Financing

Your resources will determine your concept. People often start out with grandiose expectations. They do not focus sufficiently on establishing sound financial plans for their coffee shop businesses. There is a joke in the industry that for every person who is trying to open one cart, there is someone else who is trying to open ten.

Very rarely is somebody realistic and sensible enough to say: "I would like to open a coffee cart, and if the concept is good, and if it is profitable, and if I enjoy the industry, then I will plan on opening more operations in the future."

Rather than starting out by investing a lot of energy into preplanning your business concept, the first thing you need to determine is, how much money can I pull together? You need to plan in accordance with the total amount of money you will have available to work with.

Another factor is that you cannot spend your entire budget on the initial opening; you will need operating capital. If it turns out, as it often does, that your dreams are bigger than your pocketbook, do not give up and get discouraged.

If your ultimate goal is to own a nice sit-down coffee shop business, but you do not have enough money to achieve that goal initially, it does not mean that you cannot go into the coffee shop business. What it does mean is that you may have to start with a more modest plan; perhaps with a coffee cart or coffee kiosk. This will give you an opportunity to find out if you like the coffee shop business. Once you learn about the business, and can turn a profit, it will be easier to go back to the bank and say, "This is what I’ve done! Look at how successful I’ve been! Now I would like to borrow money because I want to open a beautiful, sit down coffee shop business!"