Setting up new business

janullrich

Setting up my own coffee bar business. It is early days but I am optimistic. There are days though where I doubt myself, think of the financial stability if I was still working for someone and think negativly which is stupid I know. What keeps people setting up their own business going in the early stages. What drives them? It would be interesting to other peoples views.

bget

I know how you feel and Ill admit i get that sometimes to.. What i do is think about what makes me so sure that my business will work.. Generally the doubts come at night so i also try to sleep early so the doubts dont have time to surface. Everything always seems worse when your lying in bed awake at night!

DubTony

janullrich, check your private messages.

highlandseoghan

Keep positive. Starting a business is very hard and difficult but the long term rewards of seeing what you started from nothing and grow into a profitable business are very rewarding. Remain focused and positive and just keep looking towards the future. Best of luck with your new business.

janullrich

Thanks guys for the replies. Am viewing a place trw but nothing that some places ie Spencer Dock that the financial agents are placing special restrictions so that they don't want sole traders in/"small people" without deep pockets. A friend of mine believes that some places are looking for franchaises. Has anybody taken up a franchaise ie coffee franchaise and does anyone feel that they have any particular advantages over setting up on the own? I am looking at the option but fear it will be like a secondary school where all the rules are to be adhered and there is little independence in doing things.

Gloomtastic!

janullrich wrote: »

Thanks guys for the replies. Am viewing a place trw but nothing that some places ie Spencer Dock that the financial agents are placing special restrictions so that they don't want sole traders in/"small people" without deep pockets. A friend of mine believes that some places are looking for franchaises. Has anybody taken up a franchaise ie coffee franchaise and does anyone feel that they have any particular advantages over setting up on the own? I am looking at the option but fear it will be like a secondary school where all the rules are to be adhered and there is little independence in doing things.

I haven't got a coffee franchise but I do own a franchise in a different business area.....

If you are having nightmares about starting off your first coffee shop then maybe franchising could be a good option, especially if you have no experience. The franchisor will hold your hand through everything. They've been doing it for years and know what works, and what doesn't - that's why they like you adhering to the rules.

If I was walking down the road looking for a coffee and saw two premises - one a franchise and the other a one-off, I'd invariably choose the franchise. The standards are usually higher. That's why franchises work!

The downside is that it can be expensive to set up and you have to buy everything from the franchisor plus pay them a fee every month. The upside is you may still be in business 5 years down the line.

I hear Insomnia have started looking for franchisees. Couldn't find anything on their website but I suggest you give them a call and talk to them.

Good luck to you!

janullrich

Thanks Gloomtastic. Checked Insomnia. €155,000 initial investment :eek:I trust that is from a shell unit that has not been touched and you would have to start from the beginning for the fit-out. Streat and Subway and quoting €120,000 approx. To be honest I have approx €40,000 to invest so they are too much. A friend of mine was speaking regarding existing franchises that may be available for a lot cheaper. I don't know if anyone has knowledge re that...

Gloomtastic!

€40k is good money these days. Insomnia will be very keen to get a couple of shops on board. Talk to them.

You may be right about buying out an existing franchise cheaper than starting up. Talk to Bagel factory/O'Briens/Abrakabara - all the same franchisor. O'Briens is the one you want. The others are too restrictive in what they offer.

Remember, if you don't ask, you don't get.

antoinolachtnai

To answer your original question, a big part of it is that the belief that there is an adequately profitable market waiting to be tapped. This belief is based on intimate knowledge of the market and industry, gained over many years.

Make sure you have this.

If I were a landlord with a lot of units, I would want to have tenants who will attract visitors (and other tenants) to the area, not just serve the few people who are already there. The benefit for a landlord of a franchise or chain, and to a lesser extent, an established operator, is that there is a clear vision of what will be delivered, and there is a brand name and marketing to go behind it.

If you don't go with a franchise, the question is how you will develop and articulate the vision and then convince a landlord that you can deliver on it.

And remember, this is just business. If you don't think you can make good money on a deal, don't do it. There are loads of people opening up food operations in Dublin that just seem to be deranged from a money point of view.

kdowling

I would say be careful with franchises and make sure you speak to current franchise holders.

Most franchises take their cut from the turnover, i.e. they get their cut whether you make a profit or not.
They can set up another shop down the road or close by that will affect your business but will only increase their take

janullrich

I agree with you re franchaises. You have to be careful. Checked out Insomnia. They don't want to know you unless you have the €155+ approx. Good look in finding out those people who have this type of money. O'Briens etc don't have any suitable places. Checked out a few others but they are ridiculous money and wanted upfront. Checking out the Streat. They seem open for discussion re premises, money etc. Don't know if anybody has dealt with them before. I think they have a few shops in South Dublin but none that I know of in the centre..

sandin

If you have €40k, then you should be able to borrow another 40k and some franchise companies have agreements with banks even in these difficult times.


They may also defer payments if they like you.

Other franchises are

Gloria Jeans coffee
Coffee Republic
Costa Coffee

Hanley

I'm not sure if Fixx have some sort of franchisee arangement in place but their coffee house on Dawson Street, and Avalon House on Auginer Street servce some of the nicest coffee in Dublin.

I had an idea for a coffee shop which I would never get around to doing so might as well tell you - "Tasters" - since tasting menus is the trend in nice restaurants these days why not try and bring the concept to cheaper food - sandwiches etc. For the same price as a usual sandwich you get a small amount of 5 different sandwiches. You could do the same for soups, wraps, bagels etc. On the drinks side you could do it with juices too. Might be a bit more expensive in terms of packaging and utensils but could be a nice new concept for a cafe that would get the punters in, get some press and get people talking about it. If it worked you might be selling the franchise instead of buying it!

janullrich

Checked out some of the places you mentioned. Costa don't do franchaises in Ireland but open your own shops. As for Coffee Republic and Gloria Jeans I have sent an initial enquiry but I ain't going to tell my life history or tell somebody all about my assets and liabilities who I don't know! Also I asked Gloria to clarify the amount that needs to be invested - €200k!!!!!!!!

Hanley

janullrich wrote: »

Checked out some of the places you mentioned. Costa don't do franchaises in Ireland but open your own shops. As for Coffee Republic and Gloria Jeans I have sent an initial enquiry but I ain't going to tell my life history or tell somebody all about my assets and liabilities who I don't know! Also I asked Gloria to clarify the amount that needs to be invested - €200k!!!!!!!!

Something to think about - how much goes towards actual build costs? Does it get transferred directly to the franchisor or does it just need to be held in a business bank account?

I wouldn't be surprised if a lot of it wasn't just to be used as working capital in the initial stages, which means it's not REALLY getting spent and could be worth looking more into if you really want to go for it.

Just a thought

janullrich

Hiya. What I think you are saying is ensure that every cent is accounted for and that what you put in is actuelly being used profitabily and not kept over for whatever reason? I have spoken to a few franchises in the coffee bar/sandwich game and one of the things they advised is that the franchisor was not always honest about the money that they invested in the business. It is important they said to be very firm about how much a franchisee will invest and know where exactly all your money is going.

Also another bone of contention that I heard yesterday was that after an initial period you still pay your royalties each year to the franchise but you many not hear from them or they are very slow in helping out. Something I need to think of for going fwd. Suppose it part of the pros and cons!

antoinolachtnai

Sometimes there is a bit of naiveté on both sides with these franchise setups. In general, the idea is that the franchisor's job is promote and manage a regional or national brand, and the franchisee's job is to manage the local business. There is a lot of unrealism in the game. On the one hand, it may be unrealistic to expect the franchisor to be available to deal with issues or to promote at the level needed for a relatively small franchise fee. On the other hand, the franchisors often oversell the idea that the franchisor is there to help with the business. They aren't. They are there to get people in the door, basically. Everything else is the franchisee's problem.

Gloomtastic!

While the experience of the Franchisor is vital in the early days of the franchise agreement and they really earn their commission, with time and experience you find yourself working more and more independently with very little interaction from HQ. However, you still need to pay your commission. That, I believe is the nature of franchises.

Anyway, i believe by year five of the agreement you should be ready to launch your own franchise idea, you know what needs to be done as well as anyone, so the cycle continues....

daRobot

Personally, I wouldn't take the Franchise route at all.

Yes, it's appealing from a Business in a box perspective, but start up costs are massive, and you've no scope to be creative in terms of what you offer. 155k from Insomnia is lunacy for a non international brand.

janullrich

Yep, had word with the Streat last week. A few of their franchises look really well but to be honest they are very slow re getting back with necessary info or how to go fwd, after me trying to contact them a few times so I gave up today on them. Its tougher finding a decent place then it is in getting a job!!!

antoinolachtnai

Does this brand have strong value? Remember, the franchise has to have value to the customer, not just to the franchisee. For me, this brand does not have much recognition. If they can produce data to you to back their feeling about the strength of the brand, fair enough. (I know nothing much about the company, I have only seen or even heard of one of their locations and was not particularly impressed. Obvously you need to make your own mind up.)

I wouldn't evaluate the value of a franchise on the basis of whether it is an international brand or not. The main thing is whether they can deliver the marketing support in Ireland to deliver punters in your door.

It is really hard to find a decent location for sure.

janullrich

Yep. The Streat advised that they are not going to locate in Dublin City at all due to costs. I believe that if you are to be a successful franchise you need to local in a major city to have any credibility. Bottom line. They located in North Wall Quay but that went belly up! I feel it is best to move on therefore.