Opening a retail coffee house - part 7

The first few months of having the business went by really fast. We opened in September and before we knew it, Thanksgiving was just around the corner. We closed on Thanksgiving Day and the day after. It felt great to have two whole days off of work. But the problem with having your own business is that when you're closed you don't get paid. There's no vacation pay you can use or holiday pay, you just get NO pay. The first few months were hard because business didn't boom like we had thought. We were naive...perhaps we watched that baseball movie too much and really believed that "if you build it, they will come." Well, it doesn't really work that way, there's something called marketing that you had to do. So, we started making flyers and putting it on people's cars. But did you know that you need a permit from the city to do that? Well, we didn't know...oops! The flyers didn't really work anyways. We didn't seem to get any new business from it. What helped us was that we were open next to a dry cleaners. I don't use dry cleaners very often, but alot of other people sure do and this dry cleaners was open early at 7am for their customers to pick up before work. We made sure we would open our front doors and let the great smell of coffee flow out in the mornings. We also started advertising in those coupon books that get mailed to homes. Those coupon books actually did quite well especially when we were offering buy one get one free.

Opening a retail coffee house - part 6

When we first opened we decided we would be open 7 days a week. We were young, didn't have kids and full of energy, so we didn't mind all the work. Oh, but did I mention that we didn't hire anyone either. We didn't want to borrow any money to start the business, so we just used our savings and a lot of sweat equity. Our hours were Monday - Friday 6:00am to 7:00pm and Saturdays and Sundays 8:00am - 5:00pm. It was alot of hours and soon all the days became a blur. When you're working every single day, it becomes hard to distinguish between the days since there is no looking forward to a weekend...or a day off. Sundays were our slowest days in sales. In the beginning, we would sometimes only do sales of $50 that day. After a couple of months we decided that we would at least close at noon on Sundays, so that we could have 1/2 a day off. It was very exciting looking forward to those Sunday afternoons. Looking back, we should have planned to be closed on Sundays or at least 1/2 day. Opening a business is very exciting and rewarding, but everyone needs a break to rest and relax and rejuvenate. It's hard to be creative and think of marketing ideas for your business, when you are exhausted.

Opening a retail coffee house - part 5

A month before we opened the shop, we had to start thinking about our food menu. We had decided on all the coffee drinks and now had to decide on what pastries we wanted to serve. It was a harder task than I had envisioned. I looked through the yellow pages for wholesale bakeries but there really wasn't very many. I actually found only 2 in the area that would come by and give me some samples. They were Le Boulanger and Fullbloom bakery. For those of you not familiar with the Fullbloom name, they are one of the main suppliers to the bay area Starbucks. When I called upon them, they had only been in business for about 1 year and was just a new business. The owner herself came out to see me with the samples and while we were talking she mentioned that she was making a bid on the Starbucks business and she was keeping her fingers crossed. I guess things turned out well for her as she is supplying all of the Bay Area Starbucks from Sacramento to Monterey. They have the best blueberry scones. We decided to order from them and also from Le Boulanger. The hard part was deciding how many to order for the first day. We were very naive. We didn't plan any big grand opening and didn't do any advertising and yet we still thought we would have a mad rush of people. So for our first day we ordered 12 dozen assorted croissants. Yep, 144 croissants in total. What were we thinking? Needless to say, we had ALOT left over. We only made $78.00 in sales that first day!

Opening a retail coffee house - part 4

After all the logistics of the coffee house was getting in order, I had to start thinking about the menu. I fell in love with coffee while attending U.C. Berkeley and was accustomed to the coffee there. My favorite place was a cafe on Bancroft called Cafe Milano. They made their coffee strong and tasty. My drink of choice was the "wet" cappuccino. Which was basically a cappuccino with not only foam but also steamed milk. So when I started my shop, I knew I would fashion it after the Berkeley style of coffee. My husband and I spent a weekend at the shop just making drink after drink after drink...trying to figure out the best recipe. We were completely WIRED after tasting all the drinks. In the end we decided we would have 4 sizes; small = 8oz, medium = 12oz, large = 16oz and a XL at 20oz. We made brewed our coffee strong using 1/5lb (.20) for each 64oz pot of coffee. And for our lattes and cappuccinos, we used 1 shot of espresso for each size, so that a small had 1 shot, medium had 2 shots, large had 3 shots and XL had 4 shots. If you are a coffee drinker, you know that is alot. I think at Starbucks, their standard is 1 shot of espresso for any size even a XL or as they call it, a grande. That just seems so weak to me. On our menu board, we even had a statement, it said "WARNING OUR COFFEE IS STRONG!"

Opening a retail coffee house - part 3

One of the most frustrating tasks was dealing with the city. This was not only frustrating but very intimidating. I don't know why, but every time I walked into the city planning office, my heart would race and my palms would sweat. I kept telling myself that these are only regular people like myself and yet in the back of my mind I would know that despite them being "regular" people, they could make my life hard. Every city is a little bit different, but in most you would go into the planning department first and fill out an application. You need to include the address of your proposed business and the first step they check is the zoning for that location. You can't just open up a retail coffee location anywhere. It needs to be in an area approved for retail. That was the easy step for me. The part I had a problem with was when they wanted the plans for my shop. I am an organized and detailed person and I would say a "DIY" (a do-it-yourself) type of person. I've seen blueprints before and thought I could draw them myself. Of course, I'm not an architect or an engineer, but I figured I'm not drawing a house or even walls that are load bearing. I was just drawing the layout of my coffee house; the counters, refrigerator placement, tables, sinks, pony wall, etc. I even went to a blueprint business and had my drawing printed on blueprint paper with the funny smell. It looked great, if I say so myself. I took the drawing to the city planning department to have it approved. The planner looked at my blueprints, checked that it had all the necessary information on it, and was just about to stamp approved on it, and then he stopped. He looked at it again and asked where was the architect wet stamp. I smiled and said proudly, "I did it myself." And he said, well I can't approve it without an architect stamp. I asked him what was wrong with the plans, did I do something wrong, was I missing something. And he said no it looks fine, BUT, it needs an architect stamp before it can be approved. So, I said, "you mean I have to pay an architect to draw my plans even though it's done correctly before you will approve them?" And he said yes. I tried to find an architect who would look at my plans and put their stamp on it, but guess what? Architects don't do that...they don't stamp other people's plans. So, I finally found an architect who basically copied the plans that I already drew so that he would stamp them so that the city would approve my plans...and all for the price of $1,000. Hmmm...now do you understand the frustration part?

Opening a retail coffee house - part two

It was easy to get overwhelmed with all the details. So, I found myself making more and more lists. I started carrying around a binder with college ruled paper and plastic insert sheets. This way I always had my many lists with me and I also had paper to write notes on. The plastic insert sheets were great because I could put catalog sheets or other info all in the binder and have them for reference. Here's one of the list I made once I found my retail space:
1) get ficticious business name filed at the county recorders office
2) get business license
3) submit drawings to the health department
4) submit drawings to the city planning department
5) submit sign plans
6) get quotes for signs
7) get quotes for ice machine
8) decide on layout and material used
9) open up 1 phone line
10) design logo
11) order business cards
12) decide on espresso machine
13) decide on grinder
14) call places regarding soda machine rental
15) get quote on insurance
16) get quote on scales
17) decide on uniforms
18) open bank account
19) find supplier of coffee to go cups
20) order printed plastic bags
21) order coffee bags
22) order labels for bags
23) decide on espresso bar menu
24) decide on merchandise to carry
25) find bakery to supply pastries
26) get resale license from State Board of Equalization
27) decide on decor
28) submit plans to the landlord for his approval
29) print gift certificates
30) get employer identification number and EDD #
31) open up PG&E

As you can see, there was alot of things to do.

Opening a retail coffee house - part one

It was in the fall of 1991 when I decided to leave public accounting and start my own coffee house. I had been in public accounting for 2 1/2 years and while it was interesting, I wanted to open my own business. We were living in El Sobrante, but my husband and his sister had an electronics business in Fremont, so we decided to open a shop in Fremont so that he would be able to help me when he had time. I quit my job in October 1991 and started my search for the perfect spot. At that time there was no good gourmet coffee place in Fremont, so it seemed like a great city to start one. There was no Starbucks in Fremont. The only place I could find in Fremont that was supposed to have "gourmet coffee" was a place called Penny University. It wasn't very good at all, not like the coffee houses I fell in love with when I was attending U.C. Berkeley. It looked like there would not be much competition. I didn't have any experience looking for a retail space and didn't know that you could get a realtor to help you without having to pay them. I didn't realize that the lessor (the owner of the space) typically paid the realtor's commission. We didn't have much money and I was determined to open the place on a shoe string budget with just sweat equity. I basically just drove around and looked at spaces that looked like it had alot of traffic. A few months into the search I settled on 1,000 sqft space that was located in a small strip mall. I thought it would be good because it was on a main street and it had Blockbusters as an anchor tenant. After I found the space I wanted, I had to start making plans. I made a list of everything I needed to do:

1) decide on a name

2) decide on the type of ownership entity; sole proprietor, corporation, etc.

3) file for a FBN (ficticious business name)

4) open a bank account

5) get a business license

6) get a permit from the Alameda County Health Department

7) design the space

8) build out the space

9) design a logo

10) work on a menu

The list went on and on and soon I was overwhelmed and questioning myself.

Going wholesale

Going wholesale is very different from just being a coffee retailer. The marketing is different, the customers are different and the hours are different. At our retail shop in Berkeley, we were open 7 days a week from 7am to 6pm Mon-Sat. and from 8am to 12pm on Sundays. We needed to have an employee there on time to open and someone had to be there at all times during the work hours. Like I said both my husband and I were working full time jobs and so we had to depend on other people to be there and hope that they were doing a good job. We thought once we moved to wholesale all our problems would be solved. We didn't need anyone there all the time because there would be no walk in traffic. We basically took our little index box of our wholesale customers and we thought that would be good enough. Well it was for awhile except that you really can't grow a business if no one is there. I bought an answering machine...yes that was in the late 80s when there was no such thing as voicemail. I made a recording asking the customer to leave their name and number and their coffee order. Then I would check the machine periodically for the orders. When we got an order, my husband and I would go down to San Leandro after our day job and go roast coffee and fill orders. This went on for a couple of years until we were down to only a handful of customers. I guess we really missed the mark when it came to customer service. People don't like just leaving their orders on a machine without any human contact. The majority of our wholesale customers were cafes, restaurants and a few mom and pop stores. If the customer had been with us for awhile and liked our coffee, they didn't mind just leaving the orders on the machine. But once the purchaser left and a new person came on board, they didn't think much about our customer service. I guess I can't say I blame them as I also like good customer service, but what were we to do at that time when we were both working in the day. Luckily the rent was very reasonable at the warehouse and we had enough customers that we were able to make a small profit. Of course, if we had paid ourselves a decent salary for the time that we put in, we probably would have been losing money. However, when you're first starting a business you don't take into account all the time you put in. Despite all the pros of going strictly wholesale, I found myself missing the retail aspect. I missed seeing and talking to customers and having a store front. By the early 1990s, I was itching to jump back in to the retail side.

The move to wholesale

When we decided to close the retail shop in Berkeley and go strictly wholesale, our first step was to figure out where we wanted to move. We knew we didn't want to be in Berkeley anymore because Berkeley's attitude against businesses was not very friendly and very restrictive. Plus it didn't really make sense for us to be in Berkeley anymore. At the time we were living in El Sobrante; I worked in San Francisco and my husband worked in Fremont. We decided that San Leandro would be a good middle point for us. I contacted the city and found that they seemed pretty relaxed there about businesses. I asked what they needed for us to open and they just said we needed to apply for a business license and pay a small fee and then we were open. Now finding a space was not much more complicated. We really didn't have any experience looking for space since the first coffee shop we opened was already an on-going business. We basically just looked for something in San Leandro that was close to my in-laws house in case we were tired and needed a place to sleep. We chose a warehouse place on Davis Street right off of 880. The leasing agent was as green as we were, making all these promises which I guess he should not have because when we went to sign the lease, his manager did not seem happy at all with the deal, but he did honor it. The space was about 1,000sqft and they included tenant improvements such as tiling the floors and running all the gas and electricity to our coffee roaster. We were excited but now had to plan the move from the Berkeley site to the new site. Of course, we didn't hire professional movers. We thought we could do it all ourselves with some help from friends. The move was much harder than we thought, due to the Sivetz coffee roaster and the huge afterburner that was on the building's roof. Let's just say we were extremely lucky that no one got hurt in the move. I didn't realize until after we lowered the 6 ft tall, 500 pounds steel afterburner down by rope and ladders that it originally went up to the roof with a crane. Sometimes ignorance is bliss.

How it all started

Ever since I can remember, I've always wanted to start and own my own business. I don't mean to sound cliche, but I do think the bug started when I had my first lemonade stand when I was around 7 years old in Oakland. We lived in the Lakeshore area with alot of kids in the neighborhood. It was fun picking the lemons from our lemon tree and juicing the fruit. I don't think it tasted very good, but the adults were nice and bought from me anyways. I thought what a great idea; pick fruit, squeeze, add sugar and water and voila you got cash for it. Of course I didn't think it costs anything since I just got everything from my parents' kitchen for FREE. Those summer days always stayed in the back of my mind as I grew older. I always knew I wanted to start something, but didn't know what. When I went to college at U.C. Berkeley, I fell in love with coffee. I guess it was only natural considering all the late nights studying. My dad was a partner in a coffee roasting business in Berkeley and I worked their part time while attending college. It was located only two blocks from the original "Peet's Coffee" but unfortunately was not even 1% as successful. However, it provided me a job and an opportunity to learn about coffee. I graduated with a bachelor's degree in Business and went off to work as an accountant at a big public accounting firm in San Francisco. The love of coffee never left me and as people would tease me I was still in the "bean" business...bean counting, that is. After a year into my accounting career, my dad's partners wanted to sell out of the business. I had just gotten married and my husband was working in the electronics industry in Fremont, and we thought why don't we buy out the partners. We were young then, 23 years old with no kids and lots of energy. So, we jumped into the venture, thinking we could run the business while we both had full time jobs. Let's say we didn't have much of a social life then. We hired employees and I did all the books at night and on the weekends. The honeymoon period didn't last long...no, not my marriage, but with the employees. It became evident that it was not working out being absentee owners in a retail coffee shop. We were just breaking even and knew we couldn't sell the business for much. So, we decided to close down the retail shop, move the coffee roaster to a warehouse in San Leandro and just concentrate on the wholesale side of the business. We figured we could do the roasting and filling orders at night after our day job. Thus, began our journey into the coffee business and the many other shops we started.