steps to opening a business

57 East 8th Street Ph-616.396.5465 Holland Michigan 49423 ontrack@jpscoffee.com Steps to opening a food and beverage business: How to succeed The rumors that you’ve heard may be exaggerated, but they are probably not far from the truth. Over 50% of small businesses fail in the first year and over 95% in the first five years. And unfortunately restaurants can exceed the statistics in fail rates. Banks have many different reasons for NOT loaning money. It can be based on the industry an applicant wants to go into; the degree of comfort the bank has with the individual’s life experience and business savvy; the net worth and liquid capital an applicant has; the thoroughness of an applicant’s business plan; whether or not an applicant has experience in the new businesses industry; or any number of other reasons. Sometimes the use of a competent consultant will help secure funds for the venture. Banks are not enthusiastic about loaning money with no guarantee of return, and much less when they have no way to get their money back if a new business fails. Remember, having a plan is the best thing you can do to insure you take care of all the details of opening you new store. Following are hints, suggestions and a general blueprint to help you get started. Make and keep detailed notes of all conversations, phone calls, thoughts, etc. You never know when you need to go back and look up something or remember a person you talked to and what they said. Remember, these steps are in general order of importance, not absolute. Much equipment, some logo’ed items (if you order any), and possibly other items have lead times of up to 4, 8 or even 12 weeks. Construction delays, as well as other delays, can hold up store openings. Stay on top of details. Communication is key with all of your working relationships. The steps following are given based on some key assumptions: • You first started with a vision in your head of what you want to create. To make the vision a reality there are steps that need to be followed. o You have taken the time to create a complete business plan. o You have researched your industry and are at least familiar, if not quite educated, with the aspects of the business you are looking to open. If not, a consultant and help from those in the industry will be invaluable. o You have secured adequate financing for the complete buildout, including enough working capital to insure your new business has time to break even and then begin being profitable. 57 East 8th Street Holland Michigan 49423 Ph-616.396.5465 ontrack@jpscoffee.com 57 East 8th Street Ph-616.396.5465 Holland Michigan 49423 ontrack@jpscoffee.com 1. We recommend using the services of a qualified consultant. Use the services of someone who has either; a. been there and done that successfully, or b. has a track record of helping others successfully. They should save you many times over the amount invested in their services. 2. Find the best location and secure lease. a. If needed you can use a realtor or property solutions company for: i. Lease negotiation assistance ii. Build-out negotiation assistance 3. Hire a General Contractor (Being your own GC can save you money, (if you have experience at it), if not, it may cost you lots more in the long run) – a good GC will guide you through all details with: a. Wall placement b. Plumbing (water and waste) c. Electric d. Phone e. HVAC (if necessary) f. Flooring 4. Contact local health department, building inspector, design review boards, etc. for specific codes on bathrooms, ingress and egress, signage, and any other details concerning local or state codes that will need to be addressed. Communicate with all authorities earlier rather than later. Easier to build now than to change later! 5. Develop floor plan a. Create layout for best customer and employee flow, use of floor space, equipment layout (determines plumbing and electric stubs) b. Transfer layout for cabinetry and equipment to CAD and insert equipment for stubbing for all necessary utilities c. Hire an architect or engineer for any necessary building improvements. Wall design, lighting, floor covering, décor, 6. Hire a CPA or financial professional 7. Determine signage needs for inside and outside of store 57 East 8th Street Holland Michigan 49423 Ph-616.396.5465 ontrack@jpscoffee.com 57 East 8th Street Ph-616.396.5465 Holland Michigan 49423 ontrack@jpscoffee.com 8. Put signage in papered over windows. First that the store is coming. Then later update it to announce opening date, grand opening, specials, etc. 9. Order logo cups, mugs or other logo items needed for opening. 10. Order equipment, cabinetry, and smallwares 11. Purchase and/or order miscellaneous items Some examples of: a. Cash register or POS system b. Specialty equipment for your menu, recipes, or business c. Purchase office supplies (fax machine, shredder, etc.) d. Internet connection and security for it e. Phone lines (main, fax, extra) f. Safe g. Security system (if desired or if area merits) h. Music system service hook-up, or tuner/amplifier w/ CD player, speakers, i. j. Menu Boards Wallpaper, graphics, or signage for store k. Price gun 12. Obtain the proper licenses and permits a. Local health dept b. Your City - Business license c. State – Sales & Withholding and Unemployment d. IRS – Employer identification number 13. Determine Grand Opening advertising venues a. Advertising (TV, radio, magazines) b. Coupons and flyers c. Product give-away 14. Get needed insurances a. Property b. General c. Auto d. Worker’s comp 57 East 8th Street Holland Michigan 49423 Ph-616.396.5465 ontrack@jpscoffee.com 57 East 8th Street Ph-616.396.5465 Holland Michigan 49423 ontrack@jpscoffee.com e. Health f. Disability g. Key person life 15. Establish accounts with utilities providers a. Electric b. Water/sewer c. Phone d. Rag service (if desired) e. Equipment service company f. Floor maintenance crew 16. Order inventory from suppliers a. Foodservice supplier b. Beverage supplier c. Miscellaneous items d. Industry specific suppliers 17. Order any printed materials a. Menus, drink cards, etc. 18. Order any proprietary, branded, and logo items a. T-shirts, hats, bandanas, aprons, nametags b. Logo mugs (handled ones) c. Gift cards 19. If using consultant, have on-site training scheduled 20. Hire and train staff 21. Finish details in store 22. Have all pre-opening inspections completed 23. Establish local marketing venues 24. Open store with creative grand opening The beginning of a business is a stressful and exciting time. Be as prepared as you can. It is vital not only to the success of your business, but to your own peace of mind. It is true those that fail to plan, plan to fail. 57 East 8th Street Holland Michigan 49423 Ph-616.396.5465 ontrack@jpscoffee.com