Location question

[mokajava]

Hi. We're just starting to investigate a possible site for a coffee shop, and we have a location in mind. I just have a few misgivings, and some feedback would be really helpful.

Our potential site is in a small business strip with a diner and a laundromat. The rest of the building has offices, including an engineering firm, with a total of about 170 people working on site. The intersection has a traffic count of about 23K, and is on a major route for commuters into downtown (yes, on the inbound side). It has 30 parking spaces, often occupied in the AM by diner patrons, who could make the traffic in and out of the lot a little hectic in the mornings.

Is it a good idea to locate next to a diner? It's a popular spot with the pickup truck set for very down-home food and bottomless cups of brown water. The worker bees upstairs currently buy takeout cups from them. They've been in business for 20 years and have tons of regulars, most of whom drive there. I checked with the owners and they're pretty nervous about having something that looks like competition to them. I told them we would probably bring in a new and different clientele that would be introduced to their business as well, and that we wouldn't be selling food, but they seem unconvinced and most likely view us as threatening yuppie interlopers. Which we are.

I don't want to start out with an absence of goodwill, but I think this site has a lot of potential. This is a relatively coffee-savvy town, but our neighborhood itself is pretty blue-collar. However, with a lot of homeowners and childless couples in the area, I'm sure there's a completely untapped demand for good coffee here.

 

[jpscoffee]

Without knowing the area, the exact look of the location and other information it is hard to give feedback. But here are a couple answers to your questions.

First, you and I know that you will serve a completely different product (GOOD coffee), but the existing tenants don't. That said, lots of people are looking for GOOD coffee. So all things being equal, it's a free country. If I went into that location I would do what I could to live at peace with a neighbor, but I can only change me, not them.

"Is it a good idea to open next to a diner?" I would say that question is mostly irrelevant compared to other questions.
1. Is this a GREAT location?
2. Is there enough traffic?
3. Is there enough visibility?
4. Am I capitalized enough?
5. Do I know enough about coffee?

In other words, if you don't give them competition, someone else will.

Hope this helps!

 

[mokajava]

Thanks, JP for your response...

But the issue turns out not to be whether we should open next to the diner, but whether we will actually be granted the lease there. They have been there for a long time and actually have the power to veto our lease.

What I need is to present a business case that we're not a threat to their business. All I can say is that we don't plan on selling food other that whatever baked items go with the coffee. Not sure if this is compelling enough. If it isn't, we're SOL.

 

[jpscoffee]

Ah yes, that does put a little twist on it. I hope it works out the way you want!

 

[espressomaniac]

keep looking

The fact that you already brought it to their attention has already raised a defensive front on their end, it looks like the presentation went badly or indeed, they are going to be adament about any place serving anything food related, "I'd ask them if they would like to set up an espresso machine, but it sounds likely they'd opt out saying people are happy with the muddy water, no need to change and actually give a damn". You will have to do much gain their approval, and I feel, by the time you've made all of their accomodations, your operation would be too restricted to do much with. Food should be the natural evolution to your menu, once you get over the espresso equipment jitters and everything is paid off, you'll be searching for additional sources of revenue, and guess what, that diner's days are numberd if you do this right and aren't afraid to take this to the next level all together.

Sorry to sound so cut and dry about it, but it's business and you can't limit it's potential. Sooo....look for a place that can turn into a diner itself, get your biz plan(s) together, one for the all out diner, the other for the espresso stand, if you play your cards right, they may opt to let you do your coffee + light menu verses a mainstream diner opening up in their town.

The draw back to this approach, if they call your bluff, you should be prepared to open that new place, or at least show enough in the literal preperations on site that you are serious, again, giving them one last chance if they finally realize you are serious.

That tangent to the side, are there "NO" other potential locations??? I can drive into any city and town with a notepad and jot down many potential locations through raw observations, some needing more capitol to start up over the others, but it seems there always is plenty of room to set up shop. If you just take a road trip yourself and simply drive and/or walk keeping an eye open, ignoring the details of who'm to contact about what property "deal with that after the fact" as long as you are realistic, you'll see your options are just not quite as limited to be forced to attempt to open up under the shadow of the pre-existing diner.

 

[mokajava]

A couple more possibilities...

Espressomaniac:

Thanks for your reply. I didn't get the impression that the presentation went badly. I don't really have any interest in opening a diner or operating a big food service business (for ethical reasons, we'd have to do vegetarian and that's not really a viable option here), just in having a nice place to sit or take out really good coffee. I just think there's a gulf between the oldtimers and the newbies in this town, and it's pretty tough to surmount, so you're probably right about it not being worth pursuing if there's this much (any!) resistance.

I'm looking at a couple of other places now. Both are in a close-in suburb that's seen some tough times but is now undergoing some major development. Property values in this area are going up because of the closing of a factory that caused the air to stink on a regular basis. Because office space is still cheaper than in town, lots of new businesses are moving in and lots of new office space is being created. Only other competition is a drive-thru and a Dunkin Donuts, which is mobbed all the time. DD's drive-thru causes traffic jams onto Main St. most mornings. I think they're maxed out.

Scene: major business route is split, one being Main Street, and one being commuter artery. Both get lots of car traffic ~20k each way. Neither are super-full of pedestrians. Most in-town business is along Main Street, but lots of people also commute out.

First spot: stand-alone building along the central business route. On the out-of-town commuting side. Faces the back of businesses "downtown", but you have to cross business route to get there walking from downtown. New office strip opening about two blocks away (same side of street) in the next six months. Large residential neighborhood on the same side of business route. Three parking spaces, on-street otherwise; or big municipal lot -- across business route. ~1600 sf

Second spot: funky, irregular retail space in the bottom of a small, turn-of-century apartment bldg (6 units) on Main Street. On out-of-town commuting side. Across the street from city park with playground. About half a mile from "downtown," but 3 blocks from police/fire headquarters. I think the evil Dunkin Ds is in those three blocks. A few other lunch-type food businesses nearby. Most, but not all, residential is beyond the business route. ~1000 meandering sf.

Either one sound better? I'd really like a spot in the center of "downtown" (in quotes because that's an exaggeration), but I'll have to convince the owner of the store I want to get out. Could happen. :wink: