3 important things to consider when Buying Coffee Business

As a business broker, I’ve sold many different types of businesses but I have especially sold many coffee businesses. In my experience, a coffee shop presents a few different sets of circumstances that should be considered before and during the purchase.

Ah, nothing beats the smell of roasted coffee beans. If you’re buying a coffee business that presently isn’t roasting on the premise but your thinking that would be an important part of your concept for improvement, then you better make sure it’s ok with the landlord first. Think about it, you’re roasting the beans and the smoke they give off is the magical smell that’s so attractive. Where is that smoke going to go? A certain amount of smoke will already fill the shop; too much smoke will get the fire department in for a visit. Therefore, there must be hood or an acceptable form of ventilation for the smoke to exit. The installation of a hood is a big deal to a landlord; it changes the use of the premises and changes the insurance on the space, so not all landlords are not willing to do it. It’s something to consider if your concept is reliant on that.

In any restaurant purchase you should always have the equipment examined by a repair man. “Why, you say, the business is only 2 years old how bad could the equipment be?” Are you sure they bought everything new? Not to mock the old, ass out of you and me…. Don’t assume that the equipment is the same age as the business. You also shouldn’t believe everything you hear either. As a business broker, I’m only as good as the information I get from my sellers. Let me give an example, once I listed a yogurt shop and the seller told me all his machines were a couple of years old. I found a buyer but they asked for the serial numbers of the machines and when they called the Taylor rep they found out those machines were 10 and 12 years old! The seller lied to me and to them, I dropped the listing of course, I don’t work with liars.

If you’re opening a new shop or buying a franchise, many times the franchise will allow you to choose your own equipment like the grinder, the espresso machine and possibly the POS (point of Sale). Choose wisely! Don’t go for the cheapest machine, these 3 machines are going to take the brunt of the work and they will be at the heart of your business. We are very fortunate these days to have so much viable research material available on the web. Dedicate a few hours and read what other people are saying about that equipment and when you narrow it down to a couple of models, ask the rep if you can try at their show room to see for yourself. It should easy to use and clean. Find out about the warranty and the customer service if something breaks.

These are just a few tips to consider when buying or starting up a coffee shop. Stay tuned for more tips and articles on Bizben or join me in attending a free workshop for, “Is Buying a coffee Franchise Right For Me?” See Bizben workshops for scheduled dates and times.

Christina Lazuric Woscoff
Business Broker/Principal