Chris had built The Longhouse Café into a popular plant based café in the centre of Brighton in about 18 months, and he decided to sell it so that he could concentrate on his other business interests and spend more time travelling. He had never sold a business before, the café was still young, and he wanted a reasonably quick sale.
This case study explains how we marketed a café with a short trading history, found a buyer within two months and completed the sale in about five months, despite long delays on the landlord's side.
The sale at a glance
- Business
- The Longhouse Café, a plant based café on York Place in central Brighton
- Trading history
- About 18 months on this site
- Turnover
- Around £98,000 expected for the first full year
- Net profit
- £28,000
- Premises
- Leasehold
- Asking price
- £59,995
- Interest
- More than 700 enquiries and four serious buyers
- Outcome
- Sold for £55,000 and completed about five months after instruction
The owner and why he sold
Chris opened The Longhouse on York Place as an offshoot of The Vegan Viking, a small business he had run for the previous six months delivering organic plant based food around Brighton. The site itself had already traded as a coffee shop for three years before he took it over. By the time he came to us, both of his businesses had a strong following on social media and excellent reviews online, and he had decided to sell the café so that he could focus on his other interests.
He spoke to other agents before choosing us. He regarded us as the most expert of the firms he talked to, and he put it more directly than that.
"Way ahead of everyone else."
Chris, owner of The Longhouse Café, on why he chose us
The café and its location
The café is two minutes' walk from The Lanes and close to the station, and it sits opposite St Peter's Church, which draws a steady flow of visitors. The area has heavy footfall from office workers, commuters, students and tourists, and it is within easy reach of the city's colleges and the university.
The Longhouse is a plant based café with a focus on health and wellbeing. It specialises in breakfasts, brunches and lunches made with high quality ingredients, most of them organic and bought from local suppliers, and it serves locally roasted coffee, blended teas, smoothies, pressed juices and fermented drinks.
Its mission statement, painted along the front of the counter, is "Born in Brighton. Created by the community. Powered by plants." The business was run by Chris working full time in the café, with one full time and five part time members of staff, and it also offered home delivery through Deliveroo.
Its customers were people interested in health and wellbeing and in organic and fermented food, along with tourists, local residents, students and anyone in need of a restorative breakfast after a night out. The café had five star reviews on Google, Facebook and Happy Cow, the vegan and vegetarian restaurant guide, and it had been nominated for Best Breakfast at the Brighton and Hove Food Awards.
The challenge of selling a young business
At about 18 months old, the café had a short trading history, and its Deliveroo trade had only just started. Buyers are usually wary of a business that young, because there is so little evidence of how it will perform over time. What worked in Chris's favour was that the café served a new and growing market, and that brought far more interest than a business of its age would normally attract.
Timing also mattered, because activity in the business sales market tends to slow from the start of December and Chris wanted a quick sale. We therefore had the café on the market within 48 hours of being instructed. The valuation and the paperwork were handled by email, and we gathered the due diligence documents before going to market so that a buyer would not have to wait for them.
Chris was very organised and willing to do whatever helped the sale along. Because he was working in the café all day, many of our calls took place in the evenings and at weekends.
Finding the buyer
The marketing produced more than 700 enquiries through business for sale websites and our own buyer database, and four of those turned into strong interest. The eventual buyer liked the café as soon as she saw it. She had already made an offer on another business that had fallen through, so she was ready to commit, and she offered £55,000 subject to finance.
Chris felt she was a good fit for what he had built, and although other strong candidates were still interested, he accepted her offer. We then helped her prepare the documents her lender needed, the finance was approved soon afterwards, and we drafted the heads of terms, which both parties signed.
The landlord and the legal work
We had contacted the landlord's agents early in the process to find out what they would require from a new tenant, and we kept them informed as the sale progressed so that the transfer of the lease would go as smoothly as possible. Even so, the landlord and his solicitors held matters up for some time, and that stage took longer than any other part of the sale.
We arranged a solicitor to act for Chris, who proved very diligent throughout. Chris found them "very patient" in the face of the long delays from the landlord's side.
The result
The sale completed about five months after Chris instructed us. The café sold for £55,000 against an asking price of £59,995, which had been set to leave some room for negotiation, and that was the figure we had valued the business at.
Chris was very happy with the result. He had never sold a business before and was surprised at how smooth and stress free the process had been, and he was grateful for the advice and help he received along the way. The buyer was also buying a business for the first time, so both sides were relying on us to guide them through it.
What other café owners can take from this
A short trading history does not rule out a good sale, provided the café serves a market that buyers want to be part of. It helps to go to market at the right time of year, to have your documents ready before the first enquiry arrives, and to speak to the landlord's agents early, because the landlord is often the slowest part of a leasehold sale. If you are weighing up a sale of your own, our page about selling a café covers the questions buyers usually ask.
Our fees are agreed individually, and any initial fee and completion fee are agreed with you before you instruct us.
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