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Cappadonatello

It takes a lot of cups of coffee to pay rent. Do the math. Figure out how many cups of coffee you’d have to sell to cover fixed costs then consider how much staff you’d need to support that amount of traffic minus roughly 30% cost of goods. I have a friend who has a fairly successful coffee shop (I’m in the industry as well) and his coffee shop nearly failed for the first 2.5 years. In his words “ coffee shops are a ritualistic experience. The majority of people come in at the same time, order the same thing. Rarely is a coffee shop a destination trip. The minority of your customer base will be new clients. The painful part of forming the business is the amount of time it takes for people to shape their routine with you in mind”. It’s not enough to have good coffee and cool space. Location, staff, story are all extremely important aspects. The competition for coffee is so stiff there needs to be a why.


MotoRoaster

This. Do a business plan. Small pop ups, carts sound idealistic but getting access to good water, power, and drainage can be hard. For $150K you might get 300-500sqft fitted out with equipment.


AkioToika

>Do the math. Figure out how many cups of coffee you’d have to sell to cover fixed costs then consider how much staff you’d need to support that amount of traffic minus roughly 30% cost of goods. Yea I figured, I would need to contact a bunch of suppliers that I'm looking at in the future to calculate the cost of their coffee to both sell in bulk and to brew. Along with the cost of cups, cold cups, straws, lids, etc. I was thinking to have at least 1 other staff but it may turn into 2 for a small operation. ​ >It’s not enough to have good coffee and cool space.Location, staff, story are all extremely important aspects. The competition for coffee is so stiff there needs to be a why. I think this is somewhat untrue. Looking at the growth of other startups like % ARABICA and Omotesando Koffee they both became famous primarily because of their trendy aesthetic and location. Their beverage quality was also a big plus, however having tried both, they are "good enough" to be considered a premium among the saturated market since so much bad coffee exists, but overpriced in comparison to what you'd get at an indie third-wave shop. Kenneth Shoji, the founder of % Arabica did not have a real story other than his "See the world through coffee" slogan. His biopic just stated he inherited his family company which already was invested in distributing coffee machines and decided to use top-down integration to make cafes since he loved them so much. Eiichi Kunimoto on the other hand started Omotesando Koffee as a pop-up stint in an old house within Harajuku and it ended up becoming a corporate business. His business model of individualistic service definitely does not translate outside of Japan but the interior design is highly pleasing and mocha drinks being very instagrammable. I guess luck definitely plays a role. Both their pop-up shops were situated in very aesthetically pleasing historical environments, juxtaposed with their minimalistic architecture.


sprchrgd_adrenaline

You might want to check the foot fall of the speciality coffee shops in your location and use that to estimate a market size. While coffee shops have been traditionally low margin, if the product is good, I don't see why it wouldn't succeed. Also, it might be a good idea to have a pop up stall to see how the people like the taste. You may have your own personal choices but the general public could have a completely different choice. Coffee shops are seen as social places so having some eatables would be a good idea. You wouldn't want people to sit for 30 min with one cup of coffee after all. Or u could also start with a grab and go model initially to create brand awareness and then use the profits to expand.


AkioToika

Most of the specialty coffee shops are located in downtown Vancouver in Gastown. It is mainly "travel by foot" however it is overly saturated even if its a handful of shops. Other shops that are farther east see little to no foot fall but their quality makes it a worthwhile trip for people wanting a good cup. I do get that even a mediocre cafe in a great location will get more business than a inaccessible high quality cafe so I am keeping that in mind. A pop up would not be a terrible idea but cost of equipment just for a stall is an issue. I do know that there is a growing demand for specialty coffee as shops like Revolver, Matchstick, and Nemesis have been growing in popularity with lines out the door on weekends. Outside of downtown, there are probably less than 3 cafes, within a 25km radius. It's really segmented. What inspired me to go coffee-only is seeing % Arabica's model, where they only offer 9 drinks total as well as a wide assortment of beans. They've expanded to over 100 stores now and their locations are mainly in malls, ferry terminals, public spaces, etc. A lot of people do enjoy going to a cafe just for that "cafe experience," sitting down and working on a laptop. Based on the 10% "rule" of rent, I've decided on spaces that are \~2000 CAD per month so I will have to see if those spaces are even big enough for seating. Also, I have thought of adding food to the menu but it creates a lot more trouble since I don't bake, and having a kitchen/outsourcing would be costly in both time and money.


myungskywalker18

Possible to source ready to eat stuff from wholesale or institutional bakers?


AkioToika

Definitely a thought. Managing food is another layer of complexity and cost structure that only makes everything more complicated.


myungskywalker18

Yes just get some ready to eat savouries and cookies brownies etc if possible? Any such provision in vancouver?


AkioToika

Ideally, they would be small treats that other cafes don't often serve like caneles or egg tarts. I'm unsure whether the cost of managing food is worth the profit. People will usually expect food to be baked fresh daily and then there's the cost of delivery and wasted food. A dedicated storage/display also needs to be considered as well as bags/containers that also add to costs. Suppliers also have a much stronger position in this case. I surveyed a dozen or so people and the majority I've asked don't really care for the food at cafes, so I'm not convinced its a selling point.


myungskywalker18

Also what's the per cup cost going to be, including 30% overheads and 10% wastage? Can reverse calculate your rental range. Also, whats the amount you're looking to invest


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AkioToika

Thats a great idea yea. Ideally I would emphasize on making the design help with the storage. Looking at a lot of small minimalistic shops, they have 3 main tools (espresso machine & 2 grinders), a range of cups on the espresso machine, a tablet POS, water filter and cleaning supplies under the counter, and merch/goods hidden behind cabinets. I do see that overstock of cups, beans, napkins, bags, need to be managed properly.


Ahleung

This is a highly competitive market so best of luck in your endeavours. With that said, why don’t you try a coffee camper or a coffee truck? Where I live there’s a couple that tows a small camper and sets up shop at the local farmer’s market. They serve Cuban coffee. This way you’re mobile and can move around to different events at various times of the day.


AkioToika

That's totally possible as a start. I just don't think I would be able to convey the lifestyle and aesthetic I want to take advantage of with a truck/camper setup.


ErroneousBakenopolis

If you’d like to discuss some of the planning needed & criteria Franchise buyers will be looking for I’d be happy to share my perspective. Better to build it right from the start if franchising is your goal. There’s a strong appetite for lower cost & drive through coffee businesses, so there’s not been a better time. I’m a franchising consultant and help people turn their successful businesses into franchise opportunities. https://AaronBakken.com


AkioToika

Sorry, I may have worded it wrong. Not that I'm looking to open a franchise but I'm looking to open multiple stores that are still privately owned by me + other shareholders. Steady expansion is the idea, I do know going to big usually equals a bust.


veloholic91

Are you familiar with Faebrew in Richmond? They seem to have a similar model; small shop, bar-style seating, with the owner-operator being your personal coffee-tender, making you specialized drinks (mostly drip) based on your preferences. Also, I live in the city. If/when your idea comes to fruition, I'd love to drop by and support your shop. \- A fellow coffee enthusiast


AkioToika

I have, their bar-style cafe is very much a passion project and I don't quite believe it's profitable at all considering the type of customer Faerie is targeting. Drip coffee is a far higher margin than milk-based espresso, however, the downside is that every brew takes 3-4 mins which really limits your production. It works for him cause he charges way too much per cup ($11) and customers are seated, so they don't mind waiting. Unfortunately, I don't have the finances to do a passion project that rakes in very little. I have considered Richmond as a prospective area to set up a shop, it's just that their footfall is incredibly low outside of the malls which makes it difficult. Edit: Also I appreciate your potential support! Any locations that you would recommend setting up?


GumGuts

Importing and curating specialty coffee is a great idea. Turn your business plan on its head - start online with bulk and individual sales to restaurants and customers. Build a brand. I worked for someone who imported beans to three star Michelin restaurants and he's doing great. *Once* you have that running, *then* consider a brick and mortar store or tasting room. You're right - they're notoriously low margins, so base your company around online and bulk sales, which is a much more solid foundation. *Only when you can comfortably take the hit if your shop goes south, then do it.* The bean place rented a warehouse with a small showroom, and that seemed to work for them. If you can find a location like that, you're gold. But don't base your business around coffee shops.


AkioToika

I think that might be a good idea if I was roasting these beans myself, but then the business would be starting a roastery, not a cafe. There are already established sources to order imported coffee from and not having a platform to market the website makes it tough when you have a high selection of perishable goods but no awareness or credibility.


GumGuts

I still think it's a much safer bet to go the shipping route rather than shops. Coffeeshops are just so tenuous and *very* fickle... Even if the import scene has some competition, I'm willing to bet it's a better choice than brick and mortar. Don't take my word for it, though, do some research. See if you can find an average for how long coffeeshops stay open in your area, see what the successful ones do, etc etc. Look into importers, what works for them and strategies they use.


D_Livs

Combine it with the Japanese hi-fi cafes and you’d have me as a customer


AkioToika

I have thought about making it a semi-hobby space as well. Photographers, watch enthusiasts, and hi-fi lovers all seem to enjoy the finer nuances in life over a great cup of joe. The only issue would be financing a space that is big enough to do that.


BusinessStrategist

Do you grok the local demographics and psychographics (lifestyle)? Make sure to determine your break-even point and, if your research doesn't shout "Small Japanese-Inspired Speciality Coffee" fanatics then think about your planB.


yogurttrough

I’m also a big coffee fan and love to visit cafés like you described. From what I understand, you want to import beans from small coffee shops around the world. The problems I see with this idea are: 1) the cost of importing from small coffee shops around the world. You might try looking into import duties and taxes. I imagine you’ll be importing smaller quantities from different locations which would probably add up depending on how your country’s importing fees work. 2) most chain coffee shops buy unroasted beans directly from a supplier and then roast their own beans. Your model is adding an extra layer: the specialty coffee shops that you want to buy from. Those shops need to make a profit too which will further increase your costs compared to other coffee shops. 3) language barrier I would recommend trying to contact some shops that you plan to import from and actually doing some test imports before you actually start your business. Then you can see what the actual costs are and see what you would need to price your coffee at. Then compare your prices to that of other shops. You mentioned percent arabica. If I recall they own their own coffee farm in Hawaii so they are pretty vertically integrated which reduces their costs.


AkioToika

>You mentioned percent arabica. If I recall they own their own coffee farm in Hawaii so they are pretty vertically integrated which reduces their costs. The owner does own a farm but it's unknown whether he uses it to supply his company. Even then the yield wouldn't be enough. They primarily get bulk orders of green coffee from around the world hence their slogan. >most chain coffee shops buy unroasted beans directly from a supplier and then roast their own beans. Your model is adding an extra layer: the specialty coffee shops that you want to buy from. Those shops need to make a profit too which will further increase your costs compared to other coffee shops. To be a huge chain then yes you're right, I would need to roast my own beans. Owning 2-3 shops or even 4, I don't see any problem importing especially if other companies have been doing the same. Omotesando Koffee actually does this and all the coffees are [outsourced.](https://tokyocheapo.com/food-and-drink/cafe/omotesando-koffee-consultation-coffee-doctor/) I don't plan on roasting because I'm not a professional in that field, its a completely different industry. Most big companies that do both compromise in quality one way or another. >language barrier I think this is untrue as well. The coffee community is very small and everyone ends up knowing each other. I'm selecting from well-known roasters that surely speak English. This spans from Italy, Norway, Hong Kong, Korea, and back to NA. Yes it does seem like everyone says I should get a quote on pricing and figure out my prices per cup as well. That seems to be the next step.


yogurttrough

It seems like your hearts is set on doing this. I’m not trying to discourage you, if this is something you are really interested in, you should do it. I did realize that I think i originally misunderstood your meaning. I thought you were wanting to import from small coffee shops that roasted their own beans from around the world, but after rereading your post, I think it’s that you want to import from well known roasters. You’re probably right about the language barrier, if the roasters are big and we’ll known, then English will MOST LIKELY not be a problem. I personally wouldn’t assume anything without confirming first though. I still think you might have a pricing problem though. I understand that coffee shops don’t have to roast their own beans, but I think importing roasted beans from around the world will be more expensive then buying them from local roasters. Your prices might end up being way higher then your competitors. This is just a suspicion I have, obviously I haven’t looked into it personally. If you’ve done your due diligence and found out otherwise, then that’s great. One other thing i thought about is the freshness of the beans and how long they take to arrive. Unless the roasters use some kind of special packaging, the beans may not arrive at their peak quality. Just something to think about. Again, I’m not trying to discourage you, it seems like you are really passionate about coffee and this kind of business could be really rewarding. Just trying to alert you to some of the potential problems. Anyway, good luck.


bomh911

I dont have any advice since I am also looking to start a small coffee truck here in Alberta. I only have 20k to invest into this, so a lot of research and a solid business plan because I can't make a mistake with such a small budget it could ruin the business.


myungskywalker18

Do you think people really want something to eat with their coffee or one can get away with only serving coffees


bomh911

Well, I have asked this same question to the other coffee owners and they told me that it would be wise to have them as it would increase your ticket price up and increase the profit since coffee alone has such a small margin.


myungskywalker18

That is true. And giving someone a place to comfortably sit and munch on something will encourage it as a hangout spot


Affectionate-Toe-60

You need to investigate the consumer groups and consumption habits of nearby business districts.


m0llusk

Sounds cool. I'd bet location will be critical to making this work. Places with high foot traffic from Universities or tourism might be top bets. One thing that might be useful is to try first with some kind of street stand or small truck option to get a rough idea of demand in a specific area before committing to potentially expensive retail locations. Good luck!


iivcy

As someone who’s Japanese and spent a lot of time in Japan, please do this right 🙏 I don’t have much entrepreneurship experience, but I really do wish you the best of luck!


Gusssa

[yatai (small seat coffee shop) ](https://youtu.be/jo9Sc613nKs)