Thinking of opening a coffee shop? The first question to follow logically would be: How much money do you have? Opening a coffee shop is no small task. It requires a lot of money even by conservative estimates. What if someone told you that you don’t need any money to open a coffee shop? Would you want to know how? Let us tell you how.
Setting up a coffee shop
Setting up a coffee shop can be more complicated than you may have thought. There need to be a list of things sorted out in detail before the coffee shop has actually opened. These are:
- Expertise
- A place to house the coffee shop (leased property)
- Licenses and permits
- Furniture and fittings
- A reliable coffee shop POS System
- Staff
- Kitchen stocks
- Marketing
- Insurance
Save for expertise which is your own if we don’t count the months and years spent in gaining that, all the other listed things cost a certain minimum amount of money. Conservative estimates calculated by many studies put that amount at roughly £85000. The good news; you can get this money for your coffee shop business.
Find an investor
It may interest you to know that most start-up businesses are not bankrolled by their founders. Rather they come into being through third party investments. But where to look for such investors?
Dig your personal contacts list
The first people to look at would be your family and close friends. Dig out your contacts list, start making calls and setting up meetings wherever you hear something positive; from interested family members and close relatives to close friends and their acquaintances who may have the money but not the expertise. While it can be a very difficult pursuit, don’t give up. Exhaust all the options that you can think of.
Find investors online
That is correct. You can find potential investors online. Just log on to the internet and start searching. There are a few popular sites wherefrom you can find investor(s) for your business.
Crowd-fund your coffee shop
If you cannot find an investor with pockets deep enough to finance your coffee shop, you can look for crowd-funding. In crowd-funding, there’s a number of people who pour in varying amounts of money to help you set up your business. One advantage of such type of funding is that you don’t have a single investor distracting you with their questions and inquiries. Participants in crowd-funding tend to associate with your efforts and hence can complement your efforts.
How to convince an investor
Once you have got in touch with some investor, the next thing is to get down with them for some real business talk. This is important. Convince them of the viability of the coffee shop and show them realistic returns.
Questions in potential investor’s mind
Any investor would want to know the answers to the following questions:
What is your business plan?
Why should I invest in this plan?
What would be the returns?
Why should I trust your plan (or you)?
The answers
This is the most crucial thing for hinged with it is the outcome i.e., whether or not your dream is going to become a reality. So prepare yourself thoroughly.
- Chalk out a compact yet comprehensive business plan.
The plan should focus on the following things:- The reasons your coffee shop would succeed
- Opportunities
- Returns
- Challenges (and how to cope with them)
- How much profits do you expect to make
- Lay out your vision with maximum clarity. Make sure that the investor sees your vision. This is very important in making up the mind of the investor.
- Lay out the returns in realistic numbers. If you are able to position your estimated / planned and anticipated returns within the scheme of the proposed coffee shop business, it is very likely that the investor would say ‘go ahead’.
- Equally importantly, develop relationship with the investor. Build trust and gain their confidence.
If you have got all these things worked out thoroughly, then pull up your socks. You are ready to kick off. And guess what, you have opened your coffee shop without a penny of your own being spent.
