The Trial & Settlement
This is a preview to the chapter The Trial & Settlement from the book The Complete Guide to Buying a Cafe by Craig Reid .
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The TrialAs we mentioned earlier the trial period occurs after you have agreed to buy the business and have paid a deposit. In this period you are not actively involved with running the business. You should be present for at least a full week, attending in the same hours as the owner to observe the business and sign off on the takings at the end of the day. The aim of the trial period is to ensure that the takings for that week are equal to or greater than the $ amount agreed with you (usually this is the weekly turnover specified in the business summary).
When watching the business during the trial period, try to look out for the following:
• Family or friends of the owners coming to the café that week to bolster the turnover
• The owner putting transactions through the till and paying for them using his own money
It’s difficult to be watching what goes into the till at all times so prior to the trial period ask your solicitor to add to the contract the requirement for transactional level “Z Reads” to be provided as well as hourly “Z Reads”.
Note: A “Z Read” is a function on point of sale systems that clears the transactions and prints a report. Z reads are typically performed at the end of the day’s trade as part of “cashing up”.
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What else is in the chapter 'The Trial & Settlement'?
Trial observation form:
Busy periods, e.g. more than 50% full (note times) ...
During the trial period, learn as much as you can about the business from the owner. Try to get the owner to commit to a structured training plan where you ...
When you sign the contract it will specify the date for settlement. Much like buying a property, settlement is a complex process involving the transfer of several legal documents and ...
The suppliers may have no idea that the café has been for sale so you should call each of the café’s suppliers to introduce yourself and to supply contact and ...
Cheques for settlement
Your solicitor will advise you on what cheques need to be prepared for settlement. These have to be bank cheques. Alternatively they may advise that you can pay by direct ...
Cash float / change for point of sale system
This is an amount of cash that is kept in the point of sale system so that you have adequate change to give customers. Usually this is $300 or so. ...
Prior to settlement day you will undertake a stock take – this will involve going through all the current stock in the café and calculating a value of each item. ...
On settlement day it is your responsibility to ensure that you have staff available to work so you should ensure that you have contacted staff to work on the day ...