Cafe Start Up Help...Please!

[Rachaels24 Junior Member Find all posts View Profile Close Rachaels24]

Despite the statistics and reading numerous articles and blog..I have decided to take the plunge and open my own cafe by the beach in Sydney...I am creating niche product that I know there is a large market for.

BUT before I do anything, I want to prepare a full business plan with thorough financial expectations. I am starting from scratch and trying to calculate my start up costs, running costs, break even point, renovation/design costs..etc to determine how much money I will require to put into the business to make it successful.

I wanted to ask for some help to see if anyone could share an idea of their fixed and variable running costs? Also any advice on websites or assistance to obtain this financial information... I would greatly appreciate any support of advice...

Thanks

[Topher Senior Member Find all posts View Profile Close Topher]

Re: Cafe Start Up Help...Please!

My only advice would be to talk to your roaster and a good accountant with experience in the the industry.

Good Luck.

[LaughingAtFate Senior Member Find all posts View Profile Close LaughingAtFate]

Re: Cafe Start Up Help...Please!

Hmm, Perhaps looking into governmental assistance? I know theres something called "NEIS" available to someone whos never operated a business before, They offer training and advice about such things as "how to fill out the tax forms" and "do you have a business plan? if not, we can train you in how to build it up" They also offer financial support to setup

Contact your local C-link or DEEWR office for more details. as for all the other stuff, Fixed and variable costs are all down to where you are and what sort of moneyflow you have to offer.

[dr.a.j.pickering Senior Member Find all posts View Profile Close dr.a.j.pickering]

Re: Cafe Start Up Help...Please!

I am creating niche product that I know there is a large market for

This is the work you need to do, are you sure it is niche, are you sure the market is large enough

[cosmicfluff Member Find all posts View Profile Close cosmicfluff]

Re: Cafe Start Up Help...Please!

Also, be aware that DA applications and subsequent approvals can cause a lot of grief and money. Negotiate good terms with RE agents/landlord in case DA approval for your proposed cafe drags on for too long.

[cuppacoffee Senior Member Find all posts View Profile Close cuppacoffee]

Re: Cafe Start Up Help...Please!

Hello Rachael and welcome to CS!

My (perhaps controversial) advice:

a) The only reason you will need a business plan is to satisfy the lender or make you feel good. NEIS is available to unemployed people with a new business idea. If you fit into this category then stop here and consider getting a regular job.
b) Location is critical. Allow me to repeat that. Location is critical!
c) If you find a place that is already approved by the local council as a food business, you will save yourself a lot of angst, time, and money.
d) If the premises requires a Development application, it is likely to take 3 to 4 months before your fitout begins.
e) In regards to setup costs, its hard to say since I dont know what you intend to do except that it falls under the somewhat vague cafe category. So Let me give you a vague, entire fitout, $70K figure as a minimum starting point.

Cheers and if youd like to talk off site, send me a message.

Den

[bennett Senior Member Find all posts View Profile Close bennett]

Re: Cafe Start Up Help...Please!

My (perhaps controversial) advice

Whats so controversial about your advice Dennis?

It all rings true to me. Maybe its a little blunt - but thats just Dennis. ;D

[summercrema Senior Member Find all posts View Profile Close summercrema]

Re: Cafe Start Up Help...Please!

iPod, iPad are niche products ... if you have lots of $ I suggest buy a shop and you can forget about landlord problems .. look for a good solicitor who knows about cafe business etc, even Gordon Ramsey closed his restaurant in Melbourne, just good food is not enough .. dont forget you are the last one to get paid & no sleep.

[askthecoffeeguy Senior Member Find all posts View Profile Close askthecoffeeguy]

Re: Cafe Start Up Help...Please!

Try drilling a lot of holes in a bucket and then filling it with water and then try to catch the water with both hands and hold onto it as it runs out of the bucket

Now imagine that that water is the money that youre pouring into your business !

Not trying to disuade you but it is a risky business and a great way to lose a lot of money very fast if its not done right!

I budgeted $70k on my last cafe (Ive owned 3 cafes) and managed to spend double that - and what ever you spend on fitout you still need to budget to run at a financial loss for the first 12 to 24 months of trade - and youre fortunate if you manage to break even after two years!

Thats the conventiaonal wisdom as I understand it - and it seems to hold true: you need to have enough cash surplus after paying for fitout and other associated setup costs to prop the business up if it proves necessary to do so until you fall on your feet

Of course it is possible to do it for much less, especially if youre planning to do much of the construction work yourself - or if someone near and dear to you is able to do so - but is still a monumental effort to get a new cafe off the ground (which is not to say that it shoudnt be done)

A good start is to draw up a floor plan to scale - and then figure out what is required to fit out and to occupy every single square inch of the place - including equipment, materials, resources, fixtures and fittings, adequate commercial refrigeration and storage, and stock

I for one would recommend paying someone with suitable industry experience in these areas to bounce ideas off and to help get the project off the ground

It may seem like an unnecessary expense at the time but it could halve your stress levels and could potentially save you a lot of $$$ in the long run by making informed choices

My 5c worth and good luck!

ACg

[patcy2004 Junior Member Find all posts View Profile Close patcy2004]

Re: Cafe Start Up Help...Please!

Hi, I have a question, what are the advantages / disadvantages of leasing equipment from your coffee supplier as opposed to buying your own and any thoughts on second hand stuff?

Thanks

PS Im new and looking at starting up a cafe in Melbourne suburbia..

[blanyon Senior Member Find all posts View Profile Close blanyon]

Re: Cafe Start Up Help...Please!

Pros - easy option
Cons - cost, restriction of equipment, long term deals (I think)

Depends on the type of operation you are looking at as to the option you should choose, very broad question me thinks.

Brett

[patcy2004 Junior Member Find all posts View Profile Close patcy2004]

Re: Cafe Start Up Help...Please!

Thanks Brett, Im thinking about a very small cafe, really basic fit out..

Not sure if I should buy second hand equipment or lease from coffee supplier, just wondering what other people out there are doing ..

Thx for response

[Sketchy Senior Member Find all posts View Profile Close Sketchy]

Re: Cafe Start Up Help...Please!

buy. There are some good machines around at reasonable prices. We bought our first machine 2nd hand then as the cafe grew we upgraded to a new one. This way we choose what coffee, how much coffee we order. And in some cases with a lease machine you will have to buy a certain brand of softdrink as well

LE

[AndyL Senior Member Find all posts View Profile Close AndyL]

Re: Cafe Start Up Help...Please!

Havent posted here in a while. Opening a cafe in this environment would be a pretty hard. So many empty shops in Melbourne. A dangerous time for cafe owners. So many streets are down 20 to 30 percent. Opening up with no experience, would be crazy. Leasing equipment? Dishwasher for sure! Coffee machine? depends if you want to upgrade. Second hand equipment? Risky as hell. Second hand equipment on a slicer, oven shouldnt be a problem or coffee machine if you are lucky. Dont buy second hand fridge. Buy the most expensive fridge you can afford. They will always break down. To fix a commercial fridge would cost you $300 to $1000. Once they break, they will break down every year.