Hi All,

I'm about almost to leave my job to start a new Cafe/deli Business. I have no catering /cafe experience (so far). I enjoy food and cooking, and have had the idea to start my own cafe business for the past few years. I hold a reasonable amount of business experience from past jobs. I've worked in retail in the past; both on the trading floor dealing with customers face to face and in back office preparing accounts filing tax returns etc.

I?m confident that I have chosen a good location with heavy foot traffic and a lot of office buildings close by. (I haven't signed a lease yet) I've done my market research worked on the figures and chosen a good name for the business. My current job is safe or as safe as jobs are these days. I believe that I would be better off investing in myself instead of working 10 or 12 hours a day for the boss.

I?d really love some feedback from others who have been in my situation. And if there are any cafe/deli owners reading this maybe you could offers some advice and let me know if, in your experience can people with no experience in this industry make it work.

Thanks
D

First, expect to work more hours than you could ever have imagined. Second, with no experience in the food industry ---- how do you expect to make this work?

Figures and a good name aren't all that is needed to make a food business work. It comes down to quality, do people want it, and flawless execution of the product each and every time.

Enjoyment of cooking and food is also a bit understated. You have to LOVE LOVE LOVE it.

Sorry to sound so negative, but experience in the food industry is such a huge step in the right direction ----- I'd get a job in the industry if I were you BEFORE you open yours and get a taste for what it is going to be like. Also, you should do that before investing a ton of money into something that you may not like.

The food industry is not like most other industries out there. Lots of work, time, energy, and tears.

On the other hand, if your plan is great, your funding is there, and you REALLY feel you are ready ---- dive in! THis industry is, in my opinion, the best way to connect with people!

Good luck!!

http://www.allthingscheesecake.com

Save the Earth! It's the only planet with cheesecake!

Thanks for taking the time to reply.

The idea I have is to operate a cafe/deli, selling hot and cold pre-prepared deli rolls etc. There is no facility to cook on site so there won?t be much experimenting in the cooking dept, just preparing and heating up rolls at first. I have booked myself onto a barista course and will be working in a local cafe on my weekends to gain some basic experience of the daily routines over the coming months.

Long hours are a given, I just know I?m better off burning up my energy on my own business idea. The hope is of course that the rewards will eclipse the sacrifices.

Can anyone offer some advice on buying plant equipment rather than leasing? Is there a potential downside of opening on a busy main street? Is there a % of food wastage that should be expected and built into a cash flow?

Thanks heaps!
D

A place to start for equipment is http://www.katom.com. Their prices are the best that I have found so far. The only drawback is that you have to install the items yourself or hire it out. BUT, the manuals that come with the equipment are so simple, it's just as well that you do it and save money on installation! Ha ha.

A busy street in connection with your business is that you have to have the right kind of traffic. By that I mean you have to have the people you are targeting travelling there. Also, you place must be easily accessible either on foot or from a vehicle.

Food loss should always be as low as you can keep it. I built mine into the cost of goods sold percentage. From experience, I know that I can expect approximately 25% cost of goods sold and 5% for food loss. The best way to control food loss is to know your customers. If you are projecting that you will serve 100 people on opening day, make food for 80.

Your food items should be purchased first based on your calculations/projections for the first week or so, then, base it on sales. The extra items like take out containers, etc. shouldn't be considered a loss item --- it is a part of your cost of goods sold.

Good Luck!!


http://www.allthingscheesecake.com

Save the Earth! It's the only planet with cheesecake!

Being in the food industry, I can vouch for the long hours and hard work.

I have few suggestions, since my experience is in a different branch of food than you're planning and is potentially of little value.

1. Yes, calculate in loss. If you don't you'll have to calculate it out of profits.

2. pay yourself separately and keep track of all cash transactions. It is far too easy as a small business owner of a food business to fall into the trap of nipping a bit of food here and there and not keeping track of that and the cash coming in. It will eat into your earnings and revenues when it should be on paper and going out as salary. Your accountant will thank you for it.

3. For the machinery... I suggest leasing to start, you may discover that you are not happy with a particular machine and although on a monthly basis it is more expensive to start, having leased, you will be able to switch to a better model if the one you leased isn't quite up to snuff. Both the leasing fee and the interest is deductible. Buying it, locks you into being unhappy with it until it has lived out its amortization schedule.

4. An added benefit to leasing is the maintenance schedule and installation. Having bought a steam jacketed self-stirring kettle, we have found that we need a gas certified electrician to install it. Having bought our printer, we find that we have to pay cash to have a technician visit.

I hope these thoughts are useful to you.

Tina Brooks, VP Marketing
Brooks Pepperfire Foods, Inc.
Makers of Peppermaster Hot Sauces
http://www.peppermaster.com

Eat more peppers!

Do your self a favor and call a local foodservice dealer. If you are in New Zealand I do not know where to go if you are in the US please let me know what state and I can recommend a few. Do not attempt to buy a equipment for a new start up business with no industry experience especially over the internet. I know all the internet companies personally and you will get burned if you make a bad purchasing desicion this is not a computer you are buying this could be $1,000 of dollars of equipment and you do not want to make a costly mistake. I have worked with the majority of the Foodservice Dealers in the US. If you want to keep your costs low by used equipment to start. Your heaviest piece of equipment should be purchased new. For example a Range may be your most heavily used piece of equipment so by that new or maybe it is a slicer. Your tables for example you can buy used. If you have questions let me know I deal with restaurants, hotels, hospitals,etc. in foodservice every day.

As far as lease verses buy decision check with your accountant on how this will effect getting loans or future money needs. If you need money down the road and do not own the equipment you do not have any assets to borrow against.

I'm glad you're taking a job in a coffee shop. I'd also take a job in a resturant... any job to start.

I would not start a business for a year, during which time you gain experience, create a business and marketin plan, do market research etc.

Your local small business administration office should be of assistance.

And read the book the Emyth Revisited.

Maria Marsala

Let me help you substantially grow your financial advisory business or nonprofit with P.E.P. Increase productivity, efficiency, and profit.

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