facebookHow to start a coffee shop business? - Seedly

Gabriel Tham

Tag Team Member at Kenichi Tag Team

12 Mar 2020

Property

How to start a coffee shop business?

Can we just buy over a coffee shop with all existing tenants and stall owners? Seems like a very lucrative business opportunity for those who can afford

Discussion (2)

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You can certainly buy over an existing coffee shop business. From the way you phrased your question, I'm assuming you're referring to neighbourhood kopitiams that lease their space to stalls, and not cafes. Your purchase price would include the future profits the sellers would have earned, the price of the land if the seller owns it, and other associated expenses like renovations, legal fees, potential lease termination fees, etc.

See here for an M&A guide on how to buy a business in Singapore.

If you're interested in starting a cafe, rather than a kopitiam that you lease to stall owners, that's a different ball game. See here for a guide on how much it costs to open a cafe in Singapore. (P.S. it's at least $120,000!)​​​

Rais M

25 Feb 2020

Accountant at SME

The easier way is to just buy over a coffee shop.

But it is not exactly that easy at all. If the food are average or if the location is not that good, there will be no crowd. When there is no crowd, the food stall cannot make money. Great food usually have their customer based at a certain location and will be unlikely to shift to your coffee shop if you invite them

And if you buy over a coffee shop with great tenants. These tenants can simply move out if they do not want to pay higher rent. And chances are they know they can demand a lower rent cause they bring in the crowd for you.

It may sounds like a lucrative business opportunity when it comes to collecting the rent or profit sharing with the stall as an income but lots of work and effort is required to bring the crowd in the first place.​​​

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