The Risks of Starting a Small Business
Are they lower for Specialty Coffee and Espresso Operations?
Owning your own specialty coffee shop or espresso bar is an excellent way to be in business. Because even though many bricks and mortar businesses are generally very risky, the risks of starting a small business are somewhat lowered when it comes to a specialty coffee shop or espresso bar, especially for someone who has the passion and background for what they are doing.
Firstly, coffee shops and especially espresso bars require minimal investment in terms of furniture, fixtures, equipment, and inventory. Compared to a restaurant, equipment needs a significantly less. All you really need in the way of equipment are a cash register, espresso maker, dishwasher, a grinder, and a small bar fridge. Similarly, furniture and fixtures can also be relatively minimal. And compared to a retail operation, espresso bars and coffee shops can get by on less than $100 of inventory. So compared to the risks of starting a small business that is either retail or hospitality based, the money needed to start is much less.
Another factor where the risks of starting a small business is mitigated is the area occupied by the operation. Most businesses requiring a storefront will need a certain amount of space. But specialty coffee shops and espresso bars can get by with extremely limited space. Given the minimal requirements for equipment and inventory; combined with the possibility of being strictly a takeout operation, a space requirement can be very small. Again compare this to most businesses which will start with a basic level square footage due to inventory and equipment needs. Add to that requirement that these businesses will have for their customers to either browse or sit, then you’ll have a distinct advantage in favor of a espresso bar or specialty coffee shop.
Finally, another one of the many risks of starting a small business revolves around the staffing requirements. The costs of labour will have a significant impact on the bottom line. In order for you as the owner to properly run your business, you will need to have enough energy to do so on a day to day basis. This cannot be underestimated because if you are unable to perform for any period of time because of lack of energy, then your startup will definitely suffer.
In terms of staffing, coffee shops and espresso bars can be totally owner-operated. Again comparing this to a restaurant, it is unlikely that one person could handle a restaurant alone. Even most retail stores would need two people. Generally these types of operations need people to be available to receive inventory throughout the day. As a result, staffing only one person could seriously damage customer service. The risks of starting a small business our increased when you need to hire people to help you run it.
The greatest risk that coffee shop and espresso bar owners face is due to the low barriers of entry to their business. Since investment requirements are relatively low and the operating risks are similarly lower, many people think that it would be a freeze to set up and run a specialty coffee shop or espresso bar. The risk comes from a larger universe of possible competitors.
A decision to run your own business always involves a certain level of risk. But for those with limited funds and a passion for the business, the risk of starting especially coffee shop or espresso bar may not present a problem.
|
|