Cafe/Coffee Shop Advice

helimachoptor

Hi folks, I was hoping for some advice.

My wife is currently working in a MNC, but has long held the desire to open a coffee/shop café type place. We’ve been giving it more thought over the last while, so I was hoping I could get some help with some questions and some general advice.

- We need to find a place first, assume some sensible things to check are any previous similar entity’s in the immediate area, why did they close/fail?
- What type of customer traffic are you going to get/target? College, passing football, shopping centre etc
- In SC’s with open plan car parks (I’m thinking Stillorgan and Frascati) is it possible to negotiate a couple of dedicated car parking spots close to the premises?
- How will a lease work, assume it will be 3/5 years, will there be a break clause?
- How much are rates (no clue on this) Shop will be in the Dun Laoghaire/Rathdown area
- Do people lease/buy the relevant equipment?
- Does anyone have a ballpark figure for setting up something like this?

Thanks
Heli

duploelabs

There's quite an extensive thread here
http://www.boards.ie/vbulletin/showthread.php?t=2057278302
might answer some of your questions, otherwise I'd be happy to answer any others via PM

antoinolachtnai

helimachoptor wrote: »

Hi folks, I was hoping for some advice.

My wife is currently working in a MNC, but has long held the desire to open a coffee/shop café type place.

There is an awful lot to learn to be able to do something like this. Operating a place like this requires specialised experience and skills, the same as being a marketing manager, a solicitor or an engineer. The market is extremely sophisticated, especially in the geographical areas you have mentioned. If she does this she will be accepting the risk of her losing her savings and livelihood. She needs to be sure she is in a position to take that risk.

- We need to find a place first, assume some sensible things to check are any previous similar entity’s in the immediate area, why did they close/fail?

No, that is not really where you should start. What you need to start with is what sort of place you want to have. This is your wife's dream after all. She needs to think about what she really wants.

When she has decided what that is, after doing extensive research and visiting similar business all over Europe or the world, and after preparing a business plan, she will really be ready to look for a location.

- What type of customer traffic are you going to get/target? College, passing football, shopping centre etc

Given your wife's starting point, you and she really need to come up with the concept first and then see what is the most appropriate site. If you are just going to take a site and then figure out something to put in it, then how will that meet your and your wife's aspirations? Would you be happy enough running a Subway or an O'Brien's (or a similar operation) in it? I imagine that wasn't what you had in mind.

- In SC’s with open plan car parks (I’m thinking Stillorgan and Frascati) is it possible to negotiate a couple of dedicated car parking spots close to the premises?

The short answer to that is yes you could do that, but the cost would be prohibitive. Three reserved parking spaces in a busy car park beside the shopping centre would need to get the same rent as the shop unit itself. And how would you stop other people from just parking in these spots? Have two shifts of parking attendants, who would also need to be paid? So in practice, it is not feasible.

But this is not the right starting point. If you are doing a destination type place that needs its own parking, why would you put it in a shopping centre? The whole point of being in a shopping centre is the passing traffic, the people who are going there anyway.

- How will a lease work, assume it will be 3/5 years, will there be a break clause?

This is not how it works. You need to be thinking in much longer time segments in your business planning. You can't just open a non-brand-name cafe for 3-5 years and expect to make a return on your initial investment.

On a three year lease, if you are successful in your venture, the landlord can just kick you out at the end and put his own cafe in there which will benefit from the goodwill you have generated. This is why you need a long lease. If it is any sort of decent site, the landlord will want a personal guarantee from you and will want to be satisfied that the guarantee is backed by assets.

- How much are rates (no clue on this) Shop will be in the Dun Laoghaire/Rathdown area

You can look it up, or I can look it up, but you would be better off to get professional advice from an estate agent which you will need to search and rent the property anyway. People make a fuss about rates, but they are far from the most important cost to consider.

- Do people lease/buy the relevant equipment?

What people do is not of any great relevance. The relevant issue is what you will do. No one will advance any credit to you on the strength of your venture. You will have to buy things outright or get a personal loan of one form or another.

- Does anyone have a ballpark figure for setting up something like this?

It's not clear what exactly you have in mind, but I suppose between 50,000 euros and 500,000 euros. It really depends on your own expertise and your ambition. Looking at your aspirations and skills at a high level, I can't see you getting to profitability for any less than 250,000 euros when everything (long loss making period, loss of income to the family as well as the actual investment) are taken into account. But obviously that's just a ballpark estimate.

I don't mean to be discouraging. This is a very difficult business to be in.

helimachoptor

antoinolachtnai wrote: »

I don't mean to be discouraging. This is a very difficult business to be in.

You're not at all, I'm reading the Clondalkin thread and it's eye opening! (2 years from his post to opening)

As a background, my wife used to be a pastry chef when she was in college, her family all worked in a local hotel where she's from so they are all excellent in the kitchen. She has a real passion for food, however we also have 2 kids and a mortgage.. so it needs to viable.

We are just discussing it at present, but happy to spend some time doing research. She has identified a particular USP that she would like to market towards, but still no alienate passing trade. We have a lot to consider, the other thread and your posts are good food for thought

antoinolachtnai

Honestly,having worked in a hotel kitchen a decade or two ago is going to be of little relevance or help. The world has moved on. The standard is much higher on all fronts - kitchen, service, marketing, everything. Working in a kitchen has surprisingly little to do with running one.

Consider whether this is a good investment in your situation. There would be a good chance you could lose all your savings on this even if you had a great business plan and all the expertise needed.

I would go and do a lot of research and talk to a lot of people, visiting a lot of places on the way.

If nothing else I would attend one or more of the more serious cooking schools. There are full time courses which cost a few thousand euros. It might sound like a lot but it really isn't. It will at least give you a vague idea of what the food part of the business is about.