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Hi guys,

many thanks so far for all the advice everyones given me.

 

I was just wondering if anyone could give me some input on the upfront costs I may incur taking over an existing shop?

 

I will have all of the equipment ready, so at the moment I'm envisaging:

 

Lease Deposit + rent

Insurance

Refurbishment Costs

Rubbish collection? (if not already paid)

 

Would I be required to pay utilities and accountant fees upfront from day 1? and are there any other costs I may have missed?

 

Thanks again

Matt


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Hi Matt, are you only looking at costs from taking it on to opening day 1?

I suppose you'd still need to consider have you got all the right equipment for you. Are you opening a coffee shop or cafe, in case it affects thinking?


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Hi Matt, are you only looking at costs from taking it on to opening day 1?

I suppose you'd still need to consider have you got all the right equipment for you. Are you opening a coffee shop or cafe, in case it affects thinking?

 

I have all of the equipment and the lease will be signed, I'm just looking into what additional costs I will have to pay upfront from day 1 in addition to the sale price of the shop and the lease.

 

and it is a coffee shop :)

 

are there deposits or downpayment's that need to be made for utilities or is this treated in the same way as a house so just a monthly cost?

and apart from the areas listed above is there anything I may have missed?

 

Thanks


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Music? If so then licensing required there too (PRS or similar)


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(Maybe you have already checked, but...) worth checking if there are any outstanding utility payments due on the property.

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Music? If so then licensing required there too (PRS or similar)

 

Thanks Glenn, hadn't thought of this.

I'll be using Apple Music so will have to look into this and whether its needed?


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(Maybe you have already checked, but...) worth checking if there are any outstanding utility payments due on the property.

 

Thanks, there shouldn't be anything outstanding, so as long as no upfront cost or deposit is needed it should be ok (I hope)


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PRS and PPL for all music (unless classical or very old)

This can be very expensive. Downplay the size of the premise and hours open

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Offer free wifi.....tbh..........do you *really* need music for a cafe ? I find that it is an extra cost that you don't need.

 

If you need music......here is a hint on cutting the cost. Play your music from CD (NOT junkbox.....this boost up the price), less covers.....say around 25 covers (reasonable for a cafe)

 

or

 

You get royalty free music.

 

Spend some money on making sure the whole set up is right. i.e. no cheapo stuff if your market is mid range......good food and coffee served on crap cups and plates.

 

I just opened 3 weeks ago and found out that companies which deliver stock to you are extremely more expensive......if you have a cash and carry or Costco near you......use them as 1st port of call.

 

 

Thomas

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Isn't there some odd law that states you can have a single speaker music system without having a license? Like a sort of mp3 bluetooth speaker device... like they do in smaller shops/hairdressers etc. Someone mentioned to me that licensing is only for multi speaker systems...


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Is the radio still free?


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I was told during a visit that ANY music played needs to be paid for. I had a Spotify professional account and had to pay around £300/year if I remember for PRS, plus the £9.99 for Spotify. We were known for great music but dunno if it made us any money. Most customers don't seem to care. I was actually in a restaurant the other day and they accidentally had a song on repeat that no on seemed to notice. It played 6 times until I mentioned it! The charge depends on the number of covers you have.

 

Utilities you set up an account and pay however you prefer. I would personally advise paying on meter reading. We had a situation after two years of paying same amount each month by DD of receiving a bill out of the blue for around £2500 and it nearly broke us. Despite a reading being taken every quarter by their reader they had never changed the monthly amount to reflect. Be careful.

 

You will need your insurances. Some you can pay monthly some you can't and some you can but at a premium - depends on supplier.

 

Rubbish collection will depend on your Council. We paid by purchasing Council official bags in advance as the charge is per bag.

 

Food and drink supplies you will need, so perhaps 10 days of coffee and then re-bought on a strict rota to allow for de-gassing and based on actual usage. Everything else from cakes to bread to whatever you need food and drink wise: some you can pay on account, some on account after you prove yourself reliable, some you can pay for yourself and some cash on delivery (esp. small suppliers).

 

All your refurb costs will need a deposit at least. If you're VAT registered then get VAT receipts to reclaim.

 

Accountants fees if you go that route ... some will take a monthly fee for 'everything' agreed within the letter of engagement, so book-keeping and PAYE and VAT usually. So you pay by invoice afterwards.

 

Recruitment costs for staff paid in advance if needed.

 

Rent you will pay in advance, plus a deposit which will vary. Can be quite a chunk.

Edited by Condyk
terrible typo errors throughout

---

Dave

 

Ex Coffee shop owner. Happy to help wannabee shop owners!

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http://www.prsformusic.com/SiteCollectionDocuments/PPS%20Tariffs/rs-tariff.pdf seems to list the prices. £127.20 for smallish cafe running a single speaker system.

 

Dave, what are estimated monthly costs for all your insurances you need? Any which specific insurances are we talking about?

 

Thanks


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You will need employers and public liability, plus whatever other additional insurances that you feel you want and that may be appropriate to your business and risks. Shop around. Try a few specialist cafe/restaurant insurers. I can't remember my costs now and I sold up 2 years ago so will be different now. I vaguely remember there's a commercial quote web site to at least give you a ballpark, something like moneysupermarket. Between £3-400 strikes a chord, but hazy memory now!

 

You also need to make sure your food hygiene is sorted and you follow regulations with high discipline, like every moment of every day. You will need someone accredited on site to supervise food handling at all times (Level 3). I trained all staff to minimum Level 2. This will entail a cost before you trade.


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Dave

 

Ex Coffee shop owner. Happy to help wannabee shop owners!

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I didn't know about the food handling! Who does that training and what are the fees? I'm a barista at the moment and haven't been trained anything official!


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I'm not sure if this has been mentioned but you probably shouldn't expect to start making a profit for at least a few months and try to budget accordingly. And then you need to be aware that profit could mean some loose change in your pocket.

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I noticed you guys mentioned about the food handling certificate. I guess this will be a must for any coffee shop owners, so double checking: did you all took the certificate? I'm looking into taking the Level 3 course myself now and noticed that some websites charge from £20 (reed.co.uk) to £125 + VAT (the one mentioned above) and was wondering... are there any massive differences? All are online courses and claim to be accredited.

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