[Closed] Long shot - how much to open a coffee shop?

molgrips - Member

Chewkw - indeed, but many business go to the wall with a small loyal customer base. Don't forget most people still drink Nescafe at home.

No, I am not referring to those ultra niche coffee shop that want to hack off your arm for a cup of ultra niche coffee (they think they are god sent like those celebrities shite).

Just coffee that taste like coffee ... 🙂

I'm pretty sure that a coffee shop is A1 in planning terms, the same as the bakers it is now / was last so planning consent shouldn't be necessary. That is one reason why corporate coffee shops / sandwich bars have spread so quickly.

Env Health will have a view on matters however but probably common sense - you don't want to poison anyone do you?

I have sorted out alot of these places after they have gone bust and I have to say a population of 3-4,000 is on the small side and will make it a lifestyle business; i.e. you work bleeding hard for little return. Not necessarily a bad thing but don't expect to pay off your mortgage with it. In a small town near me there is a Waitrose whose cafe is permantently jammed and a really decent independent coffee shop 250metres away that is empty and must be due to close soon. Totally unfair but somewhat predictable.

Gross profit should be 65-70% of turnover, net of VAT. Wages will be your big cost but hopefully under 35% of turnover (although this will depend on whether you many employ people or do it all yourself, taking your income from the profit). Ideally rent will be <12% of turnover. If you make 20-25% net profit you will have done well.

My biggest advice is don't sign up for a long lease in your personal name or give a personal guarantee (PG) to anyone. Just don't, I beg you.

Don't be put off but don't expect easy money.

What I am saying is that you have to appeal to the widest possible customer base. If that means boring coffee then that's just too bad.

chewkw -

Several reasons in no particular order:

I'm pretty sure that a coffee shop is A1 in planning terms

My biggest advice is don't sign up for a long lease in your personal name or give a personal guarantee (PG) to anyone. Just don't, I beg you.

molgrips - Member

What I am saying is that you have to appeal to the widest possible customer base. If that means boring coffee then that's just too bad.

Yes, absolutely after all you need them to support the business but good coffee does not mean boring so long as your customers like them and are willing to pay for them.

3-4000 population ... one group to start with.

🙂

This came up recently at work

The planning status of coffee shops which also do food is potentially a grey area - tread carefully with the Council

jhw - Member

This came up recently at work

The planning status of coffee shops which also do food is potentially a grey area - tread carefully with the Council

What is it actually?

Is that to do with cooking in the premises?

🙂

Make sure you give the coffee shop a good name. "Rob2's Cup of Tar" ain't going to work, but coffee shops called Starbucks seem to do quite well, so you could try that - OK I know it's a common name, but if it works, it works.

Joking aside, as someone has already said, do the marketing. You need to have some idea how many cups, buns, etc you are going to sell [b]before[/b] you set up. Ask around and find out if someone knows someone who used to do the market research for Starbucks or Costa - and then see if you can get some free advice.

But the name needs to be good too.

What is it actually?

Basically yeah, it's the amount of cold food served relative to hot food - but I think it's an uncertain area is the main thing, it could go either way, so you have to let the Council take the lead a bit...

This might help:

http://www.propertyweek.com/a1-planning-permission/3091596.article

last I heard to open a coffee shop is now circa £9m 8)

Hi

I have an unused Rancilio 3 group sitting in my garage (cost circa £7k 4years ago). It belongs to a friend who unwisely opened a franchise coffee shop.

Sure open a coffee shop work 24-7, but do it for yourself not a franchise.

That's quite a lot!

Yep 75kg paper-wieght

3400 seems pretty small, but it is hard to say without knowing the make up of the population. Fortunately the ONS can help you there:

http://www.neighbourhood.statistics.gov.uk/

To work out your potential customer base you'll need to know the demographic groups who buy coffee in the type of shop you want to open - you could buy some market research, or do as thisisnotaspoon suggests and do your own- and see how many of those you have in your potential catchment area. I suspect it is a lot fewer than you think.

It is probably worth speaking to owners of similar shops in similar places, and asking the locals if they want a coffee shop (you'll need to ask careful questions to work out who likes the idea from those who would actually buy stuff from you).

tonyg2003 - Member

Sure open a coffee shop work 24-7, but do it for yourself not a franchise.

Be your own boss rather than slave for others.

rob2 - Member

That's quite a lot!

That's rather normal for 3 group.

🙂

I've searched out some stats on demographics as there was work done for the new house build plus the village did a big survey for it's recent parish plan which surveyed what facilities people want, how many people work, wage ranges.

Need to get number crunching!

Searching out grant options too.

Will look at franchise if only to have a comparison to a self own business model

Again, even with this info, I think you'll still have to do your own market research and be prepared to make changes to your original idea. Sometimes someone can throw in an idea thet you hadn't thought about. I'm going through this process at the moment, at the most basic level it's quite interesting from a research point of view, invaluable.

Good luck.

Hi,

A coffee shop opened recently in a village near me around a year ago.

It seems to be doing quite well.

http://www.chosencoffee.co.uk/

if you use good coffee then your chances of success start to go in your favor. nothing worse than burnt tasting over extracted coffee. even the yummy mummies with their skinny mocha chocca vanilla lattes can tell the difference between good and crap coffee.

if you have a good local roaster they should be able to help with barista training.
unless you and your family who are going to help in the cafe don't have a love for good coffee or can at least taste the difference between good and bad then your clientele has just halved.

it's the same with bike shops, enthusiastic and knowledgeable staff attracts business.

all the cafes i use are focused on the quality of their coffee and then the food/cakes, they are all very busy and all use good beans (square mile/monmouth/hasbean). if the product is good they become destination visits rather than passing trade, people choose to go out of their way or stop off because the coffee and cakes are so good. passing trade and non-repeat business doesn't grow a business.

if you are ever in 'that London' check out flat white, milk bar, espresso room, dose, beas of bloomsbury, brill, the modern pantry.

Cheers good stuff here

Don Simon - yep going to take some days off and do some surveys by the current shops on footfall , what people would be looking for etc. Not been in business on my own before (and still may not be!) but lots to learn

Rob,
There are coffee shops in our village.
One pretty much the size you're looking at, the other huge in comparison.
Both privately owned, not franchise, operations.
Village is circa 5000 people and we do have a small flow of tourists (mostly coach trips looking at locations used on last of the summer wine etc) and plenty of walkers / the odd few mtbers etc passing through

Smallest appears to do really well from across the spectrum - youth, yummy mummies, right up to the 'olds'
All food, cakes etc are home made (by various suppliers so they are not baking all night as well as working all day) and prices are sensible.
I can try and have a word with Lisa, the owner, for any top tips - I can say though that she does run it with 2 staff - herself and a.n.other. The do work very hard through the day but they have their regulars they all know and have a laugh so it might not 'all' be work for your wife and the other mum - so long as back up staff are available for busy times / illness etc. Lisa opens 9-4 - catches the school runs and she herself goes off to pick up her kids etc at the end of the day.
Given the other mum in your plan is well connected I'd sit with her and ask for honest opinion on it working, then invite a few unknown (to you) folk into the same conversation - that as well as checking rates etc, as already mentioned, should start to give you a picture for the potential?

Almost forgot - the much larger shop here is IMO not as good (coffee not good, food not all home made) but - and it's a big one given the space you're looking at - it is 'buggy friendly' - plenty of space to park up prams on the lower floor, loads of nice comfy sofas upstairs for those who want to get out of the way. Their other big SP is homemade ice cream which is rather good...

Franchises - may have changed but I'd considered it years ago and, when I (very briefly) looked into it, the major chains were looking to people who could / would open 3 'units' in a given geography so that gets real silly expensive...

Have fun......

If you do open it with your wife and best mate running it, then do it as a business and make them both Directors. That way by paying a salary (circa) £450pcm and the rest in divis (obviously need to make a profit for this), you'll save a whole shedload of NI (employers and employees) and income tax.

Imo i think you will be very lucky to set a coffee shop up for less than 15k.

if your next to the station you need to put a hatch in the front window and serve from there, so many people will personally do without if they think there pushed for time.( and people always run late near train stations.

dont ignore any of the cash croppers either.

Bacon, sausage, tea, coffee, toast, homemade cakes/sandwiches if you can make it yourself do-so, but make it well dont make it cheap.

I wouldn't try to be a coffee shop i would aim for the poshest cafe selling the best coffee and cakes in town.

Try and attract as much of the takeaway market as possible, they dont create washing up and have a higher profit margin.

your first employe must be someone you can trust.

cleaning products cost a fortune.

People will steal from you.

Remember not all of the general public are rude idiots,(all though some days this may not seem true).

Theres some good money to be made if you get it right, and get it right quickly.

Ive got a mobile burger van that does tea, coffee, burgers, bacon,, hot dogs, chilli, and vegetable curry, cakes, flapjack, 5 days a week outside a local college/school,parked in a lay-by from 5.30 am to 2 pm.

tea £1s/1.50l pg or tetly
coffee£1s/150l nescaffe or kenco
builders brew (in your own mug) £1.50
bacon roll £1.75
sausage roll£1.60 2 sausage £1.90 3 sausage
hot dog roll £1.50
burger £1.50/180 cheese
chilli beef £2.00
veg curry £2.00
cans £1

Every item is priced at twice what it cost and in some cases more.

Takings are around the £700 a day mark i pay a lady £75 a day to work it, she restocks from the cash and carry on the way home,so she's finished every day for 3 i make the chilli/currys at work and freeze them there, then transfer them to the freezer in the van simple.

I paid £8000 for the van in feb 2010 and paid it all of by the end of november,the big money is in the vans that can cook chips/run fryers but the running costs are massive, but i intend to book on a few events this year and see how it goes.

I wont kid you though, its very hard work and its quite dirty as well, but at the end of the day its over £3000 a month profit.selling food anyone can make, but very few do it well.

M

If you do open it with your wife and best mate running it, then do it as a business and make them both Directors. That way by paying a salary (circa) £450pcm and the rest in divis (obviously need to make a profit for this), you'll save a whole shedload of NI (employers and employees) and income tax.

£97 a week is the magic figure to pay yourself to avoid tax & NI and then dividends for the rest.

Leaving NI out of the equation for various reasons, as income tax is 20% and corporation tax 21% you need to be pushing a profit of circa £40,000 before this actual becomes worthwhile if it is the only reason to become a Limited Company.

Guys, this is great stuff.

Some offers of help in here, if you are ok with it I'll email you to follow up if that's coolio.

Good info there Merchant-Banker. I think it would be better to slave it for £3,000 net profit per month for yourself than be a lowly bureaucrat (me) any day.

Spoke to Lisa - turns out she bought the shop as a going concern so apologies, cannot assist with opening costs.

Couple of things she did mentioned (sorry if done above - no time to browser and check)
Our local council - you have to register with as providing food etc, you have to go on hygeine courses and they do come and inspect on a regular basis. PResume that's a national thing?

Equipment - plenty of refurb stuff around to keep costs that bit lower.

HTH
Chris

Bit of an update for those interested!

We've done several full day surveys to get info on what people would look for, how often they would use it. Fed that into a giant cost/revenue model

Spoken to the local councillor about planning permission

Spoken to all the local businesses to understand the customers

Got contacts together for possible shop fitting

People seem really up for it and what they really want are nice cakes and bacon sandwiches in the morning

Lots still to do though!

good luck with it .

Good luck but please don't commit yourself personally to a long term lease that could sink you if the business does not work out.

We've started discussions on the lease and they have agreed in principle a stepped lease rate and a break clause

If anyone knows any cheap suppliers of equipment let me know!

God stuff and now you have something viable less luck of the good variety is needed. 😉

Geoff Burch has a book Go It Alone where he uses the example of a cafe /coffee shop to ridicule people who have poor business plans/ ideas. eg make sure you have a daft / twee name for the coffee shop and let things generally go down the toilet from there.

Cheers mac 😉

I work in financial/business planning so I'm purty good at the numbers - it's a business venture afterall and we will press go only if the return is acceptable. With two kids in nursery a pipedream is not something I can afford!

An acquaintance of mine has just (a few months ago) opened one in Darlington. It's called "Afternoon Tease" and it does burlesque lessons as well 😉

Nothing else to add, i just i'd give it a plug.

http://www.afternoon-tease.co.uk

Cool, there's a Market for everything!

Rob if you want cheap equipment id recommend looking around at auctions. There are a lot that have high end catering equipment in, all stainless steel and often at 10% of teh original value

Holy thread resurrection !

Well for those interested we have set it up. I'm in the unit now just doing the decorating !

All major building work is done and sourced suppliers and done all our cost forecasts.

Wife has handed in notice and due to open on 16th may!

It's in Cholsey in oxon - near the ridgeway - so bikers welcome! Got a great cake supplier too for everything from chocolate brownies through to full on special cakes!

What will it cost - all in about £15k and that is with getting some blimin cheap trades people too.

So touch wood it will work but it's been fun trying so far!

Well done matey! 😀

I love seeing someone actually follow through on something like you and your missus have done.

Best of luck - sorry you're nowhere near me...I'd love to have dropped in and been one of your new customers.

Might be a good idea to set up a Facebook page and get some local friends to "Like" it - easy way to spread the word - six degrees of separation and all that!

Indeed, get yerself on social networking sites - I believe it's all the rage these days.

Good luck Rob, i sincerely hope it works out for you, follow your dreams 😀

Good stuff and good luck. Keep us updated.

Good luck Rob! Please post updates. I discussed this with a friend a few years ago but more deli-based with coffee shop as well. Never got beyond talking though.

I followed this thread with interest too.

Congrats and good luck to you both!

MM