Topic: Tips for looking for your future cafe space
Guest: Alden Hozouri
Title: Founder & Head Roaster at Crossings Coffee
Connect: www.crossingscoffee.com • @crossingscoffee
What should you look for when you are location scouting a future cafe space?
Things to consider:
The Building: Does it meet your needs?
If not, what needs to be done to modify it?
Will the landlord offer Tenant Improvement money (T.I.’s)?
What is the curb appeal? Would you want to be a customer there?
The Terms: How much do you need to sell per day to cover the lease terms?
Rent per square foot of space.
Does it include outdoor space?
CAM or Common Area Maintenance fees (i.e upkeep, sewer & water, garbage, signage, etc).
Length of the lease:
Does it include the option to renew?
Are rental increases built into the base rate?
Are their hidden costs?
Who is responsible for property taxes?
Are their additional insurance concerns?
The Neighborhood: Who are the neighbors!
If in in a business district, who are the neighbors? Will their businesses attract customers that may overlap with your customers or bring new ones? Will they drive your customers away?
Does your business meet the needs (and market) of the residents in the community?
Do you have direct competitors? Indirect competitors? Is their room for your business to thrive?
How much traffic (walking, biking, driving, etc) is passing your location daily?
Is this location a destination or have build in consumers?
The Landlord:*
What are their reputation? What do other tenants say?
Are they communicative?
Is the building well kept and the property clean?
How involved will they be when you’re looking for repairs?
Permits:
What permits have been offered at this location previously?
Will you need to apply for new permits?
How long will permitting take?
Will you have to pay rent while you wait?
*Alden’s biggest warning signs revolve around the landlord and/or property manager. If they have poor communication skills, are unwilling to negotiate terms (or even share terms upfront), and have a poorly kept building it is unlikely those challenges to your business will change after you sign the lease. This is an important relationship. Working with a professional real estate broker can help mitigate some of the sticking points, but don’t be afraid to advocate for yourself and your business.
We are only scratching at the surface. There will be local differences to all of the above. Depending on the cost of entry, you may be able to purchase your cafe/roastery space property. A lot of the bullet points still apply.
Ultimately, you will be layering variables on top of variables when determining the type of cafe you plan to open and where. Not all locations are considered equal. Sometimes a great business idea or concept isn’t enough to offset a bad location. Sometimes a great concept can become a destination and the return is a more affordable space. You’ll need to determine the level of risk you need
FROM THE SHOW: TICKET
When Alden and I refer to a ticket, we’re talking about the total sale on a single receipt (or ticket). If your average ticket covers the cost of a $3 batch brew coffee and a $3 cookie plus tax, your ticket would be the final amount—$6+sales tax. Your average ticket is the total revenue of all sales in a given period time divided by the number of transactions.
A single ticket may include more than one person’s purchase which will raise your average ticket. If your primary sale item is coffee, what other items will you offer—pastries, merchandise, burritos—to drive up the average ticket, which will reduce the number of patrons you need to cover your expenses.
This is similar, but not the same as the term heads, which will often be dropped in a conversation about tickets. Heads is a slang term that refers to the literal number of people who come through your doors (or drive-thrus) and make a purchase.
BTW: ALDEN CONSULTS WITH NEW CAFES AND ROASTERS
It’s true. Contact Alden for help navigating the path to successfully opening your cafe, roastery, or hospitality space. He’s been there, done that, and can help you skip some of the pitfalls.
Email: alden@crossings.coffee
ELSEWHERE IN COFFEE
You’re probably not shocked but Starbucks is in the news.
Writer Kelsey Ables details a new lawsuit against the company from the National Consumers League over Starbuck’s claims of “100% ethical” sourcing of their coffee and tea products.
"In the complaint, filed in D.C. Superior Court on Wednesday, the National Consumers League alleges that producers in the coffee giant’s supply chain have a documented record of “child labor and forced labor as well as rampant and egregious sexual harassment and assault.” The suit says Starbucks has “unjustly benefited from branding itself as a leader in corporate responsibility” while hiding the “true nature” of its practices.
Starbucks plans “to aggressively defend” itself against the allegations, Michelle Burns, executive vice president of Global Coffee, Social Impact and Sustainability, said in a statement Wednesday. “Our commitment and our responsibility to build a more sustainable, equitable, and resilient future for coffee is unwavering,” she said, calling their ethical sourcing program “best-in-class."
Is it a coincidence that my social feeds have been filled with ad-posts from Starbucks about their sourcing? Hmm…
Read the full column on the Washington Post.On the other side of the coin, Starbucks sold a lot of $50 Stanley thermoses in a collaboration with the outdoor gear brand and Target stores to celebrate Galentine’s Day.* Passionate fans of Stanley and entrepreneurial sorts camped out to get limited-edition pink thermoses the second they dropped.
Not coincidentally, Starbucks recently updated their Bring Your Own Cup policy to enable customers to bring their own clean mugs to be filled. It is a win for advocates of sustainability when considering the tens of thousands of disposable cups added to the waste stream at Starbucks every day.
By some counts (which I haven’t found updated in several years) put the number at 8,000 coffee cups…per minute. That is 4,000,000,000 (four billion) non-recyclable* disposable coffee cups per year. If you’re going to go to a Starbucks and not a local spot, bring your refillable mug.
*A majority of disposable coffee cups are not recyclable due to the film or lining on the inside of the cup that prevents the liquid from soaking into the paper making it collapse. The same film often also prevents heat loss. It’s a win for your coffee, but a loss for sustainability. If you do get a coffee in a to-go cup, the cardboard heat sleeve and the plastic lid ARE recyclable.
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