coffeemill
New member
- Oct 25, 2007
- 2
- 0
Hello Everyone! I am new to this forum and also new to this business. I am looking at possibly buying an existing coffee shop and wanted to get some feedback from the pros here.
Shop background: located at a beach resort area but open all year, a coffee shop has been at this same location for 10 years and the current owners purchased it in 2004.
Sales of 300k with COGS at 40.7% with a net of 15k. They have 87k in equipment of which is about 4+yrs old. They are asking 125k.
They have invested 199k in the business and have only paid back 4k of the loan. The biggest expenses are payroll being 25% of sales which only includes a small salary for one owner (not at shop full time). I don''t think the current owners really know how to operate a business and this is why they are selling before they loose any more money.
Having never been in this business before I question the cogs and payroll. I was trying to gather info from this site to determine what the COGS should be. I am thinking 30-35% if you have food which they do, light breakfast and lunch. Can someone tell me what % of sales payroll typically runs and am I off on the COGS?
Any comments or suggestions or just tell me I am crazy for looking at this would greatly assist me in making the right decision.
Thanks
Shop background: located at a beach resort area but open all year, a coffee shop has been at this same location for 10 years and the current owners purchased it in 2004.
Sales of 300k with COGS at 40.7% with a net of 15k. They have 87k in equipment of which is about 4+yrs old. They are asking 125k.
They have invested 199k in the business and have only paid back 4k of the loan. The biggest expenses are payroll being 25% of sales which only includes a small salary for one owner (not at shop full time). I don''t think the current owners really know how to operate a business and this is why they are selling before they loose any more money.
Having never been in this business before I question the cogs and payroll. I was trying to gather info from this site to determine what the COGS should be. I am thinking 30-35% if you have food which they do, light breakfast and lunch. Can someone tell me what % of sales payroll typically runs and am I off on the COGS?
Any comments or suggestions or just tell me I am crazy for looking at this would greatly assist me in making the right decision.
Thanks
