Low cost startups

[Bigdog]

Hey all... I'm new here but I've been in the coffee business before, and having just retired from a couple of careers within Government I am opening up a coffee bar.

I am a great believer in low cost startups and I shudder to see what some people are contemplating as initial costs. Either they have way more money, credit, good friends or wealthy parents than 90% of the world, or they are hiding drug money. :shock: I for one think that low cost startup, used equipment, low rent, excellent location and maximized sales, coupled with local community participation is the way to go. Throwing buckets of money at a poor location, shiney brand new equipment or hiring a large number of staff will not necessarily make a success of your business. In fact it puts you at a disadvantage right off the hop. Every dollar you spend needs to come out of your profits... do the math.

Anyhow, I wish everybody lots of success, I'm just trying to point out that I think we can all get up and running for a lot less than some people are talking about. I for one don't have the backing of the big chains, nor the luxury of having 4-6 staff to sell my coffee. I'll be in there grinding and serving, myself. And loving it!

I love this forum... the information here is fantastic! Let's go sell coffee! 8)

 

[KG]

I am just begining the process as well. What do you think your intial cost is going to be. I am trying to go as low cost as possible, but things add up quicklly.

For example every good location I have found also has a high rent.

 

[Bigdog]

Well, you know, rent is one of those things... some people have a formula for figuring out how much they should pay and I guess I do too. My figuring goes like this: How many days a month will the store be open?
Divide the rent by that number which gives you a daily rent figure. What is the profit on the most likely barebones product sold? Divide that into your daily rent figure, and that gives you the number of units to sell just to open the doors. Example... open 25 days a month... rent of 2000.00 equals $80.00 a day for rent. Profit on 12 oz coffee with no cream or sugar = $1.00. Theerefore I need to sell 80 black coffees a day. Just to keep the doors open! So you can see the rent to profit relationship here... and I wouldn't pay $2000.00 per month for rent, so on to the next location.
Of course you need to look at all your variables with traffic being number one... lots of traffic= lots of potential. But remember potential isn't money in the bank... you still have to convince people to part with their dough for your product.

Hope that helps...
Geoff

 

[yumsetti]

Hello,
as for start-up costs, I am looking towards $50,000. That is to buy and renovate a beater in a small town and get used equipment. However, I liked the location because it has two apartments on top, another source of revenue. I would like to hear if anyone else has apartments bringing in revenue. It would add a whole other aspect of stress, but I like stress.

 

[dragonflydesserts]

start up costs

We just finished renovation and marked our first day of business last Wednesday.
Our startup costs were less than $50K. We were hoping to complete the shop for less than $35K, but our biggest surprise was the poor condition of used equipment in our area and in a couple of pieces that I purchased on ebay.
We bit the bullet and purchased a new espresso maker and ice machine. I think that it was well worth the investment and I dont have to worry abou them breaking down.
We planned to renovate and open in 30 days and it actually took 2.5 months.

 

[D JOSEPH]

WOW

The cost of my cafe is $90,000. Yes and start up cost is still growing. I do have other features like computers, lounge area etc. Another reason my cost is so high is that it is a new place, so I have a construction cost. Location is great. Alot of housing above store. Rent is 2,500. I have not looked into used equipment. One reason is that I want a warranty. Secondly, equipment may not be in good working conditions.