So I’m planning on opening a coffee shop with $100,000 in the morning Tempe area (Arizona.) I have a 9 page doc I made with everything I need to buy and plan for financially. I have been wanting to open a coffee shop since I was a little kid and now I have the opportunity to do so. I feel that I have great design skills to do marketing myself along with the business smarts. So unlike lots of coffee shops near me, I would be able to standout from the rest in terms of aesthetic. I have little real world business knowledge, besides setting up and operating QuickBooks. I currently work at Dutch bros part time, go to college with 16 credits, have to pay rent for me and my girlfriend in my apartment and make $1,000 additional monthly from family. Do you think it’s realistic to open a walk in coffee shop with this in mind?
Posted by Desperate-Cat-991
8 Comments
100k seems like alooot of money for a coffee shop tbh
How much experience do you have as a barista / coffee shop employee?
I think its a horrible idea. You have no business experience, yet you are risking a monumental amount of capital. Statistically, most entrepreneurs fail their first endeavor, your particular situation is only going to exasterbate those chances.
My first business was freelance digital marketing, my startup costs were only $1,000 and my monthly costs were only $150. That business eventually failed, but the experiences learned from that failure was absolutely VITAL to the success of my next business. It was a cheap lesson for me to learn. Don’t make the mistake of choosing a business with high upfront costs as your first.
It sounds like you have a lot planned out.
I do recommend checking out textbooks regarding marketing and entrepreneurship, which might help build future plans.
One of my business courses recommended this textbook, which might help.
Entrepreneurship: Theory, Process, and Practice by Donald Kuratko, 10th Edition, by Cengage South-Western
It is expensive, but it did open me up to a lot of potential factors (good and bad) that I need to consider when starting a business.
Here are some questions to help. You don’t need to answer them on here. I just thought that these might help you get one step closer to your goal.
Do you have physical marketing, like signs and logos? Do you have copyrights or trademarks for the business name and slogans that you plan on using? (This can cost money, so it is important to plan ahead.) What are the goals for your business? Is it driven by a focus on people or profit? (Business ethics are important.) Who is the audience that you are targeting? Have you researched locations and what are the values of the residents of those areas? What makes your idea or product unique? What qualities are you looking for in your employees? How do you reward them or provide incentives for staying with you? How do you adapt if something goes wrong with a machine or an employee?
I hope that these questions and ideas provide some help in your journey. I am not trying to overwhelm you. It is okay if you don’t have all the answers. You are starting something new, and new stuff comes with some unknowns. However, you can prepare for some of it ahead of time.
No.
You need to be prepared to spend 60 hours a week at the shop, which given your current lifestyle of being a full time student you will not be able to do.
If you have the $100k cash in hand you might look for an existing coffee shop to invest in as a minority owner with some of that money. This will give you back-end understanding and you will be able to earn dividends as the coffee shop is successful. Then you will be in a better place to open your own shop.
I think you have a much better start then a lot of people do that are asking these kinds of questions. You have both capital and relevant experience.
The one gotcha I see is whether you have experience *managing* a coffee shop, the people and logistics side of it. Because when you open your own you are going to have to hire and train and inventory and purchase and do Health inspections and a thousand other things that owning a business entails.
If you have that and are comfortable with the space I think it can be a reasonable risk. I still wonder if there’s some kind of soft start you can do that is less expensive than opening a physical location and quitting your job.
The coffee equivalent of starting a catering company instead of an expensive restaurant, while you still work.
bro youve got the passion and the barista chops which is dope but honestly id test the waters first.. maybe a popup or rent a spot at farmers markets before dropping 100k on brick and mortar. tempe has arizona state so foot traffic could be insane but rent might eat your margins alive. test the brand, see if people actually vibe with your aesthetic then scale up once you know whats working
It’s doable, but I wouldn’t count on that $100k to take me far. Buildout will cost a fortune, and you’ll also need to budget for equipment, permits, and inventory.
Retail in Tempe runs around $20-28 per square foot. Employees will cost you $15-19 per hour depending on their role. Once you’re open, expect monthly costs around $25k (rent, payroll, utilities, supplies). You’ll need to sell a LOT of coffee each month just to break even.
I’d recommend keeping at least 6 months of operating expenses separate from your buildout budget. That’ll give you a cushion for the first few months when things move slow.