Would this business idea work?
allthatyouwant
Posts: 1,381 Forum Member
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A small shop or kiosk in the middle of a city centre selling hot food and drinks (i.e. coffee, sandwiches, pastries and breakfast items) all for a pound each - essentially a pound coffee shop.
Working on the premise that everyone needs to eat and drink and there is a market for city centre workers lunching on a budget. Could also incorporate some kind of loyalty scheme for workers or pre-ordered sandwiches etc...
I know rent would be expensive initially and I would look to source equipment online or from closing business - do you think this kind of business would work or is there too much competition?
Working on the premise that everyone needs to eat and drink and there is a market for city centre workers lunching on a budget. Could also incorporate some kind of loyalty scheme for workers or pre-ordered sandwiches etc...
I know rent would be expensive initially and I would look to source equipment online or from closing business - do you think this kind of business would work or is there too much competition?
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You've essentially been beaten to it.
There's a chain of Pound Bakery shops selling pasties, pastries, sausage rolls etc and some of them sell tea, coffee and hot chocolate too all for £1 (or more usually, 2 for £1).
But if you think it would work, go for it.
Anyway, on to more practical things...
It's easy to sell a cup of tea for £1 - lots of profit to be had there.. the raw ingredients probably cost less than 10p.
But a pastry? A sausage roll? Have you costed this up?
Also you're right. The rent will be your killer.
Imagine you have to pay rent for your shop or kisosk of some sort of £500 per month. If you make only 20p average profit on food transactions you would have to sell £2,500 per month of food (2,500 sausage rolls at £1) to just break even every month - not even making a profit.
There are other high costs to consider as well such as staffing and compliance costs. Don't forget things like permits and business rates if applicable too.
It wouldn't work in an upmarket Waitrose-style town (as neither do pound shops) - but any densely populated urban area should have more than enough food-fall willing to pay that for food.
It's broadly comparable to Greggs and McDonalds. Cheap shit that sells by the tonne.
I don't know how you'd make money selling alcoholic drinks for £1.. your stock would have to be duty free to be sold at that margin
Get that wrong and you'd be out of business in no time.
Staff always welcome stuff delivered i know cuz have seen it many times in some places i have worked in.
You dont need the shop just a simple website, delivery van with trolly and a be ready to cold call.
Calling is not as hard as you think. You would really be doing them a favour. Your target are SME businesses. Ask for manager and pitch. All you need is a few minutes to tell manager or even reception you have something their staff would love.
If u cant do the calls hire someone freelance from people per hour to make the calls to businesses informing them of your £1 food to office delivery. A decent telemarketer can get 1 business an hour interested.
30 businesses with an average spend of £15 per office ( each staff spends £2) would gross you £450 a day. Of which there is no reason why 250 - 300 wont be profit.
Pick up the phone monday and starting dialing offices asking them if its something they would be iterested in as you are interested in offering them a very cost and time effective option for their lunch breaks.
I'm never one to knock the spirit of entrepreneurship, but it seems unworkable to me. After all, why do other similar businesses charge prices that are two or three times as much per item, it can't just be pure and simple greed? You'd have to be massive to get anywhere near the economies of scale you would need on ingredients, not a start up company.
Let me tell you where I am...
No way you could make money selling pints for £1.
You would obviously buy your sausage rolls and that premade. You could offer a small selection of sandwiches instead of a broad range, they would be easy to knock out. Like cheese sandwiches. If you made your tea and coffee with better quality brands it won't cost you THAT much more, maybe 2p a drink, but a cup of Yorkshire over Tetleys for a quid would be attractive to me anyway.
But as mentioned you'd need to work out overheads and all the other associated costings. Would a kiosk really cost £500 a month to rent? I have no idea....