What should you look for when buying a deli, then?
First of all, decide where you want to locate. Delicatessens are specialised shops, so it is unlikely that you will have the footfall to justify a premium site on a busy high street. You'll find that many are in small towns and villages, or on secondary sites in larger towns, away from the central high street.
More important is the area. Although it is not always the case, delicatessens tend to be frequented by professional people with a high disposable income. Therefore, suburban areas with an affluent population can be prime markets. The average local house prices will give you an idea about the prosperity of an area.
Be extremely wary of locations in tourist areas, even if an available business seems to be thriving when you view it. "If you are in a seasonal location, you sell a lot over the summer when the customers are there, but over the slow periods you risk all your food going off. If you're not selling top quality food, you'll lose the remaining customers and from there it can spiral downwards," explains Leeper.
When you find a business in the right area, you can approach the sellers and start negotiations. This is the time to ask them about every aspect of their business.
"You should look at the trading history and also look for any possible new competition and any current competitors," explains Sheehan of Christie and Co. "The quality of the equipment is important - you don't want to buy a deli in which the counter needs replacing unless you take this into account."
Also, look at the business accounts and adjust them to your own needs. If the current owner is making a profit it doesn't necessarily mean that you will, especially if you had to borrow money. Likewise, if the owner is not making a profit, you may think you could cut costs to increase profitability.
Make sure everything can be verified with documentation. You will probably use accountants to go through the paperwork and assess the value of goodwill - the amount you pay for the value of the business built up over the years, its lasting reputation and regular clientele.
Thorough due diligence will ensure that you pay a reasonable price for the business and also help convince the bank to lend you money.