# Coffee House Dreams



## BertVanGoo (Nov 20, 2015)

Hi,

I've been toying with the idea of opening a coffee house and eatery. I live in a town of circa 55k people, the current competition is Costa, Nero and other such shops, no-one else provides a quality cup of coffee.

I've started a business plan and come to the conclusion that I'd need about £50k to start up? It would be 40 covers with a menu mixed between indulgent food and a healthy option?

For my start up costs I believe I've covered everything off.....he says....and thats with me considering a Kees Spirit.....although I might be aiming a bit high there.

I found a property of 1500 sq ft with rent of £27k a year, plus VAT & rates. Unfortunately the freehold is owned by a Marsterstons brewery hotel so they will not give permission to change the usage on the shop.

I'm just wondering if anyone on here has started something similar? I wake up some days wondering if 40 covers is too much? Does anyone have any pointers?

Now I know the property is not available I've slowed down in looking at the details as do not want to take up any old shop.


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## risky (May 11, 2015)

40 covers does sound high for a town with only 55k population. More restaurant size than coffee shop.


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## Mrboots2u (May 10, 2013)

40 covers a day ? Week ?


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## Jon (Dec 3, 2010)

Presume OP means 40 seats?


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## BertVanGoo (Nov 20, 2015)

jonc said:


> Presume OP means 40 seats?


Sorry, yes I did mean 40 seats.


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## BertVanGoo (Nov 20, 2015)

risky said:


> 40 covers does sound high for a town with only 55k population. More restaurant size than coffee shop.


As mentioned above, the idea is that it would a coffee house and eatery. Although it would not be open in the evening, which is why I have doubts on the size. Wondering if I should be thinking half that size??

Initial footfall shows that it shouldn't be an issue, busy area with lots of businesses around and a couple of hotels, but due to the place now not be available I haven't done a full footfall count. Will see what now comes up in the area that is suitable.


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## 4515 (Jan 30, 2013)

Sounds like you will have around 50 to 60K pa ongoing costs for rental and salaries which equates to a lot of coffees and cakes per week - this excludes electric, water, heating, insurance, running repairs etc. What is your anticipated revenue / margin and how does this break down into number of drinks / food ?

I'm not well up on coffee business start ups but I'm guessing that there would be up front local advertising to be done, maybe some start up offers so the start up costs could eat into cash in the early months.

I did a similar excercise some years ago when the lease on a local pub came up for grabs. I'm not saying that it would be the case here but I would have worked like a dog 7 days a week to earn 20 to 30K pa. The pub is no more and was developed into a domestic house.

Not having competition will help. However, the big boys (no matter how bad their product) have established brands and a loyal customer base so local education and establishing a reputation for great coffee and service will be key.


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## BertVanGoo (Nov 20, 2015)

My initial figures are £160k a year, with £100k of that on wages. That looks a bit high and I have not taken in to account apprenticeships and having more part time than full, but it roughly equates to needing £428 a day. I'd be looking at a 60/40 split on food/drink, so 53 people spending £5 on food and selling 71 cappuccinos a day at £2.5.

These are rough figures to start with and been conservative, I should be able to reduce the staff costs. Please let me know if the figure don't seem right get to you.


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## Rhys (Dec 21, 2014)

If there are lots of local businesses around, you might do well to have a takeaway service as well - less covers needed, less clearing up to do etc.

There's a coffee shop/artisan eatery in York called Brew & Brownie. I used to go there every weekend until we couldn't get a table. It's always packed, and has a queue outside. It isn't that big (probably around 20 covers on sharing tables).


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## BertVanGoo (Nov 20, 2015)

Rhys said:


> If there are lots of local businesses around, you might do well to have a takeaway service as well - less covers needed, less clearing up to do etc.
> 
> There's a coffee shop/artisan eatery in York called Brew & Brownie. I used to go there every weekend until we couldn't get a table. It's always packed, and has a queue outside. It isn't that big (probably around 20 covers on sharing tables).


Thats like us with Black White Red in Winchester. It's a 20 min or so drive for us, but the nearest place that does a decent coffee. It has 40 seats or so and is always busy, the food is great as well.

We do have quite a few big businesses in town, so lunch times are usually quite busy in the area. Take away would be done as well.


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## 4085 (Nov 23, 2012)

spend morning in each of your opposition shops and watch. I think the potential footfall from a town that size would worry the hell out of me with the expenses you quote. sounds to me you need to turn 9k a week and I would say that is impossible, especially from start up. You want to serve as such as you can 'to go' so they are not taking up space, chatting at your expense. The rent is horrendous and has to be paid, no doubt quarterly in advance. Would look for something a little less grand that requires less of a startup.

Not being rude but it sounds like you have little experience of this sort of thing and there is a big difference between a business plan and reality


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## Rhys (Dec 21, 2014)

Observing several 'coffee shops', the current theme is 'you don't need to decorate, just rip everything back to brick and leave it looking gutted'. It's certainly a talking point seeing bare, scruffy brickwork and cable ducting wandering around (as long as its safe.) So no expense needed on decorating lol.


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## BertVanGoo (Nov 20, 2015)

dfk41 said:


> spend morning in each of your opposition shops and watch. I think the potential footfall from a town that size would worry the hell out of me with the expenses you quote. sounds to me you need to turn 9k a week and I would say that is impossible, especially from start up. You want to serve as such as you can 'to go' so they are not taking up space, chatting at your expense. The rent is horrendous and has to be paid, no doubt quarterly in advance. Would look for something a little less grand that requires less of a startup.
> 
> Not being rude but it sounds like you have little experience of this sort of thing and there is a big difference between a business plan and reality


Why would the footfall worry you? And can I ask where you get a figure of £9k a week from? That seems a little high to me as I'm getting just over half that?


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## 4085 (Nov 23, 2012)

you quoted 160k a year with 100k on wages, and that excludes base running costs. filter in wastage, theft etc........160k gives you 3k a week overheads as a base. look at all the extras....do not know what gp you will be expecting but lets say your turn 6k a week with a 50% gp..those margins are tight and would scare me


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## 4515 (Jan 30, 2013)

Based on your predictions of daily sales and a six day week, it looks like your turnover (not profit) is less than your outgoings.

Your calculations appear to work on opening 365 days a year and the £428 / day is margin for the business to wipe its nose. This doesnt take onto account any taxes due, any interest on business loans (assuming you are not self-funding) or any profit for yourself.

It would scare the bejeysus out of me to outlay this amount on a start up business. That said, faint heart never won fair maiden.

If I was looking at starting a coffee shop, without an established brand, I would look to start off smaller with a view to expand when the business model was proved.


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## BertVanGoo (Nov 20, 2015)

dfk41 said:


> you quoted 160k a year with 100k on wages, and that excludes base running costs. filter in wastage, theft etc........160k gives you 3k a week overheads as a base. look at all the extras....do not know what gp you will be expecting but lets say your turn 6k a week with a 50% gp..those margins are tight and would scare me


The £160k does include base running costs and these are worst case figures. Also, why would the 55k population be an issue?




working dog said:


> Based on your predictions of daily sales and a six day week, it looks like your turnover (not profit) is less than your outgoings.
> 
> Your calculations appear to work on opening 365 days a year and the £428 / day is margin for the business to wipe its nose. This doesnt take onto account any taxes due, any interest on business loans (assuming you are not self-funding) or any profit for yourself.


That wasn't my prediction of sales, that was a rough figure of what it would take to cover costs, and I wouldn't be closed on a Sunday. It would be self funded as well.

As mentioned, the figures quoted are on the high end and this is because I'd rather quote worst case at this stage. I think we've gone off subject a little from my first post of asking if people have started anything similar. I appreciate people trying to help and make sure I'm aware of the risk, but I have enough experience in finance to know that, hence why I wouldn't need a loan to start it up. I don't have the experience in the industry, but do have friends that do and have said that the plan is very viable.


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## 4515 (Jan 30, 2013)

What are your predicted actual figures in terms of sales and margin ?

It sounds like you are going into a business that is pureley a business to you and not a passion, which is fine. If you have friends that say the business is viable and are happy to entrust your hard earned in their view then go for it


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## BertVanGoo (Nov 20, 2015)

Far from it, I love coffee and want to learn more and have a better understanding, but I also like the fact it's still a growing industry and wouldn't mind a part of it!


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## 4085 (Nov 23, 2012)

Good luck.........question......do you expect a chef who can cook, or so he thinks, primarily for cook books he has bought, to open a restaurant come coffee shop and be successful. It takes years of training and understanding to achieve this. You talk about apprenticeships.....who has the knowledge and ability to train them o are you talking about having Baristas work for you,even though you have not given that impression so far.....I am not trying to knock your idea, but I think that if you think you can open from scratch and compete then we will agree to differ!


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## 4515 (Jan 30, 2013)

BertVanGoo said:


> Far from it, I love coffee and want to learn more and have a better understanding, but I also like the fact it's still a growing industry and wouldn't mind a part of it!


Good to hear

Do you have your predicted turnover / margin figures ?


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## BertVanGoo (Nov 20, 2015)

A chef that can cook! Please, I know you're not knocking it, and forums are always hard to judge how people are coming across as it's just text and not a face to face conversation.

To give you an idea here is the restaurant that my friends opened http://www.quayfifteen.co.uk it is now no. 1 on trip advisor for Southampton...... the coffee place would be as pretentious









They are two brothers that I grew up with. Both have been great so far in giving advice. One, who was the chef has now stepped away and gone back to contract work where he goes to underperforming restaurants/hotels and sorts them out as such.

I am wanting to ask if he would be interested in coming in with me, but I'm not sure he will right now? but even so, he is willing to help out and I could always recruit him for a short period to start with. When I say apprenticeships they would be both kitchen and on the floor. There would be a full time Barista/general manager on the books as well as a full time chef, the rest part time.

I'm not sure if you've had a bad experience with a start up or I'm just an optimistic person, but yes I guess we'll have to agree to differ


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## froggystyle (Oct 30, 2013)

Have you ever made coffee, i mean with real gear?

I only ask because lets say you have spent loads of cash, got all the gear, open the shop, pull a shot and the customer says this coffee is bitter or sour, what do you do? do you know how to dial beans in to get the best from them?

Or maybe you will employ a barista, how do you know if the barista is any good? they may knock out crap coffees, meaning you lose custom, and you struggle to get shot of them.

I know nothing about finance side of things, but i do know that any business can only survive if the person/persons running it have a passion and understand every aspect of what they are selling.

I hope you make it work though.


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## 4085 (Nov 23, 2012)

Bert, it has taken 3 pages of thread, for you to reveal your hand! With all that experience and backing knocking around, I do not see what you are going to gain from here really. What you have just described is not how I read your opening posts.....but, whatever shape your venture takes, good luck


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## BertVanGoo (Nov 20, 2015)

I have figures (which I'll get when I get to the office) but they're not really relevant now the property isn't available. There is another place available which is slightly bigger and on the high street, but the rent is £35k plus rates and VAT, so not feasible at all.


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## BertVanGoo (Nov 20, 2015)

dfk41 said:


> Bert, it has taken 3 pages of thread, for you to reveal your hand! With all that experience and backing knocking around, I do not see what you are going to gain from here really. What you have just described is not how I read your opening posts.....but, whatever shape your venture takes, good luck


Hold on a second, my first post gives a very small brief on what I'm thinking and a couple of questions. I've answered questions that I've been asked, which has then lead to me having to explain more details. For me to put down the whole idea and share links to similar business would take some time and probably be a bit boring for most to get through.

The reason I'm here is to get a better understanding of coffee and that side of the business. Yes there is experience with the food, but I know just as much, if not more than then about the coffee. What I don't have is the experience and knowledge that most on here will have.

Thank for your input though


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## BertVanGoo (Nov 20, 2015)

froggystyle said:


> Have you ever made coffee, i mean with real gear?
> 
> I only ask because lets say you have spent loads of cash, got all the gear, open the shop, pull a shot and the customer says this coffee is bitter or sour, what do you do? do you know how to dial beans in to get the best from them?
> 
> ...


I own a Sage Barista Express, I'll let you decide if that counts? and have had training using a Fiamma. So far I have done a general welcome to Barista trying and a milk texturing course. Next on the list is the cupping and sensory course.

I also speak to the local roaster, which is Peaberry coffee, quite a bit and pop in to the place where I do the training. I recently bought a Eroica for which I will be practising on as soon as I move house next month, and had it serviced by the same guys.

I've been told I make a good coffee, but friends will tell you that!


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## 4085 (Nov 23, 2012)

BertVanGoo said:


> I own a Sage Barista Express,
> 
> I've been told I make a good coffee, but friends will tell you that!


Try selling it, not giving it away and see what they say then! All I can say, is practice and practice. If you are employing Baristas, then accept that they know more than you (initially). Remain enthusiastic. Do not enter into deals to receive free equipment if you contract to their beans...


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## BertVanGoo (Nov 20, 2015)

dfk41 said:


> Try selling it, not giving it away and see what they say then! All I can say, is practice and practice. If you are employing Baristas, then accept that they know more than you (initially). Remain enthusiastic. Do not enter into deals to receive free equipment if you contract to their beans...


Ha very true. It's exactly why I bought he Eroica, my milk skills aren't cutting it on the sage and it then struggles to make a decent espresso straight after.

What at would your views be in second hand equipment? Providing they're in very good condition. I understand you don't quite know how they've been maintained, but would a good service sort that out? Or is it a bit of a gamble, like buy min a second hand car?


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## BertVanGoo (Nov 20, 2015)

BertVanGoo said:


> Ha very true. It's exactly why I bought he Eroica, my milk skills aren't cutting it on the sage and it then struggles to make a decent espresso straight after.
> 
> What at would your views be in second hand equipment? Providing they're in very good condition. I understand you don't quite know how they've been maintained, but would a good service sort that out? Or is it a bit of a gamble, like buy min a second hand car?


Sorry for the poor grammar, on my phone didn't sensor check!


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## 4085 (Nov 23, 2012)

If you buy something new, when does it become second hand in a commercial environment? Most 2/3 groups are built to last but they still need serviced regularly. Water is very important. Machines in a hard water area even run though a filter, can still clog up machines. You could take a chance and buy one from eBay........you could find a local coffee engineer that you are going to need in any case for servicing, who is bound to have or get machines that he overhauls. Just be careful and yes, treat the purchase as a second hand car. The machine is the mainstay of your business, along with the grinders so whilst there is no need to go and buy a Kees, neither do you want a £300 eBay special. You are still at the planning stage which is a big advantage. You will know a bargain when you see one.

The Eroica looks capable but it has quite a small boiler at 9 litres.


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## 4515 (Jan 30, 2013)

BertVanGoo said:


> What at would your views be in second hand equipment? Providing they're in very good condition.


Youre looking at spending the thick end of 200K in the first year of a business

Another 5K on new coffee equipment would hardly break the bank. Youve mentioned in another post that youre looking at SJ's but wanting to pay sub £200. Why not grab the bull by the horns and buy a new commercial grinder that you can then use in your business venture ? It doesnt sound like money is an issue


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## BertVanGoo (Nov 20, 2015)

working dog said:


> Youre looking at spending the thick end of 200K in the first year of a business
> 
> Another 5K on new coffee equipment would hardly break the bank. Youve mentioned in another post that youre looking at SJ's but wanting to pay sub £200. Why not grab the bull by the horns and buy a new commercial grinder that you can then use in your business venture ? It doesnt sound like money is an issue


I wouldn't say money was no issue, there is still budgets to consider and so much you should be willing to risk. My concern with buying new is if for whatever reason I decided not to go ahead then I have a £500 grinder sat there being used three or four times a day. I'm not the sort of person to spend money just because you have it, I've been in serious debt before and it's not a nice place to be.


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## offtheground (Jul 15, 2015)

I have no real tangible advice to give, however am in the process of opening a coffee shop myself so thought I would chime in. I'm equally inexperienced, but if you've done your market research and business plan to the best of your ability, you're 100% committed to this project and are prepared for working every hour under the sun and for the shit to hit the fan on a regular basis, then you're starting from a good place.

It's important to take advice from those giving it to you but not to get hung up on it, because only you really know the amount of work that you've put it on figuring out that this is the best way forward. Your costs inc. rent do seem a little high, especially in a small town, but if you've spent enough time counting customers all day long for weeks on end in your competitors, and if you've done the same with the footfall in the town and outside your potential premises at all times of the day and week, then only you really know how viable it is and whether there is enough potential income there to both cover your costs and actually generate you some profit. Nobody else on this forum does.

Don't worry too much about the barista-ing, it is something easily enough to pick up and perfected if you put in the many hours of graft. With all due respect to the coffee connoisseurs, coffee experts and the like on here, this is making good coffee we're talking about, not painting the mona lisa. You're not born with the ability to taste a good coffee. As you say, there are always people to help you as long as you're willing to reach out.

Good luck to you, I'm sure you can make it work. I've been around loads of coffee shops and spoke to the owners where possible and the two main pieces of advice they've given me are:

a) Keep costs down where possible and make sure that when you're getting your chequebook out, what you're spending money on is absolutely necessary and beneficial to your business

b) If it's not working after a couple of months, change it.

Hope this helps, stay positive, and don't let the negativity (which is everywhere) get you down. He who dares, wins, and all that.


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## BertVanGoo (Nov 20, 2015)

Thanks, some sound advice there.

Yes the rents are high, but unfortunately living in Hampshire and within an hour of London they generally are. Will just have to weigh up size vs costs and whats more important out of the two.


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## Yes Row (Jan 23, 2013)

You're mad, do a business plan, cash flow forecast and shadow P&L.

Take it to the bank/accountant and get their opinion based on facts and not dribs and draps of info (use worst case income)

I am a self employed business man ( licensed trade) and would not dream of asking Camra members for commercial advice

Live and die by your break even figure....ensure you know it!


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## froggystyle (Oct 30, 2013)

offtheground said:


> Don't worry too much about the barista-ing, it is something easily enough to pick up and perfected if you put in the many hours of graft. With all due respect to the coffee connoisseurs, coffee experts and the like on here, this is making good coffee we're talking about, not painting the mona lisa. You're not born with the ability to taste a good coffee. As you say, there are always people to help you as long as you're willing to reach out.


DO worry about this, you can have all the plans and fancy equipment, fancy machines, lovely beans, lovely cakes... But if you make shit coffee, people are not going to come through the door, you say you have some of the chains present in your town, they make shit coffee, if you match this shit coffee the punters will more than likely go back to the chains.

You have mentioned you have had a course, do more courses, get the right people making the coffee not just some cheap young person who has no deisre to perfect whats in the cup, passion is everything not just from you but also from your staff!


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## Kofe (May 4, 2014)

Read this book burtvangoo

It helped me.

http://www.amazon.co.uk/Setting-Managing-Your-Own-Coffee/dp/1845283279


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## offtheground (Jul 15, 2015)

froggystyle said:


> DO worry about this, you can have all the plans and fancy equipment, fancy machines, lovely beans, lovely cakes... But if you make shit coffee, people are not going to come through the door, you say you have some of the chains present in your town, they make shit coffee, if you match this shit coffee the punters will more than likely go back to the chains.


Completely agree, I think you misinterpreted my comment. How it was meant to read was 'don't let it hold you back, you can learn', hence the "if you put in the many hours of graft". There are some on here, judging by previous replies on this thread, who seem to forget that their knowledge and expertise came from nothing, just as anyone's does. Cynicism will not be helpful to the OP. I am not at all underestimating the importance of learning and perfecting the art of making coffee, of course, just providing some encouragement. This is a support forum, after all.


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