The Complete Guide to Buying a Cafe
Practical Advice to Get it Right

What does 'Rent' mean?

Find out what Rent means. Rent is explained by Craig Reid - author of The Complete Guide to Buying a Cafe

Rent

Rent is the amount paid to lease the cafe premises. Rent is a critical (fixed) cost and should represent 10-15% of turnover. Rent is subject to GST so be careful to check whether the rent stated in the business summary includes or excludes GST.

Search result for 'Rent' in The Complete Guide to Buying a Cafe

81.
"... fall into a category which makes up a particular percentage of turnover (ex GST), as follows: Category % Staff wages 25-35 Food 25-35 Rent 10-15 Other (utilities, insurance, repairs, etc.) 10-20 Profit Whatever is left! The percentage guide is useful, but the most important thing ..."
"...Rentpercentage guide is useful, but the most important thing to remember is that there must be balance. For example, if the staff costs are high, this should be balanced by the food costs or Rent being a bit lower. You can see that if all your costs are at the ..."
107.
"... GST in turnover to be yours. In a café, approximately 80% of the GST (included in turnover) will need to be paid to the government. This is because there aren’t many expenses within a café that are subject to GST (the main exception being Rent). - The Cash Dilemma - One of ..."
177.
"... & Variable Costs - Fixed costs are costs to the business that tend to remain the same or “fixed” over a period of time. For example, the most common fixed cost is Rent. Rent will be agreed at a set rate, usually on a yearly basis with a percentage increase per year. Other fixed costs ..."
182.
"... basis with a percentage increase per year. Other fixed costs are likely to include: • Council rates • Strata rates Rental costs for equipment, etc. Fixed costs are important to consider as they are independent of turnover, i.e. no matter how much - or how little - the ..."
196.
"... the capacity of the café. If you can outgrow the capacity, it is time to find a bigger, better café or, perhaps, to open a second one. - Rent - Rent is a critical (fixed) cost and should represent 10-15% of turnover. Rent is subject to GST so be careful to check whether the rent ..."
198.
"... or, perhaps, to open a second one. - Rent - Rent is a critical (fixed) cost and should represent 10-15% of turnover. Rent is subject to GST so be careful to check whether the Rent stated in the business summary includes or excludes GST. Rent will usually be based on a lease which runs ..."
"...Rent will usually be based on a lease which runs for a certain period of time. Depending on the café you may purchase an existing lease e.g. one that was initiated by someone else and which has some time to run. Usually leases have an inbuilt yearly percentage increase. This ..."

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"...Rententioned previously, increases will commonly be factored into the lease. Here we see that the increase in this lease is 4% per annum. If we consider that the Rent is $924 a week (including GST), this equates to $48,048 per annum. This correlates with the figure of $43,690 in the ..."
"...Rentback to the 4%. The following table shows the effect that a % increase in Rent can have on the % of turnover. At the start of the lease the turnover amount is towards the higher end of the scale (10-15%), but if we make the assumption that turnover stays ..."
"...Rent scenario makes the assumption that strata rates and council rates stay constant over the 5 year period, which is unlikely. You can already start to see what an impact the Rent will have on the profitability of the business over time. In this case the Rent is initially high, ..."
236.
"... “projections”, as projected figures have been altered to show how the business might perform in the future. - Outgoings: $88.00 - Rent $924.00 TOTAL OPERATING EXPENSES $1,012.00 Outgoings represent other costs associated with the building in which the café is located – for ..."
239.
"... Outgoings represent other costs associated with the building in which the café is located – for example strata fees, maintenance fees, storage fees or possibly even marketing fees (e.g. for shopping centres). Rent is obviously the amount payable as per the lease. - Utilities ..."
243.
"... - Utilities - Utilities include Gas, Electricity, water, etc. Unlike Renting a residential property, utilities such as water will not be included in your Rent. If you are Renting a business within a strata complex there are several other factors to consider. - Strata - Strata ..."
312.
"... which seems a small amount. This could indicate that the owners are paying staff cash. Postage $70 Rent $36,400 Rent is due to increase to $45,244 - an increase of almost $9,000 Outgoings/Strata Fees $1,580 Double check what this includes - remember that strata rates vary from year to ..."
"...Rentnext stage to our analysis is to apply these financials to the situation of the new buyer. As we discussed earlier, if this café is to be run by one person, additional wages would be required. As we also know, the Rent will be increasing by approximately $9K per annum. ..."
336.
"... / (LOSS) $75,489 Wages required to cover 1 owner $50,000 Based on 40 hours per week with dual role as chef Increase in Rent $9,000 Increase in Rental as per new lease Interest income $1,163 Not applicable Estimated profit $15,326 4% profit margin - not good! What initially ..."

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10.
"... variances throughout the year should be questioned. GST on Purchases This is the amount that can be claimed back (deducted) from the GST payable. This amount should be approximately 2-3% of turnover and includes GST on purchases such as Rent. Total Salary Wages and other payments This is a ..."

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Chapter 8: Meeting The Owner
40.
"... – ask if it includes owners’ or family members’ wages or staff paid by cash. What is the Rent per week? Check against the business summary – ask what the additional outgoings and strata rates are. How much profit do you make per week? Check against the business summary – if it is ..."
103.
"... of the seats or extra seating? What is the curRent Rent / terms of the lease? Cross reference with the business summary / financials. Check if the Rent figure includes GST. Check how long is left on the lease and if there is an option to extend. Will the lease be a new lease? Check if ..."
108.
"... other outgoings? Other outgoings should include strata fees or any other shared fees, etc. When is Rent reviewed? Again any Rent increases should correspond with the outgoings in the business summary. What are the percentage yearly increases in rent? This is normally a fixed percentage and ..."
109.
"... any rent increases should correspond with the outgoings in the business summary. What are the percentage yearly increases in Rent? This is normally a fixed percentage and wouldn’t normally be higher than 5% Is the building a strata building? If so, ask who the managing agents are and how ..."
193.
"... average turnover per week? What are your food costs per week? What are your staff costs per week? What is the Rent per week? How much profit do you make per week? Staff Questions Question What to look for How many chefs do you ..."
387.
"... last empty? Premises Questions Question What to look for How many seats inside and outside? What is the curRent Rent / terms of the lease? Will the lease be a new lease? Is there an option on the lease? Are there any clauses in ..."
417.
"... lease? Are there any clauses in the lease, e.g. development clause? What are the other outgoings? When is Rent reviewed? What are the percentage yearly increases in rent? Is the building a strata building? Who is the ..."
423.
"... lease, e.g. development clause? What are the other outgoings? When is rent reviewed? What are the percentage yearly increases in Rent? Is the building a strata building? Who is the landlord? How is your relationship with ..."

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49.
"... licence (no toilets is a problem) • Bundle product offerings to maximise sales • Promote more effectively Threats • Increasing prices in area – increased Rent • Entry of similar competition Here are some templates for your own use. - The Four “P’s” – Template ..."

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