Thinking about buying a business

Tommyh

Hi all. Many thanks for all your comments and its all interesting points I hadn't really thought about.
The business in question is a small sandwich shop in the Kemp Town part of Brighton. There is a hospital close by and there is a also a big American Express building, both have scope for deliveries. My main idea for expansion though is baking. I am a keen cake and biscuit maker which are popular. I see this as a bit of a way to increase sales of them. Yes, I know that baking is a very popular pastime at the moment, and there is a lot of competition in the city, namely "choccywoccydodah" which is amazing, but this is further down and away from the centre. Its current opening times are 8-3 Mon-Fri. So obviously anything outside those hours, such as weekends would be extra revenue. It would be just me running it, but starting at 7 really isnt an issue, in fact it is a relative lie in.
I will keep thinking about it, working things out and having a look at the competition and area and work things out.
Cheers
Tom

paddyrg

I see quality baking is your passion - so cheese and tomato white sliced bread sandwiches piled high isn't going to make you excited after the first thousand or so, and distract you from what you actually want to do.

Are the sandwich and coffee office and hospital crowd actually going to stick around for premium baking? Is premium baking a spontaneous weekend purchase, or is there a reason why CWDD close at 3pm and weekends? There may be an opportunity there, but if CWDD see you getting successful, they could just open Saturday which may wreck that plan?

If you do the coffeeshop thing, in the mornings some people want irritating fancy coffees (a latte taking minutes to prepare whilst other customers walk away), some will be pleased to have good quality fresh filter coffee, fast and cheap. As the margins are staggering on coffee and the upsell opportunities there, it may be worth looking at how you can gear a campaign around it (maybe give away a bunch of 'one free coffee' tickets to Amex/hospital nurses rep) so people know they can come by your place and get a fast hot caffeine fix on the way into work even when time is tight. And/or offer a filter coffee for (say) 40p with any other purchase - enough to cover your costs/cups/etc and enough to draw people off their route if they're usually spending £3 for a coffee. It creates a buzz and it gives upsell and spoils your competitors upsell opportunities too!

But do make sure you're driven enough to want to do it all day every day forsaking pretty much all else...

vegasvisitor

I can sort of relate to what you're looking to do, being a keen baker and I'd love to take it a step further. That said, I also know how difficult it would be. I think finding the right premises is probably one of the hardest parts.

You need to look into it further, as everyone else is saying. I hope it works out for you if you decide to go for it. I'd be keen to hear more if you do, so please do post back here.

AbbieCadabra

do you already know that the AmEx office & hospital don't have anyone doing deliveries at the moment?

soolin

Brighton hospital has several eating places. One of the canteens does a very nice hot meal with drink for around £3 or less with staff discount.

da_rule

What sort of business is it (sole trader/limited company etc)?
Are you taking on any debts as well as assets?
Is there an order book? If so how much is it worth?
Is there any old equipment that is likely to need to be replaced soon?
Are there any staff which you would have to take on?

Then you need to look at the accounts. You need to see net and gross profits, expenditure, asset values etc for as many years as you can get hold of.

Owain_Moneysaver

Tommyh wrote: »

The business in question is a small sandwich shop in the Kemp Town part of Brighton. There is a hospital close by and there is a also a big American Express building, both have scope for deliveries.

This Amex building which is relocating staff to Sussex? Is it the same building that will be demolished in 2016?

Your chances of being allowed inside the Amex building by security to deliver round the offices is non-existent. And while you're doing deliveries who will be minding the shop?

Owain_Moneysaver

Tommyh wrote: »

Its current opening times are 8-3 Mon-Fri. So obviously anything outside those hours, such as weekends would be extra revenue. It would be just me running it, but starting at 7 really isnt an issue, in fact it is a relative lie in.

If your shop opens at 8 you won't be starting at 7. Your wholesale bread delivery will probably be at about 5, and if you are offering your own freshly baked breakfast goods you'll probably need to be in about 3 to make and bake, depending on how big the ovens are.

motorguy

Tommyh wrote: »

My wife is worried we'll lose everything etc.

And based on everything you've told us subsequently and what we've learned about the location, shes DEFINITELY right to be worried.

giantmutantbroccoli

You've got a lot of good advice on this thread so far, I just wanted to highlight this statement:

It has a lot of potential, and obviously the harder I work, the more successful it will be.

Unfortunately, this is not always the case! You have to plan thoroughly and know exactly what you're doing, and even if everything goes swimmingly there will still be a point beyond which extra work will not equal extra profit. Don't be fooled into thinking that investing more time and effort will always pay off. Sometimes it's more important to know where to invest your time and effort than it is to simply work harder.