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Thread: Coffee Shop Business Plans
- 11-02-2004 06:57 PM #1
Coffee Shop Business Plans
Coffee Shop Business Plans...
Lets talk about whats needed to make a complete business plan for a coffee shop. Everyone out there running a coffee shop had some kind of business plan. This thread is to help people learn about whats needed in planning and proposing a business plan for a coffee shop.
- 11-11-2004 03:26 PM #2
Yeah we need help
I have a question about average ticket prices. We are putting together our proforma statement and I was wondering what kind of average ticket prices you guys see. Also should we lease our equipment or buy it? We have been going back and forth on this but still have yet to make a decision. Thanks for the time and hopefully the responses.
- 11-12-2004 12:29 PM #3
Leasing or buying is a simply a case of cash flow.If you have lots of upfront cash then buy most of the stuff. If not then lease. But make sure you assume that you will NOT make a profit for at elast the first 12 months. You MAY make it sooner but plan to have enough cash to keep going for a year at a loss. Otherwise you will be deeply sad and out of business.
And get your own coffee equipment. Do NOT get cornered by a coffee company that offers "free" equipment cause then they have ALL the power and you cannot change no matter how bad they are. ALWAYS own the equipment that makes you profit. Coffee equipment is where you make your profit. Own and control it yourself to control your destiny. Also clean and service it constantly to keep it in tip top shape. Be nice to it and it will be nice to you.
as far as average ticket prices and average sales there is no true average. Everyone is differnet. However it is VERY easy to make some guesses. Figure that to be profitable you need to have at least 60% of your revenue be espresso based drinks and that the average drink price is about $3.00 to $3.50. Figure that about 10-25% of those people will buy something else like a muffin or scone and you have your average ticket easily.
BE CONSERVATIVE in your model for revenue growth. Have extra cash on hand! ALWAYS go for the BEST location NOT the lowest rent. Pay 30% more rent and likely you will get 70% higher revenue and traffic. Don't cut costs tomake money, raise revenues and customer satisfaction.
choose a good roaster partner NOT just a coffee supplier. Train your Baristas to execute coffee perfection EVERY TIME. Quality, quality, quality.Andy Newbom
Barefoot Coffee Roasters
- 11-12-2004 02:27 PM #4
The question of lease vs buy is one we debated over for several months. The benefit of leasing is you get the expense write off. If you buy it you only get the interest expense. Beware that as a startup company many leasing outfits will pass on leasing to you. We purchased our equipment so we didn't have to worry about it. There was also the opportunity to take advantage of accelerated depreciation on new equipment in 2003. We will do so again in 2004 which, I think is the last year for this depreciation "bonus".
As far as an average ticket price..... You can use a flat average which is the easiest or make a few assumptions about how much people will spend. The assumptions should be based upon your own menu pricing and specific offerings. For example, say 10% of the customers add a muffin or bagel to their order. This would raise your average sale. On the other side is that occasional customer who orders brewed coffee. Perhaps this is 5% of the customers. I use $3.50 as a flat average on my projections.
- 11-13-2004 02:13 AM #5
If you cannot afford to set up shop then don't open your doors, or at least scale it back to keep your doors small so you can handle the business.
I'm finding my approach to be more old fashioned, and in fact, eccentric at this point, but for the ultra conservative you gotta give it credit.
Seed "loaned" capitol verses have on hand chunk of cash.
When you pick up a loan for your operation, they are charging "less" then credit card rates, but more then mortgage. Likewise, the longer the term, the more money they make out of it, and in fact, when it's all said and done, you are looking at an average rate of 33% mark up from the initial loan and this is being paid off in 3-7 years, so you have to take this into consideration before you decide to "finance" your way to the future.
I suggest going one of 2 routes and they both hinge upon what location, gig, or general actual nitch you are filling can handle you and you alone in a unique way can fufil, and even then only if it proves adventagous as well as generally accepted in order for it to fly.
So, in case you haven't figured out my point of view by now, buy directly what you can afford, even if it's a used, as long as it can take care of your direct short term application. From there, take it's profits to upgrade. If you never lose sight of that ideal, you'll do well and of course will turn into a working, high end operation.
- 11-15-2004 09:52 AM #6
I agree that one should not finance 100% of a business such as this and maintaining cash flow is priority number 1. However, the statement about 33% average rates on loans is very misleading. No bank will charge 33% apr on a loan. If the risk is that high then they will just not do the loan.
There are a number of factors that determine the rate on a loan.
(1) Is it a term loan or a line of credit?
(2) What is the length of the term?
(3) Does the borrower want floating rate or fixed rate?
(4) What type of borrower is requesting the funds? Individual or corporation?
(5) What collateral is pledged to secure the loan?
(6) Are personal guarantees provided?
(7) How much equity will the borrower have?
(*)Is it a startup Co. with no history or an existing business with a track record?
There's more to it than this but I think everyone will get my point.
- 11-19-2004 07:43 PM #7
Hello, I'm new to the form. I have been reading through all the postings and thank everyone here for all the valuable information. I am considering opening a drive thru espresso stand on the east coast. I'm new to all this, but am serious about this venture. Of course my head is swarming with questions and concerns. I have the Drive Thru Start-Up Guide from E-Imports and have ordered two books from Bellisimo. Any help that anyone might have regarding writing a Business Plan, I would sure appreciate. Thanks again for all the great input ~ this is an awesome forum.
- 11-27-2004 11:37 AM #8
Chairs and Tables
Were in the middle of planning. Is it realistic to find chairs for less than 35 each, that look pretty good. We are having a hard time finding some good used furniture, in bulk. Thanks
- 11-30-2004 05:17 AM #9
UK Coffee shop
We're looking to set up in the uk (V excited group of friends) - any1 from uk with help for business plan etc
This is a gr8 site hope some1 has some tips
- 12-31-2004 01:12 PM #10
Here is a link with lots of biz plan examples, there are at least 3 or 4 food/bar/cafe plans you can model after.
Good luckYou want cream and sugar?
NO COFFEE FOR YOU! NEXT!
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