Advice for Coffee Kiosk in a mall

Bjensen8969

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Sep 26, 2016
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Hello all, I'm new to the forum and the industry and hoping for some advice! I'm planning to open a coffee kiosk in a mall and would love to get some honest feedback from anyone who has been there, or in a similar situation. I've been blatantly discouraged from moving forward by a company we were considering hiring to help with our startup and training. This company specializes in helping new coffee businesses start up, I'm not sure if I'm allowed to name them. They also put me in contact with a mall kiosk owner from another state who is closing his shop after 4 years of poor sales, he was equally discouraging.

However, the numbers are still telling me this is a good idea. I'm currently a manager for another store (not coffee) in the same mall where I hope to open, so I have a fairly realistic outlook on what type of sales we can project. I've also met with owners of some other food-related kiosks in the mall (a pretzel kiosk, candy kiosk, and a gourmet popsicle kiosk) and they've shared their sales reports with me.

So here is a breakdown, and hopefully you all can help me see if I'm missing something big. I'm projecting around $16000 in sales monthly, that number should at least double, if not triple during the holiday months. Rent would be about $2000. I'm basing supplies on what the previously mentioned company suggested, and that number is 25% of sales (is this realistic?). And finally, I plan to work full time myself, and then hire 2-3 part time baristas and plan to budget 1800-2000 for payroll, not including myself (again, I currently manage a store in the same mall, so I belive that is a realistic payroll budget for this location). So, I am figuring a fairly decent profit margin for a kiosk business. I will also say that the kiosk owner who is closing told me his numbers were very similar to my projection (although he is in a much lower traffic mall). I don't plan to get rich doing this, but if I can work for myself doing something I enjoy, and be profiting $8000 a month on average (and that's a whole lot more than my managers salary I currently make), I am confused as to why the "experts" are warning me not to move forward.
ANY advice would be greatly appreciated.
 

JSACoffee

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Aug 26, 2016
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East Central Wisconsin
It might just be me, and I do not know the mall traffic, but $16,000 in monthly sales for coffee drinks seems like a very high number. At $4 a drink, that's about 130 drinks a day, everyday.
 

Musicphan

Active member
May 11, 2014
1,508
2
Kansas City
The sales projections seem high to me for a mall kiosk... at least if you are projecting around the 130 drinks a day. You have the benefit of a large audience but you are missing the morning commuter traffic (assuming your mall is normal and doesn't open til 9/10am). Visit other coffee retailers in a local mall.. count the number of customers they get.
 
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Bjensen8969

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Sep 26, 2016
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Thanks so much for the replies... but I addressed those concerns in the original post. As I said, I am currently a manager for another store in the same mall, so I'm very familiar with the traffic and those numbers are realistic, if even a low estimate for the location. I also stated that I have been given sales reports from other kiosks in the mall and those projections are on target with their average sales. That is why I'm posting... I've done that homework already and the numbers seem solid to me. Is there anything I'm missing? I'm hoping you all with experience can help me with some advice but please read my entire post!
 

JSACoffee

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Aug 26, 2016
34
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East Central Wisconsin
Well, I did read, and re-read you post( yes, all of it). The problem that myself and another mentioned is the sales number seems lofty, but you did your homework, so let's take that out of question. Are you serving an already established coffee roaster's coffee, or an off the shelf brand? I ask because it takes quiet a while to build a loyal customer base. Unless you can associate your kiosk with an established name in your area, it's a dream to think you are going to pull those numbers from day one.

For supplies, it depends what type of cups you are going to use. Let's say cups run .23 each. That's $30 a day for generic, non branded cups. Paper sleeves, napkins, 4 different types of creamer, 8 flavor bottles, stir sticks, filters, and of course the cost of the coffee to brew. Espresso machine? Coffee maker, hot water dispenser, quality grinder? Don't forget monthly service on these, unless you can do it.

The cost of supplies depends alot on information you didn't provide. Foam or paper cups, types of coffee drinks, ext. Figure out your menu, then the products needed to make them, then COGS, and i wouldn't be surprised if it isn't higher than 25% for supplies.
 
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Bjensen8969

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Sep 26, 2016
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Thanks JSA, I didn't mean for my comment to come off rude, I just wasn't sure if everyone caught that part of the original post since it was so long. I do appreciate the honest feedback. I am pretty confident in those projections, and the leasing staff at the mall has also verified that those are realistic projections. I understand the concerns over the fact that mall customers are not typical coffee shop customers (morning commuters), we plan to specialize in flavored espresso drinks and blended coffees, to better suit customers leisurely walking around the mall, than the wake-me-up's that a typical coffee vendor would cater to. However, there are several hundred employees in the building about 14 hours a day, and other than one fast food restaurant that serves drip coffee, there isn't anywhere else in the mall to buy coffee, so we're hoping thats where our regulars will come from. I am definitely planning to go with generic paper cups/napkins etc to keep overhead low. We have all of that information already in spreadsheets and put into a complete business plan with financing approved. I truly feel like I've covered all of my bases, and yet the coffee shop professionals I've consulted are telling us it's not a good move... which is why I'm so confused.
 

friedcoffee

New member
Jan 12, 2016
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India
If that are the realistic numbers, then it's a must take business. Additionally, you can have more products like muffins and cookies that will contribute more to your sales. With the food business plus good taste, I have never seen a business getting dumped.
 

Twidbin

New member
Sep 26, 2016
5
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Iowa
I own a small shack outside of a mall, has been there 12 years, great location, and I can tell you we don't come close to $16,000/month. We do good business, turn a profit, all that, but 16k a month is highly ambitious. Not to discourage you, but just give you something to relate it to with the whole coffee shop at a mall thing.
 

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