7 ms·

Well, actually i did work at the library, but i changed for one reason to my local coffeeplace: taking and making calls. Thats the one reason i've left the lib

Well, actually i did work at the library, but i changed for one reason to my local coffeeplace: taking and making calls. Thats the one reason i've left the library. I tried a starbucks for working but he is right, the tables are not big enough etc, so i actually went to a local coffeeshop and talked to the owner about me liking to work at his place. I made a deal with him, i did all the quick-wins of online advertisement for him, (it's in germany so: qype, facebook, twitter, simple page with a fair amount of seo). For this i got my special table, big enough for everything i would ever need(i could easily place 2 macbooks + papers on it) + a coffee and bagle flatrate for a year. I think we both made a good deal.

Gormo 16y ago
I wonder if there's a market for a coffee shop that has small, private office spaces available, perhaps available for free or for an hourly rent. These might be the size of a typical restaurant booth (or a bit larger), but would be enclosed spaces that allow you to block out noise and distractions. It wouldn't even need to be a coffee shop; maybe something like a capsule hotel for workspaces.
- tptacek 16y ago
  No. A bunch of people tried that over the last couple years in Chicago; all of them went bust. There are too many viable alternatives to "rental cubby" to charge enough. And coffee shops of all forms are almost sure-fire money losers.
  - jeromec 16y ago
    And coffee shops of all forms are almost sure-fire money losers. I'd never heard that before. Is Starbucks an exception? Does their volume make the difference?
    - krakensden 16y ago
      I'd bet it has to do with space, if you're in the rental business, you need more of it- and it's expensive. If you're Starbucks, you do your feasibility calculations without assuming you'll get worker-cubby rental money.
    - forgotAgain 16y ago
      It requires management as well. A nearby, locally owned, not a chain, shop went bust recently. There wasn't a professional manager there covering when the owner was absent. Things went downhill quickly.
    - tptacek 16y ago
      For any piece of real estate that is ideal as a coffee shop setting, one of Starbucks, Peets, Caribou, or Seattle's Best is bound to be the top bidder. The exceptions to this rule are dense metro areas where virtually every corner retail space is an ideal coffee shop location; the problem with this exception is that these spots are spectacularly expensive and serve markets already saturated with coffee shops.
  - neild 16y ago
    Coffee shops are pretty much the opposite of sure-fire money losers. This article is a few years old, but: The failure rate for new coffeehouses is a mere 10 percent, according to the market research firm Mintel, which means the vast majority of cafes stay afloat no matter where Starbucks drops its stores. Compare that to the restaurant business, where failure is the norm. - http://www.slate.com/id/2180301/pagenum/all/#page_start http://www.slate.com/id/2180301/pagenum/all/#page_start There's a reason you can find coffee shops--both franchised and independent--everywhere you go. Selling $.16 of coffee for $4 is quite profitable!
    - tptacek 16y ago
      I see your Slate article quoting a market research report with another Slate article from someone who actually built a coffee shop, and raise you with a question and an observation. First, the article: http://www.slate.com/id/2132576/ http://www.slate.com/id/2132576/ Second, the question: does that "10% failure rate" stat include Starbucks, Seattle's Best, Caribou, Peets, or Tully's? The rest of Mintel's stats do. Finally, the observation: the margin on coffee beans doesn't determine the margin of a coffee house. Coffee beans aren't the dominant expense of a coffee house. Wages, followed by rent, are instead. You'll like that Slate article; it has math, and everything.
      - neild 16y ago
        I remember reading the Slate article you're citing when it first came out. It's a fairly amusing one, which can be summarized as: "Wealthy person without a lick of business sense opens the 'café' of his dreams, declines to do any work himself, and goes out of business." It's entirely irrelevant to the economics of the average coffee shop. First off, it's not clear to me whether the establishment the author opened was a coffee shop or a restaurant. The subtitle says "coffee shop", but the article then talks about finding someone to "whip up pretty crepes". I recognize that the dividing line between restaurant and coffee shop can be a bit fuzzy on occasion, but it's there and relevant. Most restaurants fail. The really notable part of the article comes at the end, however: "There was, of course, one way to make the cafe viable: It was written into the Golden Rule itself. My wife Lily and I could work there, full-time, save on the payroll, and gerrymander the rest of the budget to allow for lower sales." Yes, Mr. Michael Idov, you could have done that. You should have done that, from the start. That's what small business owners do: They work. That's what your competitors were doing. The goal may be to eventually make enough money to hire people to do all the work, but that's not where you start. You start by busting your ass. That's the story of a dilettante who opened a restaurant as a fashion statement and went the way of all such fools. Anyway, back to coffee shops. I don't know if Mintel's stats include the chains. They probably do. You might note, however, that the article I referenced is entirely dedicated to the proposition that Starbucks's presence in the market has been good for small, independently-owned coffee shops. Furthermore, even if we assume that no chain stores fail at all, a 10% industry failure rate would still have independent coffee shops doing pretty well. (Back of the envelope calculation: 14,000 independent coffee houses in the US in 2005, 11,000 Starbucks in the US in 2010, so let's say indies are only 25% of the total. If 10% of the total fail and all failures are indies, then 40% of indies fail. 60% success rate isn't bad for small businesses.) And, finally, you're right that the margin on coffee beans doesn't determine the margin of a coffee house. That's what happens when your cost of goods is effectively zero, and I assure you that any restaurant or retail outlet would love for their margin to be solely determined by wages and rent.
- eavc 16y ago
  At that point, you might as well find co-working space with decent coffee.
  - rue 16y ago
    Sadly there isn't a single co-working space in this city. Starting one doesn't sound like a viable business plan either.
- carbon8 16y ago
  Basically what you are describing is a coworking space. Coworking spaces are great, but from the perspective of an operator (I recently opened one) it's not a business to go into if you are looking to make money with it. Rent can only be so cheap (and in the US the commercial real estate market is already picking up again), you only have so much space and people are only willing to pay a certain amount. It's also logistically more difficult to manage and monitor an hourly pricing structure than one that's per visit/day/week/month and those longer periods require larger lump sums then some people are willing to pay. Coffee shops, which are more profitable but also not usually a huge money makers, can make money from walk-ins and, due to the lower upfront prices, require less commitment from each customer. There are a few hybrid coffee shop/coworking spaces, but it's unclear how viable the model actually is. Commercial espresso machines are very expensive ($10K-$15K+), barista salaries are an additional expense and you need to balance serving people who walk in with the people who are on the coworking side. Also, if you have things like enclosed booths that means you have to fit in fewer people per square ft. So, there's often a market there, but the economics are such that it's hard to make it very profitable, certainly much harder than many other businesses. Still, just so this doesn't sound completely pessimistic, it's not much work to maintain a straight coworking space (not much more than a regular office), it's entirely possible to make enough money to offset the work you put into it and there is a lot of value that extends beyond the immediate financial compensation.

Gormo 16y ago

I wonder if there's a market for a coffee shop that has small, private office spaces available, perhaps available for free or for an hourly rent. These might be the size of a typical restaurant booth (or a bit larger), but would be enclosed spaces that allow you to block out noise and distractions. It wouldn't even need to be a coffee shop; maybe something like a capsule hotel for workspaces.

tptacek 16y ago
No. A bunch of people tried that over the last couple years in Chicago; all of them went bust. There are too many viable alternatives to "rental cubby" to charge enough. And coffee shops of all forms are almost sure-fire money losers.
- jeromec 16y ago
  And coffee shops of all forms are almost sure-fire money losers. I'd never heard that before. Is Starbucks an exception? Does their volume make the difference?
  - krakensden 16y ago
    I'd bet it has to do with space, if you're in the rental business, you need more of it- and it's expensive. If you're Starbucks, you do your feasibility calculations without assuming you'll get worker-cubby rental money.
  - forgotAgain 16y ago
    It requires management as well. A nearby, locally owned, not a chain, shop went bust recently. There wasn't a professional manager there covering when the owner was absent. Things went downhill quickly.
  - tptacek 16y ago
    For any piece of real estate that is ideal as a coffee shop setting, one of Starbucks, Peets, Caribou, or Seattle's Best is bound to be the top bidder. The exceptions to this rule are dense metro areas where virtually every corner retail space is an ideal coffee shop location; the problem with this exception is that these spots are spectacularly expensive and serve markets already saturated with coffee shops.
- neild 16y ago
  Coffee shops are pretty much the opposite of sure-fire money losers. This article is a few years old, but: The failure rate for new coffeehouses is a mere 10 percent, according to the market research firm Mintel, which means the vast majority of cafes stay afloat no matter where Starbucks drops its stores. Compare that to the restaurant business, where failure is the norm. - http://www.slate.com/id/2180301/pagenum/all/#page_start http://www.slate.com/id/2180301/pagenum/all/#page_start There's a reason you can find coffee shops--both franchised and independent--everywhere you go. Selling $.16 of coffee for $4 is quite profitable!
  - tptacek 16y ago
    I see your Slate article quoting a market research report with another Slate article from someone who actually built a coffee shop, and raise you with a question and an observation. First, the article: http://www.slate.com/id/2132576/ http://www.slate.com/id/2132576/ Second, the question: does that "10% failure rate" stat include Starbucks, Seattle's Best, Caribou, Peets, or Tully's? The rest of Mintel's stats do. Finally, the observation: the margin on coffee beans doesn't determine the margin of a coffee house. Coffee beans aren't the dominant expense of a coffee house. Wages, followed by rent, are instead. You'll like that Slate article; it has math, and everything.
    - neild 16y ago
      I remember reading the Slate article you're citing when it first came out. It's a fairly amusing one, which can be summarized as: "Wealthy person without a lick of business sense opens the 'café' of his dreams, declines to do any work himself, and goes out of business." It's entirely irrelevant to the economics of the average coffee shop. First off, it's not clear to me whether the establishment the author opened was a coffee shop or a restaurant. The subtitle says "coffee shop", but the article then talks about finding someone to "whip up pretty crepes". I recognize that the dividing line between restaurant and coffee shop can be a bit fuzzy on occasion, but it's there and relevant. Most restaurants fail. The really notable part of the article comes at the end, however: "There was, of course, one way to make the cafe viable: It was written into the Golden Rule itself. My wife Lily and I could work there, full-time, save on the payroll, and gerrymander the rest of the budget to allow for lower sales." Yes, Mr. Michael Idov, you could have done that. You should have done that, from the start. That's what small business owners do: They work. That's what your competitors were doing. The goal may be to eventually make enough money to hire people to do all the work, but that's not where you start. You start by busting your ass. That's the story of a dilettante who opened a restaurant as a fashion statement and went the way of all such fools. Anyway, back to coffee shops. I don't know if Mintel's stats include the chains. They probably do. You might note, however, that the article I referenced is entirely dedicated to the proposition that Starbucks's presence in the market has been good for small, independently-owned coffee shops. Furthermore, even if we assume that no chain stores fail at all, a 10% industry failure rate would still have independent coffee shops doing pretty well. (Back of the envelope calculation: 14,000 independent coffee houses in the US in 2005, 11,000 Starbucks in the US in 2010, so let's say indies are only 25% of the total. If 10% of the total fail and all failures are indies, then 40% of indies fail. 60% success rate isn't bad for small businesses.) And, finally, you're right that the margin on coffee beans doesn't determine the margin of a coffee house. That's what happens when your cost of goods is effectively zero, and I assure you that any restaurant or retail outlet would love for their margin to be solely determined by wages and rent.
eavc 16y ago
At that point, you might as well find co-working space with decent coffee.
- rue 16y ago
  Sadly there isn't a single co-working space in this city. Starting one doesn't sound like a viable business plan either.
carbon8 16y ago
Basically what you are describing is a coworking space. Coworking spaces are great, but from the perspective of an operator (I recently opened one) it's not a business to go into if you are looking to make money with it. Rent can only be so cheap (and in the US the commercial real estate market is already picking up again), you only have so much space and people are only willing to pay a certain amount. It's also logistically more difficult to manage and monitor an hourly pricing structure than one that's per visit/day/week/month and those longer periods require larger lump sums then some people are willing to pay. Coffee shops, which are more profitable but also not usually a huge money makers, can make money from walk-ins and, due to the lower upfront prices, require less commitment from each customer. There are a few hybrid coffee shop/coworking spaces, but it's unclear how viable the model actually is. Commercial espresso machines are very expensive ($10K-$15K+), barista salaries are an additional expense and you need to balance serving people who walk in with the people who are on the coworking side. Also, if you have things like enclosed booths that means you have to fit in fewer people per square ft. So, there's often a market there, but the economics are such that it's hard to make it very profitable, certainly much harder than many other businesses. Still, just so this doesn't sound completely pessimistic, it's not much work to maintain a straight coworking space (not much more than a regular office), it's entirely possible to make enough money to offset the work you put into it and there is a lot of value that extends beyond the immediate financial compensation.