Gold Coast coffee shop broker says investors need to know their beans

FROM $45,000 to $320,000, 23 of the Gold Coast’s best coffee shops are for sale right now, including Palm Beach favourite Mr Bengel. So, it is time for a career change? SEE THE FULL LIST

THE great Australian dream of owning your own pub has been replaced — these days, it’s about counting your beans and buying a coffee shop.

In fact, demand for coffee shops for sale on the Gold Coast is now so strong, it’s enabled local businessman Craig Louw to turn his lifelong love of coffee and cafe society into a niche market boutique brokerage, The Coffee Shop Brokers.

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Mr Louw helps clients buy and sell coffee shops of all shapes and sizes from Noosa to Tweed Heads, working from his laptop over a latte at cafes that serve as his mobile office, including Blackboard Coffee at Varsity Lakes and Miami’s Niche Espresso.

“Australians love their coffee so it’s no surprise that many dream about running their own coffee shop,” he said.

Coffee shops have become hot property with both buyers and sellers on the Gold Coast. Picture: Thinkstock.

BEST OF THE GOLD COAST: THE TOP 10 COFFEES

TOP COFFEE SHOPS FOR SALE ON THE GOLD COAST

— Palm Beach, $175,000: Very busy coffee shop with a fantastic location on the busy Gold Coast Highway in Palm Beach

— Real Food Kitchen Burleigh, $150,000: Trendy health focused cafe located in Burleigh on the Gold Coast. Owner is looking for immediate sale

— Mr Bengel, Palm Beach, $180,000: Excellent position with constant traffic from the local businesses, beach goers and passing trade on their way to work.

— Popular Coffee Shop in Oxenford, $210,000: Located in a very busy area in Oxenford with a consistent loyal customer base within a popular strip of shops and ample parking

— House of Hubert For Sale in Tugun, $320,000: House of Hubert’s picturesque location on the southern end of the Gold Coast, just meters from the beach makes it a destination not to be missed.

— Kingscliff Cafe, $295,000: In busy retail precinct surrounded by hotels and resorts, a stone’s throw from Kingscliff.

— Cafe 2 Pla y , Helensvale, $45,000: In the Homeworld Centre.

— Mervyn Roy, Bilinga, $275,000: Retro coffee shop in beachside Bilinga.

— Southeast Espresso , Coolangatta, $130,000: 229 Boundary St, Coolangatta, 150m from the beach with a constant flow of tourists and locals.

— Coffee Shop, Mermaid Beach, $95,000: Popular well-located and established coastal coffee shop on the Gold Coast Highway.

— Cafe, Nobby Beach, $170,000: This well established cafe is finally for sale in Nobby’s Beach on the Gold Coast nestled between Mermaid Beach and Burleigh Heads and has been an icon in the area for seven years.

— Coffee Shop, Currumbin Industrial, $65,000: This coffee shop is only 2 months old and located in the Currumbin Industrial area, with daycare across the road and on a busy road.

— Cafe, located in one of best shopping centres on Coast, $199,000: Open seven days a week and has a loyal client base and strong reputation.

— Coffee Shop, Southport: $125,000 + stock: Surrounded by business and residential development.

— Mudgee Bah Espresso, Mudgeeraba, $129,000: Boasts an outside deck area with comfy sofas and shabby chic furniture, a walk in cold room and galley style kitchen inside.

— Southport’s Finest Cafe and Hotspot, $240,000: Popular cafe in popular strip of shops in busy area with a consistent customer base and ample parking.

— Mobile Coffee Trailer Ready To Go, $50,000: Perfect lifestyle business ready to attend markets and events across the Gold Coast

— Espresso Bar Coffee Shop On The Beach, $299,000: Across the road from the beach in a southern Gold Coast tourist hot spot loved by locals and holiday makers for great coffee, food and a priceless view.

— Good Day Coffee, Tugun, $260,000: A growing and successful business increasing turnover monthly with regulars and new clients.

— Coffee Shop Miami, $169,000.00: On the Gold Coast Highway.

— Cornerstone on Minnie, $120,000: An all-round coffee experience. Sells a prestige coffee brand and breakfast and lunch menu

— Coffee Shop, Carrara, $79,000: In the forecourt of the Woolworths Centre. High visibility and huge passing foot traffic. Undercover parking provides easy access.

— Hail Mary, Burleigh, $125,000: Located in a lane way surrounded by locals and tourists.

“I’ve sold a lot to people in the UK who want to live their dream — running a coffee shop in Australia.

“People from Sydney and Melbourne are selling up to come up here and buy an apartment and a coffee shop. Then there are a lot of locals — people sick and tired of the commute to Brisbane who would rather live locally and use their finances to buy a coffee shop.”

Founded almost three years ago, The Coffee Shop Brokers’ focus on the bean scene allows it to attract clients specifically looking to invest in coffee shops or coffee-related outlets.

“Last year we sold 52 coffee shops, predominantly on the northern part of the Gold Coast — our biggest clientele,” he said.

“In the last seven days I’ve sold six coffee shops — five on the Coast and one in Brisbane.”

“Australians love their coffee so it’s no surprise that many dream about running their own coffee shop,” coffee shop broke Craig Louw says. Picture: iStock.

While the businesses listed with Mr Louw sell for anywhere from $5000 to more than $250,000, some of the smallest are sometimes the most profitable especially once the cost of rent, length of leases and other overheads are factored in.

“Generally, $1000 a week clear profit will allow you to get a $100,000 asking price but then again, you get the seller who says ‘I need X amount of money even though I know it’s only worth so much’ or people who are ill or have had a family break up and want an urgent sale,” Mr Louw said.

The Coffee Shop Brokers’ focus on the bean scene allows it to attract clients specifically looking to invest in coffee shops or coffee-related outlets. Picture: iStock.

“People think the bigger it is, the more money I’m going to make, but some of the small coffee shops might sell 59kg (of beans) a week while the big ones are selling 25kg a week with a bigger overhead.

“Someone could pay $2500 in rent in James St in Burleigh and then someone in Tugun has a landlord happy with $500 week.

“It’s a case-by-case basis. Coffee shop turnovers are all different.”

Mr Louw said coffee shops typically had a multiplier between 1.5 and 2.5.

“The better the cafe is, the higher the multiple,” he said.

“The longer the lease, growth opportunities, customer base, position, social media marketing results in a higher multiple.”

Changing the beans used in a coffee shop’s brew is one of the biggest mistakes made by many new owners. Picture: iStock.

Mr Louw said changing the beans used in a shop’s brew was one of the biggest mistakes made by new owners.

“Small niche market roasteries have been popping up and coffee shops are embracing those roasteries and selling signature beans,” he said.

“The turnover is there based on the food and the coffee. The new owners change the beans because they can get them for $4 a kilo cheaper and the locals go somewhere else.

“It’s like changing the whiskey or beer in a pub. You don’t change what’s creating the revenue.”

Mr Louw said owning a coffee shop was more challenging than buyers often imagined.

“If you buy a coffee shop you need people skills. If you’re not a social person, forget it,” he said.

“It’s 6am early starts and when they close at 3pm people think the day ends but they’re still busy arranging stuff for the next day and sorting issues with staff and suppliers.”

Gold Coast coffee shop broker Craig Louw works on his laptop from coffees shops including Blackboard Coffee at Varsity Lakes. Picture Mike Batterham

Mr Louw, a former project manager who built mobile networks around the world — including for Vodafone during the World Cup in South Africa and for Virgin Mobile in London during the Olympics — said the first question many buyers asked these days was how many followers a venue has on social media.

“Instagram is a big thing. If your food is not photographable, it’s not going to get out on social media.

“Buyers say to me I see this coffee shop for sale but it’s only got 500 followers on Instagram.

“If you’ve got 11,000 Instagram followers, you’ve got the whole crowd captivated. They must like something about what you’re doing if they follow you.”