I really need some info on specifics, espAnnual Income

[Buzzed Fae]

I'm at the end of my rope. I really don't know how anyone finishes a business plan when no one from their business is willing to talk to them. The story: I want to start a coffee house in a beautiful turn of the century house in a small town in Wisconsin. All the biz books I've been reading recommend that I find a real coffee shop that I can get some stats from, but no one is willing to talk to me, and I'm calling people up to two states away trying to get info. :roll:
The town has approximately 1500 people, and a large number of tourists during the summer. What I need to know is what approximately my Annual income will be? Approximately how much coffee should I expect to go through? In the business plan, do I include coffee expenses for a month, or for a year (for the loan)? Approximately how much is spent the first year for advertising? Exactly what liscenses will I need from the state (I am considering having a soup pot, possibly cold sandwiches, definately pizza, and baked goods (which will be delivered from the local bakery)? One company suggested a water softener--wouldn't filtered water taste better and be less expensive/lower maintenance? Do many coffee shops have security systems? I'm planning on having a vintage shop in the back--should I have surveilence there, but not worry about it up front? Do I even need a system? Can I buy used furniture (couch) or do I have to have new? Any good advice about insurance? How often would I utilize the accountant?
Any help you could give me would be extremely appreciated--you wouldn't believe how many people I've called that wouldn't talk to me, how long I've been working on this plan, how many times I've bashed my head against the wall out of frustration. Out of everything, the most important is that first question, that figure that the bank needs me to get my hands on--the approximate annual income.
I'll be sippin coffee and anxiously fidgiting while awaiting a reply. Please help.
Thanks again, Miss Emily M Drews.

 

[GeorgeW]

I'm in the process of opening my own cafe, while I can't give the truth from an existing owner, I can comment on what I've learned as a cautious prospective owner who doesn't want to lose all his hard earned cash in a disastorous venture.

A coffee shop is all about volume and you need to figure out how many prospective customers you legitimately think you can get in a day. From there you back out your material costs (coffee beans, cup & lid) to determine your average profit per drink. At that point you should be able to forecast some numbers for revenue - then back out your monthly costs and estimate your tax liability.

1500 residents in your town? Are there any other competing coffee shops or other businesses that serve coffee? I can only say from my own research but I don't see how anyone could possibly make a living with only 1500 prospective customers for the majority of the year, unless every single one of them was a specialty coffee drinker.

Maybe you get enough traffic during the summer months to keep you through the rest of the year? I'd try to be honest with myself when trying to come up with some projections on potential sales per day first. The rest of your expenses dont' matter much if you can only average 25 cups a day.

As far as used furniture, etc. Sure, there is no reason you shouldn't be able to use antiques or older furniture. Insurance, security systems, etc. Well that all depends on the area you live in - is there high crime, etc? Accountants? Well, they can be expensive for what you get, try reading a book like "the samll business survival guide by Robert Fleury" it has some pratical info on how to manage your cash and simplified accounting that you should be able to do yourself. Good luck!

 

[mikefly]

FIRST!!!!! take a deep breath lol......
next find out if you can get a state or local traffic count for the streets you can see from your shop, if not get one of those little clicker counters and conduct your own, not all day but pick a high traffic hour a low traffic hour and a couple of average hours now figure about 3-4% of those people as customers....now figure your average ticket i would venture to say if you have sandwiches that it could be upwords of $4-5 bucks.... now you can figure your food and coffee costs(paper etc) figure you rent, utilites etc.
now as far as permits im pretty shure you will need a standard health permit which will alow you to prep and sell food that you make or from other licensed places....yes get insurance if you have employes then you will need workmans comp....now if your doing this on your own on a low budget then get as much used stuff as you can my place is loaded with used stuff and we will use it until it is no longer useable then we will replace with new....and definitly use filter water....
try to work the place by your self as much as you can dont run out and get a bunch of employes!!!!!!

 

[ourcoffeebarn]

What part of WI are you in we may be able to help. I am in west central WI closer to Minneapolis/St Paul metro area. I have some profit plans I can talk with you or visit my website.

 

[Buzzed Fae]

Thanks for all the advise so far...

I'm online at least once a week (I surf from the library).
So I'll be checking in. If anyone has anymore helpful advise or new suggestions, I'm listening.
I can use all the help I can get. :wink:

 

[consciouscup]

Income

I signed the final bank papers today to open our shop in October in Chicago's NW suburbs.

You have three (and one-half) elements to consider:

1. Number of orders per day (average) and average purchase.
2. Cost of Goods Sold.
3. The rest of your nut! (Or, should it be bean!)

We bought two business plan packages and tossed them both out. However, we found Business Plan Pro to be very useful and it includes sample business plans that may match your business. We just had to export to Word and Excel to really refine the look as doing "what if" within Business Plan Pro is simply impossible.

Microsoft (damn those big Seattle companies!) offers some very good spreadsheets free if you have Excel. They are open source so you can modify them easily.

Good luck!

Jack

 

[mikefly]

we used business plan pro and 4 banks plus the SBA turned us down ended up scraping together hitting ebay and filling out credit card apps(do not recomend doing it this way lmfao)but we are just under a month open and are averaing $300 a day in sales and climbing

 

[barefoot]

I am NOT convinced that yu can make enough money with only 1500 people because you can not get enough customers. You need at least 100 customers a day at an average sale of $3.00 to equal $300 a day. will that pay all your bills? I doubt it! And that would mean that you would be getting 10% of the ENTIRE TOWNS POPULATION EVERY DAY! Not too likely.

So I would rethink the whole thing unless you can get daily access to another 10-30k people. sorry for sounding mean.

 

[consciouscup]

Desserts

Our shop will be adjacent to a 16-screen theater.

Does anyone have experience with a shop in proximity to a theater and the effects, if any, on evening traffic? Is it worthwile to stay open late ... perhaps at least on weekends.

We're considering having gourmet desserts and ice cream/sherbet/gelatto (I can never spell that right!).

Jack

 

[newcoffeegal]

Theatre traffic

Hi Jack,

It sounds to me like you are probably not going to get the kind of traffic you need to stay in business. One thing to think about is if you are adding specialty foods to the mix, your costs will increase and you will most like not receive a good return on your investment. Food is perishable (obviously) but most of that food ends up going to waste. I do not think that adding gellato and the like will increase your sales as much as it will increase your costs. Sorry to seem negative, but I don't think anyone on this forum wants to see a fellow coffee lover/entrepenuer (sp). not succeed. Especially in a town of only 1500. Best of luck to you!

 

[consciouscup]

Oops

I'd be more than a bit concerned with a market population of 1500, too!
Unless of course I could count on thousands of summer or holiday visitors a day and then kick back and relax off season!

My location has 18,000-20,000 autos a day passing. Many on the way to a commuter rail station in sight of our location. We'll be OK as soon as we bring the contractors down to earth a bit.

Here's OUR biggest mistake: Hiring friends/acquaintances to do the design and drawings ... we're now weeks behind and paying someone else more to clean up!