diamondpenguin

Coffee Shop

26 posts in this topic

Hey everyone, I have a big goal to start a coffee stand, I figured if we could get 7 customers an hour, we could earn a million dollars in three years, that being I work 7 days a week there. The thing is it would cost 100 grand to start a brick and mortar store. 25k to start a roadside store. How would you start a coffee stand?


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7 customers an hour seems pretty insane unless you live in a big city and could have it on the side of a busy street. But you'd probably have to pay for permits to be there and also ingredients so that the coffee is good and actually desirable.

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Posted (edited)

7 per hour is 56 coffees per day. 56 coffees per day if you work 8 hours  a day, 7 days a week is 20,384 coffees per year. That's 61,152 coffees sold in 3 years

Even if I grant that you can sell 7 coffees an hour (unreasonable), how are you ending up with $16 per coffee? (Or an average order of $16 per customer, at least.)

Even if you work 12 hours per day, every single day, that's 91,728 coffees sold in 3 years. That's still $11 per coffee.

If somehow you never need to sleep or use the bathroom and you can work 24/7 without hiring any extra staff, that's 183,456 coffees sold in 3 years. That's still over $5 per coffee.

Please show your math.

Let's work backwards here....

If you want to earn $1,000,000 in 3 years ($333,333 per year)....

If you can reasonably sell an artisan coffee for $3 (somewhere between Dunkin Donuts and Starbucks)...

You gotta sell 111,111 coffees per year

That's 304 coffees per day, every day of the year. Or 25 coffees per hour for an entire 12-hour day.

Then realize that $333,333 is your gross profit, not including all of your expenses like raw ingredients, advertising, staff, permits and licences, taxes, and many other things.

Then realize coffee is coffee, it's basically a commodity. Unless you absolutely nail it with the branding, you're just going to be some generic guy selling coffee in plain white cups on the corner. Your coffee is totally interchangeable for anyone else's. Car dealerships and churches will give you the stuff for free when you come in.

Edited by Yarco

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5 hours ago, diamondpenguin said:

Hey everyone, I have a big goal to start a coffee stand, I figured if we could get 7 customers an hour, we could earn a million dollars in three years, that being I work 7 days a week there. The thing is it would cost 100 grand to start a brick and mortar store. 25k to start a roadside store. How would you start a coffee stand?

Seems like a risky business. What is your reason, besides money, to open a coffee stand? Do you just love coffee?


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That industry is super saturated. It would be hard to compete with a lot of the chain stores. Of course if you can bring in special coffee or something different, then it could be viable. Having the perfect location would help as well. 

Where I am located I have seen things like 4 coffee places on the same street in my small town. I would not want to throw down that kind of money to compete with them personally. Even if I could reach 15% of their total market share it would be tough. 

Also, the point of running a business like that to me would be to not work all the time. I would not want to be serving coffee 7 days a week even if I had the chance of making that kind of money in 3 years. You will also run into the issue of not being able to actually work on advertising or other aspects of the business. Such as improving your supply chain, new products, new recipes, etc. 

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1 hour ago, aurum said:

Seems like a risky business. What is your reason, besides money, to open a coffee stand? Do you just love coffee?

Huge fucking coffee fan, I drink 3 coffees a day, and review all the coffees from the world. It's not about money, it's about bringing people together and giving them the best coffees from around the world. @aurum


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See if there is a big enough need in your city for something like a place for coffee connoisseurs.

If you can bring in your expertise and give workshops on coffee and maybe also sell the beans, machines or merch it might become profitable.

Maybe you can get investors from the industry if you have good connections.

 

Cater to companies to rent your place for annual celebrations or to learn about coffee.

I think that would be unique enough and coffee is popular enough.

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48 minutes ago, universe said:

See if there is a big enough need in your city for something like a place for coffee connoisseurs.

If you can bring in your expertise and give workshops on coffee and maybe also sell the beans, machines or merch it might become profitable.

Maybe you can get investors from the industry if you have good connections.

 

Cater to companies to rent your place for annual celebrations or to learn about coffee.

I think that would be unique enough and coffee is popular enough.

That's Genius! I could make a YouTube channel about how to make coffee, the best coffee for how you are feeling, How to make light, medium, dark coffee, etc. to the lamen. I feel like the thing I will struggle with most from the plan their is connecting with people, the investors,  to overcome that I'll just get over my insecurities.  I love that thing there.  The annual coffee celebrations, you know that would be really really special. That's something that really makes life worth it. Now for the how? Must do work. 


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Posted (edited)

Don't invest so much money. 

Work at a coffee store first. 

 

( I work as a book keeper for a local coffee store. The orders aren't that many.) 

 

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1 hour ago, diamondpenguin said:

Huge fucking coffee fan, I drink 3 coffees a day, and review all the coffees from the world. It's not about money, it's about bringing people together and giving them the best coffees from around the world. @aurum

Then I’d say go for it. I don’t know anything about the coffee business but I’m sure you can carve out some kind of niche.


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Posted (edited)

seems like a great idea. i personally love coffee and doing my work at coffee shops. it's an enjoyable atmosphere for me

one thought i have is that 100k for a first business is high? nowadays you can start businesses for a single digit % of that - through online means. does that appeal to you? and then maybe transition to a coffee shop once the online store pops off

 

Edited by Jacob Morres

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You will need way more customers than that. Your expenses will be much higher than you imagine and your profits much lower. Profit margins in the restaurant biz are around 20%. You will be lucky just to break even after working 12 hour days.


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Posted (edited)

Yeah guys, I honestly feel like you're right,(especially after doing the research) then we also gotta figure out how to bring customers over there too. Which is annoying.-_- That's just me I guess, always dreaming up new fantastical ideas. The more fantastical the better, so yeah I really appreciate all your hard work and insights guys and gals. The easiest profitable businesses to start are really lawnmowing, and car detailing. Or so they sayo.O 

Edited by diamondpenguin

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6 minutes ago, diamondpenguin said:

car detailing

I've had a business in this. It's good for someone trying to get some cash together. Cleaning a car for 5-6 hours to get maybe a hundred bucks or two isn't really worth it. I mean even if you did a half ass job and turned them in a few hours it still isn't that great. You can actually invest into good gear, products, and learn a lot of techniques. I started it originally because it was pretty satisfying after cleaning my own rig nice. No much so after that. 

Personally, I would go with something a bit less labor intensive that scales better. Online business opens up a lot of options for you to choose from. Not to say that there is not money in those other ones. Plenty of successful businesses there. I would also base it off something you are passionate about. 

Another thing I have learned in business is that these types of businesses make it fucking hard and grindy to even make six figures. No doubt you could make 6 figures mowing, but you got to run the numbers. Unlikely, you would be mowing that many lawns yourself. Try to find something where you are not too late to the party. Where it's growing a lot and is a bit more new of a field. There will be a lot more opportunities there. You don't even have to come up with any good ideas either. You just need to execute on an idea well.

 Of course if you can take the life purpose course and work on that too. Although, from the stuff you mentioned it sounds like you just want to get your feet wet in business. The stuff I mentioned is practical for creating a life purpose too. 

17 minutes ago, diamondpenguin said:

The easiest profitable businesses to start are really lawnmowing, and car detailing. Or so they say

That's one tough thing in business too that can put you into a bind. Starting out it can be hard to actually put capital into a business. I would recommend working a job to get some starting capital. Even if you decide to go with one of these routes. You don't want to be losing money using some crappy old mower for example. Test the business out though before you dump a lot of money in it. It's still on the tail end of garage sale season and you can even get a decent mower for like $10-$20 if you look.  Test to see if it is even profitable. You can even do that with your own coffee from home if you have some friends or family who might buy it if you want to go that route. 

 

 

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the choice of vehicle is the most important part about it. then find out the best spots to sell coffee, during the week. keep moving. make yourself rare in sense of time frames.

don’t just sell coffee, sell amazing coffee and some other specialities or coffee in a special way. 

as soon as it is running, dream up your next business, find someone to take over the four wheeled coffee machine or job and have fun with the next business. 

either like that or keeping in dreaming. if you start with thinking in profit margins you probably never do anything fun or exceptionally beautiful.

 

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IKEA now actually allows you to furnish your own tiny coffee spot with around 3-4 tables and up to 12 seating spaces at once so the layout may not be super expensive. Not sure how much license to operate is. You also gotta account for staff expenses, utilities, sanitation, logistics. 

The 1 million seems a bit like a pipe dream ad neatly broken down by @Yarco . Not saying don't dream big but be a little bit more realistic.

But you can't expect to compete with big chains. All you can do is look for a niche group of people. 90% of people buying street coffee just want A coffee, any brand will do. How will you be different?

 
If you're really serious about this thou:
1. Make a serious business plan including financial prognosis -expenses vs earnings
2. Figure out who your niche clients will be
3. Familiarise yourself with all costs of setting up a place like that. Maybe you could also frenchise under a big chain, the way Subways do
 
If you need a loan, the bank will need some seriously financial prognosis and solid business plan.
 
It's not impossible but entering a commodity market that is already super saturated will he risky. Maybe what you can do is establish a cute little hypster coffee store in area where there is none also serving some vegan friendly snacks. Those sorts of places are very popular

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Posted (edited)

The world needs now, more than ever, coffee stands on top of mountain peaks or in a middle of a trek. Just imagine the long line of people waiting to take an energizing sip from your hot coffee on their way to the Everest, Mont Blanc or Kilimanjaro. Now imagine you'd open a worldwide chain of that.

Edited by Shaul

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@diamondpenguin what about trying it with a bike coffee stand. its maybe more of an eye catcher than a small car, maybe even less expensive.

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On 10/08/2021 at 5:33 PM, diamondpenguin said:

How would you start a coffee stand?

I'd sell it out of a vintage camper van, and drive it from festival to festival. Cause it's a nice environment and you'd definitely have lots of customers day and night. I've seen it happen.


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