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It's a tough business. Even Starbucks couldn't make it just selling coffee. They had to start selling sugar drinks and bad food. I could tell you stories but t

It's a tough business. Even Starbucks couldn't make it just selling coffee. They had to start selling sugar drinks and bad food. I could tell you stories but the article covers it well. A cafe/restaurant will destroy the most savvy of business people. I don't care how successful you were at what you did. The food business is a different level of insanity. If you are going to open up a coffee shop, you better own the building, roast your own beans, and have a location where 1000's of people walk by everyday to work or public transportation. Even at that your chance at success is marginal. It all looks romantic until you're in the hole 150k with no end in sight. Great Article.

astrodust 10y ago
Around the time this article came out I was looking at business opportunities for some under-employed friends and it seemed like a cafe would be a good idea. We knew the neighbourhoods where it would work, we knew people that were worth hiring, they all had restaurant experience, and as for the supplier side, that was never a problem. Once I started researching it wasn't hard to hit nightmare after nightmare story. You can do everything perfectly right and still bust out. You can do everything totally wrong and strike it rich. It's such a gamble you may as well take your money down to the casino and play roulette. Not starting a business like that was probably the best idea. For one, I still have those friends, and two, didn't end up bankrupting myself by stubbornly sticking it out, or getting destroyed when the landlord, smelling opportunity, starts jacking up the rent to the moon. We have it so easy in the tech biz. You can compete with everyone in the world, and you can do it from anywhere in the world. Being nailed down to a physical location in a very specific niche is problematic if you're used to being able to operate nimbly, to jump from opportunity to opportunity.
icantdrive55 10y ago
I worked a a cafe called Zesto's while I was in high school. From the outside, it looked wonderful. Really inviting. Wood booths. Just inviting. We served a lot of speciality coffees, and had a small menu. Moosewood recipe soups, burritos, lumpia's, etc. It started off doing pretty good business. Then the dentist(who was the financial backer) decided to hang out, and micromanage. After all he was a Dr., and let us know. Sales were going up, but ge wanted more profit. His first mistake was to cut back on portions. I never told him, but burrito buyers don't like small burritos. Plus--the cost of rice, and beans don't cost much. He literally irritated all the workers with his presence. He treated the better/honest employees like dirt. The ass kissers were robbing him blind, but he just thought they were great. Within a year, workers were stealing, and giving away food. I went down with the ship, and bought the espresso machine in the chapter 7, or 13 fire sale. I still have it. I learned I would never open a resturant, nor coffee house. I learned you never cut back on portions. You don't piss off the help. There's a lot you just shouldn't do in the resturant business. Raising prices is fine, if you increase quality, and portions, especially if your demographics are young people. I always thought if I was forced to go into the food business, it would be a pizza parlor near a college. Cost of ingredients for pizza is low. There's a reason Papa John is a billionarie. I do regret not opening up a place where young people could dance, and drink. The amount of money people spend in their twenties drinking, looking for that special someone is staggering. If I had what I spent in my twenties on essentially looking for a mate; I could retire.
- pm90 10y ago
  > I do regret not opening up a place where young people could dance, and drink. The amount of money people spend in their twenties drinking, looking for that special someone is staggering. If I had what I spent in my twenties on essentially looking for a mate; I could retire. Hehe as someone in their twenties looking for a mate, I can relate. I try to rationalize the expense as "having good experiences" and to be fair, I've had quite a few remarkable ones. And I do honestly think that hanging out with close friends over a beer is very relaxing, when done occasionally (e.g. over the weekend to catch up). But the financially minded part of me can't believe how much I spend on rideshare, cover, drinks, food etc.
- paulcole 10y ago
  >Cost of ingredients for pizza is low. There's a reason Papa John is a billionarie. And it has almost nothing to do with low cost of ingredients.
- deleted 10y ago
  [deleted]
qohen 10y ago
If you are going to open up a coffee shop, you better own the building, roast your own beans, and have a location where 1000's of people walk by everyday to work or public transportation. And it might help to have a Starbucks nearby -- no, really: http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2007/12/dont_fear_starbucks.html http://www.slate.com/articles/news_and_politics/hey_wait_a_m...
deleted 10y ago
[deleted]
Theodores 10y ago
I used to commute into London from an unremarkable train station that had a remarkable coffee 'hut' on the platform. I was aware that he and his helpers had a 5 a.m. start but their day was not anywhere near as long as the customers with their commutes. In chatting with the guy I realised he had more money, time, friends, trips to the country and holidays abroad than me. Unlike every other platform coffee place en-route his 'hut' was not part of a chain, the coffee was essentially unbranded. Okay, captive market, known footfall, no opportunity for growth, however, I think that Neville was getting the economics right. He also does customer service and remembers everyone's name. So by the time you get to the front of the queue your drink will be made to your normal specifications already. As well as working back the queue he also keeps an eye on time, so he will give you a wink or a no if there really is no chance of you getting your drink and the train. There is no branding, no lifestyle to be sold, just what you want for your commute. Prices are not overly cheap but certainly not expensive for London. So you pay a fair price for a fair product. His helpers are family members as well as his daughter's friends. So it is a team of two on site with his other half dropping off supplies. Despite the dawn starts they have nothing to complain about, job satisfaction is high. I respect the business acumen and hard work that goes on at this particular owner operated place, it is a business I want to support. I don't feel I have to though, I would buy from the nearby Costa if that was the only option and pay the 50p surcharge with delay. I don't believe Neville is waiting for Starbucks to buy him out for millions and I doubt that he cares that his kids go into the business, since he hasn't even 'expanded' to the other platform yet - 'branched out' - I doubt he wants to take on the world with some mission statement to deliver excellent coffee (with everyone's names remembered). There is no romantic love of coffee, the business is just what it is, there is no struggle, it is all under control. Edit... P.S. What happened to Slate, why are they no longer a thing?
- nkrisc 10y ago
  Sounds to me like he was working to live and not living to work. Honestly it sounds admirable.
- mrgoldenbrown 10y ago
  This model sounds extremely dependent on getting a good deal on the rent for an exclusive "on platform" hut. If you have a long term cheap lease from the local gov't, it's much easier to have high job satisfaction.
hackermailman 10y ago
Even owning the building is no guarantee of keeping costs down anymore if you live in a municipality like I do where property tax assessments are based on the potential for development of the property, as opposed to actual use. If they decide your coffee shop could be redeveloped into a large apartment building they will tax you that much. http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/soaring-land-values-in-vancouver-spark-a-property-tax-revolt/article33672975/ http://www.theglobeandmail.com/report-on-business/small-busi...

astrodust 10y ago

Around the time this article came out I was looking at business opportunities for some under-employed friends and it seemed like a cafe would be a good idea. We knew the neighbourhoods where it would work, we knew people that were worth hiring, they all had restaurant experience, and as for the supplier side, that was never a problem. Once I started researching it wasn't hard to hit nightmare after nightmare story. You can do everything perfectly right and still bust out. You can do everything totally wrong and strike it rich. It's such a gamble you may as well take your money down to the casino and play roulette. Not starting a business like that was probably the best idea. For one, I still have those friends, and two, didn't end up bankrupting myself by stubbornly sticking it out, or getting destroyed when the landlord, smelling opportunity, starts jacking up the rent to the moon. We have it so easy in the tech biz. You can compete with everyone in the world, and you can do it from anywhere in the world. Being nailed down to a physical location in a very specific niche is problematic if you're used to being able to operate nimbly, to jump from opportunity to opportunity.

icantdrive55 10y ago

I worked a a cafe called Zesto's while I was in high school. From the outside, it looked wonderful. Really inviting. Wood booths. Just inviting. We served a lot of speciality coffees, and had a small menu. Moosewood recipe soups, burritos, lumpia's, etc. It started off doing pretty good business. Then the dentist(who was the financial backer) decided to hang out, and micromanage. After all he was a Dr., and let us know. Sales were going up, but ge wanted more profit. His first mistake was to cut back on portions. I never told him, but burrito buyers don't like small burritos. Plus--the cost of rice, and beans don't cost much. He literally irritated all the workers with his presence. He treated the better/honest employees like dirt. The ass kissers were robbing him blind, but he just thought they were great. Within a year, workers were stealing, and giving away food. I went down with the ship, and bought the espresso machine in the chapter 7, or 13 fire sale. I still have it. I learned I would never open a resturant, nor coffee house. I learned you never cut back on portions. You don't piss off the help. There's a lot you just shouldn't do in the resturant business. Raising prices is fine, if you increase quality, and portions, especially if your demographics are young people. I always thought if I was forced to go into the food business, it would be a pizza parlor near a college. Cost of ingredients for pizza is low. There's a reason Papa John is a billionarie. I do regret not opening up a place where young people could dance, and drink. The amount of money people spend in their twenties drinking, looking for that special someone is staggering. If I had what I spent in my twenties on essentially looking for a mate; I could retire.

pm90 10y ago
> I do regret not opening up a place where young people could dance, and drink. The amount of money people spend in their twenties drinking, looking for that special someone is staggering. If I had what I spent in my twenties on essentially looking for a mate; I could retire. Hehe as someone in their twenties looking for a mate, I can relate. I try to rationalize the expense as "having good experiences" and to be fair, I've had quite a few remarkable ones. And I do honestly think that hanging out with close friends over a beer is very relaxing, when done occasionally (e.g. over the weekend to catch up). But the financially minded part of me can't believe how much I spend on rideshare, cover, drinks, food etc.
paulcole 10y ago
>Cost of ingredients for pizza is low. There's a reason Papa John is a billionarie. And it has almost nothing to do with low cost of ingredients.
deleted 10y ago
[deleted]

qohen 10y ago

If you are going to open up a coffee shop, you better own the building, roast your own beans, and have a location where 1000's of people walk by everyday to work or public transportation. And it might help to have a Starbucks nearby -- no, really: http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2007/12/dont_fear_starbucks.html http://www.slate.com/articles/news_and_politics/hey_wait_a_m...

deleted 10y ago

[deleted]

Theodores 10y ago

I used to commute into London from an unremarkable train station that had a remarkable coffee 'hut' on the platform. I was aware that he and his helpers had a 5 a.m. start but their day was not anywhere near as long as the customers with their commutes. In chatting with the guy I realised he had more money, time, friends, trips to the country and holidays abroad than me. Unlike every other platform coffee place en-route his 'hut' was not part of a chain, the coffee was essentially unbranded. Okay, captive market, known footfall, no opportunity for growth, however, I think that Neville was getting the economics right. He also does customer service and remembers everyone's name. So by the time you get to the front of the queue your drink will be made to your normal specifications already. As well as working back the queue he also keeps an eye on time, so he will give you a wink or a no if there really is no chance of you getting your drink and the train. There is no branding, no lifestyle to be sold, just what you want for your commute. Prices are not overly cheap but certainly not expensive for London. So you pay a fair price for a fair product. His helpers are family members as well as his daughter's friends. So it is a team of two on site with his other half dropping off supplies. Despite the dawn starts they have nothing to complain about, job satisfaction is high. I respect the business acumen and hard work that goes on at this particular owner operated place, it is a business I want to support. I don't feel I have to though, I would buy from the nearby Costa if that was the only option and pay the 50p surcharge with delay. I don't believe Neville is waiting for Starbucks to buy him out for millions and I doubt that he cares that his kids go into the business, since he hasn't even 'expanded' to the other platform yet - 'branched out' - I doubt he wants to take on the world with some mission statement to deliver excellent coffee (with everyone's names remembered). There is no romantic love of coffee, the business is just what it is, there is no struggle, it is all under control. Edit... P.S. What happened to Slate, why are they no longer a thing?

nkrisc 10y ago
Sounds to me like he was working to live and not living to work. Honestly it sounds admirable.
mrgoldenbrown 10y ago
This model sounds extremely dependent on getting a good deal on the rent for an exclusive "on platform" hut. If you have a long term cheap lease from the local gov't, it's much easier to have high job satisfaction.

hackermailman 10y ago

Even owning the building is no guarantee of keeping costs down anymore if you live in a municipality like I do where property tax assessments are based on the potential for development of the property, as opposed to actual use. If they decide your coffee shop could be redeveloped into a large apartment building they will tax you that much. http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/soaring-land-values-in-vancouver-spark-a-property-tax-revolt/article33672975/ http://www.theglobeandmail.com/report-on-business/small-busi...