Opening a coffee shop! (Hold up, I'm not an idiot)

[SpencermKing]

^^^^ Thank You! This is quality information. I apprecaiate your straightforwardness. What do you have to say about this. I am going into this with a partner. We have kind of split up the number crunching. Is that a good idea? Or should I just take lead and do all the crunching myself?

I am willing to pay for someones services if they are willing to help me along the way of this planning.

 

[John P]

One of you should take the lead on the number crunching. I'm sure there's plenty to do for both of you.

 

[sidg]

I wonder about the non-profit status that you are seeking? Are you planning on it being donation based or is the business non-profit and you will charge per item (I know many shops would say they qualify as non-profit these days ) ?
I've gotten into the coffee business for community building purposes but have chosen to go the for profit company rout for several reasons.
1. We chose to not put other local businesses at a disadvantage because of different tax liability, etc.
2. We did not want to get caught up in the legal issues that were going to arise. Trust me the state will not understand the difference between you and the shop across town that is doing everything else by their books in the usual way.
3. We believe that paying a fair tax and contributing to the greater good is not necessarily a bad thing.

Now having said those things I would not tell you that we are completely successful yet. We have been open for not quite 6 months and we are still putting more money into the shop. We are still months away from "breaking even". We have been successful in building community. People are getting to know who we are in the community and are responding in positive ways. We have a group of regulars who would not have known us or one another if we had not been intentional about what and how we were doing things.
Equipment wise we started out with used equipment that was tested and cleaned and ready to go for about 10cents on the dollar. We didn't scrimp on the build out and people like the space we occupy.
I'm sorry if I missed it but where are you located? That might help in providing resources or people in your area that can be recommended.
best wishes in this venture
Sid

 

[SpencermKing]

I am in Northeast Alabama

And thank you for advice!

 

[Ellie]

I have a roastery in a small citiy in south Georgia, and have supplied and mentored a few coffee shops throughout the last six years, since we have been in business.

It looks like I've used up my PM's (from what I can tell we now only have 50, and I've already used 63 over the years). But feel free to email me at ellen@thebeanery.com.

Two issues stand out to me:
First is your partnership with the investor. Most, but not all, investors want some management control over the business, unless your partnership is one where one of you has the expertise and one of you has the money. Many partnerships fail over money disagreements. Kind of like a marriage! So hopefully the two of you have clearly delineated your roles.
The second is the viability of this business. I've seen coffee shops come and go in my town. The ones that have survived have these things in common: saving on buildout costs creatively, association with a college, strong downtown, or military base, serving outstanding coffee and food items, and a drive-thru.

• Spending too much on the buildout can kill you...it takes a LOT of cups of coffee to get a return on your initial investment. Build cabinets yourself, scour for used furniture, etc.
• It helps, in a small town like yours, to have the help of a larger cohesive group. If you have earned their love and support, and continue to contribute to them in whatever ways are meaningful to them, you have created a "destination" for them. Fundraisers for their causes, events at your shop that they care about, and continuous social interaction with them will keep vitality in your business.
• It's a numbers thing...it's necessary to sell food at a walk-in shop in a small town. Coffee shops in small towns can also really boost coffee sales if they have a drive-thru. Even folks in small southern towns like the convenience of a drive-thru. It won't detract from the inside ambience. But it will add to your bottom line.
• I've always wondered why any coffee shop or restaurant owner thinks that a mediocre product can keep them afloat. Once the shininess of the new shop wears off, what will keep your customers coming back AND spending money? You've GOT to blow them away with excellent coffee and food. NEVER buy your coffee at Sams Club. Anyone can buy coffee there, so yours wouldn't be anything special. Buy from a local roaster if possible. If you don't have one nearby, we would be happy to have you as a customer :coffeemug:
• If you are going to operate a coffee shop, become an expert on coffee. Train and encourage your employees to become experts on coffee. If you can't become an expert on coffee, then become an expert on food
• Be sure that your non profit status is solid. Get input from your county commissioners or whomever is appropriate. I have seen a church owned and operated coffee shop lose their status because it APPEARED that they were making a profit! This is an area that I don't have expertise in, but I do know that an organization must apply (with the IRS, I believe) to receive non-profit status. If this is a vital component of your business plan, I hope you have already started the process, and understand what you can and cannot do in order to maintain that status.

Happy planning and much success!
Ellen