Wrong time to open a business?

[ZowieHendrix]

A friend just approached me to say she was going to open a niche food retail business with her husband and they were planning to plough their savings into it.
Another friend is debating opening a cafe, has been looking at commercial properties whilst on furlough.
Am I wrong in thinking that it's not the right time to open a new business, especially one that revolves around others having disposable income? Aren't we supposed to be having a recession and then there's Brexit and it's impact on food prices.
I don't want to dampen there dreams and I won't say anything, but I don't know if now is the right time when similar businesses seem to be struggling.

I think it's a good time to be laying down the groundwork before opening in say 6 months. The circumstances we are in won't last forever. And when the world is opened back up to us, I think people are going to go mad, like they did post WWI.

We had a food place open during lockdown. It’s doing brilliantly as they are doing great food combined with fabulous social media work.

I ate in when I was able to, struggled to get a table and had to come back and now they are regularly posting that they are completely booked for takeaway. Guy said they couldn’t keep up with demand.

They have hit on a market perfectly.

I think they are taking a risk to be honest, but it's their money. What if no one likes the food? Do they know how to run a cafe? Those are things to consider anyway, but during a pandemic is a bit of an odd time to try. But maybe it will be great and they'll succeed.

I think they need to position themselves to be opening just when we know there are no more lockdowns (easier said than done).

I then predict there will be a bounce back, and there may be less competition than before.

One thing though, when ever they open, most restaurants,/bars/cafes eventually go bust.

Now could be the right time to be negotiating a good deal on a commercial rental property.

If they’re going to be offering a decent takeaway menu for during lockdown they’ll make a killing. And then they’ll be rammed inside once lockdown is over.

There was a woman on our local hub trying to find a shop to do nails out of the other day and I must admit I thought exactly the same as you op, is she mad?! There must be a reason behind it though.

It may be an excellent time if they do their research thoroughly. They'll need to get the right location, suppliers, be sure there's a market for it and have savings to live on for at least the first year.

I launched a new chocolate business with family in November - it's doing well! Some people are still spending and if it's niche food that she knows there is a market for, and she has some savings for any bumpy months, then it could be a winner.

I agree with pp that like the roaring twenties there will be an increase in spending after all this, especially on small luxuries if big ones are out of reach or otherwise not possible.

There are masses of people with plenty of disposable income right now. Dh runs a business selling a high end bespoke art of sorts. He has never been busier. Hasn’t had a chance to breathe since the first lockdown. There are lots of bored people at home without commutes to pay for who are doing loads of shopping.

But no it’s not the time to open a business in an industry affected by COVID, like restaurants or catering or a shop selling non-essentials. But again I think people are bored and restless. It’s probably a dumb idea unless you really know the industry and know how to run a business.

I started a business just before lockdown and extended it earlier this month as it was doing so well.

It's not doom and gloom everywhere.

At the moment I would say:
Food retail business, yay.
Cafe, nay.

I think pent up demand for any outsourced food / entertaining will be big.

I'm looking for a push takeaway for my DH birthday soon. When lockdown is over I'll be eating out ( although I may choose a sunny day and an outdoor table!)

Posh takeaway!

I agree that demand will be big after the lockdowns, but from what I gathered from people and local pages, they will be going to their favourites to support (so am I) so I am not sure if a new place would be reaping any benefits of the demand. But it wouldn't be dead either though.

There is also the old chestnut that if you open a business in a recession and it works it's a good business with legs. Any fool can make money in a boom.

Wow thanks everyone. I wondered if maybe it hasn't 'hit' everyone financially yet. The niche food business will include a store in a not so nice part of town. I don't know how much people are travelling to do their food shop these days. Plus Brexit. My dh is in food retail and business is booming for him but he's not sure how long it will last before there's redundancies and the knock on effect of whole industries not doing so well.

a recession is a bad time to sell but a good time to buy

... within reason of course...

There aren’t enough take aways in my area selling family size, quality ingredients comfort food, like cottage pies, chilli con carne, sausage pasta bake and lasagne. I would love that as an alternative take away.

They should probably consider this too: if they get forced to shut by the government, can they afford to live on no income? Do they have enough savings? Because they won't get furlough money or anything from the government being such a new business.

I'm about to launch a new business, a luxury product that relies on people having disposable income. There is never a 'right' time to start a business tbh but I wouldn't be ploughing all my savings in, start small with something scalable. The cafe I wouldnt touch with a barge pole though tbh, bloody hard work, massive overheads and so many go bust in their first year.

BluePeter I found something like that on holiday and loved it. I think the issue is it looks so expensive because the ingredients are way more expensive than say pizza. Especially if you want a decent result.

When I returned to the resort the following year the sole proprietor had given it up.

Sadly a lot of cafes etc won't reopen, meaning there will be space for new businesses. Now is the time to be doing the planning and possibly getting a good deal on premises and equipment. If they can open and offer delivery, they will do ok. We might be in a recession but a lot of people haven't been impacted financially. In fact those who have been lucky enough to continue working and the whole retired population, who will be key users of cafes, actually have more money as spending will have dropped. So not all doom and gloom for new businesses. Although not sure I'd be sinking all my savings into it, I'd hold some back in reserve for n case of future lockdowns.

A cafe opened last July and has now closed permanently with a to let sale outside it.

I'd advise your friends to see if there's a demand for their food first. Can they open an Online store or food market stall first (food market near me are open, SE here) This is a good way to see what the market is like in their area for their products.

They also need to remember the due to redundancies people have less money to spend on luxuries. They should reduce their debts/mortgage before undertaking a massive financial commitment in this climate.