How To Buy and Open An Espresso Coffee Stand Business
Buying an espresso coffee stand business can be a worthwhile venture. If done right, you may be able to create a thriving coffee business with minimal investment. It can certainly be cheaper over the long run to invest in an existing espresso coffee drive-thru stand than say, starting one from scratch.
However, with the possibility of generating a profitable business always in reach, there is also the real possibility of you sinking in a small fortune on worthless equipment, a poorly built stand, and added cost for storage space, poor lease, and futile equipment upgrades. In addition, you may not be aware of the “bad will” a business has generated by poor management, poor service, and a poor coffee.
A specific drive-thru coffee stand location may have inherent complications not immediately noticeable to someone who is not too familiar with the area.
If you are interested in starting and opening a coffee business – specifically a drive-thru coffee stand – you will want to continue reading because we’re going to cover a wide range of elements important to your coffee drive-thru business.
Now, of course, we’ve written about starting and opening a coffee shop stand before but the subject deserves much more attention. Now, we assume that you already know the potential benefits of opening a coffee stand, so we think it’s more important to continue to remind people of the potential pitfalls when buying your coffee stand. That is, let’s approach the following discussion with a little dose of reality. Not all coffee drive-thru stands are successful.
We don’t believe in fearing the idea of failure, but rather learning from it. In fact, our whole aim here at Coffee Shop Start Ups is to learn from the success (and failures) of those veteran coffee shop owners. (In our coffee shop business plan guide, we've included nearly 8 hours of audio of coffee business veterans discussing what they've learned from having, owning, and operating a coffee shop stand.)
Starting From Zero – Launching Your Coffee Espresso Stand Business
Okay, so let’s assume that you are starting from Square One. You are beginning with none-other than your love of coffee and that you have always wanted to own your own business… and that there exists a general need for good coffee in your community. Other than that – and a small cash savings, you’re really starting from scratch. And that's okay. In this article, we're going to talk about how to move forward with your dreams of starting a coffee stand business.
So let's get started…
Starting from zero is nothing new. Don’t worry, many people who have gone on to start a thriving coffee business with less than those mentioned elements above. However, what they do have is the ability to plan, to learn, and to admit to themselves when they need a little help. These are important qualities (that are often unteachable) when starting a coffee shop or any business for that matter.
So, where do you start your coffee stand business? Start With You.
Despite what people think, business is personal. It’s never simply “business”. When we are talking about your personal life savings or your mother’s money that you’ve reluctantly borrowed, I believe business very personal. So if you starting from zero – and if you were my brother (or sister), the first thing I would tell you is to do a quick and honest examination of your own life: are you ready to start a coffee business – or any business for that matter?
Businesses development takes time, effort, money, and emotional capital. Do you have a reserve of these requirements? In other words, is your house in order? (We’ve written about preparing yourself for the challenges of starting a coffee business before and we hope you can be honest with yourself before you begin down this road). Before going down this potentially profitable (but rocky road), be honest with yourself examination.
Okay, so you are mentally and emotionally prepared to start a coffee business. Now what? The first thing that you need to do is be purposeful with your research. Starting any business should require its founder to take some time in researching everything.
Now, most of the time, someone will simply say to the aspiring coffee shop owner like, “Well, you just gotta do your research” and walk away. In a way, they are right – you do have to do research. But really the reply is only half-the answer, because the true answer is in the details. You can't really do research unless you've been able to learn what to look for. For example, this is what we have found when people decided to ask follow up questions: “Yes, but what kind of research? How do I start researching? What do I actually research?”
These are the important follow up questions that everyone needs answers to before starting their business: Where and how do you begin your research? There is of course no “right way” to start your business as people enter into launching their own coffee business from different angles, different fields, and use what resources that they have and that are available to them – at that time. The important thing is to just start. START where you are – right now!
Start Your Coffee Business Research:
Compartmentalize Internally and Externally
Do you remember when we asked if you were ready to start your business? Well, if we take a second to understand that question, we begin to realize that that's an internal research question – and an important one. Taking stock in any (and all) internal and external factors that can impact your business is important. Leave no stone unturned, as they say. So, let's take stock a little further…. You can break down your research into two basic components: Internal and External.
- Are you personally ready to start a business?
- Do you have the personality to start your own business?
- Are you willing to learn the skills that are required of you before you start your business?
- Do you have the capital or money to start your own coffee business?
If the answer is yes to all these questions, you are ready to look to external factors. If you answered “No” or “Maybe”, you will have to think about how you can “get to yes” for each of these factors. It is important that you be honest with yourself here. You would be surprised to know how many people simply lie to themselves about their personal position. What ends up occurring is that their dishonesty quickly catches up with them. (Again, consider reading one of our previous posts specifically on this issue).
Be frank with yourself with the questions noted above. You simply may not be ready to start your business. You might be itching to take a long trip, you may be wanting to start a family, you may want to go back to school. There are tons of worthy alternatives. If you start a business – especially a thriving coffee shop – you have to understand that this will be your life! Your business will dominate your days, your weeks, your months – until it gets off the ground, is self-sustaining, and an efficient management and training system is in place.
Consider your personality traits. Are you able to manage people well? Are you able to stick with this business until the end? Do a self-assessment on what traits bode well and those that don't when it comes to managing, operating your business. Many people like the idea of starting their own business – it can be a seductive and romantic to be the owner of a cafe or coffee shop – but it entails a lot of work (paper work, long hours, and dealing with customers).
Finally, do you have the money to start your business? Even a modest coffee shop can cost a significant amount of investment. There are coffee shop budgetary considerations that you will have to also be honest with yourself with. Remember, you will also have to have money to live until your coffee shop gets off the ground. You will not only need to plan your coffee business budget, but you will also need to plan out your living expenses (rent, car payment, food, utilities, spending money, etc.), preferably separately from you coffee business.
Now let’s look outward.
- Where will you start your coffee stand business?
- What are the requirements to start a coffee stand business in your area?
- Who are the competitors?
- Who will your customers be?
- How are other similar coffee shops doing in your area?
- What other factors exist in your area that may impact your business?
- Which vendors are available to work with?
External research is a broad term, but it basically means everything other than your personal assessment of business develop. This would require general market research, trends, real estate costs, demographic changes, etc. We’ve discussed and written about a variety of segments within market research – this would include evaluating real estate costs, competitors, substitutes, availability of vendors, etc.
The act of choosing where to start your business is both an art and a science. For example, the numbers (data research) may say that this is the perfect place for your business. But the reality is that it may not be. Some businesses may not workout even if the numbers say it will… you really have to get to know your community in which you plan on serving. Who will be served by your business? Will have they any alternatives to your service? What other factors (like traffic, other anchor businesses, and seasonal changes can impact your business?)
Okay, so how do you get this down on paper?
How Should You Methodically Start Your Research? With a Business Plan
Honor your coffee shop business with a business plan. There is really no way around it. Business plans are important and we highly recommend that you write one for your business. If you need help, get it. The process of developing your business an exceptional investment. While it may not be the least sexiest part of starting and launching a business, is the most critical because it helps you to articulate your thoughts and vision about your coffee business. Most importantly, a business plan separates the dreamers from the actual doers. If you have a business plan, people take you seriously. You take your own business seriously. And a business plan opens doors.
To be sure, business plans can be time consuming, and if you are not used to writing business documents, then they may be slightly challenging to write. Certainly, coffee business plans take effort to write, and they require your ability to better articulate your thoughts about your business – as well the the planning and execution. But the effort you make in your business plan will save you money, time, and will help you reach your goals much faster. However, with that said, business plans do not have to be difficult to write. Often times, you simply need a little help – or a little prompting – and you will be on your way!
FYI: We offer a coffee shop business plan template and guide that comes with some really informative audio interviews (and additional bonuses) that you want to hear before you take another step with your business planning.
How to Start Your Coffee Stand Business Research?
Answer: By Knowing Where *YOU* Stand
Be purposeful with your research. You are not doing “homework” for anyone except you. The research is for you and your success alone. No else cares more than you do about your business, so doing the research is essential.
Being purposeful and organized with your research and putting all of it into a business plan will be worth its weight in gold. If you still don’t know where to start, you can start here, with us. Consider reading the following free coffee business articles we’ve put together for people just like you.
The Physical Space: Your Coffee Drive-Thru Stand
You have only a couple of options when it comes to your coffee drive-thru stand: You can either buy an existing coffee stand, buy an unused coffee stand, or you make one yourself. (Your equipment is often a separate purchase. However, many coffee stand owners looking to stand may “throw in” whatever they've got to sweet the deal or squeeze out an extra buck from you).
If you purchase an existing coffee stand business, you will have to determine whether you can stay in the actual location or whether you will have to move – or whether you would like to move.
In 90% of the cases, the coffee stand does not own the land it sits on and usually leases it from the property owner. Finally, if you choose to build your coffee stand or you will buy coffee stand that is in storage somewhere, you will have to determine how you move the stand and where you will store it (or move it to).
Let’s take each of the potential options for your coffee stand purchase:
You Buy an Existing Coffee Stand
Buying an existing stand at first glance might be the way to go (emphasis on “might”). After all, having a Turn-key business can be convenient and actually, pretty successful. But I recommend that you always do your “due diligence” when you buy any business, especially on an existing coffee stand business.
A few things to remember about buying an existing coffee or espresso drive-thru stand. 1. The price of the stand does not generally include the cost of rent per month. So, if you were to buy a coffee stand for say, $20,000 – you will often need to pay rent for the physical location and use of a commissary and restroom for your employees.
Perhaps rent is $1000 per month. Additionally, the cost of rent might not include the use of electricity, water, sewer, commissary, etc. Plus, you will have the natural variable costs that come with owning a stand such as coffee, cups, snacks, labor, etc. So, be aware of the costs.
Here is what you will generally be negotiating when you purchase an existing coffee stand in a specific location:
- The price of the stand (on its own)
- The price/costs of equipment (if any)
- The monthly rent and lease options (extremely important)
- Your tenant rights (Appropriate signage, parking, commissary, etc.)
- Any additional utility costs.
- Other specific details that pertain to the location, the lot, municipality, etc.
Your Eyes May Be Bigger than Your Coffee Stand Budget
The first thing you will see in an advertisement (or hear from a broker) is the cost of the physical coffee stand. But in reality, as you can see from the above list, there is really a lot more to this.
The cost of your equipment will be a big lump sum that can erase much of your savings if you’re not careful. But the big cost will be the lease you sign, especially if you are struggling with getting new customers. (FYI: We have to excellent audio interviews that specifically talk about coffee equipment and signing your coffee lease – these are two important interviews that every aspiring coffee shop owner should here before they spend any real money on their business).
Lastly, you will have to due your diligence on the kind of goodwill the existing business has generated. What kind of online reviews do they have? Do they have a steady stream of loyal customers? There are plenty of important questions to still ask which are relevant and go well beyond the simple sale of a wooden structure and some coffee equipment.
You Buy a ‘Stand Alone' Coffee Stand That is Not In Use
Often times you will see a coffee espresso drive-thru stand on sale, perhaps on Craigslist or other online board. Now to be fair, many of these stands can be a “good deal” but more often than not, they can entangle you to bear someone else’s burden at a significant expense.
Sometimes, the prices can be outrageously expensive for a moldy, dilapidated stand that you will have to move, store, and upgrade. Some stands along can range up to $25,000+ for the structure. Now, remember, while that might seem like a modest amount of money to start a business – that’s only the beginning of your upfront costs.
Some stands might have some equipment stored (menus, POS systems, stools, signs, tampers, and espresso machines.) I highly recommend that you simply avoid using an un-maintained espresso machine.
If you like the espresso drive-thru stand (and have had it examined for structure/code integrity), you should negotiate a fair price. But consider that you will also have important costs associated with the purchase, including the immediate removal and storage. If you already have a place lined up for your stand, you’ll be ahead of the game. If not, you may have to pay for a monthly outside storage space.
My recommendation is that you consider looking for your potential location before purchasing your stand. Why? Because: 1. This will help you determine the size of the stand you will need. 2. It will help you determine whether you need a two window drive-thru stand or whether you will simply need a single window. 3. It will help you also determine what type of plumbing and electrical needs that you will require.
Here are the primary costs associated with buying a coffee stand (a la carte):
- Price of the actual stand (attached fixtures)
- Price of any equipment
- Price of removal (moving the espresso stand to a new location)
- Price of storage
- Price of upgrades needed to work with the chosen location (plumbing)
- Price/Rent of space including commissary
Getting Your Tools Out: Making Your Own Coffee Stand
Making your own stand can give you a lot of flexibility and ownership. If you plan it out correctly, you might be able to save money and generate a customized coffee drive-thru stand for your needs.
As with the other options, we strongly recommend that you have a general idea of where you would like to put the stand, that you negotiate a flexible lease, and that you determine what your plumbing and electrical needs are.
Of course, building your own stand might sound easier than it actually is. We highly recommend that you do your research, hire experienced contactors, and that you have a business plan already established.
Your Coffee Stand Business Will Only Be as Great as Your Planning
Whew! That was a brief discussion buying an existing coffee stand business. Without a doubt, there is plenty more to discuss. Keep this in mind, there is no way around the fact that you need a business plan for your coffee business.
Whichever direction you choose, you will need to do the hard work in thinking, planning, and brainstorming your business. Planning and designing your coffee business can be an exciting challenge, and with a little help, it can be excellent way to save money, increase your profits, and avoid devastating losses.
If you would like more information and help with your coffee business plan, consider buying our Coffee Shop Business Plan Guide, complete with an easily editable Word Template and valuable audio interviews that you will/should hear before starting your business plan.
Related Articles on Research & Planning Your Coffee Drive-Thru Espresso Stand:
- The Pros and Cons of Starting a Coffee Shop Business
- A 15-Step Plan To Starting Your Coffee Stand Business
- Finding The Space to Open a Coffee Shop Business
- How To Open a Small Coffee Stand Business
- How To Open a Bikini Espresso Stand
- Questions to Ask Before Buying a Coffee Stand Business
What would you ask an experience coffee stand owner?