Expected Market Share

[oldmissionsb]

Hello,

I am in the beginning stages of doing a business plan for a cafe in a rather unique site. We are a historic landmark and have a museum and a retreat center. Also, because of our location, we would not have any competition. Annually, we have approximately 150k+ visitors per year. My question is, what percentage of our visitors could we expect to be cafe customers? It would seem that this is a total shot in the dark, but given the lack of competiton and that many of our visitors constantly ask us where they can get coffee, etc., my assumption would be that it would be higher than the average

Thank You

 

[CanadianBrian]

Hello and welcome.
Some of the things you will need to know are what are the demographics of the visitors. Are they mostly tourists and what age group are the majority? Probably a mixture (children,parents and grandparents) seeing as how it is a museum and retreat. When will the majority of visitors come thru (mornings,early afternoon or afternoon evening) How long will they stay?

What types of items will you be selling? Coffee,tea,espresso? Baked goods (treats), sandwhiches or a fuller menu? Sitdown or takeout with a few seats?

If you look at 12,000 visitors average per month that is 2,000 per day at 6 days a week. Would the majority come thru from June till September? If so, this would change that figure.

It sounds as though you have a captive audience, but you need to answer some of these basic questions to even give a guess.

Brian

 

[oldmissionsb]

Brian,

Thank you for your prompt reply. To clarify a bit, the 150k is merely our visitors that pay to see the museum. We have bus loads of other tourists, many international, who also come to see our site but don't pay admission, so we don't have numbers for them, but it is siginificant, maybe an additional 40k more. In July and August, we have two major festivals held on our grounds, brings in roughly another 250k to 300k of visitors.

As you mentioned, our visitors range in age, with the majority being adults (18+). The musuem tourists (the 150k) stay approximately an hour or more. The bus tourists, who don't pay admission and merely visit the front of our site, stay, unfortunately for only 15 to 20 minutes. The 250k to 300k stay for much longer periods given they are here for an event.

The shop would sell the essential cafe items (drip, espresso, tea, baked goods, sandwiches, some salads, etc.). Our model would be toward more to-go business but also catering to a sit-down crowd, as we have a wonderful vista of the pacific ocean on our portico. As far as the customer trends, as you also mentioned, it would be a bell curve, with a huge upswing from June through September. The other factor is we are in a quasi-residential area (somewhat wealthy), so we are hoping to generate some business from them as well.

In addition, we have a large industrial kitchen on site, which I am hoping will produce the food (at least for lunch) for the cafe.

Hope I answered your questions.

Thank You

 

[CCafe]

Sounds like you got a winner on your hands! The question I have is how accessible will your store be to the public? Is there a possibility for a drive through? Will your patrons only be museum patrons or is it open for all to walk in?

 

[oldmissionsb]

Brian,

Because it's a historic landmark, we cannot, and would not want to, put a drive thru on the premises. Our patrons would be a mix of museum tourists and the general public, as the shop would open onto a long portico that faces the public area. The real questions is how many visitors can we expect to become cafe patrons while the cafe is starting up. Likely a shot in the dark, but probably pretty good given what we've discussed.

Thank You

 

[PinkRose]

I agree. It sounds like you have a winner of an idea!

I'm wondering if you'll be able to handle the crowds. Is there any other place for people to get refreshments on the premises?

When I see groups of tourists getting off of their bus, it seems like the first thing they want to do is find a clean restroom and then get a cup of coffee or something else to drink. My estimate would be that out of a bus load of people (possibly 60 adults and children) at least 40 would be potential customers. The other 20 would either bring their own beverages or not have any interest in purchasing anything.

You have a great opportunity! Go for it!

Rose

 

[eldub]

The real question is how many customers do you need to cover the business expenses, imo. It sounds like you would have relatively low overhead and probably no additional rent. Also sounds like you will have a captive audience. If that is the case, I'm guessing you will have more business than you can handle during the busy months and less when the tourists clear out. However, if your overhead is as low as it appears, wages for shop staff might be the only real variable expense..

Will there be enough business to keep someone employed full time, year round? Can you hire enough part-time staff to cover the shop during the busy season?

 

[oldmissionsb]

I agree. It sounds like you have a winner of an idea!

I'm wondering if you'll be able to handle the crowds. Is there any other place for people to get refreshments on the premises?

When I see groups of tourists getting off of their bus, it seems like the first thing they want to do is find a clean restroom and then get a cup of coffee or something else to drink. My estimate would be that out of a bus load of people (possibly 60 adults and children) at least 40 would be potential customers. The other 20 would either bring their own beverages or not have any interest in purchasing anything.

You have a great opportunity! Go for it!

Rose

Rose,

We do have public restrooms and a couple of soda vending machines, which we would do away with if we pursued the cafe idea. We would be the only game in the area, so nearly everyone within the organization "feels" it's a good idea. It's just a matter of convincing the higher ups, who tend to be quite reserved, that the risk, given our situation and the initial upfront cost, are quite a bit less than if we were trying to do it in another part of town.

Thank you for your feedback

 

[oldmissionsb]

The real question is how many customers do you need to cover the business expenses, imo. It sounds like you would have relatively low overhead and probably no additional rent. Also sounds like you will have a captive audience. If that is the case, I'm guessing you will have more business than you can handle during the busy months and less when the tourists clear out. However, if your overhead is as low as it appears, wages for shop staff might be the only real variable expense..

Will there be enough business to keep someone employed full time, year round? Can you hire enough part-time staff to cover the shop during the busy season?

We have absolutely no rent, the overhead would be quite minimal, and we would have a captive audience. The real issue, as I mentioned in a previous reply to Rose, is to convince the higher ups, those holding the purse strings, to spend the money on the build out and other start-up costs and jump into a rather unique situation. My estimate is roughly $70k for equipment, furniture & fixtures, inventory, etc., to get it going. I need to show them how long it will take, given the number of customers coming through the door when we open, to see an ROI. They want numbers, but you can only give them estimates on the number of customers they can expect at first. Despite our unique situation, the cafe will not have, like any other start up, throngs of customers beating down its doors at first, but once it's rolling, I think it could be very profitable.

As far as staffing, we would hire a FT manager with benefits and probably four to five PT employees. The problem with hiring seasonally, is the investment of time and materials to get those employees working at a high-enough level. We might have to eat some payroll during the lean months and work with the schedule to keep payroll under control.

Thank You

 

[eldub]

With the captive audience no rent and an existing kitchen, I'm guessing you could get up and running for less than $70,000. (You certainly shouldn't need any more than that, imo.) I guess it depends on the amount of renovations needed and how fancy you want to get. Imo, people visiting your museum will probably be happy to get a beverage, hot or cold and the details such as furnishings will do little to influence purchasing decisions.

I would consider starting off with a very limited menu and options; espresso machine, coffee brewer, grinders, ice machine, a seating area, cash register, small ware, to go cups. Skip the fru-fru for now. Maybe contract with a local baker to bring in food items to go with the drinks.

Remember, you have a captive audience that won't be visiting for the drinks. Anything you provide/make available will be appreciated, imo.

scott

 

[CanadianBrian]

Location,location,location. Sounds like you have a viable business to investigate. In fact, you might want to look at finding a financial partner (if you cannot afford it yourself) and look at paying rent to the museum and open the business for yourself.
Brian

 

[eldub]

I was thinking the same thing, Brian.

 

[oldmissionsb]

With the captive audience no rent and an existing kitchen, I'm guessing you could get up and running for less than $70,000. (You certainly shouldn't need any more than that, imo.) I guess it depends on the amount of renovations needed and how fancy you want to get. Imo, people visiting your museum will probably be happy to get a beverage, hot or cold and the details such as furnishings will do little to influence purchasing decisions.

I would consider starting off with a very limited menu and options; espresso machine, coffee brewer, grinders, ice machine, a seating area, cash register, small ware, to go cups. Skip the fru-fru for now. Maybe contract with a local baker to bring in food items to go with the drinks.

Remember, you have a captive audience that won't be visiting for the drinks. Anything you provide/make available will be appreciated, imo.

scott

The improvements--that is, plumbing, electrical, building of counters, etc.--and the equipment are the major portion of that $70k. Because it's a historic site, we have to be a bit more careful in how we go about the work. Also, because of the sites plumbing and electrical limitations, we would have to do quite a bit of work to get those services to the space we are considering using. Nevertheless, we're looking at functionality over aesthetics, given that most of our customers will be hitting it and quitting it. As for aesthetics, we want it to look nice, but it doesn't have to be top shelf either. We also have a great opportunity to generate considerable business from the residents in the area, as our site is situated in somewhat of an affluent residential part of town. There's also a city park across the street, and we have a huge parking lot to accommodate customers with cars. Anyway, it feels like such a win-win situation, but, as I said before, I need to convince the folks holding the purse strings to make the initial investment and that we can generate enough business right out of the gate to see a steady ROI until the business really gets rolling. But all that is is still a guessing game. You just have to look at your situation (in this case very unique) and have confidence it will work.

Thanks for your insight!

 

[PinkRose]

Is this the website for the historical site that you're referring to?: OMSB Homepage

This too: http://www.santabarbara.com/points_of_interest/mission/

 

[eldub]

I was wondering the same thing, rose. But I didn't find any mention of this property being seaside, though it IS located in santa barbara.