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Starting a Coffee Shop

This is a discussion on Starting a Coffee Shop within the Introductions forums, part of the Information category; Hello - I am brand new to the forum and had a question to ask. I'm sure this is not an uncommon question, so I ...

  1. #1
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    Starting a Coffee Shop

    Hello - I am brand new to the forum and had a question to ask. I'm sure this is not an uncommon question, so I apologize for the redundancy.

    I am working toward opening a coffee shop/lounge. While trying to budget starting costs, I'm finding a HUGE variation in machines, rent, fixtures, etc. We are in the Nashville area and there are already 6-7 really good and apparently successful coffee shops in the city. I have a small-scale coffee shop in my home for family and guests with a commercial FETCO brewer, and plan to make sure the equipment in our retail location is the best quality as well. We are VERY particular about pure water, organic & fair trade coffees and teas, equipment quality and longevity, etc.

    With all that being said, we are on a very tight budget to get this coffee adventure started and open for business. We (my wife and I, and our 4 grown children) are coffee purists. We also love teas and the many benefits of herbs and natural benefits of various mixtures. Coffee is more our passion, however. The real QUESTION is, how much money do we have to have in the bank to get started on a very limited scale, that we can grow over time as profits increase? I work in the medical field and plan to continue that income while this coffee dream takes hold and begins to grow.

    What is a reasonable price range for the following items?
    Equipment brands and costs
    Retail location rent cost
    Coffee costs
    Fixtures (tables, chairs, front counter, etc.)

    How do you know if an area is already saturated enough with coffee shops?
    How do you know if it's working or that it's time to throw in the towel? (Other than running out of money, of course)
    Are there any words of wisdom anyone can offer that I haven't mentioned?

    Thank you for your replies and help. I will keep you all updated as we make our final decisions about moving forward with this new chapter.

    Mike
    LongLiveTheBean

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  3. #2
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    Mike,

    As someone who would rather see someone succeed rather than fail, I cannot say strongly enough that until you have enough money to start this venture, don't. Simply don't.

    You cannot start a business if you are worried about nickel and dime-ing everything. You certainly should not skimp on equipment, and if you are concerned about spending (for example) $12-$15K on an espresso machine vs $6-$8k, you really shouldn't be opening a shop at all. If $10-$15K here or there would keep you from opening, then you are not ready. It sounds like you want to do things right, so take your time, make sure you have plenty of liquid cash, DO YOUR OWN RESEARCH, and prepare properly over the next year or two.

    The only time you would ever need to throw in the towel would be when you haven't taken the proper time to learn, understand, plan, and execute properly. I had no doubts, no fears, and I knew that we would be successful. And we have been. But you have to be committed. Have a well thought out and researched plan, execute that plan, and continue to improve both your coffee skills and business acumen week after week, month after month, and year after year, or there's no point starting at all.

    Those who fail failed before they started. Succeed before you start, it makes it much easier.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    twitter.com/caffedbolla

  4. #3
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    I'm thinking out opening of opening a small roaster shop and I just attended some low cost classes through the local small business development center. They were pretty good, helped getting a business plan started and got me thinking about all kinds of stuff that wasn't on my radar.
    I would highly recommend it.

    This forum is great and you will get some good advice too.

    Adam

  5. #4
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    Hey Mike,

    I have no experience opening a coffee shop, but I have seen a lot of success and failures here growing up in San Francisco. There seem to be 3 different combinations that work.

    1) Large shop, lots of initial funding, high grade everything, lots of space for people, wireless internet, etc.
    2) Medium size shop in good neighborhood with lots of foot traffic, decent food and coffee for cheap. Adding in board games and catering to allow hanging out is always good.
    3) Small shop, limited options for drinks / food, but do them well! This one is getting more and more popular.

    It sounds like 3 may be your best option to start. You could open a shop that does just "cup at a time" pour over coffee which is big here in the city, but still relatively new in some places. A lot of people use the Melitta cone but I personally like the Quick Drip (small manufacturer whose owner runs a little shop I go to) as it takes a lot less time and I can take it anywhere without he fear of breaking (stainless steal). Provide a limited number of pastries (that are good) and tasty coffee at a decent price, with low overhead and you can start something without the cost of espresso machines.

    Just my 2 cents.

  6. #5
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    Mike,

    I am sure you will be purchasing coffee from the good local roasters.
    Find the one who has good reputation and consult with them.
    I have my very bias opinion about the coffee house and how they should be set up with equipment but the local roaster have dealt with all of them from small to large so they will have better idea.

    As far as equipment goes, you should decide either purchase or lease ... If the purchase is the option, you could look into used stuff.
    You will need large fridge, freezer, under counter fridge, under counter dish washer, cold espresso base drink maker, and tons of other equipment that you can purchase used.

    As far as saturation of business, check out what your town is offering and offer what they don't have.
    Most of the town do not have high end coffee shops, single origin coffee, or even a good fresh roasted coffee.... Find out that is not offered there...

    Good Luck

  7. #6
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    Good luck with your venture and welcome to the forum!

  8. #7
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    Mike,

    Re: What CoffeeJunky wrote.

    Be aware that not all local roasters are good. Most local roasters happen to be poor to adequate. Sometimes your best move is to seek out a great roaster that's not local. If you are using the same beans as any of the other shops in your area, then, immediately, you have lost a chance to differentiate.

    When we started we made a conscious decision to not use anyone local. First and foremost, there wasn't anyone exceptional. And secondly for the reason mentioned above. After a year and a half, we started sourcing and roasting our own seasonal regional, and single-farm coffees.

    Start with superior ingredients.
    Last edited by John P; 02-11-2013 at 05:41 PM.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    twitter.com/caffedbolla

  9. #8
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    John,

    I was not talking about just any local roaster....
    "Find the one who has good reputation and consult with them."

    The local roaster = Any roasters who are not out of town and take 2 weeks to send you the finished product. Also roaster who is ready available to help you.

    I think reputation is very important as far as the roaster goes.
    If there isn't anyone local, I can recommend you one.

    Good luck

  10. #9
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    Another thing about coffee business, I don't think you need to be exceptionally better then anyone who is in your area. You just need to be better or sometimes if you are equally good, you have product to sell.

    Some might disagree with me but if you have convenient location, decent product and great marketing, you will have good turn out most of the times....

  11. #10
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    CoffeeJunky,

    Getting people through the door is the easy part.
    Creating a place worth going out of your way for is something else.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    twitter.com/caffedbolla

 

 
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