Farm shop & Tea Room

Undervalued

TeaRoomVenture wrote: »

:hello: lovely people!
I need to pick your brain on a business venture I'm about to throw myself into. I want to take over a farm shop and a tea room in a country side location. Big car park, garden on the side, huge potential.
What would you expect to find in a typical farm shop and tea room?
Type of produce
Deco
Food & Drink menu
Child friendly
Facilities
Service
Type of payment offered
Price range

How often would you visit it and if not why?
What would be the extra mile?
Any big no-no?

Please feel free to add any question I would have missed!
Thank you very much for your help:T

"Child friendly" can easily mean "avoid like the plague" for adults wanting some peace an quiet!

It is a difficult balance to get right and you have to decide what type of customer you are trying to attract. I recently read a Trip Advisor review of a cafe from a mother thanking the owners for being so understanding about her children running around! On the strength of that my friends and I went somewhere else, but fully understand that others may think differently. Don't try and be all things to all (wo)men as it is easy to end up satisfying nobody.

TeaRoomVenture

Savvy_Sue wrote: »

think very carefully about that, and think through some 'what if' scenarios.

For example, you talk about 'we'. So I'm guessing that's you and your Significant Other. If there are more adults in the 'we', that's probably a good thing. If you have children, you need extra contingencies for childcare.

I mention this as we have friends who, some years ago, were running a CyberCafe in France before everyone had easy access to the internet at home. It all worked very well: Mum or Dad would open up, the other would drop the children at school, one of them could pick the children up and the other could close up. They also had a part-timer to enable them both to carry on with some other paid employment, because the cafe alone wasn't enough to keep a family of four.

Then Mum was seriously ill, in hospital for some weeks. Hospital was more than half an hour in the opposite direction from home to the children's schools, so a quick drop-off became an hour's round trip for visiting.

And at that point, keeping to the advertised opening hours became completely impossible.

One thing with anything retail or catering is that IMO you will lose business if you are not reliably open when you say you will be. Hence the need for lots of contingency planning!

Hopefully the peaks are regular, and hopefully you can concentrate your staffing so that service in the tea room doesn't suffer.

Thank you for your thoughts, indeed it is something difficult to deal with when it happens, it goes with the territory I guess of being self employed unfortunately!

TeaRoomVenture

Undervalued wrote: »

"Child friendly" can easily mean "avoid like the plague" for adults wanting some peace an quiet!

It is a difficult balance to get right and you have to decide what type of customer you are trying to attract. I recently read a Trip Advisor review of a cafe from a mother thanking the owners for being so understanding about her children running around! On the strength of that my friends and I went somewhere else, but fully understand that others may think differently. Don't try and be all things to all (wo)men as it is easy to end up satisfying nobody.

😂😂 I see your point and it is pretty tricky to cater for everyone, I understand it may be preferable to avoid mixing generations sometimes or to have a different area, which is what we would potentially aim for so everyone has a breathing space!!!

FatVonD

Extra hot water to refill my pot for a second cup.

Reasonably-priced cream tea option.

The option to have smaller slices(or cubes?) of a combination of cakes for the indecisive?

TeaRoomVenture

FatVonD wrote: »

Extra hot water to refill my pot for a second cup.

Reasonably-priced cream tea option.

The option to have smaller slices(or cubes?) of a combination of cakes for the indecisive?

Great idea for small taster version! Thanks again.

Pennywise

TeaRoomVenture wrote: »

The owners want their life back

Oh dear! That suggests it doesn't make enough profit to be able to afford staff to run it.

So rather than a business, you'll be buying yourselves a job.

What profit level is it making? Is it actually enough to pay yourselves a decent "wage" for the hours you're going to have to spend working on it?

Vectis

I think, rather than dwell on cake sizes and whether to serve in cups or mugs, I'd be going back to square one and questioning in more detail why the current owners would be giving up what appears, from all you've said, to be a little gold mine.

Have you taken advice on what's a reasonable amount to pay for the business? Why isn't the current owner getting a manager and extra staff in if they 'want their life back'? It could mean that they want a lump sum and this could perhaps imply that they haven't actually been able to make much money from the business over the years. Have you seen how much they've been able to take out of the business in wages (and dividends if it's a limited company)?

I'm not being negative, but small alarm bells start ringing when what appears to be a successful business is being sold because the owner apparently wants to do something else. Either you'll be paying a lot of money for it (assuming it's profitable) or you'll have to throw an awful lot of money at it. Yes, of course it could work, but I'd be spending more time looking at the figures than thinking about portion sizes etc!

Pennywise

Vectis wrote: »

I'd be spending more time looking at the figures than thinking about portion sizes etc!

Have to agree with that. You need to check it's viability based on what it's doing today. That's all that matters really. Is the asking price affordable and reasonable based upon it's current operating turnover and profits and providing an adequate "wage" for you now, from day 1 as it stands?? You shouldn't be paying anything to the existing owner on top of that because it's you with the ideas, you who'll be doing the work etc to improve it. If the existing owner wants a higher price for "potential", then he should improve it himself to make it worth more.

Improvements that you intend to make, such as new product lines, portion sizings, kids cutlery etc are trivialities at this moment in time. If you can improve things and increase turnover and profits, then that's the icing on the cake FOR YOU and you should get 100% of the benefits yourself, not pay the existing seller for your own plans and effort.

Pennywise

Also, don't just think about profits. You need to be wary of turnover (i.e. sales values). A lot of small businesses are effectively trapped to keep their turnover below the VAT threshold (£85k p.a.), especially shops and cafes dealing mostly with the general public. It's why lots of small outlets have restricted opening hours or close for the winter months etc. Thing is that if they go over the £85k, they have to pay VAT on ALL their sales, not just the excess. Shops and cafes usually have low VATable expenses (no VAT on food nor wages), so they've little to reclaim. Usual models show that turnover has to rise from £84k to around £100k before they get back to the same level of profit due to the VAT bills - raising turnover from £80k to £90k will usually mean they're out of pocket and make less profit! Keeping turnover below £85k for a shop or cafe will usually mean you're not making enough profit to pay your own wages to a decent level if there's 2 of you running it! You need it to have a turnover of around £125k onwards to make a decent profit for the hours you have to put it.

Mojisola

Vectis wrote: »

I'd be going back to square one and questioning in more detail why the current owners would be giving up what appears, from all you've said, to be a little gold mine.

There's also the possibility that changes to the local area are being suggested that would adversely affect the business.

Plans may not have reached official levels yet but the owners could be deciding to get out while they have a viable business to sell.

So - investigate the current figures very carefully and try to pick up local information from regional papers, people in shops and pubs.

The sale could be totally what it seems - people wanting to move on and do something different with their lives but you need to be sure before handing over your money.