IS anyone REALLY successful running their own coffee shop?

[poeticdiabetic]

OK, I've been really thinking about this:

I live in a suburb in the South. I don't have a lot of money, but I do have a commitment to get some money from a friend. And I make about $65k a year- which isn't a whole lot in my neighborhood.

But here's the deal: I stumbled onto a space where someone built-out a coffeeshop and just left. It's furnished. It has the equipment (minus the 3-tub sink, hand sink, icemaker and mixer.) So it's basically "bring your coffee."

Also I've found out where the former owner went wrong: She came into the shop around 11AM or noon. She left around 5 or 6PM. It all depended upon how she felt that day. Plus, she sold coffee, tea, light sandwiches, soup, ice cream, and other stuff. Oh, and you couldn't identify if they sold coffee if you just heard the name (even though the name was kinda clever.) In other words, she wasn't selling hard.

So if I went into the space, the furnishings, equipment, and everything else is right there for me. All I need is those mentioned items, inventory, and customers- if I took the plunge.

But here's my question: I love coffee. I'm a snob. I have a great roaster that satisfies my snobby attitude. But I'm used to making at least $65k (which is a sacrifice, due to the economy.) The town is a college town. There's no "Hangouts" out here. And I have strong ties to the arts community. Marketing is what I do, so marketing will be there.

But I'm hesitant. Why? Because I know of no one who makes good money selling coffee. And when I say "good money", I mean at least six figures. My personal belief is this: If I go into business... any business... I want to be successful, period. Is there anyone out there that's successful financially in this business? Today?

 

[CCafe]

You can keep on a dreaming about being your own boss then. Its possible to make that type of money over time. But you have to be willing to work really hard at it as well as being extremely flexible and know that what little free time you have now will be spent growing your business. Your going to need a lot of patience too.

If you do open your shop don't expect to start seeing the black for your first couple of years.

 

[Tophie2]

This is a question that I have asked several times, as my wife and I claimed 65k in the real world. When I pursued the coffee shop, the previous owners had 6 yrs of tax returns claiming 6 figures.

As far as asking anybody on this forum it seems they do it for the love.

As far as I am concerned, I would rather do something else 100 hrs a week if I wasn't concered about making money.

So lets do the math, open 7 days a week 363 days a year. What would you need to do to make your goal? plus rent, plus utilities, plus gogs,plus matainance, plus waste, plus permitting, plus licencing,plus buidlout,plus advertising,plus labor,plus equipment, plus signage,plus decor, plus,plus,plus.................................................................................................

 

[caffe biscotto]

I think it's reasonable to say that if you're looking for six figs in salary, your shop would have to be pulling in seven.

 

[poeticdiabetic]

I understand about it taking time to make success. That's not my question. Plus, I understand about doing it for love, as well. But I'm also a realist. I understand that you have to eat, pay your mortgage, clothe yourself, etc., and $30k doesn't do it in this neighborhood.

The upside is that the build-out's done. The equipment (except for a 3-tub sink, handsink, ice-maker, and mixer) is in the shop already. The furniture is in the shop. All I need is those equipment fixtures, some coffee, and I can open up. And yes, I know about advertising costs, but my marketing will be event driven, and I have the network to bring folks in.

My question is this, realistically- if all of this is done, can I make over $65k in profits first year? Hard work is hard work.

 

[caffe biscotto]

Of course, we'd need to know more about your particular situation...

Since it's an existing shop, you may be able to provide the following:

- Last few years sales, gross versus net
- Estimated expenses
- How many employees besides yourself
- Overhead & COGS
- Estimated traffic per day
- Menu (to expand or contract?)
- Your local competition
... To name a few.

In my experience, the profit does not go to the owner in whole, but in part, due to the constant need (and desire) to reinvest back into the shop, to grow, this will cost part of your profits.

 

[Tophie2]

If you do 65k your 1st year,PROFIT, tell us how you did it. I stepped into a great location, a former coldstone creamery, buildout complete with everything, still cost me 65k. Im just saying. You sound convinced it will work, go for it.

 

[poeticdiabetic]

Well,

If we did it, I would have to have it fully staffed so I can keep a day job. Since I normally work from home, I can still be in the shop for hours and hours. Heck, I have worked for long periods of time inside coffee shops already.

Plus, it would be cheaper to staff the place fully instead of me being there alone, pulling from the profits to pay my mortgage and living expenses. I think I can staff it for about $3400 a month. If I came in alone, I would have to clear about $4500 a month.

 

[caffe biscotto]

Hey, if the customer base is already established and you offer an exceptional product, things could be quite promising. You, being in marketing already too, would have an advantage over most small businesses just starting out. Otherwise, start ups are often in the hole for awhile before realizing any profit at all.

Where in the south are you anyway?

 

[Tophie2]

My opinion would be to forget the staffing for a while. You have to be onsite, espescially dealing with cash. This is VITAL. Hire a bunch of kids and see what happens,lol.

 

[CCafe]

Well then my honest opinion is no there is no way your going to pull $65K in your first year. Unless you have something to offer that stands out far from any of your competition I don't think you can do it.

Right now they are forecasting that were currently riding that calm before the storm. Not to be rude but I don't think the shit has hit the fan yet. We're still sliding down the hill and I think we have a ways to go before this ride is over. So I don't think this economy is going to allow you to make $65K let alone 40 or even 50 on your starting year.

 

[John P]

Unless you are in a high volume coffee centric market, taking home $65K during a good economy is dreaming for your first year.
Plan everything for efficiency and minimal waste. Spare no expense on your product or it will show. Definitely make sure your barista and coffee skills are up to snuff. This economy is great for those who are the exception rather than the rule. Be exceptional.

AND be patient. Rome wasn't built in a day.

 

[ElPugDiablo]

If we did it, I would have to have it fully staffed so I can keep a day job. Since I normally work from home, I can still be in the shop for hours and hours. Heck, I have worked for long periods of time inside coffee shops already.

Plus, it would be cheaper to staff the place fully instead of me being there alone, pulling from the profits to pay my mortgage and living expenses. I think I can staff it for about $3400 a month. If I came in alone, I would have to clear about $4500 a month.

Unless you can find incredibly dedicated staff right off the bat who are willing to collectively make $3400 a month, most likely you can't, don't do it. By the way what is the size of the college population?

 

[poeticdiabetic]

The closest college is up the street with a student population of 36,000. There are about an additional 4 colleges within a 10 miles radius, though. The total student population is over 60k.

Also, I'm getting 2100 sq. ft. for about $1750 a month. And even though I want to build staff, I will be on-hand quite often. Plus, I willl have cameras connected to an uplink so I can record the cash-flow. That uplink will be recording from my house. (I market technology.)

And here's the other big cog in the wheel: There's absolutely no indigenous arts outlet within 20 miles of the place. All of the arts outlets are traditional art galleries, theatres, etc. There's no place where musicians can come, plug in and collaborate. There's no place where you can hear some good spoken word. And there's no place where you can get some of that just by walking in the door and getting a cup of coffee. It doesn't mean that other places didn't try. It just that they don't have the network of artists that I have.

So, for full disclosure of my marketing strategy: Either my wife or myself will be on site for probably more than 10 hours per day, most days. But I think that it would be less expensive to staff the place while I work a job instead of trying to take money out of the business for my expenses. Therefore,I can have a much longer position.

In the meantime, I can be there to ensure quality. I will not cut corners on taste. I will not roast my own beans, but I'm setting up with the same roaster who supplies beans for the coffee shop that has been voted "Best Coffee" in our city for the past 4 years straight. As a matter of fact, they supply coffee to 3 of the Top 10 in the city.

But additionally to that, I will make sure that this place will be THE hangout spot in the County. It will be the coolest place for miles. It will feature and support the indigenous arts community and it will have it's own Internet TV channel and social networking site.

In short, I want to build a community surrounding the coffeehouse scene.

 

[caffe biscotto]

I really like this guy now...

You know poetic, so many people who simply "love coffee", think they can easily start up a financially rewarding coffee related business, without much planning. Members of this forum hesitate to be overly optimistic, as you may have noticed. If your business failed, you may feel as if you were ill advised by us or misled into thinking it will be easy. So, we tend to err on the side of caution. But you seem to have a well rounded & clear vision of what you want. Your expertise in marketing and technology should come in handy and I like the indigenous arts idea. I like your vision and I wish you the best.

Thanks for the info and I hope you will find the time to keep us up to date on your coffeehouse venture, in the weeks and months to come. Stick around this forum too, for the incredible amount of info and coffee industry professionals who are members.