Barista Magazine

DEC 2018 - JAN 2019

Serving People Serving Coffee Since 2005

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minimum of 200 amps of electrical power. Contract an electrician if the previous retail business did not have an appropriate setup. PRO TIP: LOOK TO YOUR OWN TEAM FOR SPECIAL TALENTS. Melissa Raef and Jake Brodsky of Novo Coffee in Denver say: "It helps to assess the skill set of the team, and utilize those skills where it makes sense. It is great to save money through DIY projects, but be realistic about if it will delay your opening, or worse yet, leave you with a build-out that is less than aesthetically (or functionally) ideal." FURNISHINGS (FURNITURE, ART, LIGHTING): Again, this expense is contingent on quality, size of the shop, envisioned aesthetics of the shop, as well as the resources at hand. Minimalist/DIY furnishings for medium-size shop: $2,500–$20,000 Elaborate design for medium-size shop: $50K–$100K PRO TIP: USE YOUR RESOURCES! Julia and Ernest of Sonder Coffee built their own furniture and sourced wood from a barn on family land to build Sonder's bar. PRO TIP: KEEP YOUR BRAND AND YOUR CUSTOMERS IN MIND. "It's important to adapt to the desires of the community—without compromising on your ethics, of course," say Melissa and Jake of Novo Coffee. "It can be diffi cult to be fi nancially suc- cessful if you hold too closely to the ideology of a business model that turns customers away." PRO TIP: BUILD RELATIONSHIPS WITH DEVELOPERS If you already have an established brand and market base, Brad Lepper of Stone Bru in Sioux City, Iowa, suggests connecting with developers who may want a reputable coffee shop in their building. Developers will often pay the majority of build-out costs to increase real-estate value. C: Payroll Similar to the cost of rent, a shop's location will determine payroll expenses. Hourly wage for baristas usually teeters right around minimum wage: $7.25 at the federal level. However, city and state levels vary, with the highest minimum wage settling at $15/hour. (Hello, San Francis- co and Seattle!) Depending on level of foot traffi c, owners will need to decide the number of baristas neces- sary per shift in order to keep a steady workfl ow (and happy baristas) without exceeding labor costs. On average, 25–30 percent of gross revenue provides a target range for payroll expenses, which includes wage, related taxes, workers comp, benefi ts, and insurance. BALLPARK PAYROLL EXPENSES: • Multiple-location coffee shop in Denver, Colo.: $30K–$33K/month • Multiple-location coffee shop in rural Midwest: $18K–$20K/month • Single-location coffee shop in Chicago: $7,500/month (small staff)– $14K/month (larger staff) PRO TIP: CONSIDER OFFERING COMPETITIVE PAY AND/OR INCENTIVES Though this may sound counterintuitive, the choice to pay a little more than minimum wage can increase quality of work and therefore quality of customer service (if you hire wisely). Brad of Stone Bru says, "If you pay minimum wage, you will get minimum effort." Unmotivated or unhappy employees who feel undervalued hold the power to hinder business, so incentives are key. Jasmin McGinnis, owner of Barista's Daily Grind in Kearney, Neb., creates a 97 www.baristamagazine.com

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