As part of their annual research into the UK independent cafe industry, Bizdaq – the Leeds based company providing an online business transfer platform for buyers and sellers – have found that the independent cafe industry is flourishing in the UK: data gathered by Bizdaq reveal a 120% increase in the number of people looking to buy a coffee shop in the previous 12 months.
The most sought after small business in the UK
These new statistics have found that the average leasehold asking price of cafes in the UK comes in at an average of between £50,000 and £75,000 with the majority of cafes reporting a turnover of between £75,000 and £100,000. At this level of asking price, cafes continue to be the UK’s most sought after small business with potential buyers. Cafes have always been in demand with buyers, as many view cafes as a lifestyle business, however the improved economy has led to a thriving independent cafe scene and the rise of niche cafes.
Longevity is prevalent
32% of cafe owners have been in the business for three to four yearsand in fact, 80% of the owners polled have been running their business for less than seven years. This clearly illustrates the increase in people recognising the benefits of starting businesses in the cafe industry now more than ever before. The price to lease a property isn’t extortionate, the average turnover is very respectable, and the running of the business lends itself well to people looking to fit their work around their lifestyle.
Sole operators dominate the scene
66 % of the cafe and coffee shops polled were sole traders, 20% were limited companies and 14% were partnerships. The fact that so many cafe owners operate their business on a sole trader basis again proves that there are plenty of thriving independent cafe owners out there at the moment.
This is encouraging despite the fact the feeling that the high street is gradually being overtaken by the big coffee chain players such as Starbucks, Costa and Caffe Nero. This proves that the sector remains completely open to small business owners.
Leasehold rules
Out of the total number of cafe and coffee shop businesses sold just 7% were freehold properties whilst 93% were leasehold. With the overwhelming majority of cafe businesses operating from leased premises, this data suggests that buyers must ensure that the terms of the lease are aligned with their business aims as commercial leases are often issued for a 10-15 year period.
Sean Mallon, CEO at Bizdaq, explained: “Our findings demonstrate that potential cafe owners don’t have to spend huge amounts of money on leasing a property to make a healthy profit. Spending anywhere between £50,000 and £75,000 will set them up for a respectable turnover of between £75,000 and £100,000 and these are likely to be strong contributing factors as to why the popularity of this sector is growing. With the present renaissance in the UK high street, there’s never been a better to buy or start an independent cafe in the UK.”
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