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How to buy a coffee shop

James Dickson, founder of Workshop Coffee Co., discusses the importance of location, experience and staff.

James on bringing transferable skills...

"I had zero operational experience, I had zero managerial skills. I come from a corporate background of valuing real estate for banks, constructing bank evaluation reports, finding interesting spaces, investment agency work - so buying real estate as an investment commodity - and a very small amount of development experience as well."

"The crossover was landlord and tenant law, buying a lease, understanding the 1954 act, security of tenure, the length of the lease, service charge provisions and looking at this business from the occupancy cost perspective and how that sits on the P&L.

"So, the crossover is understanding how important it is to rent space and how you then build your model around that."

On the importance of location...

"Location is very important, because you need a certain amount of footfall, you have to have a local market which is going to comprise your regular trade, visibility is very important and situation is very important. Those three elements comprise of what is called location. 

"A lot of people just want the site and they jump a little bit too far ahead.

"The local clientele is very important: are they office workers? Are they hospital workers? Is there a University?

"It's very, very import to really focus on location and get that right."

"What type of people comprise that local area? The best piece of advice is: really think through what that is before you open the doors or before you even sign a lease or buy a lease.

"Really think through what location means and think through who's going to be walking through the doors, or who is going to be your local market.

"It's very, very simple, but it's not very obvious. And a lot of people just want the site and they jump a little bit too far ahead.

"It's very, very import to really focus on location and get that right."

On staff...

"The focal point of Workshop is coffee: how we source, how we roast and how we extract coffee. So across those three divisions, the people that work for us have very specific skill sets in those specific areas.

"Our baristas are very well trained. They understand how to extract every shot in 28-30 seconds.

"Dialling in on the grinders every morning, getting the temperature of the products right every morning. They don't just have training from us; they also have a a background in working with coffee.

"So therefore the advice is: recruit the right people with the most relevant skill set for what you're going to be doing.

"And having people who have been in the industry, people who understand margins. They understanding running a business properly, they understand how everything is costed.

"We use what's called Fourth Hospitality (a cloud-based hospitality management system) at Workshop. We really work hard on making sure our margins are right, making sure we procure our produce for very high quality suppliers and making sure everyone is dressed appropriately."

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Matt Skinner

About the author

Matt previously managed content across all titles in the Dynamis stable, including BusinessesForSale.com, FranchiseSales.com and PropertySales.com.

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