|By Anna (Anna) on Tuesday, February 15, 2005 - 09:29 pm: Edit|
Hello everyone, here is the thing. I have a friend that has rented a spot in a farmer´s market, it is a new one, with craftters and a food court. The owner does not allow comeptition between the vendors, meaning every spot is "unique".
The place has a porjected construction, for an ammusement area, but for now it´s just the food court, crafters and farmers.
It runs friday and saturday 10 to 8 and sunday 10 to 6.
Her spot sells a combination of spanish and mexican food, has a 6 burner range, 2 ovens, fridge, deep fryer and all the necesary equipment.
Until now, she is cooking during the week and her husband runs the place, he does not know anything about food.
They are not happy with the business, and I am thinking about offering them to run it, and take care of the expenses, like a sub-contractor.
I still have to go to the place on the weekend, to see if the problem is her spot or if it is about the number of people visiting the place.
The spot is 20x10 and the rent is about $700 plus about a $100 in other expenses. My questions:
How can I calculate how much I should make to consider it profitable? What is the usual percentage in food business? (I AM NOT AMERICAN, MOVED TO THE COUNTRY NOT LONG AGO, SO I DO NOT KNOW HOW THINGS WORK HERE )
What other things do I have to consider?
I am planning to visit the place during the weekend to see how it looks, so I would appreciate any tips to cosnider during this visit. Oh! another detail, it is about an hour driving.
thanks a lot!!
|By Jonesg (Jonesg) on Wednesday, February 16, 2005 - 03:49 am: Edit|
If the rent is $700 per month? thats cheap.
If the rent is $700 per week, its very expensive.
I like rent to be less than 20% of monthly sales. If rent is 10% of monthly sales, its very good.
|By Anna (Anna) on Wednesday, February 16, 2005 - 08:04 am: Edit|
That´s the monthly rent. One of my concerns is that since it runs only fri-sund, it would be difficult to reach those selling goals. Evenmore, I would not count on fridays.........
|By Chefmanny (Chefmanny) on Wednesday, February 16, 2005 - 08:40 am: Edit|
You have to visit the place on the days it's opened and see for yourself and, don't go just one or two weekends...go at least six.
Why not just buy the business, if you don't have the cash, make payments to them as a percent of sales, this way they have an incentive not to lie about sales figures to you, or they won't get paid!
Are they not happy bacause of the money they are making or other reasons?????...you need toknow this.
Ask other residents of the town if this is a busy venue all the time or not.
|By Foodpump (Foodpump) on Wednesday, February 16, 2005 - 09:54 am: Edit|
Chefmanny's right, you have to visit the place for at least a week. Remember, nobody will sell a business that makes money. If it made money then they would just hire someone to look after it and hand them the cash drawer at the end of day.
Another option would to be to lease, maybe on a trial period for several months. A few questions to ask:
-Any outstanding work to be done for the Health, Fire, or Enviromental departments?
-Do any of the profits go to the Farmer's market?
|By Anna (Anna) on Wednesday, February 16, 2005 - 10:54 am: Edit|
Ok, some more details:
My friend and her husband both have regular jobs, they thought give it a try and eventually quit their jobs to attend the place. The thing is that she is the one cooking everything during the week (they live in PA and you can get your home kitchen certified)when she gets home from work. They have had the place for almost a year,She is kind of tired of not having life and just covering the costs.
The place is still under cosntruction, meaning, there are still many available booths, (not for food)and there is this new ara projected to open next year including concert area, mini golf, and many other family entertainment themes. The place is hugeeeeeee!!!
The place is about an hour driving, and I said before her husband does not know anything about food.
About if it is profitable or not, that´s what I want to find out during my weekend visit. I want to make sure if it is about them or the place. Because if they don´t have traffic, there is no need to talk about it........... But if it is a matter of menu design, or bad administration, or something manageable, I would think about it
One of my worries would be if it is possible to make at least $7000 a month, to consider it a good opportunity.
$1000 rent, services, and other regular expenses
$1000 employee ($8 an hour)Maybe I would not have it at first, but it has to be included in costs
$2000 production costs (food)
$3000 profit, before taxes
Am I somewhere on track with this numbers?
The owner says they have about 3500 to 5000 afluency during the weekend and expect to be raised to 10000
There is no need of any other jobs for health, fire, etc. The place is perfectly oparting
As far as I know, no profits to the farmer´s market
Yes, maybe it would be interesting to buy it, but first I want to make sure it is worth it. specially the 1hour driving and forgotten weekends........then I would take next step and offer them options. They are pretty desperate about it, mostly tired I would say... this industry is not fot everyone.
For me it would be a good start to understand american preferences and market behavior, for future plans.......
thanks again for the feedback!