Four weeks after opening their coffee shop in East Sheen, the owners, a husband and wife team, had an unexpected change in their personal circumstances which meant they could no longer run it. They had invested more than £35,000 in the business and signed a lease on the premises, and they had about five weeks before they would have to step away from it completely.
This case study explains how we found a buyer within 24 hours of putting the café on the market, and how the sale was completed just over five weeks after we were instructed.
The sale at a glance
- Business
- The Tram Coffee House, an independent coffee shop on Upper Richmond Road West, East Sheen, Richmond
- Trading history
- Open for only four weeks when the owners contacted us
- Owners' investment
- More than £35,000
- Premises
- Leasehold, on a prominent corner plot on a busy road
- Asking price
- £34,995
- Buyer found
- Within 24 hours of the advert going live
- Outcome
- Sold at the full asking price and completed just over five weeks after instruction
The owners and why they had to sell
The Tram was run as a family business, and the owners wanted it to become the independent artisan coffee house of choice for the local community, offering residents, visitors and people working nearby a different and more personal kind of coffee house. They had been open for only a month when their circumstances changed in a way that meant they could not carry on.
Simply closing the doors would not have solved their problem. If the business did not sell, they would lose the money they had invested and would still be liable for the rent under the lease, so the sale needed to be agreed and completed within about five weeks.
They were referred to us by Daltons Business, with whom we have worked for many years. Before instructing us they spoke to several other agents, and they chose us because we could have the business on the market within 24 hours, because the service was personal, and because they found our valuation realistic.
The coffee shop
The café occupied a busy corner plot on Upper Richmond Road West and attracted shoppers, local office workers, visitors and students, all of whom it aimed to serve better than its competitors. Cakes, salads, toasties and baguettes were made in house to order, and the room was light and comfortable enough for customers to meet friends, relax or work there.
The owners also had plans they had not yet had time to put into practice. They intended to apply for a drinks licence so that they could open later from Thursday to Saturday and serve sharing platters of cold meats and cheese with wine and beer, and they wanted to add hot food to the menu, a change of use that the lease already allowed for. A buyer would therefore have room to grow the business from the first day.
Pricing a business that had barely started trading
Because the café had been trading for only four weeks, there were no accounts or profit record for a buyer to rely on. What a buyer was really paying for was a newly fitted coffee shop, its equipment and a lease on a busy corner site, together with the opportunity to build up the trade themselves.
We therefore priced it at £34,995, which was close to what the owners had invested. Setting a realistic price from the outset is what allowed the sale to happen so quickly, whereas a more ambitious figure would probably have meant weeks of waiting for offers, and that was time the owners did not have.
On the market within 24 hours
We valued the business within hours of our first conversation with the owners, the paperwork was signed electronically, and the café was on the market within 24 hours of instruction. Zach carried out the valuation himself and dealt with every stage of the sale personally.
The owners checked and approved every advert before it went live. The business was listed on BusinessesForSale.com, Daltons Business and Rightbiz, as well as on our own website, and it was also sent to the buyers registered on our database.
Finding the buyer
Roya Fanaie contacted Zach only a few hours after the advert went live. He arranged for her to view the café the same day, and immediately after the viewing she offered the full asking price.
The sale then passed to the solicitors. The owners instructed a solicitor we work with regularly, who is familiar with business sales and lease assignments, and the sale completed shortly before Christmas.
The result
The owners sold the business at the full asking price, recovered their investment and were able to step away from it when they needed to. They were very pleased with the outcome. They had come to us needing a sale within a matter of weeks and hoping to get back what they had put into the café, and both of those things happened, which gave them one less thing to worry about at a very difficult time.
Roya and her husband Amir had been keen on the site from the start because it was busy and stood on a prominent corner. They renamed the business Neeman, after their two sons, and as well as coffee and tea they served healthy drinks, smoothies and pomegranate juice. They also planned to introduce traditional Iranian dishes that were not available locally, adapted slightly for British tastes.
What the buyers said
"Very good and particularly good was the punctuality, politeness and honesty. We were very happy with the time scale. We were first time buyers and you helped a lot."
Amir Fanaie, buyer
"To be honest, the service was very reliable and friendly."
Roya Fanaie, buyer
If you need to sell a café quickly
If you need to sell a café quickly, the asking price should be one that will attract a buyer straight away rather than the highest figure you could hope for. It also helps to have the lease, the equipment list and whatever trading figures you have ready before the advert goes live, to be available for viewings at short notice, and to use a solicitor who handles business sales regularly. If you are still weighing up your options, the questions buyers usually ask are covered on our page about selling a café.
Our fees are agreed individually, and any initial fee and completion fee are agreed with you before you instruct us.
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