Start up Home accessories/coffee shop

[DeniseRo]

Hello, Have been looking for shop for 2 years to start up home accessories/gifts shop. Have sourced suppliers/trade fairs etc:- Have never owned shop before. Have done market research regarding trendsetc:- (have worked in market research over 20yrs) Have found a shop (this is where my heart may be ruling my head. The shop was previously a coffee shop, but had no trade. Due to the fact that it was painted an awful bright yellow & looked like a transport cafe. Shop is in a London suburban town, end of high street, surrounded by 4 estate agents, Sainsbury's local, opticians, hairdressers, cab office (that sort of thing) also an infant and junior school. (many mums have to pass shop). I now intend to also have a section for coffees/teas etc:- amongst my wares.
The sums are worrying me a bit
Rent £13,000pa
Rates £3,000pa
wages part/time £7,500pa
insurance etc,etc £3,000pa I was initially looking for renting about £10,000pa but nothing going (only with £10,000-£20,000 premiums)
I have no idea the % profit in teas/coffees/cakes/sandwiches. Perhaps you can tell me.
My mark up on home accessories will be about 30% 40% depending.
Can someone with their wisdom please let me know if my outgoings are going to cripple me. or are these typical of this type of retail outlet (not in the centre of high street)

Thankyou
Denise

[fisicx]

End of high street, mums on way to school and a sainsburys close by. And surrounded by estate agents.

Doesn't sound too good. Mums will be passing trade - possibly getting a cup of tea at 3pm. Sainsbury traffic will be going shopping so not stopping and the estate agent traffic will be house hunting not visiting cafe's.

On the other hand, if you offer a 'home cooking' type of place that is attractive and wecoming then you might have a chance. We were in a cafe the other day and it was buzzing. It was near a bus station and in the middle of a row of niche shops. Most of the trade was women out shopping. But the owner did a roaring trade from 7 -8 every morning as workmen stopped to pick up bacon butties for breakfast.

But to answer your question, it does sound like a lot of money. And are you sure your total wage bill will be £7500pa? Are you not paying yourself anything?

[fillume]

Originally Posted by DeniseRo

... Have done market research regarding trendsetc:- (have worked in market research over 20yrs) ... it was painted an awful bright yellow & looked like a transport cafe. Shop is in a London suburban town, end of high street, surrounded by 4 estate agents, Sainsbury's local, opticians, hairdressers, cab office (that sort of thing) also an infant and junior school. (many mums have to pass shop). I now intend to also have a section for coffees/teas etc:- amongst my wares.
The sums are worrying me a bit
Rent £13,000pa
Rates £3,000pa
wages part/time £7,500pa
insurance etc,etc £3,000pa ...I have no idea the % profit in teas/coffees/cakes/sandwiches. Perhaps you can tell me.
My mark up on home accessories will be about 30% 40% depending.
Can someone with their wisdom please let me know if my outgoings are going to cripple me. or are these typical of this type of retail outlet (not in the centre of high street)

Thankyou
Denise

Hi Denise

I am starting a similar business (only coffee shop though) in the Wirral.
Don't be too scared about the rent: i would suggest to ask the surrounding business how much their lease is per annum. you will get a fair idea if they are ripping you off then. Rates: i am sure you will be able to apply for small business rates, so this amount sounds correct to me.

The % Profit on coffee is about 60%, although depends what coffee you use and how much you put in for a cup; don't forget you need HOT water (electricity used) and milk + sugar. Now, to make an espresso you need to pay 12p for 7gramms of coffee, 10p for milk (or less), 20p electricity (water + machine), totalling 42p. you can round this up to 50p: how much you will sell an espresso? COSTA coffee sells it for £1.35 and this is the smallest coffee. this is how much we talk about margins on coffee.

For sandwiches and cakes, again do your calculations: it's about 60% gross margin.

As mentioned before, mums will not come in until 12pm or 3pm for a cup of tea, but don't be discuraged by the "end of high street": you are still there.

Try offering a "unique" product.

are there any other cafes around? can you do deliveries to loacl business? can you do buffet lunches? there are so many things you can introduce...it's mind blowing.

Very very important is the marketing: invest in advertising and leaflets. the more you let ppl know you exist, the more business you will get. Have a smart appearance, so change the colour scheme and maybe transform it into a trendy cafe. ppl who go to tavel agencies, will stop afterwords to discuss what the agents said or view the various houses leaflets they have picked, and chat over a cappucino.

Don't forget to prepare a good cash flow with your accountant and include a good salary for yourself too.

Best wishes in this new venture and think you will be SUCCESSFUL.

Fel

[Mad Hatter]

Don't forget you'll need to let local trading standards know if you are going to do food and there could even be planning issues....check it out first.
I think Mums and Estate Agents may be OK. Mums like a cup of something and a gossip in the mornings when kids aren't around and would take kids in after school - so do kids type eat things at lower prices and make sure breakables are easily visible but out of the way! Estate agencies usually employ 3 or 4 people. Girls are often concerned about their figures, why not do a slimmers lunch ? (half a sandwich, fruit bar and a coffee for say £1.99 or something ) - I bet nobody else locally will be doing this. Be prepared to do a week or two of freebie food as well. Also, get an A board outside (decent and strong, cheap ones blow over in the wind) - a lot of people now walk straight past a shop without even looking in the window, the board helps prevent this.
See if you can also place a second board somewhere where the street is busier. Put on there ' Girls - look! Slimmers Lunch £1.99' or something.... (mind you you might be done for sexist advertising...........!!!!)