Investing in a Coffee Shop in D.C.
If you are interested in investing in a small to medium sized business in the United States on a temporary E-2 visa designed for investors from trade treaty countries, there is a wide choice of suitable businesses for sale in the D.C. area. Buying an existing business or buying into a well known franchise is a better option than starting a new business. Unless you have a lot of experience in the type of business you are interested in starting and the documentation to prove it to the consular officials who will be reviewing your visa application, it is better to buy an ongoing concern.
The details below describe the sorts of things you might consider if you are interested in buying a coffee shop somewhere in and around the nation’s capital city. There are always quite a number of coffees shops for sale. Some of these are combined coffee / cake shops; others are coffee shops / delicatessens. They are in many different locations and some basically serve take-aways, while others are designed for customers to eat in. Prices range from the $100,000 mark upwards.
The advantage of buying an existing coffee shop is that it will already be a going concern with an established number of regular customers. It will have equipment and furniture which may need replacing or refurbishing but will be in existence already. It will have staff who will probably want to keep their jobs if the coffee shop changes hands and who will at least know the layout of the business and more importantly the customers.
The first thing you will be looking at is the selling price and whether it is in your price bracket. Remember that you will have to demonstrate that you have committed all necessary funds needed for a viable business, even if a sales contract is drawn up which provides an opportunity to withdraw any funds you have deposited into a special escrow account if your visa is not approved. There are a number of brokers who advertise businesses on the internet and it won’t take long before you work out the range of businesses you will be able to afford. Unless you know the city and area well it is hard making any decision about what business is worth considering without making a trip to the US and actually going to look at a few businesses yourself.
Once you have narrowed your choice down to 1 or 2 possibilities, the next aspect to consider is whether the business is likely to net you a suitable level of profit. You will be required to invest in a business that can provide you and your family with a reasonable income as well as provide jobs for employees within the business. Working out what the business is worth and how profitable it is and whether there is any chance of growing the business in future will probably be the most difficult part of the application process. It is best to employ an independent accountant to review the coffee shop’s business records and tax returns over the last few years before you make a decision. One of the things you will want to know is why the business is being sold and a realistic idea of its potential. There are quite a number of coffee shops that start up in buildings or locations that are very marginal. Rates and rent can be so high that the business hardly makes any profit at all and so it gets sold.
It pays to be quite unsentimental about choosing a suitable business. You don’t want to waste time on making arrangements to buy a coffee shop that looks good on the surface, but is impractical from a financial point of view.
If you are satisfied about the business you have been taking an interest in and it is potentially viable as a going concern, then you need to make an inventory of what is in the shop: how old it is; how worn out the equipment and furniture is; if the décor needs refurbishing or decorating; what needs replacing and so on. You will then need to take into consideration any capital outlay you might have to commit before you take over the business which is needed to get it off to a good start. You will by now know how successful the coffees shop has been as a business up to now and you will want to maintain or improve the return from the business assuming that your visa application is approved.
Investing in a business in the US is a major exercise and it will certainly help to engage the services of a business immigration lawyer to help you through the various stages of the application process.