How difficult is it to own/operate a coffee house?!


Question: How difficult is it to own/operate a coffee house?
For some time, the idea of starting up a "local" non-franchise coffee house has been lurking in the back of my mind. Recently, the most ideal location in town became available. Rent is reasonable. Foot traffic is extraordinary. There is no other comparable business on this side of town.

I have a little money to work with. Enough to get started. However, I cannot give up my full-time day job. With this in mind, it would be necessary to hire a manager/employee to cover the bulk of the hours.

A perfect candidate for this position is interested and available. This person has my complete trust. However, the business would still be owned by me.

Would it be lucrative to own and operate a business mostly limited to coffee and pastries? With only one person on payroll, would a business with such limited revenue potential at least prove to be able to sustain itself?

Answers:

If you don't have much money to pump back into the business, it may not be able to sustain itself for long. All food service establishments do not make much profit. Typically, nationwide, the average net profit for food service businesses is between 3 and 6%. This means that for every dollar brought into your business, only 3 to 6 cents is profit. Restaurants and coffee shops have very high over-head.

On average, most food service businesses need 2 to 5 years to establish a customer base to turn a profit. You'd have to have enough back-up money to keep your business afloat until you can establish a good customer base of regular clientele. A great percentage of food service business close their doors within the first two years.

Personally, I suggest you not open the business until you can help offset the risk. Write a detailed business plan. See if you can get a loan. Also, its a good idea to get feedback from other people who have the same type of business. With more information, you can make a better investment decision.

chef
culinary school grad
29 years in the industry



its not hard running one its just costly because there is a high rent and high speed internet cost and all you got to sell as a dependence is coffee and snacks and light sandwiches to make good on the over head so location is KEY when owning and operating one location it self will make or break you.
most often to start its dangerous to have that as your only source of income just for the beginning stage.



It sounds like you have thought this through a great deal and are organized. So far your plan sounds good, just bear in mind that you will still need to put a lot of effort and input into your business despite having a manager. However im sure you are aware of that so if this is something you really want to do I would say go for it.

Goodluck =)



I'm guessing it would be pretty hard since you have another job. you might have to put in some hours of your own time. but if your friend is helping you it coul be a do-able task this is just my opinion though



I dont think so , personally , there are already so many coffee shops and people make coffee at home anyway and you'll be competing with starbucks and caffeine is a strong drug and so is refined sugar.



You can't operate with just one person on payroll. What happens at lunch? When this person has to go to the restroom? When this person is sick? What are your connections for coffee suppliers? Are you reselling the pastries? Making them there? Get the costs for the coffee equipment, fixtures, point of sale equipment, and figure insurance (you have to have insurance). Figure in your rent, forecasted utilities and try to figure how many cups of coffee you'd have to sell to make a profit. Visit another coffee house, perhaps you can gain some insight about their operations. Since this place is not competition, perhaps they will be willing to share information with you. Also- you will need to prepare monthly sales tax returns and quarterly federal tax returns. I've had my own business and the only good thing about it was when I was able to sell it and walk away from it.




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