Buying a coffee shop

bloodbinds

My mother has decided to buy a coffee shop (As you do...) and start up her own little business and has asked me to help setting it up.

I've gone over the figures again and again, I love the shop she wants, been through all the details, I know how much work is going to go into it and I know what she will get out of it... the only problem the business plan!

If I get even the slightest detail wrong and the bank picks up on that then the whole thing is called into question. I've got pretty much all I need now and it's just about putting it together.

Does anyone know who I can talk to about putting it together or who can proof read it for me that knows what they're talking about??

somethingcorporate

An accountant.

paulwf

The banks aren't there to catch you out! In catering you do need to know your figures inside out though, you should know your target GP and staffing percentages and things like that off by heart.

There are two things you can do. Firstly go to the bank that you don't want to end up using. Let them pick holes in your business plan and use that as your practice interview. The big mistake is to visit the bank you are targeting first then fluff it.

Secondly have a chat with the bank manger and ask them what they want to see in the business plan. They all have their pet topics they want covered, so go through it informally first before presenting your final plan and then having the funding interview. That's what I did and it was invaluable.

Show your plan to as many people as you can before you submit it (confidentiality allowing). Generally older generations are great at proof reading and that doesn't require any knowledge of the subject. Get your accountant to take a look and any business mentors you have.

nickj_2

your bank will/should have a small business advisor to help you

pitkin2020

All of the above but you will need capital, regardless of your business plan if you don't have the funds to put in then in this climate you will struggle to get a loan. That capital could be anything up to 50% of the total cost.

dottygirl

There are some excellent books on Business plans available at the library. Have you tried business link. Hope it goes well. Keep us updated.

paulwf

pitkin2020 wrote: »

All of the above but you will need capital, regardless of your business plan if you don't have the funds to put in then in this climate you will struggle to get a loan. That capital could be anything up to 50% of the total cost.

That reminds me - you'll need plenty of working capital in the catering industry. Staff are generally (but not always) paid weekly in cash. Nearly all suppliers work on a strict cash on delivery basis. Basically if you have a temporary cashflow problem within days you may run out of stock and have angry staff.

It is so different to some other areas of general retail where I used to have dozens of suppliers and you could get a 60 day credit line from most and staff used to be paid monthly. You could easily have a few tens of thousands of pounds of invoices outstanding if you did a bit of juggling.

Catherine_Johnson_2

I think the first thing anyone will ask is do you or your mother have any experience in the retail industry and, in particular, this sector? If you have no idea about costs, overheads or running a shop and managing people then you will find it very difficult to convince people to lend you capital, which is, I assume, what you will be asking the bank to do.

As others have said, there are many books around where you can learn about how to present a business plan. From my own experience, I would advise you to be pessimistic with your forecasts as overinflated year on year projections will certainly go against you.

Savvy_Sue

Catherine_Johnson wrote: »

I think the first thing anyone will ask is do you or your mother have any experience in the retail industry and, in particular, this sector? If you have no idea about costs, overheads or running a shop and managing people then you will find it very difficult to convince people to lend you capital, which is, I assume, what you will be asking the bank to do.

As it's the OP's mother who's decided to open a coffee shop ("as you do!") rather than the OP, I'd held off my usual 'obvious questions'. :rotfl:

However, one thing I will say is that I hope Mother has thought through all the obvious 'what if' questions. When you are running a coffee shop or anything retail, you HAVE to be open when you say you will be open, at least in the early days. That means you HAVE to be open even if you think you are dying, you HAVE to be open even if the cat needs taking to the vet, you HAVE to be open even if the car won't start. And for all that, you need a contingency plan: someone else who will, at the drop of a hat, put their own life on hold and go and open up for you, or take the cat to the vet. And you need a contingency fund to pay that person, or to pay for a taxi when your car won't start, and so on.

Because the first time someone sets out to go to your coffee shop and finds it shut when it should be open, they'll probably go somewhere else. If it happens twice, they may never come back!

Also if you have any planned closures, PLEASE put a notice in the window well in advance saying when you will be closed ... There's a lovely place near DH's work which trains people with learning disabilities: I now won't go there outside of term times because they're so often shut, but there's rarely advance notice of this, and sometimes not even an indication of when they'll re-open!!!

Mistral001

I am going to controversal here, especially those who follow popular TV programmes about business, where a "business plan" seems to be king.

If your only problem is the business plan, then you do not have a problem. The problem will be to get considered for a loan of any type if you do not put up some sort of security or personal guarantee. Thus it is not the paperwork that the OP needs to worry about but whether they are willing to risk their house, life savings etc....and more importantly whether the bank is going to let you do it in these changed times.

nickj_2

i would have thought the main problem with opening a coffee shop , is saturation of the market , in my local town there are at least a dozen , which when things are good is surprisingly sustainable , however over the last 6 months a couple have bit the dust