How to Value a Coffee Shop for Sale

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Buying and operating a coffee business can be a very lucrative venture with high profits, or it can be a risky challenge with disappointing results. Knowing what to look for, and asking the right questions when considering the purchase of a coffee shop, can save you a lot of frustration and help you feel more secure in your decisions.

Things You'll Need

  • Questions
  • Information

Know What to Look for

  • Have a conversation with the current owner of the coffee shop. Find out why he or she is selling the shop. Ask about the up's and down's of the business. If the owner only has good things to say, use caution. There are always points of difficulty and challenges that arise in a coffee business.

  • Ask the current owner to see the current profit and loss statement. How much is the coffee shop already making on a monthly, quarterly and annual basis? If the shop is making a considerable amount of money, this will factored into the value of the shop. If the coffee shop is still in the red, the value of the shop can be lower than its value in equipment.

  • Consider the location of the coffee shop. If it's in a high traffic area, it will naturally be worth more, even if the profit and loss statement doesn't look too good. Real estate is a large factor in the value of a coffee shop.

  • Take into consideration any expenses you will acquire when purchasing the coffee shop such as renovations, filing with the state for taxes and the purchasing of new product.

  • Consider the equipment included with the purchase of the coffee shop. If the equipment is old or low-end, this can affect the price. Ask if the equipment was purchased new or used. Write down the serial numbers of the machines and search for the equipment's history online. Use this information to negotiate the price.

References

  • Photo Credit Hemera Technologies/AbleStock.com/Getty Images
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