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Starting a Coffee Shop Business: Part One (Planning) - YouTube
Channel: TRUiC
[2]
- [Marcus] Coffee is an amazing thing.
[4]
- [Maliesha] It's first dates.
[6]
It's business meetings.
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- [John] I mean, some theorists say that,
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you know, coffee kind of started
the industrial revolution
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and took us out of the dark ages.
[15]
- [Jess] It's part of the love of coffee,
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staying on top of the
curve, ahead of the wave.
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- [Marcus] I don't know.
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There's nothing like it.
[24]
(funky music)
[27]
- The kind of person
that excels at running
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or opening a coffee
house, I hate to say it,
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but, really unusual person.
[36]
You have to have every skill set.
[39]
- Number one, they have
to have enough capital
[40]
to open a business.
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Number two, they have to have
a passion to run a business.
[46]
- And you have to be willing to learn.
[47]
You have to be wide open
to learning at all times
[50]
and never say, I got this right.
[52]
- I mean, you definitely
have to have the quality
[54]
of being okay with the unknown.
[56]
- You have to be a perfectionist,
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but you also have to be
half-assed about everything.
[61]
- You really need to sort of fall back
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on all the things you've
ever done in your life.
[65]
- If you don't talk, if
you're not out there,
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you're not gonna get anybody interested
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in what you're doing.
[70]
- They have to love being around people
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because this is really a people business,
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from your staff to your guests.
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- It also helps to be community-minded,
[78]
cause that's really at the end of the day,
[80]
what a coffee shop's all about.
[82]
- It's an odd skill set.
[84]
I don't run across a lot of
people that can multitask
[89]
that many things, the financial
side, the people side,
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the product side, the equipment,
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relations with vendors, watching numbers.
[98]
It's hard.
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My name is Marcus Goller,
and I run coffee houses.
[105]
I've been in coffee 35 years.
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I've run, probably, the busiest
coffee house in the world.
[113]
I've run really slow coffee houses,
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so I've done it all, all over the country.
[119]
So, I grew up in California,
and I went to UC Davis,
[125]
studied psychology.
[127]
But I got a job at a cafe in
Davis, because I begged for it.
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I was like, you gotta hire me.
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Everywhere I went in the
Bay Area coffee scene,
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I met wonderful people,
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people that were passionate about coffee.
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They just made me realize what
a fun occupation it could be,
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so I just wanted to be part of that.
[150]
(funky drum beat)
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If you have any thoughts at all about
[155]
going into the coffee
business, you gotta work it.
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So, get a job at a cafe.
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Especially try and go
to a successful cafe,
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to one that's more craft.
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So get a job, and then
just excel at your job.
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Put everything you've got into it.
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Do it right.
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Work with the team and
try and work your way up,
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and gain more knowledge.
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Cause either you're going
to find you don't like it,
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or you love it.
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- And then also, you
can, through that job,
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make some connections that might
help you open up your shop.
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At the end of the day, if
you don't know something,
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you can only google it so far.
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And you're probably going
to end up spending more time
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on the Internet than you
would've if you had just
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asked someone you knew had
the answer to your question.
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Networking is essential because
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we all have answers that
we're ready to give.
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But you have to be asked the
question in order to give it.
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And without networking,
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I think I would've spent a lot of time
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second-guessing myself.
[226]
And also looking for answers that were
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more readily available
if I had just, like,
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looked to another coffee professional.
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My name is Jess Harmon, and
I am the Director of Coffee
[238]
for Cultivate Coffee and Taphouse.
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Outside of Cultivate, I help other people
[244]
who are interested in starting
up their own businesses,
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and I answer a lot of questions for people
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who have general questions about roasting,
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questions about machines,
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and also just health code
questions and concerns.
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If you don't have a good
idea of what your budget is
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going into it, it's more likely
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that you're gonna run out
of money sooner than later.
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In reality, if you're serving coffee,
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you're not there to make money.
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It's not a business people
should go into to make money.
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It's a business you should go into
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if you want to be a part of your community
[282]
and if you want to serve people
[284]
and have that type of environment,
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and just be that kind of person.
[289]
There's not a very high margin
on a lot of coffee products,
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and it takes a lot to end up
turning a profit, you know.
[297]
The biggest costs that go
into starting a business,
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how much you want to renovate,
if it's turn-key or not.
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You can buy out coffee shops,
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and have pretty much all
the equipment ready to go.
[308]
But that's not usually what
people are stepping into
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when they buy a coffee shop,
[313]
so a build-out can cost a lot of money.
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And then also, your espresso
machine's gonna cost you
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a lot of money as well.
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It's probably anywhere between,
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if you're gonna get a two
group automatic machine,
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$8000 to $20,000.
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It's like buying a car.
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Yeah.
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So just your three big
main pieces of equipment,
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the water system, the grinder
and the espresso machine,
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can cost you up to $20,000, at least.
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- The number of things you need are huge.
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The only way to know that is
to have worked in the business.
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So, then, once you know what
all your costs are gonna be,
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add 20%.
[354]
I'm sorry, you know, as
fine as you can get it,
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there's always cost
overruns in construction,
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unforeseen things.
[362]
You don't wanna go into the
biz underestimating the costs,
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but you wanna be as accurate as you can.
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Add 20% and then think,
okay, what have I got?
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How am I gonna finance this?
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Can it be done?
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Sometimes you have to go
back and rework the solution,
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cause it just may not work.
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Not everybody can pull off, you know,
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a half a million dollar coffee house.
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In fact, they shouldn't.
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It's not smart.
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- Well, when I was
starting, I had no finances.
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I got a scholarship.
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My finances were dire.
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I know some people cash out 401ks.
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Some people start with all kind of stuff.
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I had nowhere to go but up.
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That's one thing I really
appreciate about, like,
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the cold brew coffee, is,
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it's a way to get into
the coffee industry.
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I think when you talk to other people,
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coffee shops and stuff, espresso
machines are like $15,000
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or, you know, like,
they're really expensive.
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And actually, when I opened
my shop, my niche was,
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everything was made with cold brew coffee,
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so I could still make hot drinks,
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but I would make them with,
like, I had a $30 frother,
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and I would froth milk
and stuff like that.
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I didn't have to buy an
expensive espresso machine
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because that would've been it.
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I would not have been in the business,
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just from that piece of equipment alone.
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Ultimately, I want the story
to resonate with people
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that look like me or have the
experiences that I've had,
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so that they can feel as
if they can do it, too.
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Like, yeah, I don't have a trust fund.
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It's okay.
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I can still do this.
[465]
- I had read a little story
about coffee roasting at home.
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So I was roasting some
coffee in this garage.
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I mean, I did that for four years exactly.
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But during that time, I
was sort of like, you know,
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slowly, methodically, like, learning about
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what I'd have to do to open a cafe.
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But I also wanted to open a roaster,
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so that's what I did, you know.
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It started off as just roasting coffee.
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I just kept doing it,
and I kept, like, just,
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kept boot-strapping it
and reinvesting and saving
[492]
and reinvesting and saving and saving.
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You know, just saving.
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And, like, I didn't pay
myself for probably the first,
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you know, I didn't pay
myself for the first,
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like, eight years of this business.
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I mean, I would drink coffee for free,
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but, I didn't pay myself, like, any money.
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I had another job.
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(funky drum beat)
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- [Marcus] You know, unless
you have a rich uncle
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or you're wealthy yourself,
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you're probably going to have to go out
[516]
and get an SBA loan or
some kind of private equity
[519]
or a family loan.
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But they're gonna wanna
know what are you doing,
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and what are the chances of
success, and is it believable?
[526]
Does it pass the smell test?
[529]
So, wrote a formal business
plan, it was very thorough,
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so it included executive summary,
products, pricing, costs,
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all the financials for three years.
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- It's really you saying
that you know how to go
[548]
from point A to point B
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and that you've thought
through the entire process.
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It's also really important
to look at your business plan
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to see how well you've
thought through the thing.
[563]
And to know that you're,
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it's not just at the end of the day,
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this is how much I spent
and this is how much I have,
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so that's my profit.
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It's like, you really have to
plan for the whole picture,
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the whole health of the entire business
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and its sustainability.
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- And then you really
have to do a narrative
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on what it is you're doing.
[584]
So, as best you can, in detail, like,
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what is the business, what's it, why, who,
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what's the impact, why this
location, who's your customer?
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You need to know, like,
what's gonna bite you.
[602]
You need to list those things out, like,
[604]
if anything goes wrong, what
could they be, most likely?
[608]
All that kind of stuff.
[609]
- A business plan is meant
to be changed and updated,
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but also, the business plan is just, like,
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the structure of where you're going.
[618]
And if you're not willing to adapt that,
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then you're probably not
going to succeed over time.
[625]
It's really about setting
small goals and achieving those
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one little bit at a time.
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(funky drum beat)
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