What do you think about this mobile business plan? Constructive Criticism Required.

[TheGreenJoe]

Hello Group,
After months of stocking this forum, I've finally decided to post my plans in hopes of gaining some powerful insight from the members here. I'd like to first give gratitude to Mr. Shave, Javahill, shadow745, pinkrose and Coffeejunky for all your input along the way. Although not always recognized, we folks from the outside looking in have gained some serious feedback from your post. So, onto business...

I'm currently in the building phase of a mobile coffee trailer. Its a 1975 13' Scamp that I've gutted. So far I've installed my handwashing station and triple sink. The rest is still under consideration.

Plumbing:
40 gallon fresh water that is linked to a 12v pump that will feed the espresso machine and the rest of the handwash/triple sink. I was considering using an Eccotemp Tankless waterheater to heat the water to handwash/triple sink, as it is cheap, portable and appears fairly easy to install. Also, I like that is LP and won’t require watts from my generator.
Question: Will I need more than one 12v pump to feed the three stations (espresso, handwash, triple sink)?
Question: Anyone have experience cutting the fresh water tanks from RV? Is it difficult?
Grey must be 15% larger than fresh.
Power:
Ah, yes, the great mystery. So, for the most part, I’d like to run a generator that has a 220v circuit. It is to my understanding that a 220v Espresso has a faster recovery time. However, I will also been needing a pourover coffee maker, grinder, some lights and music (preferably the Dean Martin). I’ve been eyeballing an Astoria Divina (4000w), my pourover (1500w) and my grinder (300w???). So, I’m totaling 7k watts total (anything missing?). Budget: 2k
Marine battery/inverter for accessories.

Espresso Machine:
Astoria Divina 2 group 220v 4000w. Its been refurbished by a reputable guy in town. Asking 2k for the piece. Plans are to move into a Brick and Mortar, so I’d like something that can transfer over there in the next 2 years. Budget: 2k
Pourover is a Grindmaster Corp. I don’t know too much about these and haven’t dug into them yet. Was recommended by the guy selling the espresso for the budget I gave. Budget: 200$
Grinder: Still looking. Open to suggestions. I need a work horse. Doesn’t need to be pretty, just needs to work well for a reasonable price. Budget: $300
Marketing:
My town has a college district that has 3 hospitals in a 3 mile radius. I plan on targeting this during morning runs and hospitals during the night shift. Sporting events and farmers markets on weekends. Social media platforms. Loud colors for visibility and of course, a good cup of coffee for a low price.

POS
Still researching and open to suggestions. Would love something that retained clients information so that I may send out promotion information.

Profit Margin:
Still having difficult time assessing profit margins. It appears that each cup of coffee will cost me 0.8 dollars. I am still working on decreasing expenses and hope to someday dip into roasting. But in my town, we must have commissary, so I hope to purchase a commissary and bean from a local roaster. Kind of a 2 in 1 move. This being said, I’m still having a difficult time assessing profit margins for a mobile coffee shop.
Menu:
Coffee, Espresso, Espresso centered drinks, Tea, cocoa, pre-package sandwich items (any ideas here? I don’t want a kitchen in the trailer, so I need food that’s fast, premade and does require extra permitting).
Original thoughts on cost: 5k. (lol! I was a funny guy back then! ) Total Budget to date: 8.9k. Estimated Budget at End of Construction: 10.2k

Fire away group. Blunt Honest goes along way! I can use all the help I can get!

 

[Hogfish]

Just a few quick things to start,

Plumbing: where is your water filtration system? From everything I have gathered, it is essential not only for cup quality, but also will save your espresso machine from costly repairs in the future. I read on another thread that manufacturers are usually quite helpful in determining your needs for mobile and mortar ops. I would be willing to guess that they would be more helpful if you are purchasing a machine new, but it's worth a shot.

Pour over: how are you going to transfer your brewed coffee to a delivery system? What kind of volume are you forecasting?

Grinder: a workhorse, great. Where are your design considerations? How are you going to appeal to your customers? Aesthetics go a long way in terms of presentation, IMHO.

Marketing: Who have you contacted? Where are your operating locations? If you complete your build out and have no prospects, it sounds to me like you will have, guess what? No business.

You're budget is very tight, to say the least. If you don't work out every possible logistic before you prepare to open, you will likely find yourself up that creek that people refer to.

To put things into perspective, I am working on a mobile op that will be small and I am figuring I will end up around $60k. Do I have 60k, not really. Have I secured a loan well in excess of that? You betcha, along with space.

My advice to you is to really dig in further on this forum and others. The forums provide an incredible amount of knowledge, use it! You may be green starting the industry, but your plan and your vision should not be. If you haven't worked it out, you are not assured and confident, and this becomes apparent in your presentation it will be sniffed out by anyone worth their own salt in considering you as a mobile vendor.

Just my two cents coming from a guy who is not in business but aiming to be. My partner and I have been researching a long time now, years really. With a tight budget, you only get one shot. Do yourself a favor and make sure you give yourself a chance to succeed. You posted a lot of words like "still", "assessing", "open to suggestions". I have found people are reluctant to help when you post prematurely and that it is indicative of your lack of research. I would suggest that your next post is more pointed so you see more posts then this one.

Good luck!

 

[TheGreenJoe]

Hey Hogfish, Thanks for taking the time to reply! And so quickly!

Filtration: I have two choices, I can either purchase a unit, or I can purchase filtered water. Shadow745 had a unit set up directly into his plumbing system. The upside would be convenience, but the downside would be another cost. I'm leaning toward purchasing filtered water on a daily basis, just to keep the opening cost down.

Pourover Brewer: Grindmaster has a pourover brewer that will dump directly into a 3L Airpot. At 12 liters, that will give me x25 16 ounce cups to start the morning off with.

Marketing: The location of my site is at an intersection that has filters students and employees through a pedestrian crosswalk. The traffic flow on this street is 33k in 24 hrs. (An medium amount by my cities standard). In a 3 block radius there is 3 coffee shops, 2 chain and 1 local.

Social media platform will include: FB, IG and twitter. How I plan on creating virility is through discounts from check in and posting. Twitter updates. IG photos and of course FB post.

I'd really like a POS system with customer retention capabilities. In my current business we send out a monthly newsletter that has a 15% click thru rate. And I'd like to see what numbers this business has to offer.

Paper Marketing: Good ol flyers. Flyers typically have a 1% activation rate. But they also bring awareness. I like them because their dirt cheap.

You are absolutely correct, my budget is extremely tight. But, in all honesty, from running the business that I currently run, I've learned that overhead is directly related to profitability. At So, I'd like to keep the cost of this venture as low as humanly possible, with 3 exceptions: 1. My espresso machine. 2. The grinder. 3. The bean.

When I ran the numbers, I figured if I can make 50 cents per cup and sell 200 cups per day, it will take me 4 months to to make back the 10k spent. 8 months to double the investment. What were you able to figure your profit margins at if you don't mind me asking?

60k? You guys got a jacuzzi in there??? lol! I assume that your doing this in a truck rather than a trailer. That would easily tack on 30k. By doing it in a 13' Scamp, I can haul it around with my Toyota 4Runner with no issues at all.

The pit I don't want to fall in is being a perfectionist. In business, I've dealt with this fairly commonly. Folks who won't move forward until everything is perfect. Its not a bad mindset to have, however, they end up never starting, because they are waiting for things to be perfect. I like to get things on the ground and started, then adjust as I go.

The question I ask is, "What do I need to make coffee" . And I focus my finances there.

And just because your not in business yet, does not mean you don't have a valuable opinion or insight. Quite the opposite. Being in the research phase, you currently have good grasp on new equipment out on the market. I know I've certainly gained from your post. And others will as well.

Thank you again for your time.

 

[TheGreenJoe]

Here's the camper. Its a 1975 Scamp 13'. She was stolen from my house 2 months ago (thieves wheeled her onto a flatbed) and miraculously recovered! I've taken one of the tires off, so that she can't be wheeled out.

 

[TheGreenJoe]

I've gutted out the benches and tables and have pulled the carpets. I'm currently sanding the glue off the floor board to make room for linoleum. At Lowes, they had some cheap linoleum on sale that I snagged up. Its not pretty but it will get me through the health inspection.

 

[TheGreenJoe]

BTW that was my 10th post. I get my signature now!!!

 

[Redswing]

green joe...I hope you get a bunch of good feedback. You've clearly put a lot of thought into this, and I like the way you do your thinking. I'd like to watch your project unfold, because the mobile idea is on my brain a little too. Please keep us posted!

 

[Musicphan]

My 2 cents..

Water - the tanks seem a bit small. If your going to serve 200 cups of drip/pourover coffee the product alone will be 25 gallons without espresso / handwashing / etc. Tanks are cheap..
Tankless Water heaters are the way to go... they do make a smaller electric water heater.. doesn't do a great job but may pass health code (it doesn't get super hot)
Pumps.. the truck I was looking to build had one for espresso / one for hand/dish washing
Generator - seems a bit small as well. You most likely will have an espresso grinder + drip grinder ... and maybe a 2nd decaf espresso grinder. Your missing the electricity to run any type of lights / sound / pos / refrigeration / pumps.
Brewer & Grinder budget seem really low.... even picking up a used Mazzer for espresso is probably double your budget... and that's just for espresso.
POS - take a look at options like Square / Shopify... you can get a full setup for $1000... it will at least give your ability to capture emails etc for social media/marketing... otherwise good old $100 bucks for a plain jane register. Whatever you go with needs to be accounted in your electrical draw.
Profit Margin... if your COGS are .8 and your making .5 per cup... are you only charging 1.30 per cup? Something seems wrong here...
Refrigeration - I don't see you address this anywhere... you will have milk and something to store sandwiches
Budget - $9K is unreasonable... sorry. Start a list of everything you need to make drinks... Walk through the process of espresso drinks.. You will need a grinder, tamp mat, tamper, coffee, milk, cup , lid... and document all of your costs. I think that will help you look at your numbers and help you with your profit margin concerns.

Have you also accounted in your equation permits, insurance, gas, and entry fees into farmers markets,etc ?

 

[TheGreenJoe]

Hey Redswing! Thanks for the encouragement! I'll keep everyone updated and posted.

 

[TheGreenJoe]

Musicphan, outstanding post. Thank you for the 2 cents. I'm going to try to reply with quotes for the first time.....so bear with me....

 

[TheGreenJoe]

My 2 cents..

Water - the tanks seem a bit small. If your going to serve 200 cups of drip/pourover coffee the product alone will be 25 gallons without espresso / handwashing / etc. Tanks are cheap..

Solid eval. I'll dig more into this. Any suggestions as to how much water is needed? I'd be stoked if I pull 200 cups a day. Jumping jacks occur at 300.

Tankless Water heaters are the way to go... they do make a smaller electric water heater.. doesn't do a great job but may pass health code (it doesn't get super hot)

I'm waiting to hear back from Health about the Eccotemp, I'll have to see....

Pumps.. the truck I was looking to build had one for espresso / one for hand/dish washing
Generator - seems a bit small as well. You most likely will have an espresso grinder + drip grinder ... and maybe a 2nd decaf espresso grinder. Your missing the electricity to run any type of lights / sound / pos / refrigeration / pumps.

Okay, 12v are cheap. Hoping to work with one grinder in the beginning. We'll see how that turns out...
Lights, sound and POS will be from marine battery inverted and what ever is left on my 110v circuit. I was looking into Generac (thanks Shadow745 for the idea) and they have dual circuits.

Brewer & Grinder budget seem really low.... even picking up a used Mazzer for espresso is probably double your budget... and that's just for espresso.

I know! I'm hurting on this one. I'm seeing refurb Vario for 450...kinda thinking of going there...I have another post up, hopefully I'll get some direction from the gurus.

POS - take a look at options like Square / Shopify... you can get a full setup for $1000... it will at least give your ability to capture emails etc for social media/marketing... otherwise good old $100 bucks for a plain jane register. Whatever you go with needs to be accounted in your electrical draw.

I'll take a look. Thanks!

Profit Margin... if your COGS are .8 and your making .5 per cup... are you only charging 1.30 per cup? Something seems wrong here...

Sounds about right. 1.50 per cup with the slogan, "Half the cash, twice as fast". There is 3 coffeeshops around the location I want. So my plan is to come in low and underbid. Here's my math on a 16 oz cup:
Coffee: 0.4 (8.99 per pound)
Lid: 0.06
Sleeve: 0.10 (a bit more pricey, but they will be colored the same as my trailer to bring brand awareness)
Stirrer: 0.01
Creamer: 0.12
Sugar: 0.03
Total: 0.72 (rounded to 0.80 for room for error)

Refrigeration - I don't see you address this anywhere... you will have milk and something to store sandwiches

As of right now, I'm going to try to pull this off without a refrigerator. I have the space for a propane fridge and if need be, I'll install. But the only things that will need refrigeration is milk and sandwiches (if I chose to carry, I'm still considering baked goods). I must meet my commissary every morning, so I plan on holding my milk there. By my city's code, I just have to keep it below 40 degrees and 6 inches off the floor. I don't see any reason a cooler and ice shouldn't be able to handle that. But, we'll see how friendly my Food Inspection goes. I may very well need to install the propane fridge, but I'm hoping not....

Budget - $9K is unreasonable... sorry. Start a list of everything you need to make drinks... Walk through the process of espresso drinks.. You will need a grinder, tamp mat, tamper, coffee, milk, cup , lid... and document all of your costs. I think that will help you look at your numbers and help you with your profit margin concerns.

Don't be sorry! You are right. It is very unreasonable! Which is why I like it!!! lol! I'm going to try to keep this baby as tight as possible. I'll keep you posted on the expenses as I move through this. We'll see. I may very well be in over my head, but it wouldn't be the first time....

Have you also accounted in your equation permits, insurance, gas, and entry fees into farmers markets,etc ?

Yes. No. Yes and Yes. I'll get started on the insurance.

Now, here's my 2 cents: I want to thank you for overviewing my post. At the time of your posting, there was over 118 views, with you, Hog and Redswing being the only three to chime in. So, thank you.

 

[Musicphan]

Follow up comments:

Water sizing: It really depends on the business model your going after and what beverages your focusing on... espresso based products require less water / more storage for milk. Brewed coffee requires more water. Also - how long are you going to be in one spot? I was looking at doing festivals/craft shows that I may be vending for 3-4 days...some events/spots you won't be mobile. And think of how that ties to your business model... if your really going after the $1.50 beverage spot - why even deal with the costs of the espresso machine/grinders/refer/etc. ... more on that.

Grinder: Don't skimp on this... hopefully you already know the importance of a good grinder. You could probably pickup a used Mazzer for $400ish and plan on dropping new burrs $75ish. You need something beefy and the Vario ain't it. Keep in mind your equipment is going to get a good jolt down the road... even if you have super cushy air rides on your trailer. (And plan on repairs due to this)

COGS: Your COGS are about right... you don't show a cup cost in there but .75 is fair

"Half the cash, twice as fast": You really need to reconsider this strategy... I know it sounds great but unless you are the volume leader your limiting your success. Once you account for labor cost (you are paying yourself - right? - or is this a hobby?), overhead, gas, permits, the money just doesn't work. For example, our farmers market is roughly $55ish a day.. they require you to operate for 7 hours x $10 hr/labor = $70. + any fuel cost to/from the market, commisary, etc = roughly $140 day.. to break even you have to sell 280 cups of coffee. If your doing any type of event / craft fair often the entry fees are even much higher.

Thanks and NP.. I think there are more lurkers interested in the business than anything... no harm.. no foul... we all learn from each other

 

[John P]

To add to what Musicphan has noted.

1) Get a refrigerator. You are required to maintain the same standards as a brick and mortar when it comes to public health. You could not open a store with coolers and ice for your milk cooling. Do it right and avoid any sideways looks from Health. You have to put the public's health ABOVE your wanting to keep things inexpensive. Running a business costs what it costs.

2) The grinder is the most important piece of equipment in your coffee brewing arsenal. $400-$500, including new burrs for a commercial espresso grinder is a great deal. You really can't do it for much less.

3) In the end, you will likely save more than most because you are doing a lot of work yourself. But your budget is not realistic. The numbers are not there.

4) Being "cheap and fast" is a poor marketing strategy in today's market. Trying to cater to that crowd will create more headaches, and revenue loss, than you can imagine.

5) Keep moving forward. Be patient and save more money. Understand the reality of creating and running a successful business, and adjust your plan accordingly. Keep asking questions, but pay attention to the advice others are giving you and benefit from it.

Best to you.

 

[parnycoffee]

Business plan comments

FWIW - I built financial models and plans for startups, started and ran two businesses and worked in an investment bank doing management cosulting for several years. What you have is a technical plan for a coffee cart, not a business plan to understand if the business is viable, how much cash is needed and what you project to earn.

There are many aspects of a business plan that are missing here - the most important parts - sales, marketing and finance. How are you selecting the location for the cart? What is the strategy - low cost low quality to high cost high quality. Competitors in the area, number of people you plan to serve/day, how are you going to market to them, how are you going to keep them as customers, promotions, advertising, what is the likely competitive reaction, how many people will you serve if you lower/raise prices, what is the optimum price to maximize earnings, payment terms for your supplies, are you taking credit cards, who is the merchant bank and their costs. You need financial projections to determine how much cash you need to run this business until it turns profitable otherwise your risk of running out of cash and closing is huge. Get yourself a spreadsheet and start developing an optimistic, a best guess and pesimistic plans so you know what you are getting into and once you start, measure against plan and adjust the plant to reflect reality so you know how the business is doing.

Hope this helps.

 

[slurp]

cool trailer!! Can not wait to see it finished