How much savings should you have before starting a cafe? 4

Heya! Cafe owner here, coming to the end of my first year. 9 months of expenses in the bank makes a start up entirely unfeasible for most people. I opened my cafe (the wandering goblin, in Nottingham) with zero money left when the doors opened officially. The secret isn't online marketing, it's putting the work in the build community even before you open the doors. I spent months running pop-ups while getting everything organised, building a following and offering consistency before the cafe's location was even finalised.

You can either invest money OR time. As someone who's been in coffee 7 years, money wasn't an option because this industry doesn't pay. Your community will carry you through, if you put the time into building it. I hate the industry idea that everything has to be expensive. The idea you need an expensive machine and expensive grinder is also a load of crap. It's a matter of skill. I run my bar off of an old school lever machine I got second hand, and run everything through the same grinder - but with a thoughtful approach it's absolutely feasible to still keep everything dialed and tasting great. The mentality of "oh but if I had (x) machine I could do better" is super unconstructive and stops you focusing on what you can change in the moment. You need to work with what you have, and do the best within your means. A cheap machine isn't an excuse, and an expensive machine should be a low priority aspiration unless you're in it for the hobby. I'm really tired of running into this gearhead mentality.

Obviously my cafe is based in a city, so it's a little different - but the base premise is the same I think. I do agree that everything should be of equivalent quality - I think your cheapest thing should be as good as your most expensive. A bad shot should never be served, etc. An espresso shot in most cafes costs £0.30 (assuming you have half decent coffee on house). That's a worthwhile loss to remake if the shot doesn't pull right. 30p to guarantee a great experience is a no brainer.

I'm sorry to hear about the failure of your shop, I'm sure it was absolutely crushing. Having been doing nearly 100 hour weeks for the entire last year, I understand how difficult it is.

We've learned that a small village is not the place for a 3 Michelin star coffee roaster. Under capitalization gets one the wrong space, wrong equipment, and wrong aesthetic: especially for a 3 star Michelin coffee roaster. Bare minimum to open a café is probably in the 50K region, and that's with the owner working all the time. And a proper café, easily 100K. Otherwise, you're just a kid selling lemonade on the sidewalk.

Here's a clue: if you are thinking about starting a retail business, first you project the annual volume of sales through the first 5 years. Then you project the average sale amount of each transaction to find out how many transactions it takes to reach that number. If your average transaction is under $10 or so, you will likely be out of business very quickly, and you will be working yourself and perhaps your family to death just to go out of business more slowly. By the way, you need to know your costs of doing business from top to bottom. Don't forget you have to pay rent, utilities, employees, and cost of goods sold, and taxes.
Retail is brutally competitive, and you better be the only coffee shop for miles, and it better be good.
To do $500,000, you have to sell 50,000 $10 sales in 300 or so days per year! No one would open that business with the simple math above. Don't even get me started on franchises, at least you just go broke if it's your own; with a franchise, you can go bankrupt and lose everything. Lesson #1: Know what you are doing and understand the business before you invest in one. Selah