Dragons Den type investor wanted with £6k - Manchester!
Discussion
I have traded in Bury, as well as other surrounding towns for over thirty years....(Not food)
Remember,... regarding Millgate, the new "Rock" scheme will be coming onstream next year, which will tend to take a large percentage of customers over to that side of town......I know for a fact, many Millgate tenants are very worried how it might affect them long term.
Also, with respect, I would be wary of taking on the commitment of a long term lease for 250pw, with all the legal implications if you need to scout around the internet for investment for the (relatively) small sum of 6k......Also Bury is saturated with food shops, and I believe another fifty outlets are planned for the new development.
Don't want to put you off, but my advice is look before you leap.....
Remember,... regarding Millgate, the new "Rock" scheme will be coming onstream next year, which will tend to take a large percentage of customers over to that side of town......I know for a fact, many Millgate tenants are very worried how it might affect them long term.
Also, with respect, I would be wary of taking on the commitment of a long term lease for 250pw, with all the legal implications if you need to scout around the internet for investment for the (relatively) small sum of 6k......Also Bury is saturated with food shops, and I believe another fifty outlets are planned for the new development.
Don't want to put you off, but my advice is look before you leap.....
I think your outgoings are a bit low..i/ think you will pay alot more in electricity bills..
And the Sales without M&A seem high..
But If you live the dream do it, but I think at this time in the economy it wrong to invest in this market.
What was the shop before and how long had the business been going for.?
I would suggest a molbile start up up, i.e van and make produce yourself...and sell to keep costs to minimal...
The maccy 'D's test is always good..how far away are they as they invest a lot of money in postioning over sales..
Whta is the license agreement with the pastry firm..I think that as they are not a well know as the 'Real Pastry' Company it would be very hard with little capital to branch out into their market place..
Also do they produce the pastries and freeze and seend to you to re-heat or do you make on site to a recipe?
And the Sales without M&A seem high..
But If you live the dream do it, but I think at this time in the economy it wrong to invest in this market.
What was the shop before and how long had the business been going for.?
I would suggest a molbile start up up, i.e van and make produce yourself...and sell to keep costs to minimal...
The maccy 'D's test is always good..how far away are they as they invest a lot of money in postioning over sales..
Whta is the license agreement with the pastry firm..I think that as they are not a well know as the 'Real Pastry' Company it would be very hard with little capital to branch out into their market place..
Also do they produce the pastries and freeze and seend to you to re-heat or do you make on site to a recipe?
Edited by The Loose Goose on Saturday 11th July 00:24
100% markup on fast food products is pretty low. Very low infact. I'd also suggest your operating costs & outgoings are a little on the lean side too.
What's your plan if you have a bad week, or a series of bad weeks. Can you survive if you find your projections were off and infact sales were 50% lower than expected for a sustained period?
Also, whilst you say 'people are crying out for something different', you have to consider how far people would be willing to travel to get it. I'd expect a business of this ilk relies almost entirely on passing trade, and regardless of how amazing the product is, people won't be travelling from one mall to another to get it.
Personally I'd echo the sentiments above, a mobile unit (not necessarily a van btw) is probably worth considering before getting too ambitious and going straight in to a leased premises, especially long term leases. It's not a bad plan as such, just a lot to take on when the start-up budget is relatively low. Also, how well will your one oven cope at peak times?
If the marketing was upto scratch and it were executed well enough, with some decent advertising and promotion, I'm sure it could be a sound business.
Best of luck with it if you do go ahead
What's your plan if you have a bad week, or a series of bad weeks. Can you survive if you find your projections were off and infact sales were 50% lower than expected for a sustained period?
Also, whilst you say 'people are crying out for something different', you have to consider how far people would be willing to travel to get it. I'd expect a business of this ilk relies almost entirely on passing trade, and regardless of how amazing the product is, people won't be travelling from one mall to another to get it.
Personally I'd echo the sentiments above, a mobile unit (not necessarily a van btw) is probably worth considering before getting too ambitious and going straight in to a leased premises, especially long term leases. It's not a bad plan as such, just a lot to take on when the start-up budget is relatively low. Also, how well will your one oven cope at peak times?
If the marketing was upto scratch and it were executed well enough, with some decent advertising and promotion, I'm sure it could be a sound business.
Best of luck with it if you do go ahead
Edited by Stu R on Saturday 11th July 00:54
I think he point i was trying to get across in a drunken stupa is..you know the market and sales potional..Better to start small and expand that take the risk of a 1 years + lease with a changing market..
Always better to start with minimal outlay and invest the profits to build up the company..
But who I am just a PH'er and another voice in the mix..
Buiness and Dreams don't mix..
But always follow your dreams..As Kevin stated..'If you build it they will come''
Always better to start with minimal outlay and invest the profits to build up the company..
But who I am just a PH'er and another voice in the mix..
Buiness and Dreams don't mix..
But always follow your dreams..As Kevin stated..'If you build it they will come''
Cornish Delight said:
to: Stu R
Thanks for taking the trouble to tell me your opinion!
If you have a cheap inferior product like Greggs pasties who probably have a 300% mark-up, but the mark-up for a quality item is always going to be less.
If my projection are only half right then my investor will still get their money back within 6 months & luckily I don't need a lot to live on.
Plus as I will not be taking a salary for 6 months & their is a free 3 month rent free period this will give the business a chance to gain some ermergency capital in the business account.
I predict passing trade will be a small percentage of my customer base, even though the footfal is very good + the kind of marketing / promotion I have in mind people will be making a beeline for my shop from all of Bury & even further afield.
I've already answered the 'silly' idea above about trading from a van, but to add: where do I put my chest freezer, glass heated display unit + oven + Health & Safety issues etc...
But obviously nothing is guaranteed, but as Delboy used to say "He who dares, wins"
Regards: Michael
I live about 50 miles away, but when you get going I am going to come up to Bury and buy 2 pies...As I really want one now as you have sold it to me..Thanks for taking the trouble to tell me your opinion!
If you have a cheap inferior product like Greggs pasties who probably have a 300% mark-up, but the mark-up for a quality item is always going to be less.
If my projection are only half right then my investor will still get their money back within 6 months & luckily I don't need a lot to live on.
Plus as I will not be taking a salary for 6 months & their is a free 3 month rent free period this will give the business a chance to gain some ermergency capital in the business account.
I predict passing trade will be a small percentage of my customer base, even though the footfal is very good + the kind of marketing / promotion I have in mind people will be making a beeline for my shop from all of Bury & even further afield.
I've already answered the 'silly' idea above about trading from a van, but to add: where do I put my chest freezer, glass heated display unit + oven + Health & Safety issues etc...
But obviously nothing is guaranteed, but as Delboy used to say "He who dares, wins"
Regards: Michael
Hmmmm.
I looked at this, as I quite fancy the idea of having a business of my own.
But. And this is a biggie.
Hot pastry based savouries are something I know quite a bit about, as they come under my remit with the job I do for a big supermarket chain.
Your predicted volumes are huge. I mean, really, really huge.
I can't go into too many details, but, suffice to say, those predictions aren't all that far off what you'd expect a hot food counter to take in a supermarket taking £500k / week (and that includes hot chicken etc) - and comparable to what a 'central' supermarket would take on similar products.
I'd suggest that, before you take the plunge and spend any money, you look further into this - as I think someone has fed you misleading information.
ETA: Look at the price points too - our large, 'premium' hand-crimped Cornish pasty sells for the same price as your small offering. Greggs sell decent enough similar products for significantly less cash.
I looked at this, as I quite fancy the idea of having a business of my own.
But. And this is a biggie.
Hot pastry based savouries are something I know quite a bit about, as they come under my remit with the job I do for a big supermarket chain.
Your predicted volumes are huge. I mean, really, really huge.
I can't go into too many details, but, suffice to say, those predictions aren't all that far off what you'd expect a hot food counter to take in a supermarket taking £500k / week (and that includes hot chicken etc) - and comparable to what a 'central' supermarket would take on similar products.
I'd suggest that, before you take the plunge and spend any money, you look further into this - as I think someone has fed you misleading information.
ETA: Look at the price points too - our large, 'premium' hand-crimped Cornish pasty sells for the same price as your small offering. Greggs sell decent enough similar products for significantly less cash.
Edited by Alfa_75_Steve on Saturday 11th July 01:22
Hope you didn't think I was knocking your plan Michael, just re-read my previous post and it might have come across that way, not intended.
As for the mobile idea, there's lots of commercial solutions out there, there's also the scope to catch the lunchtime trades at large offices etc. A woman I know makes a VERY pretty penny by serving food out of the back of a small van, which has a heated display unit, a massive chiller, and loads of storage. A small oven I'm sure wouldn't be too much of a chore to incorporate.
One thing to bear in mind with Greggs bakery, who you obviously see as your biggest competitors, is they have a very large product range and cater for a wide variety of tastes. Sandwiches, baked goods, cakes & confectionary, and other more normal baker's fayre. Markup wise it's approaching 4 figures on in store baked stuff iirc. But they have a very solid business model to fall back on, which they're changing constantly to meet consumer demand, new stores, different hours and so on. It's served them well, and really unless you're product is mind blowingly good, you'll have a lot of trouble taking any trade off them unless it's passing. Greggs mightn't be the epitomy of fine dining, but for a quick cheap fix that fills the hole, as a pasty is designed to, they're reasonable enough.
Nice to see a new start-up keeping it simple though, but I'd get some serious market research done as from where I'm sitting the numbers seem a trifle on the optimistic side.
As for the mobile idea, there's lots of commercial solutions out there, there's also the scope to catch the lunchtime trades at large offices etc. A woman I know makes a VERY pretty penny by serving food out of the back of a small van, which has a heated display unit, a massive chiller, and loads of storage. A small oven I'm sure wouldn't be too much of a chore to incorporate.
One thing to bear in mind with Greggs bakery, who you obviously see as your biggest competitors, is they have a very large product range and cater for a wide variety of tastes. Sandwiches, baked goods, cakes & confectionary, and other more normal baker's fayre. Markup wise it's approaching 4 figures on in store baked stuff iirc. But they have a very solid business model to fall back on, which they're changing constantly to meet consumer demand, new stores, different hours and so on. It's served them well, and really unless you're product is mind blowingly good, you'll have a lot of trouble taking any trade off them unless it's passing. Greggs mightn't be the epitomy of fine dining, but for a quick cheap fix that fills the hole, as a pasty is designed to, they're reasonable enough.
Nice to see a new start-up keeping it simple though, but I'd get some serious market research done as from where I'm sitting the numbers seem a trifle on the optimistic side.
The Loose Goose said:
I live about 50 miles away, but when you get going I am going to come up to Bury and buy 2 pies...As I really want one now as you have sold it to me..
Then you're going to be disappointed, he'll only be selling pasties Edited by Stu R on Saturday 11th July 01:31
Cornish Delight:
Honestly, I do know this market quite well - given that we operate many stores in town centres. The kind of money you're talking about is what I consider to be 'above average performance' for a high-street 'central' store which also attracts people for the salad bar / bakery / sandwiches etc.
I don't know how much research you've done personally, or how much information has been fed to you by the company you're working with..... but, if I struggle to get that kind of money on hot pies out of central stores taking several hundred thousand a week from the lunchtime trade, in a much busier / wealthier town / city than Bury, then I really think you'll struggle.
I'm willing to talk about this off the record if you like - but I (obviously) have to be vague with figures and locations. I just wouldn't want to see either yourself or another PHer burned on this one.
ETA: See the thread about pizzas. I have a very upset Dominos franchisee not far from where I've just put a hot, baked to order, pizza counter into a large supermarket.
Honestly, I do know this market quite well - given that we operate many stores in town centres. The kind of money you're talking about is what I consider to be 'above average performance' for a high-street 'central' store which also attracts people for the salad bar / bakery / sandwiches etc.
I don't know how much research you've done personally, or how much information has been fed to you by the company you're working with..... but, if I struggle to get that kind of money on hot pies out of central stores taking several hundred thousand a week from the lunchtime trade, in a much busier / wealthier town / city than Bury, then I really think you'll struggle.
I'm willing to talk about this off the record if you like - but I (obviously) have to be vague with figures and locations. I just wouldn't want to see either yourself or another PHer burned on this one.
ETA: See the thread about pizzas. I have a very upset Dominos franchisee not far from where I've just put a hot, baked to order, pizza counter into a large supermarket.
Edited by Alfa_75_Steve on Saturday 11th July 02:00
Cornish Delight said:
As their is a 100% mark-up on the pasties & roughly 50% mark-up on all the other products. Estimated profit selling on average 200 pasties a day & £50 a day on drinks + £50 a dayon other stuff, could be about £1,500 to £1,800 (pre-tax) a WEEK.
The outgoings on the shop per MONTH are about £2,000 which includes rent, business rates, all insurances, Building/Contents/Public liability insurances, water rates, electric etc...
So it's possible that 50% profit each month before tax would equate anywhere from £500 to £2,000 each!
How much have you factored in for wages/staff.The outgoings on the shop per MONTH are about £2,000 which includes rent, business rates, all insurances, Building/Contents/Public liability insurances, water rates, electric etc...
So it's possible that 50% profit each month before tax would equate anywhere from £500 to £2,000 each!
Assuming at some point you are going to need to take a wage yourself and are going to need at least couple of assistants, maybe 1 part-time, to cover lunch breaks, holidays, sickness, weekends etc, then you need to factor in at least another £600-£700 per week.
This will take your overheads to nearer £5k per month, which based on your calculations (assuming £300 per week profit on extras) requires you to sell around 900 pasties per week or 150 per day just to break-even.
I ain't no expert but that seems like an awful lot of frozen pasties to me.
Doh, I'm sure some of you 'experts' on here think I woke up this morning & thought "I know what, I think I will open a pasty shop"
Now 1st things 1st before I spend 8 weeks researching the product, doing costings for staff, equipment, suppliers & competitors etc... I will put an advert on PH looking for another dope to share the risk & debt + the inevitable doom & gloom of failure! only debts & eventual forclosure & suicide to look forward too... Doh, if ony I had a brain!
Now 1st things 1st before I spend 8 weeks researching the product, doing costings for staff, equipment, suppliers & competitors etc... I will put an advert on PH looking for another dope to share the risk & debt + the inevitable doom & gloom of failure! only debts & eventual forclosure & suicide to look forward too... Doh, if ony I had a brain!
Don't take it personally - You're the one asking for 6 grand from strangers on the internet, none of whom have any idea of your previous experience, knowledge or even personality. Questions and a bit of scepticism are inevitable.
Of course we'd expect you to have done research and some sums etc, I'd have torn your plan to pieces and if I didn't think that was the case. But, those of us who do have experience in business and know a bit about it, tend to know how easy it is to be overly optimistic, overlook some expenses and so on, it's the reason so many independent start-ups fail.
Of course we'd expect you to have done research and some sums etc, I'd have torn your plan to pieces and if I didn't think that was the case. But, those of us who do have experience in business and know a bit about it, tend to know how easy it is to be overly optimistic, overlook some expenses and so on, it's the reason so many independent start-ups fail.
Looking at the figures another way, the other shops you mention selling £10k food per month is £384 a day, based on 26 days trading. The pasties have cost you £192, assuming no waste, and your shop costs you £77 day, leaving £115 a day. To achieve level of sales they need four ovens and presumably more than one person on site. It would seem that adding value with the drinks etc. is what will give you a wage.
This 'expert' would suggest that giving 50% of your profit to an investor would take the shine off your enthusiasm. For the modest amount you require why not get £6k on an interest free credit card?
This 'expert' would suggest that giving 50% of your profit to an investor would take the shine off your enthusiasm. For the modest amount you require why not get £6k on an interest free credit card?
Have you factored in the cost of buying / leasing a 'hot hold' cabinet and the running costs of one? - they're not cheap to buy or run.
If you don't have one, how are you going to keep the pasties hot once they've come out of the oven?
Have you also factored in that environmental health recommend that you have a maximum of 2 hours holding time in a hot-hold cabinet once the product has been baked? - and the waste this may cause you? (this isn't a legal requirement, but it is a recommendation which can cause you hassle if you sell anything considered to be 'unwholesome').
Depending on delivery schedules and varieties stocked, 2 chest freezers would also sound optimistic for holding your backup stock, too.
What ovens are you planning on using? - the best quality product comes from 're-vent' bakery ovens, not convection ovens, which, again, are horribly expensive to buy, and horribly expensive to run.
Good luck with it, but I'd suggest more research before throwing any money at it.
If you don't have one, how are you going to keep the pasties hot once they've come out of the oven?
Have you also factored in that environmental health recommend that you have a maximum of 2 hours holding time in a hot-hold cabinet once the product has been baked? - and the waste this may cause you? (this isn't a legal requirement, but it is a recommendation which can cause you hassle if you sell anything considered to be 'unwholesome').
Depending on delivery schedules and varieties stocked, 2 chest freezers would also sound optimistic for holding your backup stock, too.
What ovens are you planning on using? - the best quality product comes from 're-vent' bakery ovens, not convection ovens, which, again, are horribly expensive to buy, and horribly expensive to run.
Good luck with it, but I'd suggest more research before throwing any money at it.
Ramthorne said:
Looking at the figures another way, the other shops you mention selling £10k food per month is £384 a day, based on 26 days trading. The pasties have cost you £192, assuming no waste, and your shop costs you £77 day, leaving £115 a day. To achieve level of sales they need four ovens and presumably more than one person on site. It would seem that adding value with the drinks etc. is what will give you a wage.
This 'expert' would suggest that giving 50% of your profit to an investor would take the shine off your enthusiasm. For the modest amount you require why not get £6k on an interest free credit card?
Great advice.This 'expert' would suggest that giving 50% of your profit to an investor would take the shine off your enthusiasm. For the modest amount you require why not get £6k on an interest free credit card?
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