If You Consider Starting a Coffee Shop...





Starting A Coffee Shop


Got the itch to get started on your very own enterprise? So why not think about starting a coffee shop?

Coffee is a beverage that has stood the test of time. And it's always smart to choose a business dealing with a product that’s popular.

Trade in coffee beans has boomed over centuries and business prospects of this wonderful, refreshing beverage are going great even today!

To help you set shop with your own coffee business we’ve spelt out the following steps so you know the right path.

Important Points

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Point number one: starting a coffee shop doesn’t come cheap. Your shop must ride piggyback on the goodwill of a branded franchise. Buying a good coffee franchise is likely to be costly. Quite costly.

Here comes point number two: choose your franchise well. Go for the most preferred flavor in your neighborhood.

To franchise price you must add the cost of the shop itself – swank fittings, swish furniture, a location that will fetch lots of footballs, coffee making machines and so on. Get the broad picture?

Our realistic view: you must be comfortable with an investment of $ 100,000 or more. Whether you’re thinking of having a traditional coffee house, specialty coffee shop or a drive-in shop, a light wallet won’t fetch you one.

Getting Funds

Fortunately, in the US there are several sources to fund your fledgling enterprise.

Once you’ve got your business plan in place, here are some of the most common borrowing options available for you to take your pick.

The most talked about one is the Small Business Administration program or SBA. But since there’s always huge jostling going on by entrepreneurs like you, obtaining SBA loan sanction isn’t easy at all.

It’s banks and not the government that give out SBA loans. Even specialty programs like micro loans or capital group fund loans demand collateral.

In other words, most of these loans are collateral loans and they are backed by the US government similar to HUD and FHA home loans.

So if you can’t repay and default, the government steps in to reimburse the lender with part of the defaulted funds. That’s good for the lending bank and good for you too, provided you’re found eligible.

You will, if you establish good credit record, very good assets, low debt to income ratio, and unencumbered collateral. Liquid assets like stocks, bonds or a 401(k) are most preferred. You’ll need lots of proper paperwork, though, to prove these points!

Buying franchisee rights apart, you could consider buying an ongoing coffee house that’s for sale. It might cost less than a new start-up venture but you’ve got to very carefully understand why the owner wants to sell. Get adventurous, not foolhardy!

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