Canada has a thriving fish and seafood industry, thanks to its expansive coastline and abundance of lakes and rivers. And with Canadians spending more than $80 billion dining out, owning a fish and chip shop could be a highly lucrative business.
Profit margins in this industry can fluctuate considerably due to the ever-changing fish and potato prices. At the close of last year, bad weather conditions in parts of the country caused fresh potato prices to rise. The exchange rate can encourage Canadian fishermen to sell their catch across the border for more.
This article helps entrepreneurs know what to look out for when buying a fish and chip shop business, and what skills you need to succeed in this sector.
A buyer’s profile
If you’re keen to own a fast-food business, you need to have realistic expectations. The busiest trading hours will be dinner time and during the weekends, which is difficult if you have a family. List the pros and cons of the industry before you make any hasty decisions.
Competition can be fierce in the fast-food sector, and good reviews are vital. A great starting point is to work in a fish and chip shop to gain a better understanding of the sector. Try to advance to shop manager; this will help you enhance your skills in operations and training.
Do you thrive under pressure? There’ll be times when you have a queue out the door and you need to ensure every order is correct, and standards are high. Customers expect fast service, but you need to plan your frying, so the fish isn’t in the display counter for too long.
You need to be social and create a positive atmosphere in your shop, even when it’s busy. The location will determine what type of customers you have; if you’re based in suburbia you’re more likely to attract regulars as oppose to city-centre shops, which attract passers-by.
If you don’t have the capital to fund the business acquisition entirely yourself, you should look at the Canada Small Business Financing (CSBF) program. Before you apply, check the eligibility criteria for the loan, e.g. the business must offer its services and products to the public.
The Business Development Bank of Canada offers long-term financing options. You can apply for a loan based on the value of the fixed assets such as buildings, equipment or shares in an existing business; or an unsecured loan for intangible assets, such as goodwill and intellectual property.
Certain business propositions may include seller financing options; buyers will still need to make a down payment. Each seller will list different requirements and conditions for the loan; a good credit score is a must, and the ability to take over the business successfully.
What to look for in a business
Find out as much about any businesses you are thinking of buying so you cover all the important factors. There are a few important questions you should ask: Does the business have high footfall? Is there adequate parking nearby? What other shops are on the street, and how busy are they? Are there any other fish and chip shops within a 5-mile radius? If so, how popular are they? What other fast-food chains are there in the area?
Make a shortlist of fish and chip shops you’re interested in buying, then gain more insight into the local demographic for each store. Customers are creatures of habit; regular trade means you can buy a shop in a reasonably-priced location with more reliable revenue.
How positive is the seller’s relationship with his staff, suppliers and customers? If the shop has negative reviews and a bad reputation in the industry and the community, you will have to spend time and money rebranding the business to create a fresh, new image going forward.
Does the business come with a team of fully-trained, efficient employees? This will be an invaluable asset. You will need counter staff, a fish fryer, food preparation assistant and potentially a manager and wait staff. It takes time to build up a reliable team in this sector.
Is it right for me?
If you can stand the heat and enjoy working in fast-paced environments, then this could be a great business opportunity. You need to be able to strike up good relationships with your customers and suppliers and have the patience and skills to train and manage your staff.
Due to the fluctuating fish and potato prices, diversifying your menu to include other meals is essential. If you keep improving your skills in preparing and frying food, your fish and chip shop will continue to thrive; high standards will ensure your customers keep coming back.