Coffee Shop!

[topher]

you wouldn't move right next door to a starbux? When Starbux first started expanding..they first moved to San Fransico(if my memory serves me right) A guy opened a shop right across the street from them.....he made this decision due to the fact that there was always a line out the door. People laughed at him saying he could never make it that close to starbux....he was making money hand over fist from the overflow...so it can be done....and yes you can make a good money....but if you look at statistics more people do ok rather than kick butt!! This has been a discussion on the forum before...and like I said that time...it all depends on what you think a lot of money is.

 

[blackjava]

This has been a discussion on the forum before...and like I said that time...it all depends on what you think a lot of money is.

This is very true. I would say a moderate income could be made.
I'm sitting in a small town (1000 people) On main street there is a perfect
building for what I would like to do. It is well built and empty inside.
About 800 sq ft. It has a washroom and a small area at the back to use
as a serving area. Could even set up a small ropaster if I wanted. The
front area is perfect for setting up a casual seating area.

The problem is I don't know if the town could support it. There are 2
resteraunts where people go for their coffee every day. Luring them
away might be a problem. Farmers are set in their ways :lol:

People complain about the crappy coffee they buy in the stores. But
they'd sooner spend $3 a pound on garbage coffee than spend $10 or
$12 a pound on real coffee.

So that's the challenge I face.

I don't need to make a lot of money.
I'm already semi retired and collect an early pension. If I could gross a
weekly profit of $200 to $300 that would be great for me. I can live
cheap in this town.
Its a retirement plan and I will give it a lot of thought over winter. The space isn't going any where.

Take care

 

[ElPugDiablo]

hahaha topher, at least this "roasting is easy, anyone can do it" thread is a lot more civilize than the "roasting is easy with Monster Roaster, and you are making too much" thread at Roaster Guild.

Blackjava, I have a shop one block from Starbucks, where I brew what I roasted. Prior to roasting myself, I bought from a high quality roaster where I paid about U$7.00 per pound. Currently C market is about U$ 1.00, and I have not pay a single bean that is less than $1.50, before freight. I think my average is $2.50, with some beans over U$4.00 a pound. After roast, one pound of green beans lost about 15% weight, so my $2.50 per pound green beans is now $2.95 per pound roasted beans. One pound = 2 gallons or 256 ounces or 32 cups 8 ounces coffee. The cost is about 10 cents per cup before cost of buying a commercial roaster, installation, electricity, cup, lid, milk, sugar, labor, waste and etc. Yes you can buy robustas cheap, heck, you can buy arabicas cheap too, but if you are going to buy roasted beans at U$ 4 a pound, or roast similar quality beans, you might as well buy Folger at supermarket. Nothing wrong in focusing on the "$3 a pound garbage coffee" market if that is your niche. But there is no way in hell you can get away with charging $1.50 for 8 oz cup with those type of beans.

 

[blackjava]

Currently C market is about U$ 1.00, and I have not pay a single bean that is less than $1.50, before freight. I think my average is $2.50, with some beans over U$4.00 a pound. After roast, one pound of green beans lost about 15% weight, so my $2.50 per pound green beans is now $2.95 per pound roasted beans. One pound = 2 gallons or 256 ounces or 32 cups 8 ounces coffee. The cost is about 10 cents per cup before cost of buying a commercial roaster, installation, electricity, cup, lid, milk, sugar, labor, waste and etc. .

What's really interesting about this is that you just repeated everything I said earlier. I said I could buy roasted coffee at wholesale from 2 reputable roaster for under $5 a pound. The minimum order at one is 5 pounds and the minimum at the other is 20 pounds. I also said that if they where selling it to me at $5 a pound it was likley that it was worth about $3 a pound. Lo and behold you come up with $2.95 a pound, roasted.
Now if I came to you and wanted 100 pounds, what would you sell it to me for?

I'm not sure what point you where making. How much do you sell your $2.95 a pound coffee at 8 oz a cup for? Not less than $1.50 I'm sure.

Maybe you could expand on what point you where trying to make.

 

[beefybean]

Bob:

There are a number of people who participate in this forum who own coffee shops for a living, roast for a living, do both, or consult to the industry- based on their years of experience of owning or roasting.

It would appear from your in depth and thorough research, and the volumes of data that you have supplied here that you have achieved a financial breakthrough and are about to topple Starbucks, where so many before you have unsuccessfully tried.

Congratulations and good luck.

 

[blackjava]

Bob:

It would appear from your in depth and thorough research, and the volumes of data that you have supplied here that you have achieved a financial breakthrough and are about to topple Starbucks, where so many before you have unsuccessfully tried.

Congratulations and good luck.

:lol: :lol: :lol: :lol:

Wow, is that ever funny. I don't doubt that the people on here have some knowledge and experience.

And I never said I could do better than Starbucks. I said I could make a
decent income. And I also don't believe most things are as hard or
complicated as some people would have you believe. And no one here
has yet told me what they think the mark up is on a cup of coffee.
Which is what this whole discussion started out to be. They have so far
avoided the question.

This forum isn't the only source of information. Am I so dense that I can't
find the volumes of information about coffee available on the internet for any one to see.

One thing I've learned in my travels in the last 50 years is that there are
very few true experts in this world. Mostly just people who would have
you believe they are.

Bob

 

[ElPugDiablo]

Currently C market is about U$ 1.00, and I have not pay a single bean that is less than $1.50, before freight. I think my average is $2.50, with some beans over U$4.00 a pound. After roast, one pound of green beans lost about 15% weight, so my $2.50 per pound green beans is now $2.95 per pound roasted beans. One pound = 2 gallons or 256 ounces or 32 cups 8 ounces coffee. The cost is about 10 cents per cup before cost of buying a commercial roaster, installation, electricity, cup, lid, milk, sugar, labor, waste and etc. .

What's really interesting about this is that you just repeated everything I said earlier. I said I could buy roasted coffee at wholesale from 2 reputable roaster for under $5 a pound. The minimum order at one is 5 pounds and the minimum at the other is 20 pounds. I also said that if they where selling it to me at $5 a pound it was likley that it was worth about $3 a pound. Lo and behold you come up with $2.95 a pound, roasted.
Now if I came to you and wanted 100 pounds, what would you sell it to me for?

I'm not sure what point you where making. How much do you sell your $2.95 a pound coffee at 8 oz a cup for? Not less than $1.50 I'm sure.

Maybe you could expand on what point you where trying to make.

You did not reading it well. $2.95 is my roasted beans cost WITHOUT other costs such as cost of buying commercial, read expensive, roasting equipment, packaging equipment, installation, maintenance, rent, utilites, insurances, wages, waste and etc. I would be crazy to sell 5 pounds or 100 pounds to you at $5.00 a pound. As I mentioned before, I bought from a roaster averages about $7.00 a pound, week in and week out, WELL over 100 pounds a week. So, if you were to come to me for 100 pounds of assorted beans on a weekly basis, $6.99 is the best I can do, and believe me, I am not making a killing on the deal. Now, if you just want generic Colombian, sure I can do better, maybe $5.50, but if you want aged Sumatra, my green beans cost is already over $4.00, you think I will sell them to you for $5.00 a pound? Let me put it to you this way, the material cost of a car, steel, plastic, and rubber do not add up to much money, maybe $200, yet GM is losing money selling cars at $20K. So how come their mark up of 10,000% is not working out for them? It is not as easy as you think.

I sell my 8 oz at U$1.10, which I can assure you, is pretty darn high for coffeehouse.

 

[ElPugDiablo]

Currently C market is about U$ 1.00, and I have not pay a single bean that is less than $1.50, before freight. I think my average is $2.50, with some beans over U$4.00 a pound. After roast, one pound of green beans lost about 15% weight, so my $2.50 per pound green beans is now $2.95 per pound roasted beans. One pound = 2 gallons or 256 ounces or 32 cups 8 ounces coffee. The cost is about 10 cents per cup before cost of buying a commercial roaster, installation, electricity, cup, lid, milk, sugar, labor, waste and etc. .

What's really interesting about this is that you just repeated everything I said earlier. I said I could buy roasted coffee at wholesale from 2 reputable roaster for under $5 a pound. The minimum order at one is 5 pounds and the minimum at the other is 20 pounds. I also said that if they where selling it to me at $5 a pound it was likley that it was worth about $3 a pound. Lo and behold you come up with $2.95 a pound, roasted.
Now if I came to you and wanted 100 pounds, what would you sell it to me for?

I'm not sure what point you where making. How much do you sell your $2.95 a pound coffee at 8 oz a cup for? Not less than $1.50 I'm sure.

Maybe you could expand on what point you where trying to make.

You did not read it well. $2.95 is my roasted beans cost WITHOUT other costs such as cost of buying commercial, read expensive, roasting equipment, packaging equipment, installation, maintenance, rent, utilites, insurances, wages, waste and etc. I would be crazy to sell 5 pounds or 100 pounds to you at $5.00 a pound. As I mentioned before, I bought from a roaster averages about $7.00 a pound, week in and week out, WELL over 100 pounds a week. So, if you were to come to me for 100 pounds of assorted beans on a weekly basis, $6.99 is the best I can do, and believe me, I am not making a killing on the deal. Now, if you just want generic Colombian, sure I can do better, maybe $5.50, but if you want aged Sumatra, my green beans cost is already over $4.00, you think I will sell them to you for $5.00 a pound? Let me put it to you this way, the material cost of a car, steel, plastic, and rubber do not add up to much money, maybe $200, yet GM is losing money selling cars at $20K. So how come their mark up of 10,000% is not working out for them? It is not as easy as you think.

I sell my 8 oz at U$1.10, which I can assure you, is pretty darn high for coffeehouse.

 

[topher]

Sigh....to the original post...yes you can get by...I am not saying that it is a guarantee....you need to bust your ass...work long hours...but you know what....if you have the passion do it...I have been in this biz since 89 and I can not imagine myself doing anything else...if you put the numbers down and they make sense do it.....if they do not make sense...stay in school.
Good luck
Topher

 

[blackjava]

You did not read it well. $2.95 is my roasted beans cost WITHOUT other costs such as cost of buying commercial, read expensive, roasting equipment, packaging equipment, installation, maintenance, rent, utilites, insurances, wages, waste and etc. I would be crazy to sell 5 pounds or 100 pounds to you at $5.00 a pound. As I mentioned before, I bought from a roaster averages about $7.00 a pound, week in and week out, WELL over 100 pounds a week. So, if you were to come to me for 100 pounds of assorted beans on a weekly basis, $6.99 is the best I can do, and believe me, I am not making a killing on the deal. Now, if you just want generic Colombian, sure I can do better, maybe $5.50, but if you want aged Sumatra, my green beans cost is already over $4.00, you think I will sell them to you for $5.00 a pound?

Ok, what you say is fair. I am also aware that all beans are not created
equal. I am also sure that the more your beans cost you the more you
will charge for a cup of coffee, right?

Here is an example of what I can buy from US roaster that has been
doing this for 12 years with over 150,000 customers. Keep in mind that
this is what the general public can buy for. If I was a commercial
customer with big volume I could get it cheaper.

Brazil Santos Coffee
5 lb. Bag $28.25

Colombia Supremo Coffee
5 lb. Bag $28.75

Costa Rica Reserve Coffee
5 lb. Bag $28.75

Honduras 'Silver Hills' Coffee
5 lb. Bag $29.75

India Malabar 'Monsooned Voyage' Coffee
5 lb. Bag $30.75

And the prices go up from there.

These are from A Canadian Roaster. 20 pounds minimum, 5 pound bags

Brazilian Bourbon Santos Fancy
$4.75

Colombian Supremo
$4.75

Costa Rican Tarrazu
$4.75

Guatemalan Antigua
$4.75

Honduras Macala
$4.85

Mexican Fino Ultura
$4.75

Nicaraguan Marango
$5.25

Panama Bouquete
$5.25

Santo Domingo Barahona
$4.75

Again, if I was ordering the volume you use I can get better pricing.

I only show you this to let you know I am not BS'ing on the price.

I'm sure your location and style of your cafe' is a factor in your price.

So what is the true gross profit on your cup of coffee?

And would you not agree that if I had a small shop in a lower rent location
with less over head that my profit on a cup of coffee would be higher
than some one in your situation?

Bob

 

[ElPugDiablo]

Bob, I can buy beans lower than that, but no matter how low, crap is still crap. It just doesn't make sense to cut corner in coffee when you are running a coffee shop. By the way are you going to dump your pot 30 minutes after brewing?

 

[blackjava]

Bob, I can buy beans lower than that, but no matter how low, crap is still crap. It just doesn't make sense to cut corner in coffee when you are running a coffee shop. By the way are you going to dump your pot 30 minutes after brewing?

You know you really dissapoint me. Is your ego so big that you think that
no one except you buys good beans. All of those beans I mentioned are
standard for every roaster I have seen. Of course they have more
expensive beens.
And what does throwing out coffee have to do with anything. I know that
you don't leave coffee sitting in the pot on an element. I also know that
keeping it in a caraffe extends the length of time it stays fresh.

And both of those roasters are quallified proffesional roasters. So please
stop with the insults.
I came to this forum hoping that if I asked enough questions some one
would give me the answer to the one question that no one wants to
answer. All you want to do is tell me I don't know what I'm talking about.
I know I have a lot to learn. And I learn by stirring the pot to see what
comes out. So far I have a lot of chaf.
Will any one tell me what the break even cost is on a cup of coffee?

 

[ElPugDiablo]

No insult intended. However, if you are going to stir up the pot, then you shouldn't mind people telling you how they see things. It doesn't bother me when you said roasting is easy, anyone can do it, even though I disagree. So when I said low price equals low quality, you don't have to agree, and you shouldn't be offended.

Regarding to mark up per cup, assuming you know cost per pound, how many cups per hour envision you are going to sell? How many people do you have on per shift and how much do you pay them? How much rent are you paying? Are you using single cup with or without sleeve? or double cups? What kind of lid are you using? Do you have ceramic cups? Do you throw away coffee after 30 minutes? Do you have new or used equipment, and what kind of depreciation accounting method are you using? Do you do re-fill at $0.50? Every shop is different, you need to answer these questions before you can figure your profit margin. If you have items that are labor intensive, you need to factor those in, if not, then your monthly expenses divided by how many hours you are open per month will get you the hourly expenses. If you know how many items you are selling per hours, and your hourly expenses, you should be able to figure out your breakeven point.

I hope that help, and peace

 

[topher]

I want to start off by saying I was not being negative...I was being honest...I see a lot of people think since coffee is hot(no pun intended) That if they open a shop they will become rich...like I said before yes you can make a living doing it...but it does take a lot of hard work(but as in anything...you get what you put in!!) As to the prices on your coffee...if you are roasting you can do better than what you posted above...I know you are talking roasted but think if you roasted your own and buy your Brazil for about $1.19-$1.24 with the shrink and labor you can still make a profit selling to other coffee shops or restaurants wholesale. You can also make a nice mark up on the pots to go.....

 

[blackjava]

I want to start off by saying I was not being negative...I was being honest...I see a lot of people think since coffee is hot(no pun intended) That if they open a shop they will become rich...like I said before yes you can make a living doing it...but it does take a lot of hard work(but as in anything...you get what you put in!!) As to the prices on your coffee...if you are roasting you can do better than what you posted above...I know you are talking roasted but think if you roasted your own and buy your Brazil for about $1.19-$1.24 with the shrink and labor you can still make a profit selling to other coffee shops or restaurants wholesale. You can also make a nice mark up on the pots to go.....

Thanks to both of you.

I understand that there are a lot of factors involved. Topher, you described exactlly the type of set up I would like. Learn to roast and sell fresh roasted coffee and sell it by the cup. Thermos fulls to go is also a good bet where I am.
Where I am at, if we where both selling the same coffee by the cup and also roasted coffee, my profit margine would be much higher than yours.
I'm talking about a 1 1/2 man shop. I can set up a small coffee shop with very little over head and manpower. Getting the proper equipment would be the biggest initial investment. I wouldn't get into all the extras that you might have in the city. I assume you are both in a city.

Thanks for not booting me off :lol: