First I will ask you, ‘why do you want to open a specialty coffee shop?’ If your answer is because you want to make money, think again. Wait, let me say that there is money to be made if you do things right but in the end, your profit is going to be around the 10-15% range, after all bills, taxes and overhead is paid. That means if you pay yourself, you will make more than the absentee owner. So there is a real passion that is needed here, a true passion for great coffee not a passion for making money.
Now, you need a vision. Your overall vision for your specialty coffee business should be consistent with the area you are considering opening in. These two elements need to work together because without a vision, you will lose your ground and without the right area, you cannot attain your vision.
Ok, so now we get to money matters. You need to come up with a figure that you think you can afford to spend. That is your cash contribution. Yes, you are going to have to come up with some green to seed this venture. Now don’t fret too much, you don’t have to fund the whole thing. You will most likely be getting financing to handle the remainder.
So after you figure out what you are contributing, you need to borrow the rest right? Well, you can start with friends and family. It’s an ideal move as they will most likely go for a simple interest rate and favorable repayment terms. Just be sure all ifs, wants and details are spelled out in writing. We will talk more about this later.
What is your credit like? You will most likely need to get a loan from a financial institution instead of or in addition to borrowing money from friends and family.
If you have experience in entrepreneurism and business management, it can only help you in this endeavor. Let me say that these two verifiable points are feathers in your cap in the eyes of a banker. If you have no experience, don’t fuss. You can get good working knowledge by working with a qualified professional such as myself, the SBA (Small Business Administration), SCORE, or various other programs on the county or city level in your area.
In my Ebook titled “Tony’s Coffee Shop Business Plan”, I take you step by step from concept to opening your coffee shop. Along the way you have valuable information from a business plan tailored specifically for a coffee shop to my guideline extra that in itself is worth the price of the entire package. Do yourself a favor and don’t get into this endeavor without the guided help of a coffee professional. Your profits will thank you!