Starting a Coffee Business: Part Three (Opening)

Starting a Coffee Business: Part Three (Opening)


(chill music) – [Marcus Goller] There
is an order to, you know, starting a business. I don’t think I spent any
money for three months. It was mainly just
getting everything set up. I think one of the first
triggers I did pull was you just go online and you register your LLC or your S corp,
whatever you’re doing. And I’d recommend an
LLC, it’s pretty standard for our style business. – Didn’t wanna leave this business in a worse condition
financially than I was, so LLC gives you a
little bit of protection. – We are a corporation now. We were an LLC but by some crazy, we had a crazy accountant and he decided we should be a corporation, it’s stupid. LLC is good. – I think that LLCs are
pretty straightforward, and they also will protect you in the end. – So you really need to
get your LLC registered, your operating agreement, set up. And you don’t really need
an attorney for that, but you probably should if
you haven’t done it before. The employer’s
identification number, E-I-N. That was a little more of a hassle, but it’s all pretty straightforward. It’s all website driven,
you can just do that. – [Jess Harmon ] Without your federal EIN, you can’t really do very much. You’re not really gonna
get bigger time vendors supplying to you, you’re not going to be able to hire employees. I don’t think you can even apply for your food license with that one. (chill music) Food code to me is pretty important. And I think a lot of people overlook that. Because it’s not the more glamorous side. of running a coffee business. Getting the process of the food license started sooner rather than later will help you in the long run. The red tape can take an
unbearable amount of time. – [Lisa Bee] Permitting
is a different length in terms of process in say, North Carolina versus New York City. So you have to be patient with that. – [Maliesha Pullano] When
I open up the coffee shop, I not only had to have different licenses, this one is pretty easy,
it’s just a limited wholesale processor license. The cottage lodge you
can make certain things and sell them to consumer to consumer and then you don’t need
a license for that. But with a product that
you sell to stores, you have to have a license, so along with the label,
the labeling is different. Using the cottage law, you
don’t have to do all this, but you do have to write
on each individual label that this is not made
in a commercial kitchen and stuff you have to let people know. But you can’t sell those things in stores, just direct to consumer. – [Jess Harmon] I think people
make the mistake of seeing the health department their enemy versus their support system. Lean into them for advice
versus doing something and then asking for them
to come check it out. You could get shut down for a couple days while they figure out whether they like what you did or not but
you had involved them in the process from the get-go, it’d be a lot less painful, and also they could
help you find equipment for the things you’re trying to do. (chill music) Your budget is going to
dictate to you exactly what sort of building you can buy or rent. Definitely having street level visibility is super important in choosing a place. It’s also going to be a
little bit more expensive but that’s something you
should work into your budget, most definitely. – If you can get an A-level location, get it because another thing it does, is it pretty much safeguards
against competition. Say you take a C location and
build an awesome business, somebody comes in a takes
the A level location, they’re going to siphon
away a ton of your traffic because of, it’s just easier to get to, it’s a better location,
it’s more convenient, and there’s not a thing you can do. You can combat that with advertising, you can’t cut prices, that’s
not why people go to cafes. (chill music) – [Lisa Bee] You look at locations that have great visibility, also the ability for people
to get to the location, so either they have a lot of parking or there’s public transit
that brings them there. We also look at the surrounding tenants and we would like
tenants, other businesses that are high volume, high traffic. So, restaurants, hair
salons, stuff like that. We’re also looking at
very specific parameters for the interior for
architectural purposes. – [Jess Harmon] My biggest
tip is to find a landlord who’s willing to start
renting you the building the day you actually open
your business to customers, instead of starting the
lease when you are renovating the building. That could be the difference
of like three or four months and could save you thousands of dollars. – [Marcus Goller] Signing
the lease is a real moment, this is like, okay, when you do that, you’ve just committed
to a personal liability for at least five years if not more. So you better have your
financing committed, they say, yeah, we’re ready to go. You kind of want to have already talked to a contractor and visited the space, got a really good estimate,
bid, you want a bid. Signed bid, if possible. There can be water connection fees, like maybe the building isn’t
rated for what you want to do, or the electrical system is not rated for the amount of power you’re gonna need. You need to know all that. – [John Roos] In the like, getting everything up to code was huge, you know, I mean when you take a building and it doesn’t have floor drains, you have to chop the floor
out and put floor drains in and figure out that whole
thing, and I’m good at that now. You know, I know who to call. You’ve got your list of
contacts, it’s gotta be long. – [Marcus Goller] So
hiring and training staff, super important. Everything this, if you’re
going to go into business, not one thing, there’s not
one thing that’s unimportant. So, location, location, location. We talked about that, make
sure you’re funded right. So you get to the point,
you know, four weeks before you’re going to open, you need some staff. It’d be a travesty if you
didn’t hire the best people and train them right. I put a number on it
once, it’s about $10,000 if you make a mistake hiring a manager. For a regular barista, it’s
about a $2,000 mistake. So it’s really super important
that you interview right and then training same thing. If you’ve hired the right person, the training’s going to be a lot easier, and they’re going to get it
and they’re going to flourish. (upbeat music) – [Lisa Bee] All the
responsibilities and tasks that have to be done in the store can be trained. But, what you can’t train
is someone’s personality, so we really talk about how
you’re hiring that personality. You want someone to be
friendly and outgoing and engaging and you can turn
a shy, introverted person to be that person that
talks about your coffee and knowledgeable about your tea and feeling passionate
about certain products. So, we really talk about
hiring the personality and then we can train. Every franchising can train
them on all the different tasks that have to be done in the store. – You know that, you can
go back to the question you asked earlier, do you regret anything? Yeah, I regret that we
didn’t train people at all. Like, we were just like, I would be like, yeah you’re cool. I would just hire people if
they could breathe basically. I’m the worst at hiring. Like, I’ll just be like,
you seem so cool, let’s go, and then the development of our staff too. Create jobs that are so good
that people are just like, damn, I love working at RoosRoast. I wanna get a job at RoosRoast, it’s hard to get a job at RoosRoast. I mean, that’s another huge thing. Become the place that people want to work. – If you’ve set up a
culture that’s friendly fun, honest, trustworthy,
expectations are in line, you know with what people
would reasonably assume, you treat them well. People are gonna wanna work here and that keeps our costs
lower and sales up. Customers are happier, did I
make it sound important enough? (chill music) – [Marcus Goller] I would just
say it’s really hard to know as you move toward opening a coffeehouse, what steps to take next. You need your whole
personnel package ready, you need your product procedures ready, you need to be in touch with your vendors. You need to be testing recipes. I mean there’s so much work to be done, so you don’t want to, you don’t wanna dwaddle away your time, and all of a sudden the store’s
going to open in two weeks. – [Lisa Bee] I think I
remember the very first day that we opened. We were getting everything ready and we ordered a ton of
product and we expected that the day we opened
there’d be lots of people coming into the cafe, and
we all just stood there. There was nobody there, and the first people to
come in were the guys who owned the building,
and there was a sense of a reality check, uh oh, we
definitely need to do more. – [Maliesha Pullano] The first
launch it was like Art Hop which is a popular event here, so that was kind of my official test. I sold there, I remember
selling 10 bottles, which was $100 and I was like, oh man there might be something to this. But I was giving out
samples and doing a demo so that was kind of it, but the next day was like
the big official launch where my son just graduated, he was there, we opened the door to the car. The first case fell
out and a couple broke, and I was like oh my
god, cause I like signs, and I was like, that’s not a good sign, but we’re just going to do it anyway. That makes sense, you know
the universe has jokes, so let’s just do it and I probably made a couple hundred dollars
and I know my mind was blown at that time, and I remember giving my son like $10 after the market and he was like, what’s this for, and I’m like, right, just here. – Opening day, I would say
just any cafe I’ve ever opened is similar, but I’ll tell
you about the one here. It was December 27, it was really cold. We got here, I’d say 20 minutes
after we opened the doors, somebody came in, ordered
a coffee and we’re like, your dollar’s going on the
wall, could you sign it? She’s like, I’m the first
customer, when you’d open? This morning, and then
it just starts going. So, I think be really open
about what you’re doing, invite people in during construction. Do some preliminary social
media about the progress. The more you tell people
what you’re doing, the better, cause you’re
letting them get involved. (chill music)

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About the Author: Oren Garnes

4 Comments

  1. That a great explanation. For begginers. They should register it first and get two to three people to work, it all depends on how the business is runinng. I like your explanations the location is matter to the public for people to know that ☕ shop is around that location. Nice one I have never seen pot coffee shop I wish I could. America has their machines and making. Africa some time we will have pot to prepare it if we don't have enough money to start the business. The world has advance they have machines now instead of pot. I love the way they started it here. I love their comments.

  2. Uganda has very tasty coffee so much so that Colombia Bolivia and other Western nation's have more or less paid them off or threatened them or both not to compete!

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