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Permalink Reply by Dave on January 11, 2009 at 3:32am

Very interesting. From my point of view (that of a business major student), there's a LOT they could have differently. From the marketing to the location. The website seems to be sort of a resume for the person.

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Permalink Reply by Brady on January 11, 2009 at 4:49am

Wow. This was a painful read. A pretty good laundry list of what NOT to do, and proof positive that Murphy likes to work with coffeehouses too.

But seriously, someone needed to pass along the KISS principle to this person...

Thanks for posting, J.

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Permalink Reply by Djaya on January 11, 2009 at 6:32am

Great read. Lots of things i would do differently though.

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Permalink Reply by Brady on January 11, 2009 at 8:13am

You know, maybe they should have changed the name to Cafe Charlie Foxtrot? Not that our upfit was a walk in the park, or that all of our decisions were perfect. Just sayin'...

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Permalink Reply by Djaya on January 11, 2009 at 8:20am

Brady said:

You know, maybe they should have changed the name to Cafe Charlie Foxtrot? Not that our upfit was a walk in the park, or that all of our decisions were perfect. Just sayin'...

I'm not saying that everything they did was bad. It's just like you said on some points they overdid it. Besides starting a business is always tricky and you'll make mistakes. It's thanks to articles like these I get a better insight in what to do an what not to do.

Greets Djaya

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Permalink Reply by The Barista Formerly Known As JavaJ on January 11, 2009 at 7:08pm

Djaya said:

Great read. Lots of things i would do differently though.

That's kind of the point, though, isn't it? I mean, why else would the guy go through so much trouble to put this together? I think you are right Dave, it is a resume, but I think it is great he is willing to share his mistakes so we can benefit. But wouldn't you hire this person knowing they had learned so much and made all the mistakes on someone else's dime?

I'm glad this was able to help some of you. However anyone can say they would do different. I'd like to hear some discussion on specifics. If someone handed you this cafe and said go open it, what would you do different? What are the biggest lessons learned?

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Permalink Reply by Rich Westerfield on January 11, 2009 at 8:25pm

What this says most of all is: Don't open a coffeehouse in Stamford. At least not until somebody else is successful at it.

Even Starbucks doesn't care much for Stamford. It's one of the wealthiest cities in the Northeast, 110,000 population and triple that during the day from all the businesses. And not a single standalone Starbucks, although they can be found in bookstores and in Target. There simply isn't coffee cafe culture. It's non-existent. Which is surprising as the quality and number of restaurants have increased dramatically in the past 15 years.

I used to live there and still visit family there a couple of times a year and used Tango's space to hang out. Was just there in December at the place that took over Cafe Tango's space. Not nearly the calibre of the former tenant. I wouldn't expect them to make it through 2009.

And he's pretty accurate on Stamford being a real PITA on regulations and bureaurocratic BS. It's fairly common for restaurant buildout costs to double or triple there due to insane politics and general inefficiency. But once you're operating, it's not too bad.

I had posted the Cafe Tango link on coffeed.com a couple of weeks ago on a thread about books. I'd love to hear the details that Bill left out in a book someday.

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Permalink Reply by Tim on January 11, 2009 at 11:05pm

I think part of this particular dude's problem is that despite his hospitality experience, he seemed to have little experience with what it takes for a specialty coffee shop to succeed. Sure, he paid attention to some important details, location being one of them, but to spend hundreds of thousands of dollars on creating a business that has a history of failing in your particular town? There is certainly something to be said for convincing folks that you are preparing a quality, superior product to Starbucks, etc., but I think it's a horrible idea to try to singlehandedly change a city's reputation for stifling coffee shops. Besides, having a working knowledge of profits from coffee and tea sales might have informed this dude's ideas about how much money to spend on building out a space. I don't even want to know how many years it would have taken for his shop to actually break even if he hadn't closed. From my experience observing shops in Portland, OR and elsewhere, the shops that succeed are not usually the ones who rely on gimmicks and live performances. There are some that certainly celebrate the community in which they do business or or hold events for people in the coffee industry, but these don't seem to be anything close to what the day-to-day income is generated by. Your location must be at least decent and your customer base needs to be there already. You may be able to grow it eventually by preparing a quality product, but expecting to somehow create a magical following from a handful of people who appreciate what you're doing seems quite ambitious.

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Permalink Reply by The Barista Formerly Known As JavaJ on January 12, 2009 at 1:28am

Thanks for the link Rich, I first found it from you. I thought it might be useful over here.
If there is one overall mistake that was made, I would have to agree with you Rich. Stamford seems a poor choice for a quality focused shop. But to extrapolate that into a more universal rule, and something which I have experience myself, I would offer this quote:

"Location, location, location…" This well-known business phrase also has psychological and the rarely mentioned cultural aspects that must be considered when selecting a site. It is not limited to
being on the correct side of the street -- which is crucial.

In other words, location is much more than numbers and traffic patterns. Are you trying to open an espresso bar in a white mocha town?

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Permalink Reply by Brady on January 12, 2009 at 4:54pm

Tim said:

I think part of this particular dude's problem is that despite his hospitality experience, he seemed to have little experience with what it takes for a specialty coffee shop to succeed. Sure, he paid attention to some important details, location being one of them, but to spend hundreds of thousands of dollars on creating a business that has a history of failing in your particular town?... ...Besides, having a working knowledge of profits from coffee and tea sales might have informed this dude's ideas about how much money to spend on building out a space. I don't even want to know how many years it would have taken for his shop to actually break even if he hadn't closed...

Bingo.

Even without the over-runs, his expenses (esp front-end design expenses, NYC architects?) were pretty over the top. The realistic revenue from a coffee shop creates a real limitation on upfit expenses, rent, locations, size, etc. I think you've gotta be frugal at upfit to succeed... too many fail to realize this and go under as a result. The really sad part is that this poor decision-making upfront pretty much dooms them before they even open their doors.

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Permalink Reply by Matt Swenson on January 12, 2009 at 7:17pm

My favorite part:

"While the space was being demolished, I continued to focus on
the many other aspects of starting a business:

l Budget and revenue forecasting"


I wonder if this was before or after he ordered 372 cases of cups?

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Permalink Reply by John P on January 12, 2009 at 7:33pm

There is so much wrong, that it points out, managing and owning are two different animals. And Ditto to what Tim said.

Major Problems:
1) Poor site selection
2) Inadequate lease negotiation
3) Build out costs too high for THAT business. A restaurant at $40 per ticket.. Ok. Coffeehouse at $6 per ticket.. No.
4) Overruns of that magnitude show lack of planning.
5) Menu problems. Catering, wine, extra foodstuffs to salvage/increase sales poor idea. You have now lost your identity.
6- ...) Numerous.

Too much money often equals too much laissez-faire attitude. If he had a $300K budget total, better decisions may have been made. Like choosing a different location for starters.

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