Starting or investing in your own business is a thrilling time in an entrepreneur’s life. Even so, purchasing a business or franchise is a big investment. You need to know how to identify red flags and make sure you’re investing in a business that makes sense for you. That means asking the right questions. Here are 15 make-or-break questions to ask when you buy a coffee shop.
The first question you need to ask before you buy a coffee shop is also one of the most obvious. Why is the owner selling their coffee shop in the first place? There’s a good chance the owner may be retiring or moving to a new state or town. If that’s the case, then it makes sense that someone would sell their business.
What you want to look out for are financial problems or issues with the business itself. Has business declined recently? Are there other financial issues to consider? Ask for the reason the owner is selling to make sure it’s for the right reasons.
Next, it’s important to understand how the owner arrived at the price at which they are selling their business. Ask about what factors informed the price and why they are valuable. These may include the value of the location or building.
Is the building included in the price or will you need to sign a new lease? Be sure you get a clear breakdown of the costs associated with buying a coffee shop so you can be confident in your purchase.
Unless the building comes with it, you’re also entering the existing lease. You need to speak with both the business owner and the landlord before signing anything. You’ll want to know how long is left on the lease, what the terms are, and the landlord’s plans for the future of the building. The last thing you want is to buy a business only to discover your lease runs out in six months!
This is another question that may seem obvious but is really important. Did the previous owners enjoy working at their coffee shop? Just like their reasons for selling, it’s important to learn more about their experience running the business.
You don’t want to buy a business where you won’t be happy. If the previous owner is experiencing burnout or is tired of running the business, that’s a red flag that it could happen to you too. Make sure the business is a place where people like working and spending time.
If you’re about to buy a coffee shop, there’s a good chance you’ve done research on the competition. Still, it’s best to learn about what the previous owner has to say about their competitors and how they have impacted their business.
You should know who your competition is, and have a general idea of how they’re performing compared to your store. This is important because these are the shops you’ll be jockeying with for customers.
There are all kinds of places where people buy their coffee. What makes this coffee shop different? You’re going to want to ask about what separates this coffee shop from everybody else. Are there specialty drinks people love? Maybe they serve amazing snacks and breakfast items.
Whatever they’re doing, make sure your potential coffee shop is doing something to stand out from the crowd.
An important consideration when you buy a coffee shop is where the coffee shop is located. Your coffee shop location is crucial to the success of your business. Is the business in a high traffic area? Is it easily accessible from the road? All of these are important questions that should determine whether or not you want to buy.
Once you know the coffee shop is in a location to attract customers, you should also get a feel for what those customers are like. Does the coffee shop rely on foot traffic and serve a lot of college students or young professionals? Depending on whether you want to buy a drive-thru coffee shop or a traditional coffeehouse, you may do most of your business during the morning rush. Learn more about the coffee shop’s clientele and how this affects business operations.
This is an important question when you buy a coffee shop that many people don’t think of. When you buy the coffee shop, are you also buying their debt? You need to know exactly what you’re buying and everything that comes with it. If you’re getting equipment or other goods with the sale, make sure they’re all bought and paid for. The last thing you want to do is buy somebody else’s problems.
When you buy a business, you should know everything that comes with it. Equipment, furniture, décor, and signage are all essential to any successful coffee shop. Find out if you’re buying more than just the building and the name. If you need to buy new coffee makers and furniture you weren’t planning on then you would be in for a rude awakening.
Clearly, there are a lot of important questions to think about when you buy a coffee shop. One great way to have a lot of these questions answered up front is by partnering with a franchise like Scooter’s Coffee®.
Questions such as how much your investment will be and where that money goes are clearly explained so you can buy a coffee shop with confidence. Other considerations like site selection, training, and marketing will be handled for you as well.
See how you can buy a coffee shop and start your road to success when you become a franchise partner with Scooter’s Coffee today!
