Originally posted by luvmidnite
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Just some thoughts:
1) You must pay yourself a living wage. Do all initial costings based on paying yourself & friend a decent wage. In the real world: on a bad week, you may have to take a pay cut...
2) Best international figures show that for every staff member you pay $1, the associated overheads just for that staff member alone (i.e. not counting any allowance for building etc.) add another 80 cents to $1. It is really the same for your own "drawings as wages". FWIW, in my own IT empire, it was closer to $2.50 cost per $1 in wages thanks to Australian laws (compulsory workers comp & superannuation etc etc etc: it is a very long list here). Check your location's laws very carefully indeed.
3) Most cafes make very little money. Partly that is poor financial management, partly the small revenue of the "over the counter item" and partly a number of nasty hidden items.
4) Espresso machine boilers chew a huge amount of power compared to the actual energy needed to make a cup of coffee. These days, power bills are going sky-high everywhere. Generating your own may be a smart medium term move (if possible under the lease).
5) Fitout costs (already mentioned in other posts) can be horrendous. My 3.5m by 7m computer workshop cost $85K to fitout, not counting the specialised IT parts. A medical waiting room of similar size cost $650K without medical gear. Both in 1990 dollars. Scary!
6) Occ Health & Safety regs can become a millstone... check them out carefully.
I agree with the "cost it at 52 weeks without revenue" idea as it will ensure you have enough capital to last long enough to see if your business model is truly sustainable.
Looks like a bit of extra analysis is needed to fill in your odd moments during the silly season (and so on).
TampIt


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