Hours of operation and paying myself

[CollegeCoffee]

So I'm at the very beginning stages of considering opening a coffee shop in a local college town. There is no local coffee places anywhere even remotely near it, and the only places really go get coffee are Starbucks (1) or a few Dunkin' Donuts.

One question that I have is about hours. I notice that a lot of coffee places close relatively early, 7PM, maybe. My first instinct was to have it open late, and I was thinking that my hours would be something like 5AM - 12PM. Especially in a college town where people are up late studying and need a place to use the internet and drink lots of coffee. Is it at all profitable to be open that late?

Secondly, my biggest concern is whether or not I would turn enough profit to pay myself. I have a nice job making $50k/year now, but I really want my own business. I need to continue making that salary. I'm perfectly fine with being the owner and the barista for a lot of hours. I have always worked crazy hours and I'm not afraid of a 60-80 work week. Do you think that with average rent/expenses and a decent amount of business I could afford to pay myself that. What do you guys personally pay yourselves? I know there is no "average" profit, because it depends on the location, the business plan and a whole lot of other things, but I'd love if you guys could share some hard numbers about roughly how much the shop made/you made last year.

Thanks! This seems like a great forum with a ton of information!

 

[Alun_evans]

There may be a few forum gazers who suspect your last second to last line id's you as an undercover IRD agent :wink: ... not me though!

You pose a good question...how much could/can an independent starting out realistically afford to pay themselves in the first year (or two)? I would say not much,cCertainly taking $50k out of a new op, no matter how succesful it is, would I say be pretty unlikely. I would say if you could pay yourself $30k, you would be doing well.

There is a lot of perceived glitz and glamour about having your own cafe, and I am sure you have browsed the site and read comments others have posted about this. As you mentioned, you do long hours... but really you are working 24 hours in the first year, often longer. All problems fall back to you- customer complaints, quality issues, supplier issues, accounting problems, acts of god etc. When you actually do the sums the average cafe owner works for nothing for at least a few years.

So... why do we all do it? I think the succesful owner goes into a cafe fuelled by passion buit with his/her eyes half shut. Success is driven by passion and doing the little things well. Those of us without trust funds (umm...thats probably all of us here) manage to scrap by.

I think it is wise to do what you have done and say you need to earn $50k... but I think it is very, very unlikely and should be taken into consideration before proceeding further with the cafe plan,

 

[caffe biscotto]

There may be a few forum gazers who suspect your last second to last line id's you as an undercover IRD agent :wink: ... not me though!...

Alun, is this to mean the IRS? If so, good one...

... One question that I have is about hours. I notice that a lot of coffee places close relatively early, 7PM, maybe. My first instinct was to have it open late, and I was thinking that my hours would be something like 5AM - 12PM. Especially in a college town where people are up late studying and need a place to use the internet and drink lots of coffee. Is it at all profitable to be open that late?...

I don't own a coffee shop, but I've always been told that if you're paying rent 24/7, it's better to stay open 24/7. This is extreme of course, because you could stay open all night, only make five bucks in sales, but incur the additional costs of being open... utilities, employees, etc. Otherwise, your rent and other costs stay the same, whether you're open 8 hours per day or 24 hours. Just something to ponder.

$50K salary? I think this sum, no matter what country you're from, is an unreasonable expectation for any small business. If you're in it for the quick gains, you should look outside of the coffee industry. Did I just say that? Isn't coffee one of the most valuable commodities in the world, second only to crude oil??? You're right, it doesn't compute. But, truth is, if you're in it to win it in the long run and your passion for your business is true passion, then you won't mind so much that in the beginning, your main compensation is the smiles of your customers.

Take the decrease in pay and make up the difference in other ways that aren't as important to you as your desire to own and operate your coffee shop. Trade in your car for a cheaper one. You won't need much money for going out anymore either, because you'll be too busy in your shop all day & every day.

Heck, I knew a guy who left a comfy $75K job to start his own small business to only earn a very small fraction of that, doing something he loves doing. There is a silver lining to this though.... You're not working for someone else and their dream. Think about what that means. Independence has a price and in your case, it may very well be $50K, LOL. Ha! At least for the first couple of years or so.

I say go get 'em!

 

[Alun_evans]

ha ha yes we say "D" as in department not "service" either way I think the words service and department are done a great disrespect by having the initials I.R in front of them!
you are right about the real reason for getting into coffee. it should not be for the dreams of pots of gold alone. Obviously all of us posting here who are in the business make something out of what we do, and we are not putting you off but just sending a friendly heads up. of course.. there may be more dough in dough (biscotti dough that is