# Typical rent paid against asking price ?



## aodstratford (Sep 18, 2012)

Like many others I am considering opening a coffee shop and am really aware of the importance of location / premises - but am scared to death by the costs particularly the monthly rent. Is there a typical % of asking price agreed upon ? (like people will pay 90 of asking price on a house ?

I am in a comfortable job (that I can do in my sleep) with good conditions but am BORED to death ! Thanks Adam


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## garydyke1 (Mar 9, 2011)

Sounds familiar. I will watch this thread with interest


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## The Systemic Kid (Nov 23, 2012)

Went for a couple hours latte training this evening at Cafe & Co - sited in a smallish village. Found it on the internet - LM kit - Union coffee, so thought I'd give it a go but wondered why it was located where it was - not a place I'd ever have thought would support an indie. The owner, Neil, has been up and running for 18 months - his first coffee shop venture. Shop unit is nothing fancy but the bonus is lowish rent. Neil said the location was great as there are two primary schools nearby. After dropping off the kids, the mums drop in for coffees and a chat providing good steady business. Neil is now offering various types and levels of training. Just shows what passion and energy can achieve - but location is crucial.


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## radish (Nov 20, 2011)

It's kinda hard to generalise - if you are looking at a competitive area it may be unlikely; on the other hand if a unit has been empty for months then maybe.

Going in to negotiations with knowledge of the rents in the area will help you decide plus having some numbers in a spreadsheet will allow you to play around with various scenarios. Finding out what the previous rent for a specific unit will help, particulalry if you find that ownership is changing every few years - could be an indicator that the rent is too high.

Getting practical experience, talking to other cafe owners, thinking about menus/staffing and all the other research will help you decide and possibly make it *slightly* less scary.

Being bored in your current job though isn't a good reason to open a cafe.


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## garydyke1 (Mar 9, 2011)

radish said:


> Being bored in your current job though isn't a good reason to open a cafe.


Absolutely. However if your passion for coffee and running a cafe has been on your mind for 12 months, very hour of every day, AND you're rotting in your current soul-destroying job then you have a good reason ; )


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## radish (Nov 20, 2011)

Sure, but I'm just trying to balance things out a little. Being coffee obsessed can blind you a little to the fact that you have to make a profit!


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## garydyke1 (Mar 9, 2011)

The numbers definately have to add up - the business plan will contain that detail.

Id hope a coffee-obsessed/service-obsessed shop has a much better chance at success than a shop purely focusing on profit


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## ronsil (Mar 8, 2012)

I think its a mixture of both. - Without profit you don't have a business.


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## garydyke1 (Mar 9, 2011)

Yep - The numbers definately have to add up


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## Yes Row (Jan 23, 2013)

In my day job I deal with the letting of pubs. No quite the same as shops but similar. There is no rule to rent payable compared to rent expectation. Landlords will always ask for more than they will probably get. Landlords will take massive short term hits on rent, in early stages of agreements, if they are desperate to let. If a site has been closed for a while then you are in the driving seat and will most defiantly get a rent free period with a staged rent schedule.

The real key to what you pay, and this is basic business, is what your business can support. You need to put together a REALISTIC projected P&L. In the current climate in my business a wet led free of tie pub would pay approx 15% of gross turnover, again no hard and fast rules.

If you are really new to all this, I mean property and tenancies, then my advice would be get someone who is not to assist you. Tie yourself into a restrictive tenancy with prohibitive clauses/conditions and believe me you old job will seem like a dream

Sorry if I am coming across as doom and gloom but I meet people weekly that followed their dream and their heart but did not seek professional help to sort the profitability and sustainability


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## aodstratford (Sep 18, 2012)

Many thanks for all the above - I am passionate about great coffee (it puts me in a bad mood if I make myself a bad one !). I want to open a coffee place where coffee is central - I know that producing great coffee for people makes me happy. When looking at premises which I think are really good - monthly costs of rent £2000 business rates of £800 ...before staff, utilities etc - that adds up to lots of cups of coffee ! As I have considered different premises - I totally get the comments by The Systemic Kid - some much cheaper places may present better business sense. Really appreciate the comments. Thanks


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## garydyke1 (Mar 9, 2011)

Have a chat with Brownie Box Cafe (I think what they are called) serving Monmouth coffee and seem to be doing v well.

Im looking Birmingham myself


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## gman147 (Jul 7, 2012)

I think the problem is that the majority of the public do not share our enthusiasm for coffee and the ones that do are brain washed by the marketing frenzy of costa, starbucks and are of the opinion that these cafe's offer the best you can get..

We know different but I fear this will be your and everyone else's possible downfall when trying to open a successful cafe. There are of course exceptions to the rule; but in the numbers game, the odds are stacked heavily against in my opinion.


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## painty (Jul 25, 2011)

garydyke1 said:


> Have a chat with Brownie Box Cafe (I think what they are called) serving Monmouth coffee and seem to be doing v well.


Interesting, I might pop over there tomorrow and see what they're like. Surprising to see they're using monmouth so far from London


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## aodstratford (Sep 18, 2012)

garydyke1 said:


> Have a chat with Brownie Box Cafe (I think what they are called) serving Monmouth coffee and seem to be doing v well.
> 
> Im looking Birmingham myself


That is my local coffee shop ! Good place good extraction but milk a little flat. But I keep going - cakes and sandwiches good also. I work in Birmingham - whereabouts are you considering ? I have spotted some potential near the student areas - in town and possibly selly oak - they are also both close to hospitals !


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## garydyke1 (Mar 9, 2011)

Holding my cards close my chest at this early stage


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## garydyke1 (Mar 9, 2011)

poona said:


> I think the problem is that the majority of the public do not share our enthusiasm for coffee and the ones that do are brain washed by the marketing frenzy of costa, starbucks and are of the opinion that these cafe's offer the best you can get..
> 
> We know different but I fear this will be your and everyone else's possible downfall when trying to open a successful cafe. There are of course exceptions to the rule; but in the numbers game, the odds are stacked heavily against in my opinion.


This all depends if you are trying to replicate the Starbucks/Costa model . You cant compete on location/advertising/visability. You cant compete on price. You cant compete on product range.

However if your model isnt trying to replicate those false-idol giants... You CAN compete on quality. You can compete on service. You can compete on vibe/personality.

Find the right location and demographic...become known to have the best cup quality, friendly service and atmosphere...build up a client base and treat them right. It CAN work.


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