunity Knocks. Need Advice
I have been looking for a location for a year and a half. I have put offers on a few existing shops and looked at lots of locations but nothing has panned out. Recently one of the shops I put an offer on, but was out-bid, has gone out of business and was seized by the leasing company. They are offering me the equipment for free with a lease. The majority of the equipement is junk but there is some good stuff. Basically I can get in way under budjet. The problem is that the shop obviously failed and I was wondering how long it would take to attract new customers? Has anyone out there had any success buying a failed business and turning it around? The lease is inexpensive and I do have money for nice equipement and renovations. My business plan is to bring a 3rd wave shop to my community. I have been roasting on a Diedrich for a year and have taken barista certification courses but have no real experience as far as running a shop. Its just something that I enjoy and would like to take it to the next level. Any advice would be appreciated.
Replies to This Discussion
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Permalink Reply by victoria fallon on
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It is always risky to buy a failing business. location, location, location! I wonder if you could find out why it failed. Maybe you should talk to the people and businesses in the community to find out more.
Having said that, I work at an artisan cheese shop that originally started out as a revival project so to speak. There was a cheese shop in this space for 17 years and it was old and dingy and all the cheeses were behind the counter. There were no more than 20 cheeses and a collection of jams and jarred specialty products. Clearly it was outdated.
The present owners bought the business because of the location and revived this shop. They gave it an overhaul. A fresh new face lift. Needless to say the community was curious at first and soon after addicted to all the shop had to offer. That was six years ago, they are now three times the original space. A bistro was added and the retail space doubled in size. Which included an above ground cheese 'cave'. They also have another retail location in the same city, sell at five farmers markets and have a presence on the web.
I say talk to your neighbors, if the location is great and you can see yourself there for years to come than go for it.
If you build the business, get behind it, educate your customers and offer a great product then your off to a good start.
Good Luck.
Keep me posted.
Victoria
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Permalink Reply by Jason Haeger on
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It would help if you had known about the shop before it closed. That is, how were the products? How was the service? Was traffic a problem? Is location a problem?
If it was either (or both) of the first two, then you should be fine. Just don't make the same mistakes.
A re-branding is in order, lest people continue avoiding it.
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oh yes! good point Jason and an important one. Re-Branding is a must!
You have got to put your best face forward. Your mark is the first thing they see, from the street, before coming in.
Getting them to come in is step one.
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Permalink Reply by Marek on
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I agree, the fact that it was formerly a cafe should not bother you, but as the other posters have suggested... find out why it failed. There is greek spot in Fort Lauderdale... pretty much has a line up out the door seven days a week... it was formerly 'four' different establishments all of which failed... go figure.
The +'s for you... basic electrical/plumbing already in place (saves you maybe $10,000), zoning issues, health department, fire codes, etc.. have all been addressed with the past owner... you skate...
You will be able to open 2-3 months sooner than if you opened your own shop from the ground up, value ($15,000 assuming a mid-range shop) in profits.
Say another $20,000 in fit outs you don't have to do and $10,000 for the crap that's in there.
So the total upside to you is about $55,000...
To the landlord the fit out is a liability NOT an asset and make sure they know ... you know... if and when you are talking rent. If somebody wants the space for something other than a cafe, the landlord will be faced with the cost of having to remove all that plumbing/electrical/fitout/tile... think $20,000...
The rebranding is 'very' important... I would suggest some major changes to the interior layout... you don't want old customers walking in and saying... oh... all they did was slap a coat of paint on it...
Play with the anticipation factor... cover the windows with a giant question mark... or something similar... so it gets people wondering... 'what's going on in there'... and tell your trades people to keep their mouths shut... "I am not at liberty to say"... drives people nuts !!!
Every time somebody walks in and says they were a customer of the old place... give them their first coffee on the house... and chat them up...
But at the end of the day you still need to figure out... what was wrong. If the coffee sucked... it was owner run and they had a terrible attitude... or were never open regular hours... stuff like that... then investigate more...
But if your sniffer starts to send out warning signals ... listen to them... if people say they worked thier asses off ... but there just wasn't enough business... that's a warning sign.
The best people to ask... would be the merchants... left/right and center within a few blocks... people love to talk... within a couple of days you will have the whole story.
My first shop... I bought from a couple that split up... they were already divorced but they owned the shop together and didn't get along too well... they both had full time jobs... no financial resources to deadicate to the business and more importantly... were pretty much clueless about what they were doing.
I paid 'really decent money'... think HOUSE... for the shop... for many of the reasons I am suggesting to you... and used it as a springboard to open three more shops ... so far...
When you know more... post... I am sure myself and others on the board would be happy to chime in with thoughts...
Cheers and good luck.
Marek
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Permalink Reply by D. Smith on
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I talked to some of the other places around the shop. The hrs were 8-4 mon - fri. Shitty coffee and food. Prices were to high for what you got. Basically what I found out. It has been a coffee shop for 15 yrs and was busy when the first owner was operating 10 years ago.
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Then it seems like it may be just what you are looking for. The existing problems shouldn't be too hard to fix.
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Permalink Reply by Mark on
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So Many will not know anything is different and just never stop by...make sure if you go this way, to really spend time thinking how you can reach these customers.
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Permalink Reply by John P on
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If the location and conditions of the lease are right, then pursue it, but continue to pursue other options as well.
Of course if you do pursue it, make sure you change the name (of course!) color/facade of the building, look of the signage and interior, etc. There should be no visible signs that there is any similarity between what is there now and what it will become.
And serve better coffee. :)
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