ESPRESSO BUSINESS ”The Espresso Revolution” The espresso revolution in the United States began in Seattle over 18 years ago. We saw specialty coffee emerge from the coffee shop onto the streets with the advent of espresso carts. Making espresso more easily accessible to customers led to the birth of the espresso drive-thru. These operations began popping up around Seattle, especially in the suburbs as busy commuters began to enjoy their early morning gourmet java. As the espresso revolution spread south and east across the USA, it took root in predominately metropolitan cities, most often in airports and coffee shops. It was just a matter of time before this revolution would touch most towns and cities in America. Burgess Enterprises has worked with numerous coffee companies, including Starbucks, Seattle Best Coffee, Tully’s and Java Trading Company, along with many other smaller roasters. These companies have helped many chain stores, hospitals, hotels, universities and independent entrepreneurs establish profitable coffee programs and business. Burgess has been instrumental in providing expert consultation, design and production of carts and kiosk and drive-thrus, along with high quality espresso and granita equipment. The specialty coffee business can be fun, exciting, and profitable if built on a foundation of high quality, consistency, customer service and great equipment. WHAT IS ESPRESSO? Espresso is a form of coffee extraction, when properly made, the very best essence, the volatile oils, are extracted for a strong, rich, smooth, never bitter liquid. A quality espresso shot is achieved with the following variables: 1. The Proper Blend of Espresso Beans 2. Freshly Roasted Coffee 3. Freshly Ground Coffee 4. The Proper Grind 5. 7-8 Grams of Ground Coffee doe a Single or 14-16 Grams for a Double 6. A Firm Tamp of 50lbs. of Pressure to the Packed Coffee 7. Water Pressure of 9-10 ATMs (130 P.S.I.) 8. Water Temperature of 192-197 Degrees 9. A Clean Machine 10. Water Quality 11. 25-30 Second Pour for ¾ to 1 ounce of Espresso Liquid 12. The Finished Shot of Espresso Should Be Thick, Rich Caramel Color With Lots of Crema. DRINK DEFINITIONS RISTRETTO: Literally means “restricted” espresso. Made by stopping the machine part way through the process. Servings are even thicker and more potent than basic espresso and yield ½ to ¾ of an ounce of liquid. DOPPIO: Literally means “double”. Technically, the same amount of water as a single, but forced through twice the amount of grounds (14-16 grams). Most places here in Seattle simply make a double serving. Any espresso drink can be made with a doppio. SHORT: Usually served in an 8 oz. size cup. TALL: Usually served in a 12 oz. size cup. GRANDE: Usually served in a 16 oz. cup. SKINNY: A term used for espresso drinks made with non-fat milk. BREVE’: A term used for espresso drinks made with Half & Half, rather than whole, 2%, or non-fat milk. CAPPUCCINO: Espresso blended with steamed milk and topped with mounds of foamed milk. Proportions are about 1/3 coffee, 1/3 milk, and 1/3 foam. In America, the drink may sport foam but no milk, and it is commonly served with a twist of orange or a dusting of nutmeg. A dry cappuccino has more foam and less milk. A wet cappuccino has more milk than foam. **QUICK TIP: Non-fat milk produces the most foam. MOCHA: Espresso blended with steamed milk and chocolate syrup, chocolate sauce or steamed cocoa to make about one cup. Mochas are usually finished with a dollop of whipped cream or milk foam. AMERICANO: Espresso shots laid on top of very hot water to make an American size “cup of coffee”. LATTE: A shot or two of espresso blended with a cup or so of steamed milk. Some places dress the latte with a thin layer of creamy milk foam. FLAVORED LATTE: Add about one ounce of flavored syrup to accent a regular latte. ICED LATTE: Espresso and cold milk poured over ice. Flavors can be added for an iced mocha. ITALIAN SODA: Cold soda water or mineral water poured over ice and flavored with syrup. ITALIAN CREAM SODA: Add a dash of Half & Half to a regular Italian Soda. MACCHIATO: There are two versions that are both usually served in a clear glass to show the swirled ingredients: LATTE MACCHIATO is steamed milk “marked” with a spurt of espresso. ESPRESSO MACCHIATO is espresso “marked” with a dollop of steamed milk. STEAMER: Steamed milk usually flavored with a syrup such as vanilla or almond. HOT CHOCOLATE: Steamed milk blended with chocolate and usually topped with whipped cream. COFFEE DRIVE-THRU BUSINESS The coffee shop business is undergoing an evolutionary process. While some years ago customers used the coffee houses mainly as “hang-out” places, where coffee drinks were of secondary consideration, with the advent of coffee bars in business districts this began to change. Now, in many business districts throughout the country you may see lines of people waiting in front of a Starbucks for as long as fifteen minutes to get their overpriced morning “latte fix”. As more and more customers get familiar with espresso based drinks all across the country and the demand grows, there is a great opportunity to satisfy that demand with a drive-thru, in a more convenient way, with faster service, a better tasting product and at a more reasonable price. However, a drive-thru espresso stand is nothing but a convenient place to get a product fast that the customer already knows and wants. Therefore, the best place to locate a drive-thru espresso kiosk would be in a relatively “espresso educated” market. But even if your area is “Espresso Challenged”, this can be over come with the right kind of initial promotion, in the right kind of location, with great visibility and easy access. A drive-up is the ultimate state in the “espresso concept evolution”. Unlike an espresso bar or coffee house, where people may go for other reasons than to drink coffee, it does not offer any social setting or entertainment value; people drive up just for your product and because it may be faster and more convenient than standing in line at Starbucks. You should locate your drive-thru on the morning commute side of the road, with high visibility, easy access and a sign that makes an offer hard to resist. The word “espresso” by itself has little meaning to people that do not know what it is, and why should they go out of their way to come to you if they are not “hooked” on it? At the present time, the espresso drive-thru concept is in its infancy. But three to five years from now, there will be thousands of these stands all over the country. They will range from “Ma & Pa” small home-made trailers with a cart inside, where allowed, to full size, double drive-thru “Fast-Food” type structures costing $300,000 or more. Will you be one of them? There is a tremendous opportunity for serious investors to create coffee drive-thru concepts that combine an attractive design, good locations, proper equipment layout, effective marketing, fast service and good tasting product. Before you start planning a coffee drive-thru in your part of the country and see big $$$ signs, consider this: Many communities across the country won’t allow any kind of drive-thru. Should they allow a coffee drive-thru stand, they would require a restroom and full hook-ups: water, sewer, power etc. and will treat your operation like any other kind of fast food restaurant. This will discount the trailer type. If they allow a “trailer” type operation - like most of the existing drive-thru’s in the Northwest - they may require you to have a commissary nearby where you would service your trailer and use the restroom. So, before you start jumping for joy, determine whether or not you can do that in your community, and what kind of structure yours would need, a self contained trailer without restrooms or hook-ups, or a building with all the hook-ups and restroom. The difference between the two may be as much as $100,000 in opening cost. Where to Start 1. Check with zoning, building and health department in your community. Explain to them what you would like to do. While here in the West drive-thru espresso stands have been in operation for some time, in other parts of the country they have no clue. Do not try to do it over the phone. They won’t understand what you are talking about. The best way to do it is by appointment. Take with you some pictures and interior layout plans so you can show them. 2. FIND A SPECIFIC LOCATION, TALK TO THE OWNER OR PROPERTY MANAGER. Without a location, you have no business. Nothing else matters unless you get a location where to put your stand. Try to secure a long term lease, at least three years with a renewal clause. If you take a short year to year lease and make the business a success, the owner of the property may thank you for developing a customer base for him and take over your business. It happens all the time! Again, you must have something to show the owner of the property. In order to make the coffee drive-thru venture a success, the following factors must be considered: 1. Site location - without a good location, you may have the best coffee in the world and fail! A good drive-thru location should be highly visible and easily accessible from a busy highway or street, and it should be positioned on the morning commute side. 2. Building design and signs - it must be striking and attractive, something that will attract attention and stand out from the nearby structures. Depending on need and size, it could have two serving windows and even some inside seating. 3. A large menu board that can easily be read by a second car in line or from at least 20 feet. 4. Simple, basic item menu, emphasizing espresso based drinks, with reasonable prices. One thing is to pay premium price for a “latte” in a high-class coffee bar, where the customer may tie up a seat for 30 minutes or more, another altogether is to get your drink from a window and be on your way within a minute. 5. Proper equipment lay-out so as to be able to produce drinks fast and efficiently. 6. The owner/barista must be thoroughly trained in all phases of operation, with emphasis on fast and correct drink preparation techniques so as to keep the line moving. 7. Hundreds of other small details that one by one would not affect the business to a great degree, but when added up may make or break your business! As compared to a conventional fast-food drive-thru operation, that may cost anywhere from $400,000 to “sky is the limit”, an espresso drive-thru may range, fully equipped, from around $35,000 for a basic 8’ x 16’ trailer, to a $100,000 or more for a full blown 14’ x 25’ double drive-thru structure, with permanent utilities, restroom and long term lease. If you are the owner of a strip mall with a large parking lot or a gas station, you have a great opportunity to make some real money with a coffee drive-thru by placing an attractive kiosk for around $50,000. In a good location that investment may be recouped in less than a year. Depending on the location, appearance of the structure, marketing and the overall understanding of the business, sales may range from $60,000 to $1,000,000 a year. The best opportunity for a coffee drive-thru entrepreneur would be to find a “defunct” or failing conventional fast food operation and covert it into a first rate espresso drive-thru. Such a conversion could probable, be accomplished, including all the necessary equipment, for around $40,000. Use the “Return on Investment Work Sheet” that I have provided in this package. Don’t waste your time and effort shopping or “researching” for equipment etc. unless you have a specific location and are ready to sign your lease. What you need first is to learn to understand this business so you prevent major mistakes and get started on the right track Coffee Shop Business Plan A Business Plan is a description and projection of what you intend to do. A lender and/or a landlord may require from you before they lend you any money or assign a lease. A Coffee Shop Business Plan should have the following information. What do you intend to do and where? How much capital do you need to complete the project? Where will the money be allocated: How much for building out, equipment, furniture, etc.? How much do you project your sales to be the first month, first year? What will be your operating expenses? What kind of expertise do you have to plan, complete and operate such a business? If you don’t have the expertise, who will provide it and what are his/her qualifications? In short, the lender wants to know whether you understand the coffee shop business, and will the business generate enough revenues so you can meet all of your operating expenses and pay them back. Within the package of information that I will send you will be able to put together most of your Business Plan. You will find the following information: “The Espresso Revolution” Preliminary Site Checklist Espresso Liquid Profit Potential Projected Profits Per Location Projected Profits for U.S. Shops Return on Investment Work Sheet When looking at a location and after checking the traffic patterns, either foot or auto and that traffic is moving in the correct direction with easy access and good visibility use the figure of 1% of that traffic as your basic customer count. The example would be that the street you have chosen for your drive-thru has 30,000 autos passing each and every day and the heaviest traffic flow is in the morning you should attract about 300 cars per day. Based upon that assumption and the fact that the average selling price of a espresso milk based beverage sells for $3.00 you could count on approximately $900.00 a day in sales. Keep in mind that your menu would attract even more sales thru pastries, ice beverages including espressos (afternoon) which will increase your per capita spending. With just 100 customers purchasing one additional item (pastry) for an average price of $1.50 your per capita spending has just increased to $3.50 from $3.00 or an additional $150.00 without increasing your efforts. Business Plan Guidelines The main purpose of a business plan is to convince a financial lender that you are a good credit risk. In order to do this you need to display that you are well organized with a clear step-by-step plan for success and the repayment of the loan. Include: 1. Vision – What is your business dream? What, where, when, who and how? 2. Yourself – Who are you and what makes you uniquely qualified for this business? 3. Resources – What do you need to help you fulfill your vision? Include expert consultation as well as property, personnel, buildings and equipment. Where are you going to find these people and get these items? 4. Cost – What amount do you need for each of these items? What are your projected expenses per month over the next two years? 5. Profit – What is your realistic projected profit per month over the next two years? 6. Loan Repayment – What is your plan for the repayment of your loan? Watch out for these mistakes! What happens when people start a business without fully understanding what makes it “tick”? Compared to any food related business, the espresso business is more lucrative and the work environment more pleasant. However, as with any business, the owner/operator must understand it in order to maximize it’s potential. To expect the coffee or equipment supplier to teach you the coffee shop business is like to expect a restaurant equipment salesman to teach you the restaurant business and how to be a great chef! Because the potential owners think that “there is no big deal” in opening a coffee shop, or they are influenced and misguided by coffee roasters, equipment salespeople and designers, or they hire “experienced help” from another shop, they end up with far less profitable shops after having spent thousands of extra dollars. A majority of your future mistakes can be prevented by talking to the right people, getting proper training and by implementing an effective espresso marketing program. There are many cases where an owner will spend upwards of $350,000 to open a coffee shop all to have it close within weeks. With proper expertise in designing, marketing and running of the business the owner could have put about $200,000 a year profits in his pocket off $650,000 a year in sales. The reason most shops fail is because the new owner is influenced by: An architect who has never spent a day of his life working behind a busy counter of a coffee shop and who designed a work environment that was awkward to work in. By an espresso machine salesman that convinced him that the machine was “it”, that by having it he would make the best drinks. By a coffee roaster who praised the purity and freshness of his coffee, who pushed on him dozens of his bean varieties, creating a menu that did not make any sense except to the roaster. By an “expert barista” who did not have a clue on hot to prepare drinks properly and efficiently and who did not have any “espresso marketing” sense. Where was the equipment dealer that sold him his four-group $12,000 espresso machine??? What kind of advice did he get from his coffee supplier or the “experienced barista” that he hired away from the competition??? You won’t be able to prevent competition, but you could keep it at bay by creating a loyal customer base. But you won’t be able to do that by serving lousy, overpriced drinks with slow service, no matter how much money you paid the architect/designer to build a monument to your ego. With proper functional design, menu and common sense marketing combined with expert training and drink preparation techniques, such shops could become true “jewels”, providing the customers with better product and service, and awarding the owner greater income and satisfaction. Many locations just off the freeway could be as well off on the moon! The only prospective customers that notice the store are people that come to this location for some other purpose than coffee. For the most part signs can not be noticed by cars zooming by at 60 miles per hour. Unfortunately, strip malls may be good locations for destination type stores, but coffee for the most part is an impulse item and for most people the act of pulling off the road, even if they notice your sign is not worth their effort. Of course there are exceptions to every rule, when you have a great visibility and very easy access and they happen to see you when they need their “latte” fix. “Free” training may not be free after all! When establishing a menu for a coffee shop, remember that it is a “Coffee Shop” not a deli that just happens to sell espresso. How many customers will you fail to attract to the espresso stand/store due to lack of effective initial marketing? How many customers will walk out because of slow service due to poor equipment layout? How much bigger is the payroll, food cost and how much smaller are the profits due to the inability of positioning the business as a viable “coffee shop” in an excellent location? And how long will you last in business should expert competition open nearby? “Free training”, a banner and some promotional materials from a roaster and equipment supplier may not be what you think it is. Just because it’s “Free” it doesn’t mean that it is smart or has common sense. One of the major mistakes is faulty drink preparation and techniques. Creating a menu that is simple and makes sense and is large enough to be read from 20 feet away and with proper guidance from the start from their coffee roaster and espresso equipment supplier and hire an expert to implement the concept right, one could fulfill their goal of increasing customer’s shopping experience increasing per capita spending resulting in extra revenues. Here are some basic steps to a successful opening! When naming your espresso store choose a name that will make sense to your customer. Your customers have an expectation, give it to them. An “espresso friendly and focused menu” that would allow you to sell mostly espresso based drink. An efficient design and equipment layout that would make a big difference in the speed of service. Properly prepared, faster served, better tasting drinks that would bring customers back for more. Hire some “expert” who has experience in design and operation of a coffee operation. Most owners do not understand the nature of this business. They think that if you have a good machine and expensive coffee beans, you will make it. Equipment and coffee have very little to do with the success of this business. Just look at some bagel, sandwich or so called “gourmet coffee shops” in the malls. Some of them have $12,000 brass and copper decorated machines and use $8.00 an lb coffee, and they only manage to sell dozens of cups per day instead of hundreds. Don’t expect “free” training either from the coffee supplier or the espresso machine distributor to teach you how to run a coffee shop operation. The coffee roaster and machine distributor can only teach you about their products not how to hire a staff, prepare a budget. Educate yourself through reading, video or seminars to learn how to “market your espresso business” so when introducing your business to a new area it will be well though out and make sense to your new customers. Don’t make the mistake of coping other shops without any sense or reason. When designing your shop don’t choose an architect who has never worked behind a busy espresso counter and has no clue on how to layout the equipment for speed and efficiency of the operation. Espresso/coffee by the cup is a great business, with unlimited potential across the country. It may provide you with a substantial income and personal satisfaction – but only if you get enough education to conduct it properly! If you want to minimize your mistakes and maximize your chances of success you must understand what really drives this business. One of the most effective ways to prevent the above mistakes and start on the right track is by working with experienced people that “done that and been there” “A Dozen Successful Ways to Keep Your Business Profitable” Location: If you don’t have an excellent one, sell and GET ONE! No other decision will affect your business as strongly. Once you know how to run your business, you must seek to maximize the potential volume of your location. Product Quality & Consistency: The same excellent drink every time by any staff member that works the bar. “You never get a second chance to make a first impression”. Customer Service: This is a relationship-oriented business. Many believe that customer service is the second most important success factor. The essence of customer service is meeting needs and expectations. Excellent Coffee & Equipment: Yes, this is different than product quality! Many espresso bars make a “perfect” drink, but the taste is bad because of an inferior blend and or roast of coffee. Buy high-quality, FRESH beans. Make sure that the espresso machine you buy has fast recovery time and will product a quality product time after time and that the grinder has sharp burrs for better grinding. Ambiance (develop a concept): Do something to your bar/cart/drive-thru to make it special. Customers enjoy a quality, original, clean and comfortable environment that makes them feel welcome. Financial Management: It’s not enough to get your sales up to $1,000 per day. You have to learn hot to keep the profits through careful financial management. “Name” Awareness & Reputation: Word of mouth is your best advertisement. Nothing else even comes close! Keep your current customers coming back, and get out of your shop/cart/drive-thru and go meet people and invite them to come visit you. Employee Training & Mentoring: Model your values. Teach your employees about coffee, customer service, sales, personal grooming, financial responsibility and respect for self and others. Coffee Knowledge: Cup coffee as often as possible; cup with your roaster, cup with your employees, and cup with your customers! Your enthusiasm for the product will translate into a greater respect for the product, a great knowledge of coffee and SALES. Work Hard & Smart: Never stop selling! Don’t go into “cruise” mode, don’t relax. You never have it made and never have enough. Never just be satisfied with your sales. Try to grow the business every single day. At the end of the day, ask yourself, “what have I done today to increase the value of my business?” $1,000 latte: Every loyal customer is worth $1,000 a year. Don’t give your $1,000 customer a reason for trying someone else because you didn’t meet there needs or expectations. Have you ever seen a car pull out of line because the line was too long? You just lost $1,000 a year. Stay Calm and Have Fun: Make sure you love your work and have passion for the business! If your not having fun working hard in this business…for your own sake get out! Five Keys To Success 1. Location, location, location 2. Quality 3. Consistency 4. Customer Service 5. Branding - Identity If you are missing any of these components, chances are that your business will fail within one year. If you are not serving 300 cups of espresso per day, your chances of success are minimized greatly. If you are not working it yourself or a “hands on manager” and serving less than 300 cups of espresso per day your chances of failure increase ten fold. If your business meets all the criteria you stand a good chance of making a great deal of money. What’s it going to Cost? Building: $100.00 per square foot to build. 260 Square foot building $26,000 160 Square foot building $16,000 120 Square foot building $12,000 80 Square foot building $ 8,000 Permits: $500.00 EQUIPMENT Espresso machines: 2 groups $3,500 - $8,500 3 groups $6,900 - $11,800 Grinders $ 700 - $1,000 Blenders $ 500 - $ 500 Granita 1 Barrel $1,800 - $2,500 2 Barrel $2,000 - $3,000 PBS (Vita Mix) $2,500 - $2,500 Coffee Brewers $ 250 - $ 350 Air Pots $ 80 - $ 50 Cost anywhere from: $15,330 $18,900 It’s going to take $40,000 to $50,000 to open a Drive-Thru espresso stand. Equipment and Startup Supplies Major Equipment Computerized Cash Register with additional Tape and Ribbon Startup Supplies Display Container (optional) Display case(s) for Pastries Condiment Display Case Basket for Sugars Napkin Dispenser Straw Dispenser Menu Stands Small Wares Rubber Floor Mat (7ft.) Knock Box Ice Chest 6 Steam Pitchers (VEV) 3 Thermometers for Steam Pitchers Mixing Spoons (3) Foam Spoon/Knife, Spatulas (3) Ice Scoop Can Opener/Bottle Opener 12 Shot Glasses (1 oz) 36 Syrup Spouts Sanigel Lubricant Cup Card Holder Tip Jar Advertising and Operational Supplies (optional) Suitable Business Sing for the Cart Menus “Special” Board Club Cards (Buy 10, get 1 Free) Prepay Club Cads and “Get One Free” Cards Gift Certificates Miscellaneous Supplies Uniforms or Aprons Paper Products 8 oz. Hot Cups 2 12 oz Hot Cups 2 16 oz Hot Cups 2 20 oz Hot Cups 1 (600 per case) 8 oz Hot Cup Lids 2 12/16 oz Hot Cup Lids 2 14 oz Plastic Cold Cups 1 16 oz Plastic Cold Cups 2 20 oz Plastic Cold Cups 2 24 oz Plastic Cold Cups 1 (600 per case) 12/20 oz Cold Cup Flat Lids 2 16/24 oz Cold Cup Flat Lids 2 12/20 oz Cold Cup Dome Lids 1 16/24 oz Cold Cup Dome Lids 1 Napkins 1 case Fat Red Straws (8 in) 2 boxes Skinny Pastel Straws (8 in) 2 boxes Stir Sticks 2 boxes Drink Carry Trays 2 packages Consumables (estimated 4-week supply of coffee) Regular Coffee 100 lbs. Decaffeinated Coffee 10 lbs. Milk (2% Nonfat, Whole) 5 – 15 gallons/day Whipping Cream, Half & Half 1 qt each per day Condiment Sugar Packets 1 Box Bag of Sugar (for granita) 25 lbs. Sweet N Low 1 Box Equal 1 Box Other Club Soda 2 cases Syrups Hershey’s Chocolate Syrup 10 jugs w/pump White Chocolate Sauce 1 #10 Can Flavored Syrups 2-4 cases Food Item Ideas (Optional) Biscotti; Dillatante (Chocolate covered espresso beans); Muffins; Brownies; Cinnamon Rolls; Bagels; Scones; Cookies; Coffee Cake Preliminary Site Checklist 1. Site Address: _______________________________________________________________ City: _____________________________State: ______Zip: _________________________ 2. Landlord/Property Owner: __________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 3. Municipal/Governing Authority: ______________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4. Governing Building Authority: _______________________________________________ Name: _____________________________________________________________________ Address: ___________________________________________________________________ _____________________________________________________________________ Contact: ______________________________Phone: _______________________________ E-mail: ______________________________Fax: ______________________________ 5. Governing Health Department: ________________________________________________ Name: _____________________________________________________________________ Address: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ Contact: ______________________________ Phone: _____________________________ E-mail: _______________________________ Fax: _____________________________ 6. Governing Zoning Department: _______________________________________________ Name: _____________________________________________________________________ Address: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ Contact: _______________________________ Phone: ______________________________ E-mail: _______________________________ Fax: ______________________________ 7. Department of Transportation: ________________________________________________ Name: _____________________________________________________________________ Address: ___________________________________________________________________ Contact: _______________________________ Phone: ______________________________ E-mail: ________________________________ Fax: _______________________________ Number of cars per day: _____________ A.M. Hours: ____________________________ Traffic flow A.M. Hours: _____________ P.M. Hours: ____________________________ How many entries does the site have? __________________________________________ Preliminary Site Checklist, page 2 8. Current Zoning Classification of Site: ____________________________________________ 9. Zoning Classification for Drive Thru Use: ________________________________________ 10. Is site approved for Drive Thru use without seating? _______________________________ 11. Are zoning variances required for proposed use of site? ____________________________ If yes, what is the schedule and procedure? ________________________________________ ___________________________________________________________________________ 12. Are there signage or building material limitations? _________________________________ If yes, list limitations: __________________________________________________________ _____________________________________________________________________________ DOCUMENTS OF REQUIREMENTS AND LIMITATIONS 13. Is a building permit required? __________________________________________________ 14. Is a site improvement permit required? ___________________________________________ 15. Is a site improvement permit requited? __________________________________________ Is review of building or site by an architectural review board or planning commission needed? ____________________________________________________________________ If yes, what is the schedule and procedure? ___________________________________ __________________________________________________________________________ 16. What are signage restrictions by landlord and local government? ____________________ ___________________________________________________________________________ OBTAIN COPIES OF WRITTEN SINAGE REQUIREMENTS AND/OR RESTRICTIONS 17. A. Property site plan indicating: lot size, location on site, grades, adjacent site and roadway grade, below grade utility locations, location of access drives, location of traffic signals, parking locations and layout, adjacent building and uses, vacant land parcels and structures, location of site signage, location and specification of site lighting, landscaping. B. Photos of site and surrounding area. Views to include: photos from building location looking out 360 degree view, photo looking at site all directions, view to site from entry drives, mail thoroughfares on and off site. 18. Site Utilities: A. Electrical service available: __________________________________________________ Underground: __________________ Overhead: ________________________________ B. Water service available: _____________________________________________________ C. Sanitary Sewer available: ____________________________________________________ D. Storm Sewer available: _____________________________________________________ Location! Location! Location! Help your customer(s) locate the right place to start their business. This checklist is a good beginning for espresso business planning. Mobile Espresso Bar / Drive-Thru Site Evaluation Checklist 1. Evaluate Site Characteristics ___ Traffic Count: Get the most recent information for frontage roads. This is available at most municipality offices or the Dept. of Transportation. ___ Ingress/Egress: Identify access to site for primary traffic orientation. Note curb cuts, traffic flow on frontage road and on site. ___ Orientation: Identify traffic patterns of target demographic (typically AM commuter traffic) and determine if site conveniently intercepts target traffic. ___ Visibility: Determine primary traffic orientation and look for possible obstructions from that vantage point (buildings, trees, burms, etc.). ___ Queing/Stacking Lanes: Be certain there is ample room for stacking of drive-thru/walk-up traffic and convenient egress. ___ Competition: Identify other espresso/food service activities near site. ___ Site Diagram: Prepare diagram identifying above concerns. 2. Check with Zoning Department ___ Land Use: Check with municipality that property can be used for this type of business. ___ Show Design: Bring site diagram showing traffic flow, photographs and/or artist rendering if necessary to emphasize that your business will not create a liability, but will complement development. ___ Promote Quality: Present your project as a drive-thru kiosk - avoid terms such as “trailer” or “cart”. If mobility needs to be referenced, refer to the unit as a “mobile structure” or “modular kiosk that is transportable”. ___ Time Line: Ask when the approval can be expected. 3. Check with Health Department ___ Requirements / Application: Inform health dept. of your intentions, obtain list of requirements (commissary, proximity to restrooms, removal of gray water, etc.) and application. ___ Submit Application: Furnish health inspector with design, diagrams and photos / renderings of intended unit. ___ Time Line: Ask when the approval can be expected. 4 . Project Financial Impact ___ Startup Cost Analysis: Determine capital needs based on cost of intended unit, site improvements, equipment and components for core inventory (coffee, granita, beverage–related supplies, assorted bakery and miscellaneous sales items). ___ Financing Options: Determine options available for short and/or long-term financing. ___ Pro-forma Analysis: From research done (from similar businesses and competitors), generate a realistic average sales per customer that will be reliable input in sales profit forecasts. Determine if traffic available will support your investment. ___ Marketing Plan: Develop plan for first 30, 60 and 90 days of operation. ___ Secure Financing: Submit all necessary business plans and applications. The team at Burgess Enterprises is ready to help you with any of your espresso business needs. We’re partners in your success! For more information, call us today at 800-927-3286 or visit our website at www.BurgessEnterprises.net Health & Planning Department Requirements Since they will very with different jurisdictions, the specific requirements need to be determined by gaining these from the proper authorities. This will be the customers responsibility because they will have to submit an application to gain a permit for business, but gaining knowledge of general requirements will prove beneficial. 1. Usually a commissary or direct access to one (with a signed agreement from the commissary owner) is required. Normally a commissary consists of: i. Fresh water supply ii. A three compartment sink (for cleaning and sanitizing equipment) iii. A mop sink (for draining of waste water) iv. Dry storage v. Bathroom facilities vi. Storage room for cart Normally onsite requirements include: vii. Fresh water supply or tanks viii. Hand sink with hot and cold water ix. Refrigeration x. Waste water tank 2. Usually a schematic diagram of the cart and machine is required displaying the electrical and plumbing systems. (see sample diagram) Espresso Liquid Profit Potential The potential for excellent profits in espresso is great. However, it is easier said than done. Gone are the days when you can profit because espresso was the “new” thin in town. Competition is fierce, with espresso operations coming and going on a regular basis. The key to success in establishing a growing espresso business is serving quality drinks that will delight your customers and provide excellent customer service. It’s very important to realize that in order to gain significant profits a significant investment must be made. Successful owners have made a commitment to quality. Quality coffee, quality equipment and quality service are the keys. Without question the higher the quality, the greater the upfront investment. You can buy cheap and save a buck today, but with that mentality you won’t reach your full profit potential. You might not reach your 1st. anniversary. We at Burgess are committed to your success! This is why we distribute the highest quality new and used equipment. We stand ready to serve you with expertise gained from over 18 years in the espresso business. Our goal is to minimize your headaches and maximize your profits! Average price of drink $3.00 Average cost of coffee $0.40 (including milk, flavorings and cup) Average profit per drink $2.60 Drinks Per Profit Per Profit Per Profit Per Profit Per Profit Per Day Day Week Month Year 5 Years 1 $ 2.60 $18 $ 78 $ 936 $ 4,600 5 $13.00 $91 $390 $4,680 $23,400 10 $26.00 $182 $780 $9.360 $46,800 20 $52.00 $364 $1,560 $18,720 $93,600 50 $130.00 $910 $3,900 $46,800 $229,000 100 $260.00 $1820 $7,800 $93,600 $468,000 150 $390.00 $2,730 $9,700 $140,400 $702,000 200 $520.00 $3,640 $15,600 $187,200 $960,000 300 $780.00 $5,460 $23,400 $280,000 $1,404,000 400 $1,40.00 $7,280 $31,200 $374,400 $1,872,000 500 $1,300.00 $9,100 $39,000 $468,000 $2,340 Return on Investment Work Sheet Basic Investment: 1. Carts with options $______________ 2. Espresso Machines $______________ 3. Grinders $______________ 4. Granita Machines or Blenders $______________ 5. Water Softener $______________ 6. Pastry Case or Display $______________ 7. Coffee Brewers $______________ 8. Air Pots $______________ 9. Opening Supplies $______________ 10. Permits (building, health department) $______________ 11. Building (cost, plumbing, electrical, installation) $______________ Initial Investment $______________ Daily Sales: 1. Cups per day ______ X Average selling price $3.00 = $____________ 2. Pastries per day ____ X Average selling price $1.50 = $____________ 3. Blended Beverages ___ X Avg. selling price $3.00 = $____________ 4. Cups of coffee per day ____X Avg. price $2.00 = $____________ TOTAL $____________ 5. Daily Sales $ _______Divided daily customer count _____ = Per Capita Spending per customer per day $________. 6. Daily TOTAL X 30 days = $_________ monthly sales. Return on Investment: Products Percentage = Cost X 30 days Cost of Goods 0.14 $______ $_____ Rent * 0.044 $______ $_____ Misc. Operational Expense 0.03 $______ $_____ Wages (based on $8.00 ph) 0.228 $______ $_____ Payroll Taxes 0.10 $______ $_____ Advertising 0.02 $______ $_____ Business Taxes 0.04 $______ $_____ Loan Payment ** 0.024 $______ $_____ Insurance 0.02 $______ $_____ Your Take Home*** 0.3536 $______ $_____ Monthly expenses $_____ * Under 300 cups a day rent will be approximately .07% above 300 cups per day approximately .044% based upon $1,000 per month. ** Loan Payment based upon 60-month lease with 2 payments down and $75.00 document fee. *** You can reduce the Take Home by ____% and put that into a reserve account.