When it comes to getting into the coffeehouse business, you need to decide whether to:
- Buy an existing coffeehouse; or
- Start a brand new coffee shop from scratch.
It is absolutely critical that you discuss each option with your accountant and as you can expect there are advantages and disadvantages with each.
Existing coffee shop:
The obvious advantage of buying an existing coffee shop is that it should be an established, successful business. Also, you won’t need to spend as much money fitting the store out, as you would in a start-up business and it is as close to a turnkey business as you can get. On the other hand, if you buy an existing business, you may be buying the problems of the outgoing business owner, for instance increased rent and overheads, a disappointing bottom line, etc. Of course though, you can minimize the risk by carefully considering the business and its full financials with your lawyer and accountant’s expert advice and direction.
If you start your business from scratch, you can fit your space out as you like from day one. You are completely designing your store from scratch. On the other hand, start-up businesses are riskier because you don’t have a proven track record in the business as you have created it at that location, and it costs a lot more to start a brand new business as opposed to buying an existing one.
Be sure to thoroughly do your homework and research whenever you are considering an existing or start-up business – and remember to enlist a great accountant and lawyer to help you make the right decision.
Chances are you will probably require funding from an outside source to get your coffeehouse business off the ground. There aren’t too many people around who can fund a business on their own!
To secure the finance you need to turn your coffee shop dream into a reality, you’ll need a business plan. After all, the financial institution you hope will loan you money needs to know that you have a great business concept that is viable.
Even if you are fortunate enough to fund your own business, you will need a business plan!
You’ve probably heard of the term, “Fail to plan, plan to fail” right? Basically it means that failure is highly likely if you do not plan your business.
You need to know exactly where you want to take your business, and you need to come up with strategies to help you achieve those goals.
Your business plan will take into consideration absolutely everything: your mission statement, your market position, your finances, your sales projections, your marketing and advertising and your future plans – absolutely everything!
So, take some time to plan and avoid expense and stress in the long term.