Interview On How To Start An Office Building Coffee Shop Business
This post is an interview I conducted with Donna Turner who has owned a lunch truck and a coffee shop in an office building. She was generous to share her story. Her current venture is a reptile business. Check it out and enjoy the article.
How Do You Find A Great Location For An Office Building Coffee Shop?
I went through a business broker and found an existing business operation. It is best to look at the actual businesses that have their offices in the building. It is important to look at their leases. You never know. The largest employer in the building could be moving out in 6 months, and there goes your business!
How Much Does It Cost To Start?
I paid $20,000 for the existing coffee shop, which I would not recommend. I paid way too much! I used to be a property manager, and of all things, I lost the business by not paying attention and renewing my lease contract! Yep, they said I didn’t renew, so they decided to make me leave so they could remodel! I was furious.
The lunch truck business was also an existing business with a full route, already making money. We paid $20,000 but that included a 5 year old lunch truck. It was, at that time, making around $600-800 bucks a day (gross). We had to rent an ice machine as well for about $25 a month.
What Are The Licenses Required?
For both businesses you need a tax ID number and a business license. Even though I didn’t have any employees, I still had to send in sales tax to my county. Both businesses required the occasional health inspection report. The lunch truck inspection was few and far between because we sold pre-packaged food and we did not directly prepare food like we did at the cafe.
What Are The Biggest Costs?
The biggest cost for both businesses was food, snacks and drinks! Gas for the lunch truck was costly too. My rent at the cafe was fairly low and neither business had employees.
How Do You Promote These Businesses?
At the business building cafe, the business were already there and the employees at the building and the adjoining building were customers. The location naturally brought customers.
With the lunch truck, I had to hustle and pick up businesses by making stops in many places. The more stops you made at different places, the more money you would make. At one point, I had a regular route with about 15 stops every day. You have to also check with construction sites and ask them if you can come on the job to serve the workers lunch or morning break. If there is no construction going on, you don’t make a whole lot. Construction sites are where the money is.
How Many Hours Do You Work?
Both jobs had fantastic hours. With the lunch truck, Monday through Friday I was out on the road from around 8:00am to about 12:30 or 1:00 pm. After that I had to go shopping and stock up on inventory every day to reload the truck. The busier I was, the longer it took to do this. I was usually finished around 3:00 or 4:00pm.
The cafe was also Monday thru Friday which was a good thing, but I had to be there super early to get everything ready for the day. I had to be there with hot coffee and breakfast whenever the employees in the building came to work. I closed at about 2:00 or 3:00 pm. I then usually had to go shopping to buy any stock needed to bring in the next morning.
Did You Have Employees?
I had zero employees with the lunch truck business. I hired one woman to help me with the cafe, and she was my husbands relative. I tried to keep count of the sales for the day and the money that was in the register, to match it up. I wasn’t consistent with it, so I heard later that she actually was taking money from me everyday!
With both businesses, you had to keep track of your income and expenses in order to properly pay sales taxes, then income tax at the end of the year. I did this myself. I did have another person do my income taxes though, but I presented her with all of the information in a neat little package.
How Did You Manage Inventory?
I did not do inventory or stock control with the lunch truck as I was the only one working it. I really didn’t do it with the cafe either. I had a detailed report from the cash register at the end of the day, and I just bought stock whenever I saw that it was needed.
To stock the lunch truck, we went by what was already on the truck when we bought it. As we operated it, we would get various requests from customers, and I would try to comply. Things that were on sale was a good choice too! I only had a vendor for chips, and almost everything else came from the company that made our food and Sam’s Club.
Vendors did not approach us with the truck business. The cafe had several vendors come by. I did not get solicited by others. I based my inventory by what sold on the lunch truck and when I had advice or requests from the customers. The cafe had a vendor for chips, an ice cream vendor, a frozen cookie vendor with an oven, Pepsi product vendor, and a restaurant supply company.
What Were The Profit Margins? Was The Business Good For Making Money?
The profit margins were different according to what the products were. Mostly I would say the the mark up would be double on snacks and food. Sodas had less, but it depended upon the cost.
Coffee was not my biggest seller at the cafe. Fountain drinks were also common. They have a huge profit margins. I sold a lot of coffee on the lunch truck. I tried to sell a decent brand. It had a good profit also.
What Happened With The Lunch Truck Business?
The lunch truck business consisted of two trucks with myself and my husband each working one. I had to eventually give it up because toward the end, I was only making enough money everyday to re-stock the truck for the next day! We ran that business for 15 years. My husband quit a year before I did because we needed full time income with benefits for our family. We went for years without any sort of insurance because it got to be so expensive we couldn’t afford it.
The lunch truck business was highly profitable for the first 10 years or so. It generated around $100,000 a year with both of us. Slowly, the economy got really bad so there wasn’t any construction going on in the area. Also, a different kind of lunch truck came in to the area and we couldn’t compete with them. We had the old fashion kind where the stainless steel doors opened up and we stood outside to collect the money. The new trucks are the kind that are out there now. The kind where the cook is on the inside, and you walk up to a window to order. Customers liked them much better, they felt their food was fresher as they could watch them cook it right in front of them. Some of the foreign people running the new trucks had super cheap prices as well.
After I quit running the lunch truck, I really had no marketable skills to get a job. I used to be in property management before we bought the lunch trucks, but it was so long ago that no one would consider my application. I decided to go back to college for a two year nursing degree. I started the reptile business at the same time I started school. It didn’t cost much at all to start. All I did was make my website, and do a 100 postcard mail out to the local daycare centers and schools in the area. All of my marketing materials come from Vista Print which is very affordable.
My son and my husband already had a fairly large collection of reptile pets, but I have bought many more interesting ones since starting the business. As it turned out, when I graduated school, my reptile business had more than tripled in business. Being the natural entrepreneur that I am, I decided to work the business as a full time job and not go into nursing. I absolutely hate working for someone else.
How To Become A Great Entrepreneur
Here is a tutorial I made on how to become a very good entrepreneur.