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Ill_handle_it

Paying For A Job ? Buying A Cafe/sandwich Bar

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Hi, I used to be very active a couple of years ago on the blog here but what with changing jobs twice in two years (after being in the same one for 23 years) I've not had much spare time (I also took my 1st employer to an Employment Tribunal and dropped the case at the last minute due to fears of losing and paying costs). Anyway,I'm not new to the site,just to the forum. Somewhat ironically I now work in a major bank's call centre and can assure you it is very hard work and not for much money. I'd like to leave and work for myself. Having had no previous experience in catering I'm not best positioned to be buying a cafe/sandwich bar but I have made a few tentative first steps towards the goal. I won't detail very much here,it's not the right forum expect to say that from what I've seen so far it's no wonder that cafes are being put up for sale. Taking into consideration the cost of the lease,rent and other expenses it appears that I'd be paying someone to give me a job ? As I mentioned,I'm kinda new to buying and running a business so perhaps I'm not looking at situation correctly but if I am it would seem that running a cafe,at least in the south east,is lots of hard work just to line a landlord's pocket ?

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Hi, I used to be very active a couple of years ago on the blog here but what with changing jobs twice in two years (after being in the same one for 23 years) I've not had much spare time (I also took my 1st employer to an Employment Tribunal and dropped the case at the last minute due to fears of losing and paying costs). Anyway,I'm not new to the site,just to the forum. Somewhat ironically I now work in a major bank's call centre and can assure you it is very hard work and not for much money. I'd like to leave and work for myself. Having had no previous experience in catering I'm not best positioned to be buying a cafe/sandwich bar but I have made a few tentative first steps towards the goal. I won't detail very much here,it's not the right forum expect to say that from what I've seen so far it's no wonder that cafes are being put up for sale. Taking into consideration the cost of the lease,rent and other expenses it appears that I'd be paying someone to give me a job ? As I mentioned,I'm kinda new to buying and running a business so perhaps I'm not looking at situation correctly but if I am it would seem that running a cafe,at least in the south east,is lots of hard work just to line a landlord's pocket ?

Best advice I can give you - go and work, even if it is just part-time, in the type of place you wish to run be it a sandwhich bar, greasey spoon, chippy.

You will learn more about the pros and cons that way and you will also learn whether it is for you. When you have done that you can start asking advice about leases, rents, buying or ot buying the good name of a business, etc, etc.

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Hot food is hard, I owned and ran a hot food place about a decade ago a bit more than a decade now. You are looking at GP of 70%+ if it can't hit that then don't bother.

Or another way to look at it for £1 of stock you buy you need to sell it for £3 to cover costs.

Hot food isn't what it used to be, used to be able to make loads from it. Today even in close proximity it varies a lot. There is a chippy next to a sandwich shop, the chippy is always empty while the sandwich shop which sells everything the chippy does is really busy.

If it is open, then take a week out sit in a car nearby and watch how busy it is, there is no better indicator of how busy it is than this. If it is shut down then be very careful as it could be deader than dead, if it is shut down refuse to pay over the odds as there is no good will.

A lot of places are rentiered to death, the owners take too much in rent that it strangles the business. Think the same with biz rates too. My failed chippy for instance I'd need to fork out 40K with 0 business in taxes licences etc. Add in VAT and it didn't make sense with anything less than 170K.

But as above work for somebody else for a bit and see how it works out, you should see how much goes into the till. Go to a wholesaler and price it up how much things cost, add in a bills, biz rates (which you can see from the VOA website) then add in at least £150 for yourself weekly and see if it works.

But remember its hyper competitive and has long since moved to a perfect competition model, Chinese takeout places 10-15 years ago could make 230K (of which not all was declared). People see this and open their own. The town I live in, 15 years ago was just five shops now there are twenty six, none of them are that busy and they change hands a lot because they simply don't make enough to live on.

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From my observations;

Theres a chippy near me where they queue out the door most weekends, Fridays, Thursdays. I won't give a name, in case you all go round, and empty it out.

1. Is it near a main road? And are there a double yellow lines on a side road? If yes thats GOOD. People can park, pick up and go. McDonalds in Havant is a good example.

2. Are there piles of sausages, and fish ready cooked when you go in? Or does everything have to be cooked while you wait (indicator it is dead)?

3. Can you buy the freehold, and living accomodation above? Our local busy chippy has this arrangement, and thus can afford to sell chips at 60p per portion. Yes you heard right, 60p. It must be mortgage free.

4. What is the social economic group? Affluent areas do not have so many takeaway outlets for a reason.

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Best advice I can give you - go and work, even if it is just part-time, in the type of place you wish to run be it a sandwhich bar, greasey spoon, chippy.

You will learn more about the pros and cons that way and you will also learn whether it is for you. When you have done that you can start asking advice about leases, rents, buying or ot buying the good name of a business, etc, etc.

+1

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Thank you for all your advice,I have considered working in a cafe,just to get the feel of it,this is clearly a good way of testing the water and understanding the business over all. My main concerns are proving to be validated the further I look into the possible venture. It just seems like, as I stated in the title of the thread, that I'd be paying someone quite a lot of money to pay myself minimum wage,it just doesn't stack-up. It's reasonable to assume that business rents will have to fall considerably ? Who are these landlords and why are allowed to get away with such high rents ? Is this the same in the rest of Europe ? Thanks again for taking the time to reply,it really is appreciated.

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It depends on who the LL is, if they have a huge loan on the property they'll want more. I've seen LLs charge as low as £55 a week. Just small corner shops in small sleepy towns, the LLs are usually very old no mortgage types.

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Thank you for all your advice,I have considered working in a cafe,just to get the feel of it,this is clearly a good way of testing the water and understanding the business over all. My main concerns are proving to be validated the further I look into the possible venture. It just seems like, as I stated in the title of the thread, that I'd be paying someone quite a lot of money to pay myself minimum wage,it just doesn't stack-up. It's reasonable to assume that business rents will have to fall considerably ? Who are these landlords and why are allowed to get away with such high rents ? Is this the same in the rest of Europe ? Thanks again for taking the time to reply,it really is appreciated.

Welcome to entrepeneurship, margins squeezed to f#ck and capital a fortune to get. Hope you make it.

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I very recently looked at a sandwhich shop/tea room in our village. T/o is £135k with over £22k as net profit. There is plenty of scope to do more there and go after other business but that £22k seems to be more like a crap wage than a net profit as it doesnt appear that the vendor takes a wage from the business.

Even if I could double the profit, £44k to stand behind a counter 6 days a week isnt worth it.

Had the staff wages all been accounted for and the £22k was a real profit then I may well have gone for it and given some of the remaining 16 or so days a month spare that I have to the business.

I would love to have done it and am still of the opinion that food places/coffee shops are good earners but the figures just didnt add up for me on this one.

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I very recently looked at a sandwhich shop/tea room in our village. T/o is £135k with over £22k as net profit. There is plenty of scope to do more there and go after other business but that £22k seems to be more like a crap wage than a net profit as it doesnt appear that the vendor takes a wage from the business.

Even if I could double the profit, £44k to stand behind a counter 6 days a week isnt worth it.

Had the staff wages all been accounted for and the £22k was a real profit then I may well have gone for it and given some of the remaining 16 or so days a month spare that I have to the business.

I would love to have done it and am still of the opinion that food places/coffee shops are good earners but the figures just didnt add up for me on this one.

If you want to run any sort of business in Britain today the first step is to have enough capital to buy it outright.I run a car sales site that I have owned since 1994.Over the past sixteen years I have gone out of my way to build a good reputation in a bad trade.This is repaid by repeat business.I own all my own stock,it varies between thirty and forty cars that are worth roughly £150k at cost price. So I have no rent and no bank charges,I work a six day week and my net profit this year will most likely be around £28,000.

If I had to pay rent and weigh out the bank for my stock that would be halved.If you think that you can buy a business and staff it and still take a profit then make sure you have £1million to play with of your own shekelage.

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It's a sad state of affairs that the figures just don't stack up for businesses like this.

Competition will always be there, but rents, taxes, and rates must be counter productive in some ways when you see our empty town centers and local stores.

I bet you could make put a dent in the unemployment figures with a simple strategy that tipped these businesses from unviable to viable.

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What about a mobile fish and chip van? You have to be good mind, good fresh fish and oil.....you could visit regularly different areas say 5pm to 10pm...do your own market research, knock on doors to find out if it is a service that would be used? what price? what other food?.....good family business, low outgoings....try to get a spot outside a busy pub. ;)

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What about a mobile fish and chip van? You have to be good mind, good fresh fish and oil.....you could visit regularly different areas say 5pm to 10pm...do your own market research, knock on doors to find out if it is a service that would be used? what price? what other food?.....good family business, low outgoings....try to get a spot outside a busy pub. ;)

Great idea. I would definetly look at something like this over physical premises.

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If you want to run any sort of business in Britain today the first step is to have enough capital to buy it outright.I run a car sales site that I have owned since 1994.Over the past sixteen years I have gone out of my way to build a good reputation in a bad trade.This is repaid by repeat business.I own all my own stock,it varies between thirty and forty cars that are worth roughly £150k at cost price. So I have no rent and no bank charges,I work a six day week and my net profit this year will most likely be around £28,000.

If I had to pay rent and weigh out the bank for my stock that would be halved.If you think that you can buy a business and staff it and still take a profit then make sure you have £1million to play with of your own shekelage.

so the short version is that you work 6 days a week for £28k with £150k tied up in cars and you own the land?

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so the short version is that you work 6 days a week for £28k with £150k tied up in cars and you own the land?

So if you haven't got the capital to own all the stock, and land - then you'd be better off with a job, whats the point in running a business if your just making a wage.

What about a takeway your could run at the weekends, on top of your current job. Always wondered why more business don't pair up like a cafe during the week, and then a takeway at weekends or evenings.

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So if you haven't got the capital to own all the stock, and land - then you'd be better off with a job, whats the point in running a business if your just making a wage.

What about a takeway your could run at the weekends, on top of your current job. Always wondered why more business don't pair up like a cafe during the week, and then a takeway at weekends or evenings.

yeah, if you told me that I could buy the business for £150k plus the cost of land so that I could work 6 days a week for £28k then I wouldnt even be able to walk away - I would be immobile on the floor in fits of laughter.

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It’s the black market which has killed the majority of small/medium retail

What has happened is that the immigrants came over, having no jobs offered due to language problems they mostly had to do what they could to earn a wage. So they bought/started up small businesses. It’s the reason why most the shops are run by immigrants because they couldn’t get jobs elsewhere. However the problem was firstly…too many too quickly and secondly a ******ing retarded HMRC that didn’t give a shit and enforce tax law to the point now where you have tens of thousands maybe hundreds of thousands dependant on this ******up so putting it straight is going to see huge failure of small businesses and unemployment.

My high street had only 3 food outlets some 10 years ago today there is over 15. while back then all 3 made a decent living and could pay their taxes today 15 owners make a crap living and only because they pay near zero taxes.

Basically it is IMPOSSIBLE yes IMPOSSIBLE to make an HONEST living in food retail. Even companies you may consider to be 100% legit are not remember most the big fast food names are franchise models and owned by individuals who will be as bent as they can to survive.

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~15% of your turnover goes to VAT

~30% to buy the food

~10%-20% for rent

~5% for business rates

~2% for insurance/energy/water

~1% to replace equipment/goods

~2% for others

That is 70% of your take-in which goes to something else.

Lets say you are happy with £50k as a wage and you really do need to target that or higher because you WILL BE WORKING 80+ hour weeks. It is when the store is open PLUS all the shopping/stocking and that takes a lot of time.

Overall you have to turn over 250k to earn an honest buck in food retail and you will basically still be earning a wage. Sure £50k is double a normal wage but you will be working 3x as many hours.

So in short 99% of food retail is not paying its full dues in taxes, VAT and income taxes will be the main places they have to lie to stay afloat.

Of course the problem is that HMRG has ignored it so long (probably on purpose) that it is too late to do anything about it now without truly ******in over tens/hundreds of thousands of people. Literally 9/10 food stores would go bust however those that remain could then turn an honest buck.

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What about a mobile fish and chip van? You have to be good mind, good fresh fish and oil.....you could visit regularly different areas say 5pm to 10pm...do your own market research, knock on doors to find out if it is a service that would be used? what price? what other food?.....good family business, low outgoings....try to get a spot outside a busy pub. ;)

Slightly different concept to the static burger van:

Theres a fish and chip van in the New Forest - been going for years. Goes to the old peoples homes - they can't get out much, or afford the minium £7 orders that places offer for deilvery.

It might be hard to find those specialist vans though. It's like an Icecream van but for hot food.

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yeah, if you told me that I could buy the business for £150k plus the cost of land so that I could work 6 days a week for £28k then I wouldnt even be able to walk away - I would be immobile on the floor in fits of laughter.

To be fair, that was his point. i.e. don't even think about it if you can't afford the land and stock and need to take on bank debt and rents.

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To be fair, that was his point. i.e. don't even think about it if you can't afford the land and stock and need to take on bank debt and rents.

but my point was that no one who could afford it would be daft enough.

Take the business that I was looking at for example. £70k for the business, £15k for the lease (50/50 split between shop and accomodation above) but the building would probably cost close to £500k.

Once staff wages (apart from vendors) and lease etc have been taken out then the business makes around £22k net profit. But that isnt really a profit if the vendor hasnt taken a wage, imo it is a crappy wage for working 6 days a week.

If I had the £570k cash to buy the place outright then the lease would not be a factor and could be added to the net profit giving a wage of £37k. Would I pay out £570k for the chance to work 6 days a week and take home £37k before tax? Would I feck!

Take his own business. He would want to sell the stock at value so that is £150k. Say £100k for the land the lot is on and £50k for the business. Would you hand over £300k for the chance to earn £28k a year by giving up 6 days a week? I wouldnt.

We all understand hpi and the fact is that it makes ownership difficult. Anyone that has the cash to buy outright could put it away and make a descent amount without the graft. That is why most business premises are leasehold. Because those with the cash prefer to buy the property and get a return without any work and those that want to do the graft cant afford the building.

No one with the cash to buy everything outright does so, they dont need to.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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