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What Are Some Tips On Buying A Butcher Shop, Meat Market?

Posted By: Joe Ranieri, Business Broker: LA, Orange County Areas

Butcher shops, once a vestige, are increasingly becoming popular again in many metropolitan and suburban cities. In this Discussion Post on BizBen, Joe Ranieri (Orange County & LA County Business Broker) discusses various issues of buying a butcher shop and what that entails for business buyers.

Tags: buying a business

Butcher shops, once a vestige, are increasingly becoming popular again in many metropolitan and suburban cities. Words like, organic, grass fed beef vs. grain fed beef, local meat plant, are becoming more frequently used as consumers explore their buying options. A local butcher may not be able to compete with major supermarkets regarding price, but there are many ways which they can provide a niche for themselves in their local communities. According to the Food and agriculture Organization of the United Nations, "In the U.S. and other developed counties, meat composes a significant portion of the normal diet, contributing more than 15% to daily energy intake, 40% to daily protein intake."

Regarding location, a buyer should look for a location that is heavily trafficked that enables it to be the last purchase a customer makes before heading home to make dinner. Strips centers are great locations for butcher or meat markets, especially those that don't have a super market as their anchor store. Another important aspect of location is making sure delivery trucks have easy access to your location. A buyer should do some research to make sure their community will support a local butcher shop/meat market, and they will appreciate the superior service and quality that many supermarkets cannot provide.

Being a butcher is absolutely a skill, and one might not pick up in just two weeks of training. The reason why consumers may go to a butcher instead of getting their meat from a row of prepackage meat at a supermarket is because a butcher has a level of expertise on what meats will go with certain dishes, and making the right cut to the meat, while also offering alternatives to choices if price is a problem for the consumer. Many buyers for a butcher shop may have restaurant experience, but don't want to work the grueling hours that restaurants require, but also stay in the food business. A buyer should be aware that they will need a level of expertise to run a butcher shop for it to be successful, because customers will demand a level of competence when having their questions answered.

A buyer should investigate a seller's inventory and become aware of selling trends. Many butchers will inventory their meat by cut, which allows them to have the right amount in stock at a given time and minimize spoilage. Keeping inventory by cut also helps control costs, which food costs can run up to 40%, and allows controlling costs if there are delivery fees. A buyer should also know if there is a tracking system in place, so they know if the meat is cataloged by date, to be aware of which are close to expiring. A buyer should ask a seller if they have records of when certain meats are in greater needs during the week or certain holidays of the year.

Buyers should inspect all equipment, which include knives, cleavers, and saws and any other food processing equipment. Food scales should be inspected, as well as the walk-in cooler. A buyer should make sure that all permits and licenses are up to date.

Pricing can range from 4 to 5 times the monthly gross, but there are many factors, such as rent, that makes "rules of thumb" unreliable.

One of the most important aspects of being a butcher is having superior customer service, many customers will know their local butcher by name and it should be reciprocal. Not only will a butcher sell to the public but also local restaurants who use them for specialty meats that they cannot get delivered elsewhere.



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