thinking of starting up my own coffee shop

[t-maxxracer32]

Hey guys hows everyone been lately?

I haven't been on the forums much.. been real busy with school, work, and the whole xbox 360 business... After making some money with that I decided to shut it down because once I get up to my apt in tempe, the living space will limit my capabilities. No airbrushing, no garage for dremel work to the cases, no huge room for the machine, etc.

I've always been more of an entrepreneur and always when growing up I've had some sort of side business to my actual work..

A buddy of mine called me up yesterday and brought to me the idea of opening up our own coffee shop right next to the ASU campus (Mill Ave.. for anyone who lives close)
At first thought I didn't really like the idea because I know very little about coffee, pastries, shakes, smoothies, etc.. But after going to a couple different shops in town I realized it may be easier than I think.
Everyone makes random smoothies and shakes in their blenders at home and they all taste pretty freakin good even though you aren't following any recipe, or have that great of ingredients to start with.
There will be a good amount of trial and error to find out which drinks we will have, which products we want to use, which machines to use, etc but all those details can be worked out in the latter months to come..

Right now we are still in the "talking" stages trying to figure out all the costs involved in this and what we need to make daily to break even..

We figure that we need to make about 5000 a month in order to pay rent, utilities, taxes, insurance, cost of supplies (this may make it more than 5k but were still not sure), cost of renting out equipment, etc)

and daily, we will need to make about $165 (about 42 drinks) to reach that goal. When looking into it in perspective 165 a day seems pretty dang low in my opinion considering the traffic that will be going by this location, but you never really know until you start things up..

Since I am a college student I wont really be able to work a heck of alot in the shop, but the buddy of mine is a freakin hard worker (puts in about 60 hours a week for his uncles water business) so I'm pretty confident he could run the shop mon-fri then I could take over during the weekends..

One huge thing about this whole deal is that we will not hire any employees until we figure out how everything runs. My buddy will run the shop most of the time, but whenever I dont have class I will hangout there and do homework.. if it gets busy or he needs some rest then I will be there to help him out.

Here are a couple aspects of the shop that will make it some what unique to others around.
-relatively cheap drinks
-Starbucks charges about 5-6 bucks a drink so we will take it down to around 4
-with every purchase, we'll throw in a homemade cookie, piece of banana bread, rice crispy treat, etc. (this is just an idea..)
-the place will be more of a hangout spot where you get your coffee, chill do homework, study groups, etc
-possibly put up 2-3 plasma TVs with a 360, wii, ps3, etc
-have a couple computers out for general public use
-definitely free wifi
-have specials either on a daily basis or 2-3 times a week (wacky Wednesday--half off drinks, freaky Friday--buy 2 drinks get one free, etc)
-open early and close late (there are very few shops open past 9 there.. definitely no coffee places)

I'm sure we will come up with more if we come to the conclusion that we will actually be doing this..
I have not talked to anyone about pricing yet, but I called the real estate company who manages the property and left a message for him this morning so once we find out the costs for the place monthly that will basically make or break the whole operation.

I know many of you are wondering about funding so here it goes.
another buddy of mine has been wanting to go into business with me for quite a while so I called him up and he told me he could get me 25000 by August to start everything up and have some backup money in case the first few months are rough

I myself have about 10000 saved up, but that is supposed to be for my apt, food, etc in case college gets too hard and I cant work a whole lot.

The other guy who is going to be working in the shop has about 5k saved up now and can save up more before we get into this adventure.

I realize that the economy is not the best now, but that makes this a great time to start because the real estate will be cheaper to get into the building. You could also see it as a horrible time because people aren't buying.. but cmon people.. everyone buys coffee!

There are a few things we need to find out before investing a grip of time and some money.......
We are not sure if there are any other coffee areas in this little mile radius place.. and if there are.. how much business do they do.. do they have the whole hangout theme going? (I realize all coffee shops are hangout spots, but ours will have entertainment.. Tvs, games, computers, etc)
Are we even qualified to get into the place
legally can we just start up our own shop, sell whatever we want how we want, etc (I don't literally mean whatever we want...)
how long is the process to get a coffee supplier

the list could go on forever

basically the reason I made this massive thread (I do apologize for the length.. but i value everyone's opinion on here and I know alot of you are very smart) is just to see what you all thought of the idea and if you have any suggestions feel free to reply!! negative or positive I'm up for anything.

We have not put any REAL planning into this, but from talking to my 2 friends, I can tell that they really would like making this happen.

I can see this actually going somewhere.. as the main reason places close down are because they are paying the employees too much and cant make any themselves.

I don't see this idea as making us thousands and thousands of dollars every month, but it would be nice to own my own business and not have to put up with BS from management.

anyways.. let the ideas fly

[lincpimp]

I own my own business. If I have anything that diverts my attention the business suffers. So I would suggest not doing this if you plan to go thru college and get any sort of degree that requires studying. 1st year will not be hard, but your last 2 will require alot of commitment and time to pass classes.

Business fail due to poor management, and overextending. Plus the bottom can fall out anytime so having a really big float is necessary. Your idea is sound, but there is alot to do before you can sling a single cup of coffee.

[simplechamp]

It seems to me if you don't have the time to do your part-time Xbox repairs you wouldn't have the time to run a coffee shop. Go to college and get a business degree if you are interested in entrepreneurial ventures, then once you get your degree start looking at starting your own small business. You need to really understand accounting, economics, etc. to be successful, and even then it's still risky.

P.S. The whole idea of "My friend can get me $25k" is a bit concerning. Be very careful when you are considering a) taking on large debts, and b) dealing with money amongst friends. It can get pretty bad when things don't go as you have planned.

P.S.S. No one is trying to burst your bubble, it's just that these things always look good on paper, but when you actually jump in it might not be what you expected. Getting your degree should come first and foremost.

[t-maxxracer32]

Alright so the real estate guy called me back and they want a litttttle more than expected
my dad has property down here and charges 2 a sq foot plus random fees
this guy in Tempe wants 28 a sq foot at a 5 year lease

looks like I won't be doing this.

I appreciate you guys taking time to put in your thoughts and I agree with both of you

it's fun to dream

[TexasSP]

Also you must understand partnering in a business is a lot like marriage. There are good and bad and it takes work and compromise. You definitely need a contract/agreement before pursuing this. Running your own business like said takes a lot of time and effort, and if you have employees things get more complicated.

Take your time and do your research. Most small businesses fail because of the following:

1. Lack of funding
2. Poor management

I have a business partner myself and it takes a lot of effort to keep things smooth. We must both realize everything is a compromise. It works well but not all do.

It sure seems to me you invested a lot in the X-Box business to just shut it down so quick. Did you even make any money or at least break even?

How do you plan to file this new business? Corporation, LLC, LP, LLP, they all have very different and very substantial tax and structural implications. Despite what people say it's very wise to get a lawyer and CPA to advise you. Yes it costs money but screwing up because you failed to get good advice costs much more.

Good luck either way.

[simplechamp]

Originally Posted by t-maxxracer32

looks like I won't be doing this.

I appreciate you guys taking time to put in your thoughts and I agree with both of you

it's fun to dream

But see you shouldn't give up hope yet. As I said, get your degree first and then start planning for the future. If you REALLY are serious about doing this it's going to take time. Please don't take this the wrong way, but the fact that you are willing to scrap the whole idea because of one phone call shows you aren't very serious about it (at least at this point in time, which is probably for the best). The fact is most small start-ups fail, regardless of if the person running them is smart, dedicated, honest, etc. It's just how the economy is. Go to college, have fun, meet girls, etc. and worry about the small business after you graduate. Like TexasSP said, you seemed to burn out on the Xbox thing pretty quick, and the repercussions of that are relatively small, but doing that same thing with a small business would really cause you big problems financially and in other ways.

Personality wise we are probably very similar. I like to get these big ideas and go all out on something, then tend to have a short attention span and move on to something else. It has taken a lot of practice to overcome that, learning to look further down the road, learning not to put time/money/effort into something until I really understand if it's something I want to do.

[t-maxxracer32]

Reason I am done with the 360 stuff like I said is because I don't have enough room to make that business work in my small apt
can't open up shop for that because of school and my Freind doesnot know the 360 game
and yes I did make money on the xbox business. Good amount for the time I put in it.

Simplechamp.. I'm not saying that I give up on starting my own business sometime in my life but possibly right now
me and my buddy aregoing to phx next weekend to scout out other possible locations.

[josh9mille]

The fastest way to lose friends is by going into business with them. I learned that the hard way. A friend and I set up a auto repair business (on the side) and after just 4 months we were at eachothers throats and we didnt talk for almost a year. We are friends now but we both decided its just not a good idea to do business with friends.

[JThiessen]

I think its for the best that you aren't starting it right now. Get a part time job at one of the local coffee shops and learn the biz first. IMHO, your orignal plan was doomed to failure just based on lack of experience in ALL facets of it (you have never brewed a cup of coffee, you have never run a "real" business, You have never gone to college, you have never.... this could be a long list..). I dont mean any of that to be negative in any way. Check some of those "experiences" off first so you know what your strengths and weakness's are. You have a good attitude towards it, just add some humility (ie., there are things you need to learn) and you will be good to go. Learning the hard way is a great teaching tool, but I'd hate to see you guys loose that much money on this at such a young age.

[t-maxxracer32]

Originally Posted by josh9mille

The fastest way to lose friends is by going into business with them. I learned that the hard way. A friend and I set up a auto repair business (on the side) and after just 4 months we were at eachothers throats and we didnt talk for almost a year. We are friends now but we both decided its just not a good idea to do business with friends.

good to hear.. my dad told me the same thing, but figured he was just saying it to talk me out of it..

turns out he was right

okay so I dont want to make it sound like I am a quitter, but from the looks of it most of you guys do not think it is very wise for us to start up a company like this in these times..

Heres a big question though... what else can we do then to form our own business?

we both have skills that are on the opposite spektrum and together should be pretty solid.. Im great with electronics, and he understands the mechanical side of things.. He has been working for his uncle in the water purifying business for quite some time and so me and him were thinking of extending the business from yuma to tempe, but his uncle is not too excited about that idea. We would have to form our own name, get certified, get a business licence etc..

both of us would prefer to run our own company or some type of business that brings in revenue (washing cars, mowing lawns, installing water systems, etc)

we've brainstormed a number of ideas and quite frankly we are getting stuck.. neither of us are looking to make a tremendous amount of money, but Id like to be able to have this work revolve around my school schedule..

any ideas?

[PBO]

t-maxxracer32, having your own business is an excellent idea. I would strongly encourage eveyone to at least try it, teaches you a lot!

I have food industry experience & have dealt with cafe/coffee shop/restuarants from most sides of the business. Food is one of the hardest industries to own a business in, the returns are typically modest, the hours are very long (60 hrs p/wk is minimum, more if you want to expand), staff are a major problem & you ride the fluctuations of the economy harder than most businesses because you're essentially surviving off the lose change in your customers pockets

I'd suggest finding a service/technology/product based business to start off with. Learn your lessons there & when you have enough cash to loose...then try food

[simplechamp]

Your business should be going to school and getting a degree. If you are going to a good school and actually being challenged you should have just enough time to study, fit in a little fun-time, and maybe get a part-time job. If you have tons of free time while going to college (enough to start a small business) it means you aren't working hard enough or aren't being challenged enough. You said yourself in your thread selling the soldering machine "I've decided to sell the jovy 7500 machine along with the other things needed to get it going because I simply will not have the time to be doing this stuff while im away for college." Do what JThiessen said, get a part-time job in an area you'd want to learn more about, but keep your main focus on school.

[JThiessen]

Yep, you need to focus. Lets say you started a business (which by now you probably realize to some extent that it takes a tremendous amount of time), and go to school full time. At some point, likely sooner rather than later, the two are going to conflict. Which one are you going to give up? It WILL happen.
College is not a game (but it can also be the best 4/5 years of your life). I hope you are taking the studying and work involved more seriously than it sometimes sounds like you are. If you are so good at electronics, get a part time job at an electronics company. Isn't Allied Signal somewhere close to you? Future employers will look at your ability to stay gainfully employed, even if part time. Stability is a asset that not a lot of young people show these days.

[TexasSP]

I am with the others, right now school should be your business and any job should be nothing but a means to get cash in your pocket. Not to say you shouldn't do a good job where you work and put forth effort, but school should come first. Especially with the amount of money one has to pour into a good university degree these days.

As far as a side business, I think it could work as long as the focus stays on school and the business suffers first.

If it were me, I would get to school and find some kind of part time job that fits your schedule. Keep your eyes open and look for opportunities in the form of needs around you. See if you can eye any possibilities for a part time gig you could do on your own time. As for your friend, if he can fit in the picture great, if not do your thing and stay friends.

The most important thing of any business is knowing and understanding your market. Not having any experience in the place you are going makes that very hard to do.

[t-maxxracer32]

you guys all make some great points.

I will reply to a few things so I dont sound like an ignorant kid

simplechamp- you quoted me on saying I wont have enough time to put in with the machine, and that is a fact because that will require a few hours everyday to make any money. With my coffee shop idea or anything else it would have been mostly all weekends.

JT- I definitely take college serious as my parents are spending their hard earned money, and I am spending a ton of my time in it.. Im not about to fail classes because I dont give my full potential..
I may sound like I dont put a whole lot of work into things, and at times this is true but for the most part I give it my all.


I dont want to make it sound like Im making excuses or trying to make myself sound better than I am because everyone has their faults and things they need to work on, but I just wanted to respond to those comments.

Texas-once I get there I will look more into jobs that fit me.. instead of just waitin tables. Ive worked at olive garden for 2 anda half years now so its getting a little old. some electronic company sounds good.

Its always fun talking with you guys even if you steer me away from something I wanted to do (reason why I come here is for the advice.. even if that means getting told Im wrong)

thanks again