New to the business. Opening in southern nc
The beach has about 1000 permanent residence, during the summer this number surges to 25k people who stay for week long segments. This surge of people is from early june to late august and the shoulder seasons have some traffic as well. Due to the nature of hurricanes all of the single family dwellings (90% single family 10% condos) are raised on pilings. Half of commercial business are raised. Meaning the first floor is up one flight of stairs(10-12 feet). Our location will be raised on pilings.
The closest place to get coffee is off of the barrier island about one mile 3-5 minute drive away. The beverages they serve are of low quality and has no seating.
On the beach there are 4 sit down restaurants, 3 ice cream parlors, 2 made to order burger n fries joints.
There seems to be a void in coffee/pastry smoothie Togo sandwich market. Having passion for coffee we would ultimately like to do just that.
Being the middle of the summer when we will do 80% of our business I don't know how coffee will sell. 85-90 temperatures regularly.
Any thoughts and concerns are appreciated. Spent about 6 Hours reading through threads and seems you all have much experience.
Replies to This Discussion
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Permalink Reply by william ( Papa Smurf ) whitaker on
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I am right down the road from you in South Carolina. This is exactly what we need, more coffee and less junk food and drinks. I very much hope you do great, I will surely stop in the next time I get up that way.
Good luck and God Bless,
papasmurf
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Permalink Reply by nick placakis on
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I have a coffee shop as well in a seasonal resort area also on a barrier island in N.J. (Long Beach Island). population on the island during the OFF season is about 4000., so I understand your market. It sounds like a perfect scenario for you because you have no real competition by way of specialty shops. we have 3 others in our market and we fair very well during the summer. I would say we grab the lions share of the business because we serve far superior products, adhere to strict quality protocols and it has paid dividends.
Dont worry about the weather, you will offer beverages for all types of weather. Blended and iced beverages for those real hot days (which have great margins) and hot for the chilly days. you will be surprised how many hot beverages you will sell even on the hottest summer days. There are plenty of people who want hot no matter what the weather, those are your staunch coffee drinkers.
Get yourself really familiar with pour overs if you are not already. It's a great way to showcase great coffee, open up conversation and best of all cut back on waste because you should not be holding on to coffee too long in your airpots or whatever method you are going to brew into. Be prepared, because as you get into that you need to understand your flow very well so that you are staffed well for your rush hours so that you can offer this type of brew method while also handling the crowds efficiently.
For us, a sunny summer day goes something like this: late morning pre-beach crowd we get slammed (9:30-12) then a lull which is usually managable with 1-2 barista's then an after beach rush from about 3-4:30), then another lull until about 7 p.m. which is when we get the after dinner crowd ready for night time coffee and shopping. I suspect you will see a somewhat similiar traffic pattern, unless there is another viariable specific to your area which I am not aware of.
Have a real good line up of frozen coffees, fruit smoothies and iced beverages. If you want any specific info. or just want to pick my brain about our shop feel free to PM me. We have been in business for 8 years and each year continues to grow.
nick
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Permalink Reply by Atlantictradegroup on
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Wow that is pretty ironic nick. I would love to talk with you about your operation.
The worry I have is 1) being on the 2nd floor 2)offering too high quality product (want to use counter culture).
Will the high volume periods be sustainable doing pout over for everyone wanting a brewed coffee?
Any of you have suggestions for roasters and or espresso machine/grinder?
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Are you on the second floor where it requires steps or is there a ramp? Second floor makes me nervous if it makes it hard to accomodate elderly or moms/dads with strollers.
I love nuova simonelli but im sure there are others that are good as well
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Nick I can't send you a pm because you aren't my "friend"
Yes. Stairs. No elevator.
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Got your message, call me tonight I have an hour to chat. I think there are some logistics I can share with you that might help you with your flow and set up that have proven beneficial to me being in a resort area where certain hours of the day are crazy busy.
Nick
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Permalink Reply by Jay Caragay on
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I don't operate in a resort area so I don't much insight into that. But 2nd Floor? Abandon that location and treat it like the plague. You'll waste your money and kill your business.
Look for a suitable location that is ground level with great visibility and lots of walk-by traffic and easy parking. It might cost you more but it will be worth it.
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Mike,
Nice talking to you the other night. I have to say, I agree with everything Jay pointed out. He is right on with each factor when sourcing a quality
location.
Feel free to dial me up if you need more info.
Nick
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Yes nick. I really appreciate the time
Even considering the factors of zero competition no viable ground level locations and the 2nd story location as a starting point for entry?
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I'm thinking "2nd floor" - but if yours is a situation where a walk up a flight of stairs to businesses on stilts is the norm and you're on that first level, then perhaps that will be fine - so long as that's the norm. But if it's still considered "second floor" - meaning a floor above whatever is considered primary, then I would avoid.
Whichever the case, it's really up to you to decide if the business is worth the financial risk. Do you have much experience and do you know what you're doing to hedge your bet? Another question you should ask yourself is whether or not this business can provide what you desire?
You said that during the summer months, population surges to 25,000 people. Let's presume you can capture 2% of that base (500) and let's presume you can cycle through that 500 every five and a half days - that's about 90 transactions per day. Presume an average transaction of $5.25 and you get $472.50 per day in gross revenue or $3,307.50/week. Expand that to 12 weeks = $39,690.
But your installed base is only 1,000 residents. Using a similar calculation, we can derive revenue of about $552/wk, multiply that by 40 weeks and you get $22,050 - this gives you a total yearly gross revenue of about $62,000.
From this, we presume 30% cost of goods ($18,522), 30% labor and 30% operating expenses, potentially leaving the company with a net profit of $6,200 per year.
The question is whether or not this is enough to operate and for the profit you desire? Is it enough to provide for the lifestyle you desire?
Of course, I've made very simple presumptions and have not given any of the specifics of your situation any real consideration, but you should get the idea. Run your numbers, look at them very carefully and then decide if the risk is worth the investment. The idea of owning a coffee shop sounds fun and cool, but the reality can be very different. Proceed with extreme caution.
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Wow jay. This is all very helpful. I have attempted to conjure up a formula based on entering a market that hasn't been tapped by using ice cream consumption trends vs coffee and the level of ice cream consumption here. Pretty far fetched that it will be of much relevance.
The floor is the first accessible floor but up a set of stairs.
Is a capture rate of 2% fairly standard?
Experience is empty but I along with my brother own a customer service based business and have the next 6 months nearly free to work on our concept and plan to put in force.
The financial resources are there and we are excited at this point. Who knows how long the fire will be there.
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Permalink Reply by Jason Campbell on
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I am in a similar situation in the mountains of Blowing Rock NC. Our town is about 1500 folks off season and has a massive influx through the summer and fall. I am on the second floor in an outsoors store and it has many challenges.
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