Replies to This Discussion

Permalink Reply by Mellisa on October 28, 2008 at 5:41pm

First off, Jessie, take a deep breath. I found (in Feb of this year) that you just have to do that.... you know... get away from the projections and go enjoy yourself from time to time, even if you don't feel like doing that.

Second, if you haven't already noted all the expected perks of your location in your business plan, please do so. It sounds as though you will be a part of a great downtown renovation and it will bring increased traffic. Maybe you can't do projections, but could you put up a table or open the doors or something else at that location and take photos of people stopping by to shake your hand and sign a patronage support petition? It would go a long way if you could also serve coffee and hand out cookies. Do time and dates and it will show the traffic now and how many people would have stopped in if you had been open. Then project how many people will frequent the new library and tap into your town's resources to get them to project for you how much that traffic should increase due to the renovations downtown. Now, you have walk through, the library's projections, the city's projections. If you need more, do a telephone poll. You know, it may take up your time, but people will remember the advance publicity and that you took the time yourself to call them and inquire if they would like a coffee shop and that you may have even asked for suggestions of what they would like that to look like and/or serve. They now have an investment in your business and will more than likely be new patrons once you open.

As for financing, I took out a second on my home (a small second), put in some savings, stimulus payments, took out a loan for the building and renovation, and tapped into our county's economic development council and the city's economic development council... both have grants for new businesses. Although I didn't qualify for a grant, they did give me a low interest loan. Also, start small. Buy used where you can. Alot of people will tell you if you can't afford it, don't even start. Well, I won't do that. I did it and I couldn't afford it. I'm glad I did it. I'm in a town of only 750 people and I'm making it even in tough times. Don't have any preconceived ideas which are set in concrete on what you will serve. Let the customers guide you. Of course, they will ask for everything, and you will have to see what they ask for the most. Maybe ask around... put several on a list and ask them to circle 3. You will soon see what they want. I have even had people ask the next time in the shop what the outcome of the poll was.... they are interested and like being asked. And the most important thing? Smile ALOT.... the more confident you are, the more confidence the bankers will have in you.

Best of luck. Write me if you need anything else.

Mellisa
Amped UP Cafe
Hales Guitars

Permalink Reply by missyyme on October 30, 2008 at 12:48am

Hi Jessie
Firstly, I would like to say Always keep your goal clear in your mind. And never lose site of that. It will happen!
I have been doing some research on opening a coffee shop. I found this link it might be worth having a look at.
http://snoozy26.coffeeshop.hop.clickbank.net/
I wish you all the best
Susie

Permalink Reply by Brian Muller on November 3, 2008 at 7:03pm

Jessie, Keep you chin up. Stay focused. I do recommend you buy this ebook. www.coffeeshopprofits.com I have been part of starting up two coffee shops. As employee, not owner. I was very involved though and saw things to do and not to do. I bought this book some time ago think it is very good.

But your question was very pointed about financing. Mellisa provided some great ideas. Let me tell you my top observations from both shops. They are not in any order.

- Make a list of all the supplies you will need to have. How much of each you need to have. When the supplier delivers. How much you will use between deliveries. Make sure your sales projections per week can cover the purchase of these.

- Ensure your weekly revenue projection is enough to pay everyone's salary, including yourself. Do not, not pay yourself. End of year profits go to savings for upgrade and repairs.

- Research the power usage for all equipment and estimate your electric bill. same for water, and gas.

- Don't forget to plan for some advertising.

Now add all these up. including the weekly cost of lease and repayment of loans. If these weekly costs can't be covered by the projected weekly revenue, then figure out a way to make it so. Be conservative on revenue projections and liberal on costs. This is only my observations.

I hope this helps.

Brian

Permalink Reply by Steve on November 3, 2008 at 8:53pm

I feel your pain, but I would suggest Wells Fargo if you already havnt and I would clearly state that your husband is employed and will continue to be employed. After that ask about collateral and how much you need to bring to the table. The key is to limit the risk to the bank and SBA....my loan is only 250, that covers the construction and a few bucks more. I'm doing the rest.......Remember great location must include plenty of T/I money, rent reduction in the first year (trust me the recession is allowing this) then bring that too the table with the bank again and sell yourself. You truly have a great plan....just envision it more each night then make the bank a believer out of you. TRUST me...I heard the same line...start up and restaurant...your going to fail. I dont and wouldnt ever except that!

Best Wishes and dont let your talent fail you.....your too smart for them not see the big picture!!!!

Take care
Steve

Permalink Reply by Tommy on November 12, 2008 at 1:46pm

Hi Jessie,
I am also in the process of opening my Cafe. The best way for you to achieve financing is to prep up your resume. Consulted with SCORE, PDC, Mercy Corp, join the Coffee Association. Overall show them your drive and persistent and fully believe your Coffee shop will be a success. The important factor here is show them you have support/approval from institutions mentioned above. Best wishes and luck to you! : )

Permalink Reply by Jessie Burke on January 26, 2009 at 11:40pm

Hi Melissa,

I just wanted to follow up from the advice you so kindly offered a few months ago regarding ideas for securing financing for our coffee shop in Portland, OR. Your idea to get testimonials was genius. We did it - we got several testimonials from locals in the area, including the newly elected mayor, and we were able to secure financing for our entire project! Our loan goes to loan committee on the 5th of February.

So I just wanted to send out a word of thanks for your thoughtful and kind response - you helped pick me up when I was at my lowest.

Sincerely,

Jessie Burke
Posies Cafe - A Neighborhood Coffee Shop
Portland, OR

Mellisa said:

First off, Jessie, take a deep breath. I found (in Feb of this year) that you just have to do that.... you know... get away from the projections and go enjoy yourself from time to time, even if you don't feel like doing that.

Second, if you haven't already noted all the expected perks of your location in your business plan, please do so. It sounds as though you will be a part of a great downtown renovation and it will bring increased traffic. Maybe you can't do projections, but could you put up a table or open the doors or something else at that location and take photos of people stopping by to shake your hand and sign a patronage support petition? It would go a long way if you could also serve coffee and hand out cookies. Do time and dates and it will show the traffic now and how many people would have stopped in if you had been open. Then project how many people will frequent the new library and tap into your town's resources to get them to project for you how much that traffic should increase due to the renovations downtown. Now, you have walk through, the library's projections, the city's projections. If you need more, do a telephone poll. You know, it may take up your time, but people will remember the advance publicity and that you took the time yourself to call them and inquire if they would like a coffee shop and that you may have even asked for suggestions of what they would like that to look like and/or serve. They now have an investment in your business and will more than likely be new patrons once you open.

As for financing, I took out a second on my home (a small second), put in some savings, stimulus payments, took out a loan for the building and renovation, and tapped into our county's economic development council and the city's economic development council... both have grants for new businesses. Although I didn't qualify for a grant, they did give me a low interest loan. Also, start small. Buy used where you can. Alot of people will tell you if you can't afford it, don't even start. Well, I won't do that. I did it and I couldn't afford it. I'm glad I did it. I'm in a town of only 750 people and I'm making it even in tough times. Don't have any preconceived ideas which are set in concrete on what you will serve. Let the customers guide you. Of course, they will ask for everything, and you will have to see what they ask for the most. Maybe ask around... put several on a list and ask them to circle 3. You will soon see what they want. I have even had people ask the next time in the shop what the outcome of the poll was.... they are interested and like being asked. And the most important thing? Smile ALOT.... the more confident you are, the more confidence the bankers will have in you.

Best of luck. Write me if you need anything else.

Mellisa
Amped UP Cafe
Hales Guitars

Permalink Reply by Jon Mitchell on February 17, 2009 at 6:24am

Jessie -

Can we have an update on what's going on with you now?

Thanks

Jon

Jessie Burke said:

Hi Melissa,

I just wanted to follow up from the advice you so kindly offered a few months ago regarding ideas for securing financing for our coffee shop in Portland, OR. Your idea to get testimonials was genius. We did it - we got several testimonials from locals in the area, including the newly elected mayor, and we were able to secure financing for our entire project! Our loan goes to loan committee on the 5th of February.

So I just wanted to send out a word of thanks for your thoughtful and kind response - you helped pick me up when I was at my lowest.

Sincerely,

Jessie Burke
Posies Cafe - A Neighborhood Coffee Shop
Portland, OR

Mellisa said:

First off, Jessie, take a deep breath. I found (in Feb of this year) that you just have to do that.... you know... get away from the projections and go enjoy yourself from time to time, even if you don't feel like doing that.

Second, if you haven't already noted all the expected perks of your location in your business plan, please do so. It sounds as though you will be a part of a great downtown renovation and it will bring increased traffic. Maybe you can't do projections, but could you put up a table or open the doors or something else at that location and take photos of people stopping by to shake your hand and sign a patronage support petition? It would go a long way if you could also serve coffee and hand out cookies. Do time and dates and it will show the traffic now and how many people would have stopped in if you had been open. Then project how many people will frequent the new library and tap into your town's resources to get them to project for you how much that traffic should increase due to the renovations downtown. Now, you have walk through, the library's projections, the city's projections. If you need more, do a telephone poll. You know, it may take up your time, but people will remember the advance publicity and that you took the time yourself to call them and inquire if they would like a coffee shop and that you may have even asked for suggestions of what they would like that to look like and/or serve. They now have an investment in your business and will more than likely be new patrons once you open.

As for financing, I took out a second on my home (a small second), put in some savings, stimulus payments, took out a loan for the building and renovation, and tapped into our county's economic development council and the city's economic development council... both have grants for new businesses. Although I didn't qualify for a grant, they did give me a low interest loan. Also, start small. Buy used where you can. Alot of people will tell you if you can't afford it, don't even start. Well, I won't do that. I did it and I couldn't afford it. I'm glad I did it. I'm in a town of only 750 people and I'm making it even in tough times. Don't have any preconceived ideas which are set in concrete on what you will serve. Let the customers guide you. Of course, they will ask for everything, and you will have to see what they ask for the most. Maybe ask around... put several on a list and ask them to circle 3. You will soon see what they want. I have even had people ask the next time in the shop what the outcome of the poll was.... they are interested and like being asked. And the most important thing? Smile ALOT.... the more confident you are, the more confidence the bankers will have in you.

Best of luck. Write me if you need anything else.

Mellisa
Amped UP Cafe
Hales Guitars

Permalink Reply by Jessie Burke on July 10, 2009 at 1:48am

Hi Everyone,

I'm so late in writing this, but I did want to give everyone an update. Much thanks to the feedback, advice and support I received through this forum, I did eventually secure financing (for the entire amount needed - approx. $165,000). It was definitely a painful process, but I see now that I've grown so much from it.

My shop is up and running. It's called Posies Cafe (www.posiescafe.com), and we're about 75% of the way to being profitable in month two. Hopefully we get even closer soon because our build-out costs dipped too much into our working capital, so things are tight. I can only see now how wonderful it would have been if everything had gone perfectly and we had all of the working capital we needed from the beginning.

One other item I wanted to note under the "lessons learned" section is that I read the book The Alchemist quite frequently to keep me on track, and they talk about how things conspire in your favor when you are doing what you are supposed to be doing. I definitely felt that things were conspiring in my favor, but the book also says that right before you realize your dream, things get more tough than you could imagine, and it becomes a test for if you will stick it out. I thought this entire time that that big test would come prior to opening my doors, but it didn't, and I thought I got off easy because the doors opened just fine... no major tests... just unlocked, turned the sign around and we were golden. What I've come to realize, is the big test is not opening your doors, but keeping your doors open. That is when you get tested time and again, when you question yourself, when you get stressed to the point of near blindness at times... So that's where I am now. :)

And finally, I got a great piece of advice in a business class I took recently, which was this "renegotiate everything." I never thought that you could do that as much as you really can - prices on milk, your rent, even your merchant service rates (if you've found a better price or service, they all want to match it).

Good luck, and thank you all again for all of your help!

Jessie

Permalink Reply by Chris Weybright on October 13, 2009 at 8:42am

Wow! This was an amazing discussion! Way to go, Jessie, and continued success to you.

Permalink Reply by Phoebe Aceto on November 2, 2009 at 12:33pm

I am so glad I joined this group! I opened my cafe "The Shop" on June 18th and I'm right here-->

"no major tests... just unlocked, turned the sign around and we were golden. What I've come to realize, is the big test is not opening your doors, but keeping your doors open. That is when you get tested time and again, when you question yourself, when you get stressed to the point of near blindness at times... So that's where I am now. :)"

This is all very supportive and helpful!
Go Jessie, Go!!
-Phoebe