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Permalink Reply by Matt Fitzwater on April 13, 2009 at 7:50pm

Are you looking to run a cafe or roastery?

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Permalink Reply by Christine on April 14, 2009 at 11:20am

I'm looking to run a cafe. I think eventually once I start making money, I can get into roasting.

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Permalink Reply by Jon on April 15, 2009 at 10:58am

I started my own coffee roasting company in Lincoln, Nebraska about three years ago. I have a great deal to say on this subject if you'd like to hear it. I've hosted about 10 people in the last year with Cultiva Coffee Roasting Co.'s apprenticeship program (which is free) and I think most of them came to a realization about their passion for coffee and/or their passion for independence in a career decision (aka being your own boss). There are established businesses always for sale, and there's usually a good reason. Some common caution should be used when buying a business, such as, are they selling because people are no longer buying their coffee? Is it a reputation you want to change or continue in the same way? Is it the coffee, the owner's poor financial decisions, the location, or are they "just tired" of it? I would always ask to see financial statements from the previous year, their monthly revenue statements, cogs, etc. do a profit/loss projection using these figures to see if the business you're looking at seems like a viable business opportunity. As far as getting a loan: I've gotten several of them, but assets are usually A MUST to acquire funding. no bank in their right mind, in these times, will give money to someone they can't get it back from, either through property, investments, etc.. SBA loans are a bit more possible, but even then your business plan needs to be pretty damn good. and you'll still need some solid backing ontop of that. I don't want to tell you things you may already know, so anyway. www.cultivacoffee.com. free education.

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Permalink Reply by Mike McGinness on April 15, 2009 at 10:37pm

Be very very very careful considering a partnership or co-ownership. While may seem financially easier, in the long (or even short) run you may find yourself with way more head and heartaches than you ever imagined possible. If you do go that route have roles, responsibilities, decision making, expectations work wise and remuneration wise spelled out extremely clearly.

If you're serious, you must be willing to put 100% of yourself and your assets into it. Be fully committed heart, mind and soul or forget it. Expect months or even years of long hours. I mean long hours possibly going months at a stretch without a day off. Seriously.

Are you interested or do you have a burning desire to run your own coffeehouse? Don't answer me, only yourself and be honest with yourself. This isn't a business climate for half hearted endeavors.

But if it's your passion, your dream, let nothing stand in your way and make it happen.

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Permalink Reply by The Barista Formerly Known As JavaJ on April 16, 2009 at 12:01am

Christine,

The conventional wisdom is much like Cultiva Guy said. Be wary. Keep that all in mind, but also think outside of the box. The current recession is the worst since the Great Depression. Just like the value of perfectly good stocks on the stock market have plunged, so too have the value of all assets plunged, including coffee shops.

This means, that yes, it is very likely you can find a great shop at a great price, and yes, you might be able to have the owner carry a note, usually up to 80%.

Also, in reference to Cultiva Guys good advice, more important than assets right now is cash flow. If you can find a shop that is profitable by a good margin, then you will have no problem finding a loan. Why? Because right now the banks are getting free, guaranteed money from the government and they want to make loans. But the DONT want your assets, because they aren't worth .10 on the dollar, and they have enough seized assets thank you very much.

I highly encouraged a former barista of mine to buy an existing shop in a great location. He did one better and found a shop that had been abandoned by the previous tenant. He didn't have to pay an extra dime, all the TIs were already done, all he had to do was a quick facelift and he was good to go. I should add he is doing very well.

My biggest, biggest piece of advice is this: Location, Location, Location! As long as you have plenty of foot traffic, you will be fine. But understand that a good location is more than just foot traffic and demographics.

I would also highly encourage you to take one of the classes at the American Barista & Coffee School. The owner Matt Milletto is the one who runs Barista Exchange.

When you say run with 1 or 2 people, are you speaking of employees or partners? Ditto what Mike said on that.

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Permalink Reply by Christine on April 16, 2009 at 4:52pm

Thank you everyone for your responses and advice. They have been very helpful and encouraging. I am taking everything into consideration now. --Barista Formerly Known as JavaJ.. when I say run with 1 or 2 people, I mean either one. If the store I buy is already staffed with employees, then that would be what I mean, or if I can find a trustworthy partner.

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Permalink Reply by ray peck on April 27, 2009 at 8:00pm

Unlikely you will get financing from a bank. Once you find a store, share your dream with friends and family. They will be your best resource for money. Before you do that however, set up an llc or sub-s and make everyone a share holder. even if they only put in $500. Be creative. People love to help. Since you have experience that will be a plus for an owner to finance.

I looked at an existing store that was doing $300/day and they wanted $35K. I passed, even though I felt the potential was good. The next party came along and paid the owner $30K and KNEW they could make a killing. They did just that. Daily sales are $12-1500. I eat crow everytime I drive by to go to my own store, which does well. Hoping this may inspire you a little.

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Permalink Reply by Java Joe on April 28, 2009 at 3:06pm

I am looking to invest in a coffee shop (or 2) in the Las Vegas area. I am planning on attending Coffee Fest June 11-15 maybe we could discuss in more detail. I was also wanting to get some advice on what coffee machine For my home would be a good one to purchase so that i could train myself to someday open a coffee shop on a piece of property i own in Utah. PLease advise anyway you can. Thank you.

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Permalink Reply by Christine on April 30, 2009 at 10:56am

Yes! I am also planning on attending Coffee Fest. Have you invested in a coffee shop in the past? It seems that all the good locations in Vegas are taken by Starbucks. I have always thought that it would be very tough to start a coffee business in Vegas, especially from scratch, because of how successful bigger chains are here and how the majority of people here prefer to get their coffee from these bigger chains. Not to mention, how expensive it would be to start a business in a location that it would definitely do well in, like inside a casino. However, I do know of a couple independently owned cafes here that seems to be doing okay. Just something to consider.
Java Joe said:

I am looking to invest in a coffee shop (or 2) in the Las Vegas area. I am planning on attending Coffee Fest June 11-15 maybe we could discuss in more detail. I was also wanting to get some advice on what coffee machine For my home would be a good one to purchase so that i could train myself to someday open a coffee shop on a piece of property i own in Utah. PLease advise anyway you can. Thank you.

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