Opening more units

If the first one goes well the logic of opening more units can be very seductive. More turnover, more scope for economies of scale – and more money for you. Yes? Well up to a point. But consider this: if you simply open another shop and try to keep going as before you will simply double your workload. Will you work part-time in both shops? Will you open and close both shops? What about deliveries between the shops and the extra paperwork? What happens if somebody phones in sick... from two shops? And then there are things like preparing two floats instead of one for the next day. Put like this it doesn’t sound very appealing and if you do it this way it won’t be.

Opening more units is a big step which needs to be thought through very thoroughly. Firstly, you have to ask yourself some questions.

• 1.Being honest, do you simply want a small individual business which will provide a reasonable income for a limited number of years, which you can then sell before moving on to something else or perhaps retiring?
• 2.Do you like the idea of having a good personal relationship with customers?
• 3.Are you the ambitious, risk-taking, entrepreneurial type?
• 4.Do you like the idea of finding yourself spending increasing amounts of time looking for alternative sites, negotiating with bankers and talking to solicitors and other advisers?

If your answers are yes to questions 1 and 2 and no to 3 and 4, then opening more units is almost certainly not advisable.

Having said all this, if you simply want to have one other outlet not far from the original one this can probably be achieved by having one reliable manager working full time in the new shop (assuming you want to be heavily involved in the other one). Between you it should be possible to develop systems to make sure that both shops are run efficiently without you taking all the strain.

This idea could be particularly appealing if you came across a small low-cost unit in a good location. It might be feasible to create an ‘express’ outlet which you stock with ready-made sandwiches from your main shop. You could target particular markets such as morning, mid-morning and lunchtime. It would be necessary to have a good quality coffee machine but nothing other than coffee and tea would need to be made up on the site. An operation like this would need fewer staff and could open for a shorter time each day.

Whatever you decide, if you do expand, there will undoubtedly be more to collect from the cash and carry, more book-keeping to do and perhaps more cooking or baking to be done at home. Accordingly, you may find that you will need someone at assistant manager level to help out in the original shop. You will inevitably have increased staff costs.

Finding a good manager

No matter what, you will undoubtedly have to delegate to some extent, so it’s important that you have confidence in the people you choose as managers. Without doubt the best way to get hold of people who can manage the shops is internal promotion. In a small business like a sandwich-coffee bar you will know very quickly if a new employee is going to work out as a general assistant. But once they have been working for you for four or five months you will know if they will make good managerial material. Apart from being intimately acquainted with their abilities you will also start to get an idea of their medium to long-term plans. There is no point in setting all of this up if somebody is only planning to stay for a few months.

If someone is happy working for you as an assistant they might well be a lot happier taking on some extra responsibilities in exchange for a pay rise. This need not be massive. It would, of course, be subject to negotiation but an increase of 25 to 30% in their hourly rate may well suffice initially at least.

You could, of course, advertise for a manager in the press. But the applicants would be unknown quantities. You might be lucky. Equally you might find yourself paying a fair bit of money to someone who doesn’t see things your way and who might rub your existing staff up the wrong way.

Ideas for expansion

Another possibility is to consider expansion by opening up in an unusual or apparently undesirable place that other entrepreneurs have overlooked.

One man has recently opened a cafe-bar in a railway station in a market town in the south of England. Previous operators had apparently given up because of logistical problems and vandalism. He realised there was a substantial market waiting to be exploited. Having addressed the problems he is trading profitably and is now looking to open more outlets in similarly underexploited spots away from the big centres. What’s more, at the weekend he changes the nature of the place with candles and trendy music thus appealing to another more localised market.

Clearly such a course of action has more risks associated with it than opening in a conventional high street location. However, as the market place becomes more crowded it may be increasingly necessary to consider such options. And, of course, fortune favours the brave.

In addition, or alternatively, consider these more modest possibilities:

• Setting up a mobile sandwich and coffee unit on the pavement in a busy part of town. If you think this sounds a bit far-fetched just take a trip to Manhattan where street vendors are an established part of the scene. And as you know, where America leads, Britain follows. One man in Edinburgh has started to do this (he has even set up miniature coffee and cake outlets in a number of former police boxes would you believe).
  Needless to say you will need planning permission for any such venture. You will also have to consider the logistics of having suitable supplies of water and electricity not to mention a nearby toilet for the person who works there.
• Setting up mobile units at major events. These could range from outdoor music festivals to agricultural shows to fairs. I’m sure I don’t need to tell you how poor the standard of catering at such gatherings can be. Yet there is a reasonably affluent captive audience most of whom now expect much higher standards than in the past. Take advantage.
• Come to an arrangement with a larger commercial operation. There is one chain of coffee shops which has sited units in the high street offices of one of the large banks. Perhaps a gallery, a museum, a department store or your local courts complex would like to offer this sort of facility to its customers but lacks the necessary expertise. If you live in a university town what about somewhere at the heart of the campus? Catch the students as they step blinking into the daylight for breakfast at about 1pm.
• Opening an outlet abroad. Have you ever come back from a place like Mallorca or Tenerife and thought, ‘If only...’ Well why not? I’ve travelled a fair bit and I can tell you that with the possible exception of Manhattan, I have never come across sandwiches anywhere near as good as those available in good sandwich bars in Britain. Indeed a supermarket in the gastronomic capital of the world, Paris, recently advertised the joys of its ‘Sandwiches Anglais’ which they proudly boasted were made in London and available in Paris three hours later.

If you know how to run a quality sandwich-coffee bar then I think you could well possess a commercial skill for which there would be considerable demand in some of those nice overseas places associated with the tourist trade.

The logistics of acquiring premises and engaging suppliers would no doubt present a few challenges and the trade would to some extent be seasonal. However, if you have the tenacity to do it in Britain I’m sure you can do it abroad as well. An appropriately experienced legal adviser would be crucial.

Empire building

If, having made a clear success of your first two or three units, you want to start a chain of sandwich-coffee bars you are into a whole new ball game. Whilst such a venture is beyond the scope of this book there are a number of points to bear in mind:

• You can forget all about personal control of what is delivered day to day to the customer. The demands of systems management will make it necessary to reduce sandwiches, tortilla wraps, cakes, etc. to a finite list of customer friendly choices, all carefully sourced, costed, packaged, labelled and portion-controlled. The demands of efficient commerce will almost certainly mean that sandwiches will not be individually made up to order.
• Similarly, you can forget the idea of personal contact with the customers. Staff will need to be trained to carry out a range of tasks with maximum efficiency and deliver the corporate vision. Managers will be on a mission to ensure that they do.
• Virtually everything you do will require the services of experts. Accountants will be needed to put together a sufficiently detailed business plan; a market research company and/or specialist commercial estate agents will be needed to advise on the suitability of particular sites and locations; consultants in the fields of interior design, refrigeration, food labelling and packaging, lighting, shopfitting, health and hygiene, etc. will be needed.
• Apart from independent experts, you will have to put together a management team to deal with the numerous issues which need to be addressed in setting up a substantial commercial operation.
• The costs involved will be very considerable indeed – hundreds of thousands if not millions of pounds. It follows that you will need considerable financial backing. Your own bank may well be happy to help but they will refer you to a department dealing specifically with venture capital. Needless to say this is a million miles away from setting up one small independent unit.

Using a Business Angel

Another source of finance for an established small business wanting to expand could be an informal private investor, otherwise known as a ‘business angel’. Such people come from all areas of business life. They are usually looking to make a well above average return on a substantial (probably £500,000+) investment, though not necessarily in the short term. They may want to become actively involved in a business as part of their financial investment. Your accountant or business banker might be able to provide help in putting you in touch with one. The British Venture Capital Association, www.bvca.co.uk. tel: 0207 240 3846, publishes a free directory Sources of Business Angel Capital. This can be downloaded from their web site.

If this sounds exciting and exhilarating, fine. Quite a few people have made fortunes from setting up such operations. Some have expanded overseas and gone into the business of supplying sandwich meals to trains and boats and planes as well as schools.

However, there is not much point in taking on the world until you have learned the ins and outs of the business at entry level.

Becoming a franchisor

There are approximately 30,000 outlets of all kinds run on a franchise basis. It is not an easy option. There is a great deal more to it than just allowing someone to use your name in return for some money.

To begin with you must have a successfully established business with a readily identifiable image, a quality product and a readily repeatable operating system. Each new operation must be such as to allow the franchisee to make a reasonable profit on their investment and pay you a franchise fee which delivers a reasonable return to you. Bear in mind that you will have to:

• Provide aftercare, management training and support.
• Engage specialist solicitors to draw up franchise documentation.
• Put in place arrangements for the bulk purchasing of supplies.
• Register your trade marks and trade names.
• Ensure that your vision is being delivered and that your franchisees are not cutting corners.

There’s no doubt it can be done. Walk into any of the big hamburger chains around the world and it will be virtually identical to the one in your local high street. And it’s not just multinational giants. Franchise arrangements have been set successfully by much smaller operations.

Finding out if it’s feasible for you will require extensive analysis and development work. You will probably have to engage the services of a franchise consultant. If you are interested you should contact the British Franchising Association on 01491 578050 or obtain further information from their web site www.british-franchise.org.uk.

Selling non-food items

I have already mentioned the possibility of selling paintings by local artists and old photographs of your area. You could also think about souvenirs in tourist areas or perhaps eye-catching pieces of glasswork or T-shirts. For items such as these the only real problem is finding the space and making sure your display is kept smart. You may be able to come to an arrangement with a supplier whereby part of their service is setting up and checking the display on a regular basis and ensuring it looks good.

Supplying other sandwich bars

Like outside catering this appeals because essentially it’s a case of more of the same. You might find that a nearby Internet cafe or bookshop would like to offer their customers sandwiches with a cup of coffee but don’t have the facilities. Having a daily delivery from you might be just the answer.

If you set up a shop kitchen in your house to produce some sandwich ingredients why not give a few samples to other sandwich bars, wholefood shops or delicatessens? It simply means making more of what you’re making already. If demand increases you may have to consider taking on a part-timer to help you. The other issue here is delivery; it will be your responsibility to ensure that products are delivered at the correct temperature. Will you have to buy a refrigerated van, or could you simply get a couple of good quality cool bags?

In either case you will have to label sandwiches or sandwich ingredients in accordance with the relevant regulations – see Chapter Nine.

Busking

In the world of sandwiches this means going out and about in a car or van with a selection of sandwiches in the back. You go to various places – offices, factories, schools – taking the food to the people rather than the other way around. Since you are permitted to keep sandwiches at ambient temperatures for up to four hours you could do this over the lunchtime period without needing to use a refrigerated vehicle, though a refrigerated vehicle would be far more satisfactory. The idea is to build up a run of places which you service on a daily basis. Particularly if you do have a refrigerated vehicle any sandwiches remaining unsold at, say, 1.30 pm could be returned to the dairy unit in the shop.

Picnic/packed lunch service

This is most likely to be feasible if your shop is in a tourist town or city. Do a mailshot to local hotels, guest houses and bed and breakfasts and try to follow up with phone calls. Visitors phone in orders reasonably early in the morning or the day before and then collect a neatly prepared carrier bag with lots of goodies to last them through the day.

As office people seem to work harder and harder and are less able to leave their desks at set times, there could perhaps be a demand for a similar service whereby somebody could pick up a lunchbox on their way to work. This could be ordered the day before by phone, fax or e-mail.

Developing a delicatessen

You’re half-way there already. Your deli unit contains a selection of meats, cheeses, pickles, mayonnaises and so on – and you will, of course, continue to sell ready-made or made-to-order sandwiches as well as coffee and tea. You will, however, have to create refrigerated display space for a wider range of goods. You will also need a lot more places to display an interesting selection of foods and food accompaniments from around the world. This might mean a lot of shelving in imaginative places or some appropriately sized aisle units placed in such a way as to encourage impulse buys. Clearly space will be an issue, though with a bit of imagination you will be surprised at what can be fitted in.

Make it all look busy, extensively stocked and clean. Have things hanging from the ceiling and do what you can to generate some pleasing aromas. Don’t allow dust to gather on bottles of raspberry flavoured vinegar which might happen to be slow sellers.

Take a tip: don’t just be another small grocer’s shop. There are lots of those around already. Make the effort to come up with glamourous looking variations on the theme of good quality food products.

Attending exhibitions, conferences and trade fairs

As the sandwich and coffee industries grow ever larger and more diverse, so do the number of exhibitions, trade fairs and conferences in Britain as well as other European countries.

The British Sandwich Association has its big annual bash in London each year in May. In 2001 there were over 600 guests from all sectors of the industry to cheer as Tim Brooke-Taylor handed out awards for Sandwich Bar of the Year: Independent, New Product of the Year Award, New Sandwich Ingredient of the Year and so on. The BSA also organises the British Sandwich Week with the support of some of the major suppliers. It is accompanied by substantial nationwide advertising and is all aimed at helping to raise the profile of the industry.

To address concerns about southern bias 2001 saw the first Northern Sandwich Show held in the G-Mex Centre in Manchester. There is also an event called the Total Sandwich Show, organised by the British Sandwich Association and held in London in May, which has numerous stands featuring new products and equipment as well as demonstrations of how to make particular sandwiches using innovative techniques.

The BSA also organises conferences which consider the serious issues facing the industry. In 2001 there was a two-day conference in September which included topics such as ‘Are Sandwiches Meeting the Needs of Today’s Consumers?’ and ‘Sandwich Bar Retailing – The Importance of Image’.

There are also many competitions which are usually organised by suppliers or manufacturers. One of them, the ‘Delifrance European Sandwich Challenge’ had in 1999 a first prize of a holiday for two in the south of France. In addition, winners then qualified for a grand final in Paris. For your information, the winner in 1999 was a chef who gave the world this sandwich: barbecued lamb kebab with strawberries and lollo rosso lettuce in a grilled onion baguette. We really have come a long way from bog standard cheese and ham sandwiches.

There is much to learn from all such events. You get the chance to hear new ideas and see new products in action. It all helps to maintain your enthusiasm and keep your own operation buzzing with new ideas. If you go abroad you can combine business with pleasure and the costs will, to some extent at least, be tax-deductible.

Creating your own web site

Why not? Lots of people do nowadays. Apart from generating interest in your establishment you will be able to use it as a vehicle for people to place orders. If you are well versed in the world of computers you can do it yourself. In addition there are many companies (see the Yellow Pages) which will be happy to set up a site for you. Their charges will range from a few hundred to several thousand pounds and beyond. It’s really a question of what size of web site and what level of quality you require. Either way you will need an individual domain name. Again, you can do this yourself or pay a specialist company to do it for you.

There are setting up costs and annual charges for a web site (which vary according to how much cyberspace you need) and also for the use of your domain name. So the question you have to ask yourself is: Will it be commercially advantageous for me? If you plan to set up a high tech operation with Internet-connected computer terminals then it’s probably essential.

However, for the average small independent operation starting up it is probably not a justifiable expense. The market you need to attract is the one in the immediate vicinity of your shop, not some insomniac web surfer in Hong Kong.

Another point is that ordering over the Net can actually take a fair amount of time. Having logged on, a customer will have to set up credit card authorisation and give details of a user name and password for future transactions. Businesses which do offer this service will probably have a minimum charge of £20 so that customers will have to band together.

Offering Internet access

Without necessarily opening a full-blown Internet cafe it is quite feasible to install a couple of computer terminals which are hooked up to the Internet. A good facility to offer in this ever more communication-oriented society. Clearly this will be easier if you are computer literate. Even if you are not there are numerous consultants who can advise you.

There are moves in the catering industry to create units which attract people by being more and more like a comfortable living room or study – and the presence of a computer would undoubtedly help to reinforce this kind of appeal. Limited space need not be a problem since you can now get flat monitors which take up hardly any room.

You must have at least one member of staff on duty at all times who is reasonably computer/Internet literate and able to deal with any problems that arise. It is no good offering a service which you cannot deliver properly. Just think of the frustration caused when a photograph booth doesn’t work and the man in the supermarket says it’s nothing to do with him.

The other issue is, of course, that time on the computer should be limited and there should be a clear tariff for its use. Otherwise you will get some student hogging the thing for ages and only buying one cup of tea.

I think the future of Internet operations in cafes is uncertain for two main reasons which may act to diminish their drawing power:

• So many people are online at home now.
• Mobile phones will soon be routinely connected to the net.

Despite this, having one or two online computer terminals is always going to be a valuable facility to offer customers.

Selling alcohol

A lot of overseas visitors find it strange that they often cannot buy a beer or a bottle of wine to have with their sandwiches. As moves towards continental eating and drinking customs continue unabated I am sure that pressure for change will increase. It seems an entirely sensible and desirable notion that people should have the option of buying beer and wine. However, as always, the situation is not black and white. Consider these points:

• Will there be sufficient demand? Many people who buy sandwiches at lunchtime will be working in the afternoon and will probably not want to drink alcohol.
• You will need extra storage space. Not only that but your stocks might now become of interest to the criminal fraternity.
• Staff who sell alcohol must be over 18 years of age.
• Last but by no means least you will have to apply for a licence to sell alcohol (assuming you do not take over a going concern which already has a licence, in which case you will have to apply to have the existing licence transferred to you).

You will probably need professional assistance from a solicitor experienced in licensing to advise you and help with the paperwork. And obtaining a licence for the first time is by no means a foregone conclusion even if you plan to sell only beer and wine. An initial application will be considered by various interested public bodies including the police and the environmental health and planning departments who will need to be persuaded that yet another outlet selling alcohol is a desirable thing. Procedures vary from place to place but in the first instance you should contact your local council.

And finally

How long should you keep working for? If you set up a chain and become a suit-wearing executive there is really no reason not to keep going until you want or can afford to retire. However, if you choose to be a hands-on proprietor you really should give thought to planning your exit strategy in good time. For example, if you start up your business in your mid thirties then I would say, as a rough guide, you should be thinking about it once you’ve been going for ten years or so. I say this not because it’s a bad way to make a living but rather because of the physical demands it places on you.

It may be that as the years go by and your loans are paid off, you can take on a manager and/or sufficient staff to allow you to take a back seat. This will serve to put back your exit date. However, if you continue to work hands-on you will start to become aware of the fact that you aren’t getting any younger. Being on your feet all day, moving trays of juice cans around, going to the cash and carry all take their toll. If at all possible you should aim to get out before your overall health and fitness suffers as a result. I don’t want to be overly dramatic about this but I have seen people who have gone on too long and I just don’t think it’s worth it.

Oh, one other thing. I haven’t given you any ideas for particular sandwiches. Quite right. That’s your department. However, I’d like to share with you my own all-time favourite sandwich:

On the outside: walnut bread spread evenly with unsalted butter.

On the inside: pan-fried salmon mixed with mayonnaise, black pepper, a little salt and finely chopped capers; with thick slices of blood red vine tomato, coriander and a mix of cucumber, iceberg and lollo rosso.