Please help. Need feedback on possible space

[sld]

We are looking at opening a coffee shop in downtown Kansas city. The bldg we would be in will be renovated for lofts and office spaces. The owners are willing to do the complete build out and abate our rent until they've completed their lofts. (anywhere from 3 to 4 months free) The problem is the space is 3,000 sq ft and $3,000 a month. K.C is in the process of revitalizing our downtown area but as for now it's really only busy during the day. There are two huge office buildings across the street and we were told that a local college is also putting their satellite program across the street with at least 400 students. We plan on serving some food sandwiches, apps, etc and plan on getting our beer and wine license. Everything is great except the price (which dosen't include utilites). I am also wondering if it might be too big. We don't want it to look empty. Any suggestions would be greatly appreciated.

 

[cafemakers]

Choosing the right location for any new coffee shop is a matter of determining the overall value and potential return on your investment. Your $3k monthly rent could be a bargain if you are regularly serving 600+ beverages daily and will be a far better investment than a $750/month location serving only 50.

Office towers and college classrooms are definately positive features, but you may wish to have an outside consultant advise you on the true potential. For example, if you were to learn that the traffic count could not possibly support your overhead, it would be better to look elsewhere.

Assuming the location is projected to be a good value, you will also need to be particularly careful to allow for adequate capitalization to get it running. Those extra rent dollars per month will add up fast as you determine how much capital to have on hand until your business is self-sustaining.


Best regards,

Andrew
Cafemakers

 

[Polo]

It is hard to say if $3,000 per month is good or bad. The proposal is basically $12.00 per square foot for downtown KC. You should check with a couple of commercial real estate companies to see what similar type properties are goin for. The building condition will play a big factor. Also, this sounds like a tripple net lease. This means the landlord will pass through all costs incurred including insurance, taxes and CAM (common area maint.) to you. Thus, your $3,000 could easily become $4,000 or more per month once the extra costs are added in.

Don't let the cost of the premises be the only factor you consider. The office buildings nearby sound like a good customer base provided they know you are there. Is H&R Block in this area? Also, the college sounds like a good draw. Is it a CC or University of Phoenix? Will they offer evening classes? I live in Wichita so you can call me if you like. (send a pm)

Mark