Cafe owners advice?

sistabarista

Hey guys, this might be too broad a question to really address in a single thread! But I have spent some time over the last year and a bit working on a few different business plan scenarios. Those of you who now have an established business, did you write a formal plan and if so how well did you stick to it!? What are some of the 'unexpected' expenses or hurdles you came up against along the way? Hubby and I have considered and researched a few options:

1. A 'hole in the wall' cafe in the CBD (regional town of 130,000 ppl) catering for office workers on 'coffee runs'
2. A coffee van for doing functions but primarily based in our botanic gardens/playground which is ALWAYS packed with strung out parents! (God forbid though I should become the next 'expresso' van. *cringe)
3. A weekly market stall at our BUSY local markets, selling coffee and coffee-analia. This would incorporate our own roasts, which we know VERY LITTLE about at the moment but very keen to spend time learning.

The first option is really where our hearts lie, and I know that a regular customer base is what a business lives and dies by. It is a long term dream so we are not about to dive head first into the deep end without doing our homework! But please, any pearls of wisdom would be truly appreciated. We are very much open to criticism from the get-go (constructive of course!!)  :coffee2:

Lacehim

I'm not a cafe owner, but just thought I would point out that option 1 is a office hours type arrangement, and options 2 & 3 could be combined, so get a trailer or a van do the parks, or the markets.  Markets are usually a weekend affair, and the parks during the week?  Do you have kids or other things to do at the weekends? I think before you take the plunge you need to research what the market is like.  If you set up at the markets, are there any other coffee sellers there?  Permits for selling out of a van at a park?  How much would a van cost etc.

sistabarista

Thanks L! All great points  I have approached council about doing the mobile thing and have been given some good info about permits etc. At the moment the markets only have one small (average IMO) coffee cart operating but nobody actually selling beans or any other coffee merch so we think there is a great opportunity there. We do have 2 young kids and hubby works full time atm so much to think about. Thanks again for the prompt reply.  ^-^

blanyon

Given your situation I would be very careful entering into a business which will take a lot of your time and energy leaving less for the young ones (yes I am talking from experience). You need to assess very carefully the whole risk reward thing, thinking about personal as well as financial. As for your question a good location, space and lease to me sounds like the best option for a bustling business, but if you want something smaller then the other two could be ok. Planning is essential so you can ask the right questions for you. Brett

RichardM

Woah, I hadn't noticed your location - Toowoomba. I know there are a lot of cafes here that come and go, and generally, it's the ones with terrible coffee that don't last. Places like Findo's, Firefly, Coffee Tea or Me (which has changed hands and had ups and downs) can do REALLY well. Chipironi's venture into Star Gardentown has also done well.  The ones in the same area that I haven't mentioned have not been mentioned for good reason! A few other cafes that used to do coffee runs etc have gone to having almost no coffee, and mainly doing take away sandwiches etc. It's a HARD game here, as people seem to be VERY discerning. Look at GPO Cafe - It was doing TERRIBLE coffee, changed hands, changed coffee, and the place is now busy again. Business in Toowoomba is a hard slog. It's very "cliquey". To me, the best way to gauge how people get coffee is to sit in Margaret street around the Ruthven street intersection for a few hours from about 7:00am through till about 11:00am. Watch people walk past one cafe to go to the other all the time. Work out what those others are doing RIGHT, and try and replicate/improve on it.

sistabarista

Thanks guys really appreciate the feedback - and yes Richard M I totally understand what you mean about Toowoomba. I have spent LOTS of time drinking and making coffee here, have tasted some awesome ones and some really really underwhelming ones!! :'( I know what 'style' of coffee a lot of Tba customers like. In saying that, the places my younger friends RAVE about I have visited and had a very average experience - but they like the place cos it's new and 'hip' but doesn't always mean they can make great coffee? But lots of things to consider, thanks for taking the time to share thoughts  we are prepared to move town!!!

askthecoffeeguy

For my money id go the coffee cart at the markets option - low setup costs and low overheads for a potentially lucrative return and it means that you can also potentially hold down a part time job during the week till you are set up From what I've observed there are a lot of folks doing market coffee badly, but for those who do it well it can be very lucrative (but do it for cash flow not to build resale value as I'd say it's pretty hard to sell a maket based business) And any profits from the market could go towards funding a more expensive permanent setup elsewhere Doing a business plan is crucial IMHO as it helps you to refine your though process and to do realistic cash flow projections to determine what your  break-even point is and how much income is required in order to be profitable - and to recoup your setup costs I would also put some time into professional development and training - to brush-up and improve upon your existing skill set - and i would advise getting yourself a business mentor and or a business coach When I set up my first cafe I had two mentors and a business coach - All friends of mine who are successful in their fields - and it took a lot of stress and worry out of the setup process as there was always someone experienced to bounce ideas off of I've been doing some consultation and professional development work for a cafe in Byron Bay, and I assisted them with their setup, bench layout, equipment choice, and aspects of their store design - and I know that having an experienced campaigner batting for them took a lot of the guess work out of the startup process So finally I would say if you cant think of anyone you would like to mentor you then think about paying an industry consultant to fine tune your thought process - it may seem like an unnecessary expense at the time but it could save you a lot of money in the long run...

sistabarista

Thanks coffeeguy, I hadn't considered the mentor issue! But that makes perfect sense. I can't forsee that we will want to focus on resale value of the business, as it will undoubtedly be a labour of love. But then again I'm learning that it's also wise to give my future self a 'heads up'. Hindsight is a great thing, if only it worked in reverse. Well if you're ever in SE Qld.......  btw I'm SO coming to check out Foxy Brown in August when I'm visiting Melb! Saving my first cold drip experience until then, although we will be freezing our butts off I'm sure  :D thanks again

mycuppa

Not wanting to sound negative, but please be aware many markets these days have a long waiting list of coffee carts waiting to get a shot - particularly the good markets, the existing operators don't want to give them up and they certainly don't want more competition. How do I know ? because I supply quite a few coffee cart operators and I have the feedback first-hand. For some markets, the position is very important to capture a sale. This may be isolated to Melbourne and an example is there are too many farmers markets - some are quite small and getting in to run a coffee cart is almost impossible - regardless of the quality from the incumbents. I'd be careful in checking out the availability of "spots" before you launch into it as you will still need to spend quite a few $$ on setting up a compliant cart operation. Also bear in mind that once you get a gig, you are theoretically obliged to setup every time, rain, hail or shine.

sistabarista

No, realistic is not necessarily negative! It's all the kind of info I was looking for. This forum is the only place I have been able to get any honest answers so far. Appreciate it ;-) cheers! 

Koffee_Kosmo

on 1329742281:

No, realistic is not necessarily negative! It's all the kind of info I was looking for. This forum is the only place I have been able to get any honest answers so far. Appreciate it ;-) cheers!

I wrote to you on your I'm new here post, that we were a friendly bunch with lots of cafe owners as members Glad your Crema membership has given you some honest answers My contribution to this thread is simply this 1) Always go into business with both eyes open 2) Don't get crippled with high rent & debts KK

UNM

I have no experience running cafes, but do run my own business, so this may or may not be relevant to you. I see lots of excellent advice already posted. A business plan is essential. It can be a few sentences, or a huge undertaking, depending on what you want, but you need to have some concrete idea of what your business will be like initially and how it will be developed over time. Plenty of websites will give you advice on writing a business plan and plenty templates available. Choose one that you are comfortable with. Refer to the business plan at intervals and update it - it is not a fixed document but should change over time. Marketing is critical and is not the dirty word some seem to think it is. A business mentor is an excellent idea. Here in Victoria we have a govt managed scheme for business mentoring (sbms.org.au) There is probably something similar where you are. State governments generally offer good advice and assistance with starting up a business. Be aware that at some point you will probably believe that you made a horrendous mistake and want to get out. Most people go through this stage - it may just be a brief phase, or you may really not be suited to the lifestyle, but there will be times that it is not the 'labour of love' you expect. Plan for this and how you will cope with it. You can then make a sensible decision if you should continue or get out of the business with your health and sanity intact. Many people consider it a personal failure to quit a business that is not suited to them. In fact the reverse can be true.

askthecoffeeguy

Lots of good advice here to which I would add where possible be sure to have a financial buffer to get you through your first and Possible second year of trade entact Unless you have a captive market (university cafes / train stations / shopping malls etc as long as there is not too much competition )  you are probably  going to need to allow time to build trade - which means that cash flow may be unpredictable especially over the winter period So having a financial buffer (ideally a 'spare' ten grand plus in the bank) will take a lot of pressure off if there are unexpected expenses or if trade suddenly drops off And do plenty of trial runs prior to opening to ensure that your procedures are adequate to cope with even the busiest rush without compromising either product quality or customer service Where possible I would also recommend a 'modular' setup that ailows you to mix and marry and change things up a bit should the need arise to do so once business picks up a bit Hope this helps sorry for any typos writing from my iPhone ! Cheers, Pat

sistabarista

Seriously thanks again everyone, this place is a goldmine! I can't believe I didn't discover the forum earlier it might have saved me some sleepless nights racking my brain/worrying about details that are outside of my experience. I am transcribing all of these tips into my handwritten journal - kind of old school! Love technology but somehow get my head around things better when it's in my own handwriting...anyone else like that? I believe my strengths lie in the systems/procedures, branding, customer relations and importantly the coffee-making! But I certainly have much to learn when it comes to the financial aspects. Lucky for me, my other half is an accountant! We are not under any illusions about how hard it is going to be - I've been working in the industry for nearly 15 years and have had plenty of time to get jaded by it! There have been days I have gone home so exhausted I literally can't move (8 hour shifts @ 8 months pregnant!) and yet I keep going back for more  ??? I LOVE COFFEE!!! so I'm praying that years of faithfulness to my employers and an insatiable desire to know more is going to pay off for me. In my other role as a teacher I do relief work for one day a week and probably make the same income as I will from this business! Call me crazy but there is a great quote I love which says "If your dreams don't terrify you they're not big enough".........  Anyway, on a completely practical level, have any of you had experience with leasing equipment? What do you think of it?? Is it better to buy coffee machine/fridges/POS outright??? Cheers  :-*