Finding The Money To Start A Coffee Shop Business – Start A Coffee Business
Having dreams of opening up your own coffee shop? Then you have probably quickly let your dream wake up to the reality of financing. Financing our dreams can be scary and enough to keep many of us away from what we ultimately want. However, as we often like to say, where there’s a will (and a good business plan), there’s a way!
No doubt it will take work to plan out your coffee business. From the design, to your leasing options, to your coffee equipment….all the way to essential financial pieces of your business, you will certainly need a lot of work in managing to put together this coffee business puzzle. Certainly all of this plays into ultimately determining what your coffee business start up costs will be.
Assuming, you have already written a coffee business plan and know and understand your vision for your coffee business startup, you will be now be looking for funding. I should note that it’s important to develop your vision and codify that vision in your business plan so that you will be able to share it with potential investors, bankers, etc. Ultimately, the cost of your business will be impacted by the design, vision, and location of your coffee shop stand, or cafe.
Coffee Shop Start Ups provides an deep coffee business article list to help you start your coffee business.
Finding The Money To Start A Coffee Shop Business:
Your Personal Savings – This will ultimately be the first place you should look. Investing your own money into your vision “puts skin in the game” for you and demonstrates to other potential investors that you are serious about your coffee business venture. While the percentage of the entire cost of the coffee business startup will be ultimately up to you, I personally recommend that you (as the owner) put up at least 20% should be funded by you personally.
So, if you’re estimate is that it would take about $45K to start your coffee business, you should put up at least (emphasis) $9,000 of your own money it. Likewise, if your coffee start up will cost 100K, you will want to put in $20,000 of your own money.
Now, figuring out where you are going to get the rest of the 80% of the funding needed to start your coffee business is now the immediate goal. I should remind you that you should not spend your last penny on reaching your 20% investment (or 100%) in your own business. You will, after all, need money to live and pay bills. You will also need to have an emergency reserve – or capital reserve – to help you through the slow months. Depending on the ultimate estimated costs of your coffee business you will want to have a designated percentage, say 10% as capital reserves, to see you through any hiccups or delays in opening your coffee shop that may occur.
Silent Investors – Another option for you would be to offer silent investors the opportunity to either own a portion of your coffee shop or you will need to reach an agreement of paying back the loan with a specified amount of interest. You may elect to do this with one or more individuals, with each investment payback schedule negotiated individually over a period of a given time.
A Small Business Loan – You may also apply for a small business loan at your local bank. You will need to have a well written Coffee Business Plan ready to go for your loan even to be considered.
A Home Equity Loan – If you have a home – and you have equity in your home – some may consider taking a home equity loan. The details of course, will need to be worked out with your banking institution.
Offers of Co-ownership – By starting a coffee shop with your friends or colleagues that may be interested in co-owning and operating your coffee shop. The difference between this option and the “silent investor” is that your co-owners will be an integral part of the day-to-day operations of your coffee business. If you need more investors, you may consider offering several “co-owner
There are plenty of ways to get the funding you need to start your coffee business, but one thing is for certain – you will need a business plan to offer to those who would consider investing in your business plan.
Getting Your Coffee Shop Business Started:
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Here at Coffee Shop Start Ups, our Coffee Shop Business Starter Package provides you with a number of helpful tools to get your business plan going. In addition, our interviews provide you with the knowledge you need to start your coffee business. For example, as a new (or veteran) coffee business owner you will have to excel at more than producing great coffee, but you will have to excel at understanding your coffee business financials, such as determining your break-even point.
Our online coffee business course will provide you with a broad spectrum of knowledge that you will need to determine your path in starting a coffee business that works for you.
30 Great Tips to Start Your Coffee Shop!
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