LOCATION TIP

Everyone wants a new shop, café or restaurant in the most popular location, but not everyone can afford it.

Recent trends have seen well-known chefs and city operators opening new outlets in suburban locations, taking advantage of lower rents, less competition and better access and parking.

As a general rule, rent costs should be about 10% of a business’s weekly turnover. This can be as high as 15% in city locations.

If you are paying less rent in a suburban location, you might have less competition and could make more money.

Building a business from scratch is very expensive. Paying to install basic services like gas and electrical lines, power boards, flooring, drainage and exhaust can run into tens of thousands of dollars.

By purchasing an existing business, all this has already been done. You may need to renovate to make it suitable to your concept but the cost of this can be considerably lower than a brand new fit out, which can cost around $100,000 for a 50 seat café.

You might want a commercial real estate agent to find you empty premises (and there are plenty of them around) that you can renovate – your money will go a lot further.

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