Moaning Cafe Owners

[Maha]

13k p/w, owners would be lucky to draw average wage with that turnover.

I am sure the $13K p/w advertised is a great selling point not a ''make ends meet'' comment. (in this situation)

[Brett]

I am sure the $13K p/w advertised is a great selling point not a ''make ends meet'' comment. (in this situation)

I recently looked at buying a bar, restaurant and cafe here in Auckland, massive foot traffic, in a very good area with good supporting businesses and draw points including a new large new rail hub. They had a great fitout, cost them $1.8M to do only a couple of years back, and there turnover wasn't bad, however their earnings were quite low. They were turning over $40-$50k a week with serious room for business development/improvement but they were asking nearly 5 times EBITDA. I wonder how many hospitality businesses have an over inflated value on what their business is really worth? (In fact, I would imagine this applies to many businesses for sale.)
I don't think I would be very interested in trying my hand at coffee shops. Bars and clubs seem to have a higher strike rate, must be the margins on alcohol.

[george formby]

I recently looked at buying a bar, restaurant and cafe here in Auckland, massive foot traffic, in a very good area with good supporting businesses and draw points including a new large new rail hub. They had a great fitout, cost them $1.8M to do only a couple of years back, and there turnover wasn't bad, however their earnings were quite low. They were turning over $40-$50k a week with serious room for business development/improvement but they were asking nearly 5 times EBITDA. I wonder how many hospitality businesses have an over inflated value on what their business is really worth? (In fact, I would imagine this applies to many businesses for sale.)
I don't think I would be very interested in trying my hand at coffee shops. Bars and clubs seem to have a higher strike rate, must be the margins on alcohol.

Nailed it. Bottle of wine at Countdown, below cost $12, on the wine list, $30 & you just need to train someone to use a cork screw. Nope, that's no longer true either, twist & glug is the go.

Big bar / restaurants or well placed fast food outlets is where it's at. I would have a fish & chip shop in the blink of an eye.

[steve_t]

Cost of stubbie $2.19 incl. Average price in bar $8-9. Tap beer - even better

[tigertim20]

If they have no contingency plan for an event such as this then ...well bugger really...

IE: BK aint complaining.
Sure, much bigger company and thier loss must be massive, but I bet they have the patty's covered.

BK are massive, you were talking about cafe's first.
Im picking their profit margin isnt actually that high. a few days off work, and they HAVE to pay their full time employees, AND get no income? yeah thats a bit tough when its because one of your suppliers fucked up.
If (before I sold it) my business was unable to produce for a couple days because of a supplier fuckup, Id be absolutely fucking ropeable, time is money man.

Don't know about up your way, but Labour Day down here we were hard pressed to find cafes open because of them not wanting to pay extra wages and lieu days. I would of thought they would of made a lot more business on a public holiday.

working labour day you gotta pay basically 2.5x normal wages for each employee. thats a noticeable increase in overheads for the day, especially if you have 3-4 staff. They're probably guessing (fairly accurate I imagine) than any increase in patronage would fall short of matching the increased cost of being open.
and for cafe's, Id not be surprised if they didnt make any more money. people do family shit on holidays, all those locals who'd come in for morning tea/lunch before/after work coffees etc during their work day wont be coming in remember - thats probably 80% of their normal business not coming through

[jellywrestler]

Alot of business are running on a knife edge at the moment. Few days lost takings can be fatal. Wages could not be paid.

If they have interruption insurance payouts could take to long. Welcome to business in the new century.

Glad you noticed Christchurch...

[Flip]

Well heres the kicka!...typical corporates

http://www.stuff.co.nz/national/5866...od-price-hikes

So once again WE have to pay for a huge corporate companys loss of service!.....they charge us premium prices all year for their gas service, and yet when it breaks down the effected companies just pass the costs onto us! -Not the Gas company...shit no...they have big name lawyers...joe bloggs can cover it! (I mean its not like over charging us for so many years made them the profit monsters that they are nowdays...yeah screw the little guy for some more $$$!)

The gas company should be covering all forms of loss......with the profits they make, they should have insurance cover for such things

.....But on a good note for you drinkers....."Beer supplies were safe" LOL

The gas supplier and the retail network operator which might be a different company are in a force majure situation, its NGC who have the pipe line problem and can't supply gas to the retailers.

All the retail gas supply contracts contain a clause that says they can't be held responsible for damages because of a gas outage. The gas retailers won't supply on any other basis. Keep in mind the market is driven by price, so go get the lowest price network capital costs have to be kept as low as possible. That means there is little to no operational redundency built in. All the north island gas retail networks are a single point of supply system.

How fucking difficult would it be to drop a few LPG cylinders in to the cafe and do a quick nat-lpg jet change over on the appliances. Espcially if you were prepared for it. But no, like the wingy poms we are decended from, we go running to the media, or our lawyers rather than do some thing about the problem.

The ones who have me stuffed are those dairy companies who have been tipping milk away. Where the hell was their emergency business-engineering planning. A diesel burner, a hose and 4 bolts would have got them back in production, which would have cost less than one tanker load of milk.

Yea I know its a bit of a rant but I am from the boiler and fuel industry.

[Maha]

Nailed it. Bottle of wine at Countdown, below cost $12, on the wine list, $30 & you just need to train someone to use a cork screw. Nope, that's no longer true either, twist & glug is the go.

Big bar / restaurants or well placed fast food outlets is where it's at. I would have a fish & chip shop in the blink of an eye.

They would still charge you a corkage fee though?...yes?...
This is your industry Mark, the other point of notice about the Cafe' here for sale is they use 25kgs of coffee p/w.
I dont know how that would equate into the weekly turnover of $13K..they do food also, which is cooked on site.

[Maha]

BK are massive, you were talking about cafe's first.
Im picking their profit margin isnt actually that high. a few days off work, and they HAVE to pay their full time employees, AND get no income? yeah thats a bit tough when its because one of your suppliers fucked up.
If (before I sold it) my business was unable to produce for a couple days because of a supplier fuckup, Id be absolutely fucking ropeable, time is money man.

As a contractor/wage earner for 30 years + in my industry...I know the value of Time V Money...eggs are best served scrambled

[willytheekid]

The gas supplier and the retail network operator which might be a different company are in a force majure situation, its NGC who have the pipe line problem and can't supply gas to the retailers.

All the retail gas supply contracts contain a clause that says they can't be held responsible for damages because of a gas outage. The gas retailers won't supply on any other basis. Keep in mind the market is driven by price, so go get the lowest price network capital costs have to be kept as low as possible. That means there is little to no operational redundency built in. All the north island gas retail networks are a single point of supply system.

How fucking difficult would it be to drop a few LPG cylinders in to the cafe and do a quick nat-lpg jet change over on the appliances. Espcially if you were prepared for it. But no, like the wingy poms we are decended from, we go running to the media, or our lawyers rather than do some thing about the problem.

The ones who have me stuffed are those dairy companies who have been tipping milk away. Where the hell was their emergency business-engineering planning. A diesel burner, a hose and 4 bolts would have got them back in production, which would have cost less than one tanker load of milk.

Yea I know its a bit of a rant but I am from the boiler and fuel industry.

Awesome explanation mate , thank you for clarifying that.

I work for Gen-i (a division of telecom), we are contractually obligated to build in redundancy measures for major networks etc, and are also held accountable for impacting loss of service....hence why I could not understand why the gas company didn't have redundancy measures in place and are not being held financially accountable for the loss of service (As the power company's etc are...and a bit pissed at another hike in grocery prices because of this outage)
Your dead right regarding the LPG cylinders and the dairy company's......but that would require commonsense and a little bit of effort (both of which seem to be severely lacking now days!)

Thanks again for the explanation Flip, always good to learn and understand new things.

Good hearing from ya mate, hope all is well (Dog, bike, life in Oamaru etc).....hope to catch up with ya for another ride one day...("sniff"...I still haven't had a go in your awesome side car lol)

Take care

-Willy

[george formby]

They would still charge you a corkage fee though?...yes?...
This is your industry Mark, the other point of notice about the Cafe' here for sale is they use 25kgs of coffee p/w.
I dont know how that would equate into the weekly turnover of $13K..they do food also, which is cooked on site.

Corkage if it was a BYO restaurant yes.

25 kg's coffee, approx 60 double shots to the kg, 1500 coffees, average price $4 = $6000. Nice earner, but something does not stack up. I worked in a 40 seater cafe using 60kg a week, the coffee was considerably less than 35% of turnover.

A lot of money to lose if the utilities go phut. Wonder what the rent & conditions of lease are...

[BMWST?]

Awesome explanation mate , thank you for clarifying that.

I work for Gen-i (a division of telecom), we are contractually obligated to build in redundancy measures for major networks etc, and are also held accountable for impacting loss of service....hence why I could not understand why the gas company didn't have redundancy measures in place and are not being held financially accountable for the loss of service (As the power company's etc are...and a bit pissed at another hike in grocery prices because of this outage)
Your dead right regarding the LPG cylinders and the dairy company's......but that would require commonsense and a little bit of effort (both of which seem to be severely lacking now days!)

Thanks again for the explanation Flip, always good to learn and understand new things.

Good hearing from ya mate, hope all is well (Dog, bike, life in Oamaru etc).....hope to catch up with ya for another ride one day...("sniff"...I still haven't had a go in your awesome side car lol)

Take care

-Willy

You must be joking right.Do you really expect there to be a spare pipeline just sitting there?We are not talking about just a few extra dollars...it would be millions and millions(and millions)I think you will find that just about every electricity,gas,telephone etc retailer has an out clause re damages through loss of service.And the onus for some sort of backup service is on the manufacturers,esp those claiming to be an "essential" industry.

[Usarka]

If you are a National voter: It's up to each business to either have a backup, or to put demand on their suppliers and let the market work it out.

If you are a Labour voter: It's such a critical part of the countries infrastructure that it should be owned or regulated by the government.

[imdying]

I could not understand why the gas company didn't have redundancy measures in place and are not being held financially accountable for the loss of service (As the power company's etc are...and a bit pissed at another hike in grocery prices because of this outage)

In your industry they go to the competition if you say you won't provide that. In gas supply they say have a nice day if you ask for that.

[Jantar]

....The ones who have me stuffed are those dairy companies who have been tipping milk away. Where the hell was their emergency business-engineering planning. A diesel burner, a hose and 4 bolts would have got them back in production, which would have cost less than one tanker load of milk.

Yea I know its a bit of a rant but I am from the boiler and fuel industry.

A diesel burner a hose and 4 bolts? Are you serious? One dairy factory that our company supplies heat to requires 320 GJ of heat per hour in the form of super heated steam. Would you like to re-assess that 4 bolt connection and work out just where that quantity of diesel is coming from?