Barista Magazine

FEB-MAR 2018

Serving People Serving Coffee Since 2005

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what you like making and what customers want to buy from you." When it comes to money and coffee businesses, there are sev- eral different and very signifi cant things to consider, including, fundamentally, making money, and spending it. The "making it" seems easier to most people: You put a price on your chalkboard, someone pays that price, you make a profi t, right? If only it were that simple: Instead, devising a sustainable menu means considering all of your outputs and expenditure as well—person- nel costs, utility bills, raw materials and ingredients, insurance and fees and taxes, to name a few—and then calculating the margins on top of your cost of production, in order to grow a healthy revenue. " You have to make sure it will function as a machine and spit out more than you put in," says Colin. This also means that it's not an option to simply check out other shops in town and use their prices as the cookie-cutter model for yours: You don't know whether they got a deal on rent or are operating at a great loss, and your business is unique enough to warrant the work and calculations. Colin's book provides a lot of helpful information about arriving at margins and balancing budgets, but a fi nancial advisor and a keen business plan to start out are two incredibly worthwhile investments that can do wonders for your success, growth, and stability as a business. Building the Building When Oksana and Alex Fisenko were planning to open their fi rst espresso bar in Berkeley, Calif., in 1970, they already knew a thing or two about coffee: Alex was an importer and distributor of Gaggia espresso machines, and Oksana was trained up as a master of the espresso craft. What they didn't know, however, was what exactly to expect when it came to building a café business— especially, she says, when it came to the building itself. "Making coffee is easy, but this is what is diffi cult," Oksana says, recalling not only the experience she and her husband had way back then, but also what her current clients face, when they come to her as the CEO and president of Alex & Associates, Inc., a full-service coffee-business consultancy she and Alex started in the 1970s, and which Oksana still heads today. "The leasing, that's a very big challenge. Location, number one! Sometimes it took a year and a half to fi nd the proper location. Then, once that's found, the negoti- ation of the lease, then the build-up, the inspections, the plumbers, the electricians. These things are much more costly than just hanging up a shingle and opening a business." "There are so many variables to consider when selecting a site," Mark says, but he thankfully got some good advice from his mentor. "[He] suggested I don't choose a location unless it had at least two of the three variables: on a corner, near a train/subway/ transit hub, or next to a school or grocery store." Simply falling in love with the right address isn't the end of the discussion, however. "Many landlords are hesitant to speak with fi rst-time operators who don't have existing locations, due to the inherent risk involved in this business, plus the risk of engaging in a long- term lease with someone who has never done this before," Mark says. And Oksana emphasizes the importance of knowing whether your model will fi t the community, which will also dictate many of your early decisions. "If, for instance, you're going into an area that's upscale, then you've got to do upscale," she says. "Your demographic needs to be correct, you have to know what prices to put on your menu." "Once you sign the lease, the challenge shifts toward design, permitting, construction, hiring/staffi ng, and overall manage- ment," says Mark. These challenges represent the next headache, and, for many coffee-business owners, the absolute worst one. "My dad's a contractor, or at least was, so I can say this: They're all liars, in every part of the world," Colin says with a lit- tle bit of a laugh. "One week means three weeks. The less you can rely on third parties, the better. It's a nightmare in every country I've ever been to." Whether you're taking over an existing coffee business (a turn- key operation), starting from scratch in a brand-new building, or anything in between, you'll need to do very thorough and probably eye-crossingly boring research into the requirements, restrictions, and regulations that need to be upheld in the phys- ical space, even if you're working with a contractor—ultimately the business is yours, and you're responsible for the work done on it, so you'd better know as much as possible about every aspect involved. Every single city, county, state, and country is different, and the only way to know what precisely is called for from your local government is to click, call, write, and show up in person to probably several offi ces in your district. This is another place where having a detailed business plan will help you plot your course, write a chronology of permits and requirements, and check off each individual box as you venture into the long and often frustrating process of building up and getting ready. Toilets When it comes to "unglamorous," there's really nothing that captures that aspect of running a business than the word "toi- lets"—yet, believe it or not, these unpleasant necessities actually embody several all-too-easy-to-overlook aspects of business ownership and operation. They're so important, in fact, that Colin even devoted a chapter to them in What I Know about Running Touted as one of the most insightful and accessible books about the ins and outs of operating a successful coffee company, What I Know about Running Coffee Shops was written by Colin Harmon, owner of Dublin's acclaimed roaster-retailer 3fe Coffee. Colin is also the four-time Barista Champion of Ireland. You can buy it at 78 barista magazine

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