Is it Worth Buying a Cafe in Sydney Under $400,000?

Is it Worth Buying a Cafe in Sydney Under $400,000?

Australians love their coffee! The birth of this coffee-centric culture can be dated back to the 1950s with the high influx of European immigrants, who brought with them a multitude of culinary delights, with coffee proving to be one of the most popular. Whilst coffee is said to have landed in Sydney in 1788 on ships, it wasnt until the 50s and 60s when italians brought espresso machines that the love for coffee really took off. 

The current average price of a cafe for sale in Australia is $400,000, whilst a business in Sydney is $510,00. With houses prices in Sydney, well over $1 million, are you better to buy a house or a cafe - ill leave that to your financial advisors.

What you can consider though is whether the cafes for sale in Sydney under $400,000 are worth buying. Currently there are over 500 cafes on the market in Sydney. 
 

What makes a cafe profitable?

Well a profitable cafe will make you money, is the simplest answer. 

You want to look at the net takings for the business, and decide how much money the business owner is actually taking home. The business takings, or gross profits are not always a good indicator. Cafe's are notorious for having high leases and staff expenses, so you need to know, as the business owner what you will actually be taking home. When reviewing the documents you should play close attention to:

1. Net Profits - what is going in the business owners profits. Make sure you look at tax returns and bank statements. 
2. Lease agreements - what are the terms, options to renew
3. Supplier contracts - what is the buying options for the cafe - how do they source produce and what % is it of the expenses
4. Wage agreements - with wage increases on the rise, you need to know how much is going to staff

You want to make sure you understand your ROI and how long it will take you to recoup the costs in buying the cafe. $400,000 doesnt buy you much in Sydney - you cant even buy an apartment. So obtaining a business for under $400,000 you need to know what it is going to get you. Its always advised to have a professional help you review a cafe you are buying to make sure its a good choice.
 

What are the benefits of buying an existing cafe?
 

• Financial History - When you look to buy an already existing cafe for sale, you will be able to take a look at the financials of the business. You will have a better overview of the profits and losses and associated costs in running the cafe, rather than pieces of a puzzle that you will have to put together as you go. If your paying $400,000 you get to see how much you will earn and establish your ROI. You can predict your income. 
• Income Ready - When buying a cafe, you can be making money as soon as you take possession, there is no downtime for setup and building a client base. Staff have been hired, equipment is up and running - there is no wait time for business to take off.
• Ability to expand - Is the cafe you're buying running to its full potential? You can consider putting some time and effort into expanding the menu or goods and services offered to include dine-in or alfresco dining.
• Set and forget options - If you're looking to buy a business with minimal effort from an owner, you may want to consider buying a cafe for sale that is run under management. The staff have been running for some time, so you can rest easy knowing your asset is run with people with experience.
• Rebates and Grants - Consider looking into the grants and rebates available for established businesses in your state. For example, there is an Alfresco Restart Rebate in NSW that provides NSW small and medium food and beverage businesses with rebates to help cover the costs of creating or expanding an alfresco dining area.
• Implement AI technology - Alot of cafes that exist today havent embraced AI technologies. With education you can learn about the current AI tools available for cafes and implement them to increase the customer experience and profitability of the business. 

 

Check out these cafes in Sydney under $400,000 and compare

 

1. Highly Visible Café for Sale in Darlinghurst

   • Location: Sydney, NSW
   • Price: $125,000
   • Details: Cafe in Sydney's dynamic Darlinghurst with existing customer base and superior location.
   • View Details
      

2. Thriving Cafe at the Heart of Dulwich Hill, Inner West

   • Location: Sydney, NSW
   • Price: $230,000
   • Details: Popular cafe known for great coffee, breakfast, and lunch options, ready for immediate takeover.
   • View Details
      

 

1. New Profitable Food Cafe in Fairfield LGA

   • Location: Mount Pritchard, NSW
   • Price: $150,000 + SAV
   • Details: Cosy cafe situated on a main road, near a school and Mount Pritchard Mounties Club.
   • View Details
      

2. Iconic Cafe/Bakery-very low rent-large customer base!

   • Location: Sydney, NSW
   • Price: $320,000 + SAV
   • Details: Established cafe/bakery in a historic location with excellent foot traffic.
   • View Details
      

3. Cafe For Sale Sydney West Rent only 850 PW Long Lease

   • Location: Roselands, NSW
   • Price: $365,000
   • Details: Thriving business fully under management in a key location.
   • View Details
      

4. Cafe for Sale Sydney Rent 797 PW 40 Kg Coffee Long Lease Managed

   • Location: Sydney, NSW
   • Price: $345,000
   • Details: Profitable business fully under management with a long lease remaining.
   • View Details
      

5. Coffee Shop & Cafe at major transport hub - High foot fall!

   • Location: Rozelle, NSW
   • Price: $99,000 + SAV
   • Details: Located at a major transport hub with high foot traffic.
   • View Details
      

6. For Sale Busy Established Cafe Situated In The Centre Of All Sutherland Sydney

   • Location: Sutherland, NSW
   • Price: $180,000
   • Details: Thriving cafe in a prime location, fully under management.
   • View Details
      

7. Busy Established Cafe Take Away Situated In The Centre Of All Kirrawee Sydney

   • Location: Kirrawee, NSW
   • Price: $80,000
   • Details: Busy cafe with dine-in and takeaway options, potential for delivery/catering.
   • View Details
      

8. Cafe North West Sydney Area - Sales $14,500 p.w.

   • Location: NSW
   • Price: $190,000
   • Details: Cafe franchise selling 25-28 kgs of coffee per week with a simple all-day breakfast and lunch menu.
   • View Details
      

9. Waterfront Cafe - Long Lease

   • Location: North Bondi, NSW
   • Price: $295,000 + SAV
   • Details: Perfect for an owner/operator looking to establish themselves.
   • View Details
      

10. Prime, Bondi Junction Cafe

    • Location: Bondi Junction, NSW
    • Price: $250,000 WIWO
    • Details: Located in the Westfield Bondi Junction food court, promising heavy foot traffic and high visibility.
    • View Details

So how do you know if it is worth buying?

Do your research! Every business is different and there is no blanketed rule as to which one is better. You need to look at each cafe independently and decide if it is giving you the expected ROI and if you can see it being profitable into the future. In Sydney the location, lease agreements and staff are big components of owning a cafe, so factor these into your due dilligence process. A cafe's reputation is also important, so check online reviews and see what the community feels about the business. 

 

Originally published 2020. Updated 2024

Tags: nsw sydney buying listicle cafe

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