Time to spread my wings and open my own shop

[coffeedreamer]

Hey coffee lovers, this is my first real post here and it is going to be a long one - sorry. I am the operator of a large chain coffee shop in a small town of 8000 or so. We are the busiest shop in town with 2 other shops that we compete with. There is also a Tim Horton’s as well. I like my job but I am at my maximum pay now and my family just needs more money to survive.

My wife and I are looking to open a small artisan bakery and café downtown where there is no coffee competition. Well kind of, the others are just 5 mins up the hill. My only food competition down here is a Subway, a Greek restaurant, and a corner store. The downtown area is in need of revitalizing and I want to get in on the ground floor.

There is a new shoe store, kids clothing store and the grocery store (that is in the same mall as my future shop) is planning to renovate as well as the liquor store. This area has seen professional’s open shop here like lawyers, accountants, and physiotherapists. This part of town has the city hall, a police station, 3 schools, hospital, an office building with 50 daily workers, 3 hair salons and more all within a few block radius to my future shop. There is ample parking in front of the store and lots of morning and early afternoon drive by traffic. We only have one major road in town and there is traffic driving by all day to the mill, schools and such. What do you guys think? Sound like a good spot?

My wife is from Germany and she is a wonderful baker and I would get to work with her because she would be running the food side of things. We would have fresh European style bread (not available in town) and pastries baked daily. Lunch would be a soup and salad of the day and few different Panini’s and baguette sandwiches to choose from.

On the weekend we would do breakfast as well because thereis nowhere to go to have a nice family meal in town. The menu would be crepes,waffles, aebelskivers, and eggs beni with a few other simple things. We would have seating for about 20-24 people and we will have a great play area for little ones. Free wireless of course and a cozy but simple interior is what we have planned.

We have not chosen our coffee yet but we will be only doing pour overs with Chemex and Hario, with Aeropress and French presses upon request. This will eliminate waste and give the customer an experience that they cannot get elsewhere in town; I only hope they are willing to wait for the great coffee.

Here is my equipmentlist for the bar side:

Rancilio Epoca E Auto 2 group – Espresso Machine
Mahlkonig K30 Vario – Espresso Grinder
Baratza Vario W Burr – Pour-over Grinder
Vitamix Bar Boss – Blender
Bonavita Gooseneck Variable Temp Control Kettle - Pour-overKettle

Any comments on the equipment or anything else would great? Thanks for your time, have a great day.

 

[Mr Shave]

Hi coffee dreamer,

Welcome to the forums

Questions I have
1. Is there a non compete in your current contract?
2. Go talk to downtown owners and talk to them about business.
3. How many square feet is the grocery store? It is an anchor?
4. Does the main road have a flow pattern AM/PM ?
5. Are you and your wife planning on working 7 days a week?
6. In the long run, I strongly believe you can earn more on your own. In the short term, you will most likely make significantly less than your corporate gig. Can you and your family survive off less? Along with additional financial burdens / responsibilities?
7. I believe people will vote local if value and service are there. Others from small towns have expressed challenges with price sensitivity. How will you educate customers on manual brews and change their buying patterns
8. How many sf is your potential location?

Best of luck

 

[CoffeeJunky]

Hi coffee dreamer,

Welcome to the forums

Questions I have
1. Is there a non compete in your current contract?
2. Go talk to downtown owners and talk to them about business.
3. How many square feet is the grocery store? It is an anchor?
4. Does the main road have a flow pattern AM/PM ?
5. Are you and your wife planning on working 7 days a week?
6. In the long run, I strongly believe you can earn more on your own. In the short term, you will most likely make significantly less than your corporate gig. Can you and your family survive off less? Along with additional financial burdens / responsibilities?
7. I believe people will vote local if value and service are there. Others from small towns have expressed challenges with price sensitivity. How will you educate customers on manual brews and change their buying patterns
8. How many sf is your potential location?

Best of luck

Above is all tough questions but necessary.

I believe equipment will be your preference. I would go with different one but there are many out there that can be as good. Where are you located?

I believe pour over coffee would be great but you would need to have at least two kind of pre-brewed coffee for people who need coffee "Like Now" If you just do pour over, it would not make sense for your employes to sit there for 4-5 mins per cup. That also does not make much sense unless you are going to charge 3-4 dollars per cup.

I would charge, depends on your competition, around 1.75 -2.25 per pre-brewed coffee and charge about dollar more for freshly dripped coffee. And you can also charge little more for Aeropress or Vacuum press.

You have to do your math... To make decent gross sales, you would need to sell around 300 cups per day for sit-down restaurant. About 60 percent of the coffee will be sold in the morning rush hour. Which means around 2-3 hours in the morning. That translates into about 100 cups per hour. How many can you make in pour over in an hour? That means you have to have around 3-4 people making around 30 cups per hour. That does not give you much time to prepare coffee. Also your bake goods idea is awesome. The people would love that. But that means your wife has to be at work around 3-4 am to get enough bake goods make by 6 am sales. Which means if she is planning on working til close, she will be burnt out by oh I would say, in couple of months of business. I am not saying its not a good idea but it would require tons of thinking to make this business work way vision this venture.

I think you have great idea to start. But you need to do little more investigation and talk to people who have done similar business.

My only advise would be, select the best location for your business. It will be hard at the beginning but if you have good location, you will do well. It might turn into bakery or coffee shop. Which ever, you will be a busy shop.....

Good luck....


CJ

 

[topdog]

I have independently owned and run successful coffee shops in similar enviroments than yours. I operated my business for twenty years. in Tacoma Washington about 150 miles from where you are located. It is very different to be a business owner than to be a shop manager. If you are interested in a full appraisal of your business; taxes, employees, operational fees, leases, menus, money pits and falls...etc. I would be very happy to meet with you and go over your entire business and coach you on the things to watch. I will charge you a fee for my assessment and advice. If interested let me know. hugo at harbornet . com at=(@)

 

[topdog]

I have owned and operated successful coffee shop operations in similar enviroments like yours. With a work in progress downtown and few clients and lots of competition. I succeeded by identifying the difference of being an owner than a shop manager. I could help you assess your business and help you identify your strenghts and weaknesses if you are interested. I am located in the city of Portland Or. and for over twenty years I run my businesses in Tacoma Washington about 150 miles south of Vancouver B.C. If you are interested in how to analize your business prospects and learn how to take advantage of your business enviroment, I would be able to coach you for a fee of $ 2,000.00 for a one day meeting and once a month communication for up to six months. you can reach me at hugo at harbornet. com if interested. no spaces between hugo@

 

[John P]

Coffeedreamer,

Other questions:

1) Are there other locations available?

2) Is the asking lease rate (which you obviously don't pay) in the ballpark of reasonable?

3) What's your time table?

4) How long have you been strategically planning?

5) Do you have enough capital saved to do it?

Comments: Rancilio is simply not a good machine. If $6K vs $12-$14K is going to hold you back, then don't open. You're talking nickels and dimes when it comes to total cost. Buy something decent.

1) La Marzocca - A simple Linea EE will suffice. The GB5 has more bells than is necessary.
2) Nuova Simonelli - Aurelia (several versions)

While I heartily recommend Synesso and Mistral, if you weren't thinking it, you probably shouldn't do one of those.

Heartily disagree with CoffeeJunky. It sounds like you have a good vision. Stick to it. If you offer a bulk-brewed option, you completely confuse the customer. Craft-brewed options only work when they are the only options. Bulk brewed for a small shop in this day and age is foolish. If quality is your differentiator in this market, you will do well.

Best of luck.

Don't rush.

 

[Mr Shave]

Comments: Rancilio is simply not a good machine. If $6K vs $12-$14K is going to hold you back, then don't open. You're talking nickels and dimes when it comes to total cost. Buy something decent.

I questioned the equipment as well. I would personally go with a Marzocco, even if it was a refurbed Linea. From the sounds of it, it is going to take you a long time to pay that off.

As far as bulk brewing and handling a rush. I would look/ visit at Four Barrel, Stumptown, or others that are high volume shops. They batch brew French Press, as well as serve manual brews. Food for thought

 

[coffeedreamer]

Thanks for all the input everyone, it gives me a lot to think about. I will try to anwer some question here and give you some more info.

For Mr.Shave

1. Is there a non compete in your current contract? No
2. Go talk to downtown owners and talk to them about business. I did that and got good feedback.
3. How many square feet is the grocery store? It is an anchor? Not sure. I'm between it and a liquor store
4. Does the main road have a flow pattern AM/PM ? Constant
5. Are you and your wife planning on working 7 days a week? 5 days we hope.
6. In the long run, I strongly believe you can earn more on your own. In the short term, you will most likely make significantly less than your corporate gig. Can you and your family survive off less? Along with additional financial burdens / responsibilities?
7. I believe people will vote local if value and service are there. Others from small towns have expressed challenges with price sensitivity. How will you educate customers on manual brews and change their buying patterns
8. How many sf is your potential location? 1116

Coffee Junkie thanks for the input too. Not sure where you got your numbers but they seem a bit high to me. The shop I work at sells about 45 cups of regular coffee day and throws out about the same amout. That is why I am leaning towards the pour over. The shop I work at now made $10,000 net in Jan/Feb.

All my research shows it takes about 2.5mins to pour plus grind time. I plan to sell it for about $2.50 a cup for a 16oz depending on my bean costs. I think this is the best location as there seems to be a good traffic flow and not much competition.

The owner wants a $1.25 a sqft but I hope to get it for a $1.00. The other empty spot in the mall has been vacant for almost a year. My spot have been vacant for over a month now. She might be willing to come down. My direct costs monthly look to be $2100-$2300 depending on the electricity bill.

John P

1) Are there other locations available? Yes but none have great parking or the traffic.

2) Is the asking lease rate (which you obviously don't pay) in the ballpark of reasonable? $1.25sqft

3) What's your time table? Running before Sept. at the latest but would like be in before May

4) How long have you been strategically planning? Less than a month as location was not there.

5) Do you have enough capital saved to do it? I have $104,000 equity in my house and can get a $40,000 home equity loan for only $150 a month on top of my mortgage payment which is $270 every two weeks. Still need more money though.

Why do you not like Rancilio???

Right now I make $17.50 plus 75% med/dental and my wife just works here and there. We both plan/hope to pull in $15 and hour each. Perhaps I am dreaming there.

Well now you know a lot more about me and my plans so more advice would be helpful.

Thanks

 

[eldub]

Coffee Junkie thanks for the input too. Not sure where you got your numbers but they seem a bit high to me. The shop I work at sells about 45 cups of regular coffee day and throws out about the same amout. That is why I am leaning towards the pour over. The shop I work at now made $10,000 net in Jan/Feb.

I'm guessing there is an error in the above quote....?

 

[coffeedreamer]

I'm guessing there is an error in the above quote....?

I'm not sure what you mean eldub. Our drip coffee is only 6-8% of the business.

 

[CanadianBrian]

So coffeedreamer, if drip is only 6-8%,you are saying that you do 500+ cups of coffee each day? Is the balance espresso and espresso based drinks? Quite a feat for a town that only has a population of 8000 and a Tim Horton's.
How large is your current shop you work at and where is it in proximity to your proposed location?
Will the landlord give you coffee and baked goods, pannini, and whatever else you want to sell exclusivity on the property?
How much training/expierence does your wife have in running a restaurant/kitchen?
What was in the location before?
So you will only be open 5 days per week or that is all you want to work?
Just a few questions that come to mind.
Brian

 

[coffeedreamer]

So coffeedreamer, if drip is only 6-8%,you are saying that you do 500+ cups of coffee each day? Is the balance espresso and espresso based drinks? Quite a feat for a town that only has a population of 8000 and a Tim Horton's.
How large is your current shop you work at and where is it in proximity to your proposed location?
Will the landlord give you coffee and baked goods, pannini, and whatever else you want to sell exclusivity on the property?
How much training/expierence does your wife have in running a restaurant/kitchen?
What was in the location before?
So you will only be open 5 days per week or that is all you want to work?
Just a few questions that come to mind.
Brian

I wish we could do 500+ cups a day CB. You need to remember that coffee shops sell other things too. Here is a typical good day.

35 blended drinks
95 Espresso drinks
47 cups coffee
25 iced drinks
49 other drinks (syrup add ons, hot choc, extra shots, etc)
39 cups tea
8 retail items
1-4 lbs whole beans
28 pastries
plus a few other things

We plan to be open 7 days a week CB but we just want to work 5 of those. I know this will not happen soon though but we a ready and willing to work hard. We will have other staff and we will hire/train a second baker for my wifes days off.

Thanks for taking the time to reply and ask questions.

 

[CoffeeJunky]

That sounds about right.
To negotiate the lease... Don't try to just put focus on dollar per square feet. Try to be more flexible.
Ask for free rent during the construction or decoration time.
When I was doing the build out, I got about 5 months free rent and I did build out in 3 months. So 2 months free.
Another thing is to sign a lease with heavier rent at the end.
I would pay like 1000 per month for the first 6 months, and bump up from that point on. This will require you to sign a longer term but you can negotiate that way to your advantage.

In our town, single origin drip coffee can cost up to 5 dollars per cup. It really depends on how you market as well.

Good Luck

 

[John P]

coffeedreamer,

After reading your last couple of posts, you are not ready yet.
I'd happily take your money and tell you that too, but be thankful I am doing it for free.
You still need to prepare a bit more.

... And don't fall in love with a location that can't love you back.

* Not enough money (Why only $40K out of $104 ? How much do you owe?)
* Focused on only one location
* Unrealistic expectation of commitment necessary
* IF your wife is a talented baker, perhaps the baking needs to be the star and the coffee is secondary (just a thought).
* Your mix of products does not make any sense. It conveys confusion.
* In the beginning, neither of you should have days off. If your wife is talking about days off, that's not good.
* As you are the only party writing, we certainly don't know your wife's willingness to put in at least 80+ hours per week for some time.
* Your spouse needs to be 100% committed. No short hours. No days off. Equal commitment. Otherwise, it can be disastrous. Tread wisely.
* Rancilio? Really? ... You're not ready.

 

[topher]

I agree with John P. Days off? What does that mean? I have been open for almost 2 years. The first 8 months I didn't have a day off. I now try to take one day off a week. I love when people say have a great weekend. Weekend just means 2 more work days till Monday.