Category Archives: Business

Starting a Cafe or Opening a Coffee Shop

Thinking of starting a coffeeshop business or cafe? Be careful! Selling low value consumer products is one of the toughest business environments to enter. Here’s what you must remember before opening a coffee shop biz.

Reasons to not open your own cafe or coffee shop business

A coffee shop is HARD work.  Every day you need to be ordering new stock, managing staff, greeting customers.  Day and night all you’ll think about is your coffee shop.  Accounts, partners, legal paperwork will be on your mind constantly.  You won’t sleep from stress most nights until you’re making a solid profit from the coffee shop.  These Amazon coffee shop books might help.

Coffee shop competition is fierce.  A Starbucks can open across the street at any moment.  How would you compete?  Do you have a better store ambiance? Better tasting coffee? Delicious muffins your customers love?  Think of every advantage you have before starting and write it all down.

Low profits for coffee shops – No one becomes a millionaire with a coffee shop (except Jerry Baldwin, the original owner of Starbucks USA).  Truer words have never been spoken. The profits of a cafe are low.  High workload and low profits mean high stress.  Is it worth it to own your dream cafe?

Coffee shops are high risk businesses.  A coffee shop costs the same as a regular retail outlet, yet comes with a much higher risk profile, and stock that decays within 2 weeks max.  Are you willing to accept that 9/10 coffee shops go bust within the first year?  Never personally guarantee any debt on a coffee shop business because of this statistic.

That’s the negatives of opening a cafe.  How about some positives?  Well there are some positves to having a cafe that are unique, others which are relevant to all business owners.

Reasons to own a Cafe

You are in control.  You get to make the coffee YOUR way and no one can tell you not to.  You can’t be fired from your own shop.  No one tells you what to do.   You take a break whenever you want. You’re the boss.

If you make the coffee shop profitable it is a good self sustaining, long term business.  Although difficult to turn a profit, if you can make it, a cafe is a great long term business (even with the low profits and hard work mentioned earlier).

Coffee shops have high margins and loyal customers.  If you are great at customer service and choose a great location you can bemaking serious money from the very first day of opening the cafe.  Coffee has a 70% mark up MINUMUM.  The markup on coffee is even higher if you aim for the luxery market or choose a premium location with higher rental.

The final reason to open your own cafe business is to make people happy.  To provide others will something valuable to their day and to their lives.  Even if it is just that morning mocha pick-me-up and a lick of your hot sweet muffins.

Should I open a coffee shop?

Personally, I would not open a coffee shop as a business due to the risk profile, stress, and hard work, but then you are you.  If you have that dream location, if you have the money to take a roll, and you lack alternative options, then go right ahead!  Great luck on your coffee shop business!

Should I Drop out of College?

If you’re considering dropping out of college to start a business or internet startup, or even just to be an entrepreneur and freewheel your life, then let me tell you this:

I’ve said it many times.  Do not drop out of College.  It’s a gimmick/meme to do so and you’re a sucker if you do.  It worked for them, they’re a lucky outlier, you probably won’t be.  Get that paper, consider it your life backup.  The majority of your early years should be spent aquiring these backups.  Whether simple Qualifications, or usable skills; such as a foreign language, or how to fix a computer.

When young, it might seem like a cool idea to freewheel life and play entrepreneur, but without a backup and a base cash runway you can be eating from a trash can surprisingly quick.  There is no quick fix.

Do not be lazy with your education, you will most likely get only one chance to hit that target.  TAKE YOUR SHOT.  Yes, it’s hard.  If you knew the content it already it would be easy, but then you wouldn’t be there, would you?

Ideally, get a grad job for a year after you finish.  Yeah, you’ll probably hate it because you’re a free spirit, live free and die hard, but you’ll get valuable work experience (again, it’s additional backup) plus cash in your pocket.  Save that cash.  Work your ideas in your free time.  When you hit something worthwhile, quit the job if it’s less profitable than the business and go for it.  I’m with you all the way.  But please DO NOT drop out of college to start a biz.

Backup FIRST, then take the risks.  Don’t jump without a rope.

Let me tell you a quick story I’ve heard many times now.  Guy (it’s usually males) drops out of college because he’s lazy/on medication/enjoys too many herbal supplements/just can’t get it together.  From that point, he aquires employment close to his college/university.  Usually a pizza place, maybe a Subway or Mcdonalds.  Whichever gives him a job first.

He spends his days smoking, drinking and playing his Xbox.

This works great for a while and he’s loving the greasy wind in his hair, then surprise bills pile up which he struggles to pay on his meagre minimum wage.  His friends eventually leave for the high life of graduate level employment once they graduate.

He’s alone.

Depression sets in, eventually he quites because of his “A-hole” manager.  He tries to find another job, fails because of the recession and eventually the bills pile up, he skips town and heads back to moms basement.

His girl eventually leaves because he has no money.  There’s better prospects out there.

If he’s lucky he can get some anti-depressents on his parents health insurance.

He sits at home all day reading and 4chan.  Drinking, smoking, counting the pennies he has left as they slowly whittle away to zero.

It’s over.  He should have stayed in College.

At this point, either his parents support him and he at least survives, or they don’t and he calls it quits.  Literally, quits.  Maybe as young as 20.  His whole life ahead of him if only he knew the way out.

His dreams are filled with activities his college and university friends are enjoying.  Cafe, drinking, parties, the city life.  He’s stuck in his cold mothers basement in F’knows where Utah.  No job, no money, no girl. If only he hadn’t quit College.  If only he’d struggled through.

I’ll say it again, stay.  Do not quit.  Do not drop out of college unless you have something better to be doing (not Xbox, not drinking, not smoking).  Something that makes you a reasonable income.

Is this a unique story?  No.  Is this you? possibly, even likely, if you drop out.  Don’t EVER drop out of education, whether that’s college or university, for minimum wage.  Get that certification, diploma, degree, then move forward.

Drop College and join the military?  …that’s another story.

Don’t worry about the student debt too much, but at the same time, don’t over burden yourself with it.  Take what you need and no more.  It’s a part of life for many now, relax.

The College certificate will act as your backup.  It acts as risk reduction.  This is what you need when young.  It’s your tertiary level safety net (First is your health, second is your usable practical skills).  Get it, then go from there.

Now I’m not taking anything away from you here.  Yes, it’s very possible you’re just burnt out.  It happens.  But your only real choice is to power on through.  You think that picture I painted earlier was harsh?  Won’t happen to you when you drop out of College? Let me tell you I oversimplified and the truth is much worse.  I’ve lost two friends.

College Certs, then a year of experience. After that, do what you like.  Do not drop out of college for a chance at startup or business fame unless it’s super hot and you’ve already proven it can be a success.  Trust me.  I’ve seen the downsides first hand and they’re not pretty.

Good luck and all the best.


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