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Can you offer some details about your business? Is this an existing business that relocating or a startup? Do you have prior experience in this type of business? To qualify for a commercial mortgage, you'll need to have 20-25% to put down and will need to demonstrate sufficient business cash flows to service the debt. Rule of Thumbs is 1.25x cash flow coverage. This needs to be based on historical numbers, NOT projected numbers. You'll need to have decent personal credit, and have sufficient personal income to service you personal debt obligations.1 of 1 people found this helpful
Why do you want to buy as opposed to lease? While buying builds equity, leasing will give you an out if the business doesn't work out (assuming there is no personal guaranty), which might be worth considering if this is a brand new business.
That's a general overview...if you want to get into specifics or want someone to help you through the process, I offer free consultations.
Congrats and good luck luxebnc!
A few thoughts: With Starbucks reporting losses, are you sure there is a market for it in your area. The historic arts district should be a good area; however, do you know what the traffic flow is in that area? Are there other competitors in a 20 mile radius? How will yours be unique? What will you also be offering? Do you have a business plan?
I don't mean to burst your bubble as it could be a very profitable business. Just a few thoughts.
Thanks for the feedback. It is interesting that you bring up Starbucks losses, because it has provided an insight on how NOT to run a coffee business. Starbucks has to be respected on how they put the coffee retail business in the spotlight, but they also provide a lesson in poor customer service. They stopped focusing on their customers (longer wait times, higher prices, etc) and more on their brand. Their decrease in consumer foot traffic proves again that the customer is always right. Another reason that Starbucks is reporting losses is that market penetration strategy of store over saturation has backfired. They expanded too fast even though the market environment at that time said is was a good move. Another way that kept Starbucks in mind, is through our menu choices. We offer breakfast, lunch, and evening tapas. We will also serve cocktails, beer, and wine. We expect these items will help increase average per ticket sales.
We are just the opposite. We are focused on the total consumer experience. We will cater to our patrons by consistently offering a delightful visit with great products, excellent customer service, and an inviting store. Our company mantra is "High-Pace, High-Peace".
GREAT! You've done your research. I am glad. For everything that you have mentioned, I believe that you will do very well. I know (for myself) that if I don't receive outstanding customer service, I never return. And if the customer service was great, I can only go so often if the price is too much.
Congrats again and best of luck.
Coffee Cafe, Welcome You got two good responses from Milleisen and JVCruz
It would help if you told us more. Start by going to Member page and sharing some info.
How soon do you plan on opening this Coffee Cafe?? Do you have a Lawyer??
Have you developed a Business and Marketing Plan for investors to see or read??
Do you know about SCORE?? SCORE is FREE and can help.
Good luck, LUCKIEST
You state you are buying in an historical area. You will definitely want to check with the local government and historical society. Many cities offer grant money to businesses that are "revitalizing" older structures. Your gender isn't stated, but don't forget about minority and women owned business grants as well. If you are starting this up as or with a woman, you may receive more funds by putting the business in her name! Best of Luck!
Many historic districts have voluntary associations of business owners in the district. Have you checked with them? They may be able to steer you to people that have invested or loaned money to businesses in area before.
In addition to potential government grants as already mentioned, you might see if the city has some type of economic development office. Often, cities will have a small office dedicated to promoting business in their historic district. They might be able to point you to financing as well.
Lastly, you might approach wealthy people that are prominent in the arts about becoming a partner. Not only would they have the potential profit but I'm guessing there would be a certain snob appeal for them to invite their friends to "their" cafe after the theater or whatever.
I currently own a Gourmet coffee manufacturing business in hudson valley new york. If you need any products please let us know we will be happy to help you. www.ccroasters.com
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I am in the process of opening a coffee cafe in an historic arts district. I would like to find out more info on opportunities for investor financing for my business. Also, I am purchasing my retail space instead of leasing and there need a commercial mortgage as well. Any information that anyone can offer will be greatly appreciated. Thanks for your time.