Business Article - Cafes - A Buying Guide

According to a survey conducted in 2001 by the National Coffee Association, there are more than 100-million people drinking coffee every single day, with more than 60-million more people consuming coffee on an occasional basis or at least semi-regularly. Based on the numbers acquired by this study, it can be assumed that there is still a lot of untapped market out there for the café industry. With hundreds of millions of coffee drinks of all kinds being consumed every single day, success can be almost guaranteed for any café that is run in an educated, smart way. This will involve buying and selling the right products at the right prices, marketing to the right target audiences and setting up shop in the right locations. But with the right background and experience in the industry, all of these things can easily be done to create a profitable café business setting.

There is a great deal of untapped potential that can be found in the café industry and other similar industries, and this involves buying and selling coffee and tea from a variety of venues; coffee houses, tea houses, coffee bars and many other coffee and tea shop applications and combinations. Buying a café and turning it into a profitable business is not actually a very difficult endeavor, but there are some considerations that need to be made before any serious decisions are made.

Regardless of the chosen atmosphere, buying a café can involve the purchase of a combination restaurant and café, or café and teashop, or even a pub and café combination depending on what suits the buyer best while catering to the right target market in a specific geographical area. Traditional cafes are viewed to be redundant in nature now, because many have been put out of business and replaced by trendy coffee bars full of lattes and cappuccinos, but the reality is that both of these types of cafes are still going strong, and traditional cafes still represent the mainstay of the coffee and tea market.

The market for coffee and tea drinkers is growing steadily, and as many trendy and popular cafes have shown, there are dozens of different ways to earn money within this hot industry. The most popular method for earning money within the coffee and tea industry is clearly simply to open a café, but with so many different types of cafes out there, knowing which one to buy may be more difficult a task than many realize.

One of the most important factors when determining both whether or not to purchase a café, and what type of café to purchase is the popularity and seasonality of café locations and the target market that said café is catering to. Looking to purchase in a rural neighborhood may cause problems, whereas purchasing a café located on the corner of a main street in a tourist area or coastal town may provide much improved results. Some areas may thrive during specific seasons while seeing failure during others. Target market research is a non-negotiable part of choosing a café to purchase or a location to convert into a café, and being ill prepared for the types of customers encountered in a specific area or during a certain season may spell disaster for a newly growing business. Many areas outside of the main centers of cities are completely unviable for successful cafes, as the profits made during off seasons will not be enough to compensate for labor costs and the monthly expenses that the café accrues during the seasons where tourists are not as common or in areas where sipping coffee in a small café is simply not as common.

Another truly vital consideration to make involves lifestyle. Purchasing the right café has a great deal to do with choosing the option which both best suits individual needs and capabilities, and the needs of a target market or local area. Analyzing one's own needs and capabilities is a large first step in determining what type of café to purchase, as there are café styles to suit or accommodate a variety of different lifestyles. Early risers will benefit from cafes that open as early as they do, while late risers may prefer café styles that are naturally open later, but that do not necessarily cater to the early morning crowd. Some café locations run from early morning until only late afternoon, while others are open much longer, offering second shifts. Choosing the right hours of operation has a lot to do with location, and what needs the target market has that can be fulfilled.

Buying and running a café can be an extremely lucrative career for many people. Not all cafes will receive the same kind of popularity, but because coffee culture is growing at a consistent rate, cafes do have an above average chance of succeeding, especially over other, even similar types of business. When purchasing a café, one might find that the more successful café locations are more difficult to sell, while café businesses that are struggling may sell more easily simply because the sell more cheaply than those that are succeeding within the industry. There are large differences in the protocol for purchasing a failing business or a successful one, but both can be extremely lucrative with the right owner and the right management staff. Leases for cafes in more populated or more popular areas can cost a great deal more than a café lease in an area that is not as population dense. This does not mean that a café in a less populated area will do any less well, but it is possible.

It is necessary to be a social and sociable person when considering purchasing a café, because the café industry involves a lot of face-to-face interaction on a daily basis. Purchasing and running a café also means having a background in business or at least a handful of years of experience in the management field. In order to be successful as a café business owner, some working knowledge of running a business is definitely necessary. However, most of the expertise that is required for this type of business lies in what type of products to sell and the pricing strategy for them. Starbucks has proven that for the right drink with the right marketing behind it, no cost is too high for a couple of ingredients tossed together.

Before any location is purchased for a café business, a business plan should be drawn up, that forms the basic roadmap for the success of the company. A well-composed business plan is a necessary part for every business start up, as it allows the owners of the company to figure out most of the notable steps in the process long before hand. With a strong business plan in place, it is nearly impossible for a business to fail, because its road map to success will guide the business in the right direction no matter what comes up. A solid business plan will include information about the company and the people running it, a strategy for marketing and advertising, a basic estimated budget with projected numbers for future years, and some information on risk assessment and management. With all of this information thought out beforehand, choosing the right café to purchase should be much simpler a task.

If a suitable business plan cannot be drawn up for a specific start up Café Company, the best choice for someone interested in buying a café would likely be to purchase into a franchise. Buying a franchise location essentially entails paying for the equipment, the name and the already-established popularity of the company; to make starting up a café location simpler than if building the business were to be done by hand. Purchasing a franchise location can also help a café business benefit from advertising and marketing that the franchisor takes part in, which can save significant costs in the start up phase for a new café business.

Buying a café and turning it into a profitable business can be an extremely lucrative career for anyone who has the background and experience to make it happen. Not all café locations will be equally profitable, but because of the growth in the café industry, there is a very good chance to many will see success in some form or another. Finding success in the café industry has a lot to do with choosing the right location and catering to the right target markets, but even with the right decisions made, pricing structure, product offerings and good business sense are also required facets of a potentially profitable café company.

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