Is making a profit possible?

[Java Princess]

I''ll soon be opening my coffee shop and while I''m very excited, I want to succeed as well, so I''m trying to dot all my i''s and cross my t''s.

I''ve looked at coffee shops in the US, Mexico and islands in the Caribbean. Some were selling their shops only to sell their problems so I wanted to do this from the ground up and not inherit someone else''s headaches. Of course, I also don''t inherit their clientele either but need to build my on.

I''m still in the Caribbean and in a heavy resort community - and actually sitting in the middle of one of them...right on the way to the beach (someone has to live this life ;-). My clientele base will be resort workers and residents of the area. I will also draw from the resorts since none of them would know a good cup of coffee if it bit them ;-) even though this is a coffee growing island.

To keep competition from going into this area along with coffee, I''ll be serving bagels (almost unheard of here), breads, sweet rolls, soups, sandwiches, cookies, cakes, teas, smoothies, ice cream and offering hot spot Internet as well as computers for those without laptops. There are other services, but only due to the resort-type community. Still, it will be a coffee shop. Come sit, drink, eat, read, talk...take in the island and enjoy paradise.

Am I asking too much to see a profit in less than 6 months? The cost to do business here, employment law, pay scales, etc are all to my benefit. I''ll only be in debt $10k US. I''ve heard that it takes a year or two before owner break even. With my low debt will I have better luck? I will be charging US rates or resort-type for my services/products.

I know business but am still learning the coffee business. There are no other Internet cafes within a very large area and the resorts charge a fortune for Internet and VoIP phone use. There''s also, like I said, no bagels, fresh - good breads, sweet rolls, or anything bakery/pastry around.

There will be a learning curve, I know. But, I don''t want to mess up the good thing I have with having a business here.

Any guidance is totally appreciated. Don''t feel you need to cut me any slack. Its all education to me.
JP 8)

 

[futurecoffeeshop]

I'm pretty new but you'll need to give a lot more info. 10k debt-is that your total investment? If so, are you planning on serving espresso, because a decent machine will cost you 10k. If you provide more specifics you'll probably get some replies.

 

[crema123]

hello jp,

i too have been looking at coffee shops in the caribbean, mexico, and places in central america, and i have spoken with a few owners. the general consensus is that things like labor laws, wages, etc all have a heavy price to pay, though they are all in \"your favor\" low wages attract less motivated individuals, and retaining them is next to impossible. they tend to be lazy, and certainly don''t have the service skills to make your customers happy & provide good hospitality. that''s just one example .... as for the bagels, you may find importing them is next to impossible, shipping costs, unreliability, etc will set you back further.

i''m trying not to be pessimistic, you have a great idea, i just want to be realistic ... good luck, email me if you''d like some more information...

 

[Alun_evans]

Sometimes it is a case of swings and roundabouts. It is true that wages are low in developing (albeit paradise) countries. However there are often hidden costs to doing business that you sould check up on. Its not necessarily true that the people you get working for ouwill be less motivated, on the contary you may find you have an excellent selection of people to chose from. If you have a great concept, and an initiative that looks like a winner, you can get very good people- although you would be paying more than the average wage of course. The areas you should look further at are things like utility costs as well as the grey areas that often circle around you. In the US the cost of compliance, labor, insurances, taxation (local and national) are allvery transparent. In countries South (and East) of the border often the hidden costs can ammount to 20-30% of opperating income. This in itself negates some of the gains you may have forseen. It does not mean you are not ontoa winner, but it does mean you should look at working with a knowledgeable local partner in setting up and running the business.

You may also have to look at the profile of your business...for instance in INdonesia my market is pretty much expatriate orrientated, rather than local focused because the local taste for coffee is robusta, not arabica. Limiting yourself then to an expatriate market in a resort community means you need to certainly be offering product, but unfortuntley you do need to also be price competitive, at least while building the business up.

Anyway, good luck in Paradise...