Starting a business??

[Stephen@NCAutoUSA]

Hey guys. I thought I'd ask here since many of you are successful business people. In short, I have the opportunity to open up a small juice bar business. When I say juice bar I don't mean one of those stands in the mall that have fresh cut fruit sitting out all day but rather a protein shake/smoothie spot that sells other items like coke, red bull, ABB products and water bottles. Also I think the owners of the building want me to sell hot dogs, pretzels, and anything little kids like really. The customers range from grown adults with busy schedules to parents picking up their kids from dance class and college students. It's in a new building that hasn't been fully completed yet so I can basically I think design how I want it to be. It would be in a building with dance classes, fitness classes, and a casual byob restaurant with a focus on affordable food catering to college crowd and a nice brunch spot on weekends "I'll get back to that later".

With not getting to personal I always do things backwards. For example, I own a nsx with lots of mods and parts sitting in my bedroom at my parents house but I don't own a house. Pretty dumb huh? I never finished school even though I could but there's a few reasons for that. Basically I'm not good with kids, and I was going for music education to teach.

Many of you have started your own business. Probably never a juice bar but if you could give a guy in their mid 20's advice then what would it be? There's so many questions I have but I'll start with some things on the top of my head right now.

1. I know you pay per square foot usually, does that include electricity and water and gas if you use it? Do you sign a one year contract usually for the space and pay all up front or just pay each month? Is there a way maybe I could BUY the space inside the building? So if later years down the line I could rent it out to another business if my business fails at least I still have the property?

2. Equipment. Well I have the blender, but I'm going to need to pick up another one which I can surely source. Coolers with sliding glass doors I hear are provided by a company if you carry just their products. For example if I bought coke products instead of pepsi they would give me a coke cooler. So those are rather "borrowed" I think? I'd need an ice machine, a deep 3 row sink in the back, a freezer, and maybe a "lowboy" with a removable cutting board.

3. Health codes. I'm very familiar with restaurant health codes but I'm not sure where the full blown restaurant guidelines step in and the other ends if there is a small one. For example, if I DON'T serve hot food, or if I only serve 1 item that's hot food.

4. Money to start up. Let's just say I have all the equipment. Do I need lots of backing in the bank?

This is just an idea that was presented to me last night. I worked in a juice bar before and it was probably one of the most fun jobs I've ever had. I just went to work, ate food, and went home. I know owning a business is a lot more stressful but I think of it as a great opportunity to break into the business.

If I start the business I know about food costs and all the little tricks to keep your % in check. The hours I'd basically just live there until it would get up and running. In the case it does take off for some reason I could work mornings and pay someone at night. Then I could do my normal restaurant gigs in the city.

My main concern is foot traffic now. It's not a gym with weights. It's a spot trainers hold boot camps at and also ballet classes and other things as well. I have not seen the space but I don't need more than a small 10x12 back room and a 10x10 in the front. I'm not sure of the location so if it's not near the entrance I may just take a pass. I also need to find out this restaurants price point. I believe they'll have 10+ dollar sandwiches. I don't think I'll be pushing to much food, but who knows since it's not a gym how many people will be buying protein shakes and smoothies.

If any of you guys have input please feel free to post it up. Let me know if this is just a dream or I can make it happen. Right now I'm just working around 50 hours a week as a restaurant service manager, living in the ghetto, and putting money away for a house. If worse comes to worse I just close up shop after my year or whatever the contract says, take all my equipment and leave? I have no bills but rent each month.

Stephen

 

[White92]

Is this a franchise that they want you to buy into? If so, they should have answers to all of that stuff.

 

[Stephen@NCAutoUSA]

No, it's from the ground up. It would be my spot and I would be the only one working there.

Stephen

 

[HIJACKER]

Well I have the blender, but I'm going to need to pick up another one which I can surely source.

I really think this is the least of your concerns.

 

[Stephen@NCAutoUSA]

I really think this is the least of your concerns.

I know, but equipment was a big concern I thought of considering commercial equipment isn't cheap... Plus I'll need some kind of cash register to keep inventory of products sold and cash accounted for and things like that. I mean it could just be a slow start with just accept cash for products? I remember the previous juice bar I worked at years ago only really received cash payments. I just rather buy things once and be done. So if I were to get a freezer, it would be a commercial freezer that would last. If I were to buy a cash register, it would be a computer touch screen and not a old fashion style one.

Stephen

 

[HIJACKER]

I know, but equipment was a big concern I thought of considering commercial equipment isn't cheap... Plus I'll need some kind of cash register to keep inventory of products sold and cash accounted for and things like that. I mean it could just be a slow start with just accept cash for products? I remember the previous juice bar I worked at years ago only really received cash payments. I just rather buy things once and be done. So if I were to get a freezer, it would be a commercial freezer that would last. If I were to buy a cash register, it would be a computer touch screen and not a old fashion style one.

Stephen

Yes, but cash only really limits your buyers which in turn, can impact business. Don't forget, from a consumer perspective, how irritating it is to go somewhere that is CASH ONLY. I personally, avoid those places because it's a hassle. It's 2010, if a place doesn't take my VISA card, then I have no interest in doing business with them.

 

[robr]

Yes, but cash only really limits your buyers which in turn, can impact business. Don't forget, from a consumer perspective, how irritating it is to go somewhere that is CASH ONLY. I personally, avoid those places because it's a hassle. It's 2010, if a place doesn't take my VISA card, then I have no interest in doing business with them.

Amen. I also avoid businesses that won't take VISA/MC. I don't carry cash.

 

[docjohn]

go to the place,check it out,get the specifics of foot trafic/competition in the area ect....then let us know,,if you are still serious you need to ask the specifics of the lease for space..$ per sq/ft..are there common area costs?..ie garbage/custodial/utilities...are you responsible for your pro rata share of taxes? all of these come into play when you develope your start ups proforma,if you are unfamiliar with that term google a small business start up proforma checkist.:wink:

 

[Stephen@NCAutoUSA]

go to the place,check it out,get the specifics of foot trafic/competition in the area ect....then let us know,,if you are still serious you need to ask the specifics of the lease for space..$ per sq/ft..are there common area costs?..ie garbage/custodial/utilities...are you responsible for your pro rata share of taxes? all of these come into play when you develope your start ups proforma,if you are unfamiliar with that term google a small business start up proforma checkist.:wink:

Thanks man. When I get time in the next few weeks I'm going to drop by there and set up a meeting with the owner of the building to get some of those figures together "like foot traffic". I'll google the small business proforma checklist online.

Stephen

 

[Dtrigg]

As a former business executive, Vice President General Manager, Executive Vice President, CEO, etc. You're asking extremely complicated questions. Get a good accountant and attorney. If you can't afford that, you can't afford a new business. Good luck. Ninety percent of new business fail. Make sure your business doesn't fall into that category;

 

[Dtrigg]

As a former business executive, Vice President General Manager, Executive Vice President, CEO, etc. You're asking extremely complicated questions. Get a good accountant and attorney. If you can't afford that, you can't afford a new business. Good luck. Ninety percent of new business fail. Make sure your business doesn't fall into that category;

 

[Stephen@NCAutoUSA]

As a former business executive, Vice President General Manager, Executive Vice President, CEO, etc. You're asking extremely complicated questions. Get a good accountant and attorney. If you can't afford that, you can't afford a new business. Good luck. Ninety percent of new business fail. Make sure your business doesn't fall into that category;

Dtrigg I understand that most new small businesses fail. I'm not looking for a huge operation. I'm not even looking to employ another person. It's just going to be a one man crew, me. For accounting it's pretty easy for a small place I think. It's basically "rent which would be whatever you pay total for the space" and product cost. I'm not paying labor since it's myself. Basically if my goal is around a 25% cost then I just take my monthly sales, subtract the cost of the items purchased within the month, and that's my net. Take my net and divide by the "rent" and that's what I have to live off of! The problem is just selling enough to make enough! Again Dtrigg. I'm not looking to get rich by doing this but think of it as a fun, something different career change maybe.

Doc I understand what you're talking about with utilities, garbage, pro rata taxes "from what I understand that may be calculated in the per square foot equation".

Stephen

 

[Deltron Zero]

If you're interested in starting a small business, the first thing I would do is work for a business in that industry. Maybe two or three. Your future competitors. Learn them from the ground up from the inside. Find out if it's something you really want to do. Then, once you know you can do it better you'll already have your questions answered.

 

[Stephen@NCAutoUSA]

If you're interested in starting a small business, the first thing I would do is work for a business in that industry. Maybe two or three. Your future competitors. Learn them from the ground up from the inside. Find out if it's something you really want to do. Then, once you know you can do it better you'll already have your questions answered.

I hear ya Deltron. I don't think to many people can be successful unless you've done the job at hand... When I was 18 I worked at a Juice Bar for 2 years. I know the basics but not the inner details. There's no real competitors other than the restaurant inside the spot which is what I'm worried about. I'm not sure if there's something on the college campus but I'm going to do some research. I'm thinking also to contact the college to be able to accept payment with whatever dollars they provide to students on their student id cards. At temple we had "Diamond Dollars" and they were accepted as like debit at most stores on and around campus.

Stephen

 

[TURBO2GO]

Stephen you are going to work long hours. The dollar amounts you pull in are small. You need volume sales. Volume sales means lots of hours. It may be a good learning experience and that alone may be worth it but it WILL wear you out. I realize you work a lot of hours now, but when you are done with work you aren't taking the work home with you. You will when you own this business. That is what will wear on you eventually. Your best bet would be to get something going, show profit, and sell the business for a quick profit. That is my advice if you must do it. Then let it drain someone else for a while.

It sounds to me like your finances need help in other areas. I would be more concerned with getting those under control than with adding the stress of owning a business like this one. If you want to have your own business, look for a headache free one. This isn't one of them IMO. Just synchronizing your production capability with business demand in itself will be a feat. You don't want to be sitting around doing nothing, and you don't want to be too busy and have annoyed customers. That may cause you to seek help, and help comes with a whole slew of headaches.

In general don't get caught in the same things everyone else gets caught in. Card payments, car payments, house payments... these are all things that keep a person down and the banks rich. You can risk your money for a quick return on the market or with various "investments" but after my many years of business experience my advice is to just seperate yourself as much as possible from leaches like banks and insurance. Loans and payments. Interests and gains. A lot of investment people will tell you differently than I am, the Harvard MBA's and investment pros that think because they were able to make a quick buck they are are smarter than everyone else. All those people have their highs and many have their lows.

If you are willing to work hard, work at something that gives bigger returns than 16 ounces of smoothie.

 

[Stephen@NCAutoUSA]

Stephen you are going to work long hours. The dollar amounts you pull in are small. You need volume sales. Volume sales means lots of hours. It may be a good learning experience and that alone may be worth it but it WILL wear you out. I realize you work a lot of hours now, but when you are done with work you aren't taking the work home with you. You will when you own this business. That is what will wear on you eventually. Your best bet would be to get something going, show profit, and sell the business for a quick profit. That is my advice if you must do it. Then let it drain someone else for a while.

It sounds to me like your finances need help in other areas. I would be more concerned with getting those under control than with adding the stress of owning a business like this one. If you want to have your own business, look for a headache free one. This isn't one of them IMO. Just synchronizing your production capability with business demand in itself will be a feat. You don't want to be sitting around doing nothing, and you don't want to be too busy and have annoyed customers. That may cause you to seek help, and help comes with a whole slew of headaches.

In general don't get caught in the same things everyone else gets caught in. Card payments, car payments, house payments... these are all things that keep a person down and the banks rich. You can risk your money for a quick return on the market or with various "investments" but after my many years of business experience my advice is to just seperate yourself as much as possible from leaches like banks and insurance. Loans and payments. Interests and gains. A lot of investment people will tell you differently than I am, the Harvard MBA's and investment pros that think because they were able to make a quick buck they are are smarter than everyone else. All those people have their highs and many have their lows.

If you are willing to work hard, work at something that gives bigger returns than 16 ounces of smoothie.

I thought about that. Get it up and running and sell it off. I do work semi long hours now. Most the time it does run into my personal life because the people I work for have no clue how to run a restaurant business, but that's another topic for another day.

But I hear you about my finances. I mean right now I look at it as if I don't do it, then I'm in the same place as I'm in right now. Which is saving up for a house. If I go ahead and give it a go and I succeed then it's a new career. If I fail then it's just a little bit of time and money lost.

I like to think I work hard and I know the return of a smoothie is only a few bucks, but it's something I do enjoy doing for some reason. It's like serving tables, or bartending. I just enjoy it. I'm not looking to take a loan out to start this up. I'm not building anything really I don't think. It's just going to be equipment purchases and inventory that doesn't go bad. I don't really pay for food now. So I figure I'll just eat the inventory that I can't sell at the end of xxx amount of days, haha.

Thanks for the replies thus far everyone. I'm trying to think clearly through this process but sometimes your goals fog up reality.

Stephen

 

[Deltron Zero]

Oh. And before you start your endeavor, you must first master Lemonade Tycoon!!!

http://games.yahoo.com/game/lemonade-tycoon

 

[BD]

Having to run a hookah/cigar bar for seven years, I can tell you a few thing.

1. The cost of sq/ft is to be determine on location. You need to have a very good idea of the traffic in that center. It will help you are near by some kind of landmark business such as supermarket, theater, etc.

2. You must figure out the profit margin vs. your fix cost.

For example: I negotiate a flat rate, including triple net of 2400 per month, add wifi, electricity, sat tv, phone, and insurance, my fix cost is around $3k.

3. You have to very careful with people you hire, that is where most of your liabilities are. If you're going to be there most of the business hour, which you should, you do not need to hire too many unless the business supports it.

4. Make sure you have a solid lease, 5 plus 5 is usually the case. That will give you some leverage if you ever want to sell it.

5. Make sure you talk to your landlord regarding a way out. If the business is not where you need to be and you need to close it, make sure he will not go after you for the remainder of the lease.

6. Make sure you have some kind of nitch that will differentiate you from other juice bar. For example, the Boba tea house here also serve food. Fries, chicken, etc. That will generate additional income.

7. Make sure you go to another juice bar and observe the business to have a good understanding of what it is about.

8. Once you open it, you need to understand it is a business, not friendship hang out.

9. If you have no retail experience, don't do it. Trust me on this one.

10. If you insist on doing it, make sure you are ready for the psychological impact if it turns sour, or if it become very successful.

If you have questions regarding lease negotiation, feel free to contact me through PM.

 

[steveny]

Why would you pay for a job when someone will give you one for free?

 

[NSXclear]

Look for you local Small Business Association (SBA) and SCORE office. These are governemment funded agency that help provide assistance to small businesses. The offer a lot of free services and guidance.

 

[jond]

I haven't had coffee yet, but here's my advise.

1. The economy is still horrible. Lots of people are saying we're at the 1/2 way point. AKA, it's going to get a lot worse.

2. There are TONS of businesses forsale, for cheap. I saw the local 'pitapit' that was an awesome sub shop, in the best part of town in Richmond for sale for $30,000. The guy said he spent over $250,000 getting it off the ground.
IMO, I would wait 2-3 years, save your money and buy a business that's 15+ years old with a solid track record, and buy it in cash.

 

[docjohn]

let me help disuade you further:wink: Lets say rent is 800/mo and your other fixed costs are paying for your equipment you bought or lease and or had to borrow the money say this is another 500 /mo... now you have to buy inventory to make your stuff each day and waste alot because health codes make you throw old stuff away...say this adds another 800 month..so you are at 2100/mo that you have to make to break even...you are not yet paying yourself..just working for everyone else as turbo was saying..if your smoothy is 2$ on averageyou need to sell over 1000/mo at 27 days open/mo assuming you take off one day a week can you realisticly sell over 50 smoothy/day?

 

[NSX-Stalker]

I've been in the process of looking at different businesses for about 4 months now. I looked at many different types of franchises and the possibility of doing something on my own. I've been doing software development for the past 18 years and have grown tired of the industry. I really like software but cannot stand what it's turned into plus at my age (46) I'm already considered old.

I decided when looking at different businesses that I wanted to stay away from food. I'm actually quite a good cook myself but there are several different problems that a food related business involves. The fact that many restaurants around here (and everywhere I imagine) have closed due to the recession was one factor. During a recession people will cut back on everything they can and that includes food items like coffee, eating out and those smoothies. If I were to consider something in food I would go with a franchise since I believe if you've never run a business yourself and you do it on your own there's a much higher probability of failure. Another problem with food is once you poison someone you're finished. I also didn't like the fact that most food related businesses are open late. I have two small kids and would like to spend time with them.

I finally decided on a Pinch A Penny which is a pool supplies and services business. They have over 200 locations in FL and they have never closed a store which means a high probability of success. I have picked a market and store location and they are currently researching the area for approval. The key element in this type of market is demand and there are over 5000 pools in a 3 mile radius of my location. The other nice thing about this type of business is that it's fairly recession proof. When hard times hit people will stop their pool cleaning service (and maybe I'm providing that service) but they will then take care of it themselves and come into your store. People will put off buying a new heater but they'll just come in the next year when times are better and pick one up. The store does involve a lot of work but it does close at 6 and opens at 9. I can get some extra stuff done in the morning and be home by 6:30 usually. People always have to take care of their pool regardless of what the economy is doing.

As some have pointed out you usually sign a lease for several years. If your business fails you are going to have to pay the lease until the find a new renter. You may be able to negotiate this. If I cannot run my Pinch A Penny they have a 3rd party determines a value and buys the store from me. This is pretty important insurance for us. You do pay a portion of your gross net for the services they provide but I'm able to buy product much cheaper than an independent store (they have their own line of products) and I don't have to do my own advertising which would take up quite a bit of time. The initial fee is $37,500 but I am getting quite a bit of training and support which I will need since I'm not an expert in this industry. They will design my store, provide a POS system programmed for their stores, cheaper product, advertising, a yearly trade show specifically for Pinch A Penny owners and many other things I could not manage to do or have access to if I went out on my own.

I guess I'm just saying that my research has led me to settle on a franchised business. It's something you may want to consider. The initial fee and percentage of gross is something I'm willing to trade for a much higher probability of success, piece of mind and most likely a higher number of customers. Also, if you're going to talk to a bank, especially now, they're going to be more willing to lend for a proven business model. Either way I would do quite a bit of research before even looking for money to make sure this type of business is what you want to do.

If there's a similar business sit near it for a while and do a customer count. Try to get an idea of what numbers they're doing.

Do a full business plan including capital expenditures, a five year and an eighteen month projection.

Talk to other owners if possible. If you find one that's similar and a half an hour away they may be willing to give you some advice. I've had Pinch A Penny owners show me their books since they opened their doors. It really gives you a strong sense of the bottom line.

Sorry to babble on about my business venture in your thread but I am getting pretty excited about possibly doing this.

NSX-Stalker

 

[Stephen@NCAutoUSA]

let me help disuade you further:wink: Lets say rent is 800/mo and your other fixed costs are paying for your equipment you bought or lease and or had to borrow the money say this is another 500 /mo... now you have to buy inventory to make your stuff each day and waste alot because health codes make you throw old stuff away...say this adds another 800 month..so you are at 2100/mo that you have to make to break even...you are not yet paying yourself..just working for everyone else as turbo was saying..if your smoothy is 2$ on averageyou need to sell over 1000/mo at 27 days open/mo assuming you take off one day a week can you realisticly sell over 50 smoothy/day?

I know. I have to figure out the foot traffic and what I can do to market. I have no idea the amount of traffic that's going in and out of this building but I hear it's a good amount. When I hear the numbers and actually SEE it then I'll be able to get a better judgment on what type of crowd I'll be dealing and appealing too. But it sure won't be 50+ a day. I'm counting a lot on bottle water, gatorade, and other things of that nature. I also plan to buy outright any equipment I need. I don't need much but it's going to be the bulk of things is buying the right items.

I've been in the process of looking at different businesses for about 4 months now. I looked at many different types of franchises and the possibility of doing something on my own. I've been doing software development for the past 18 years and have grown tired of the industry. I really like software but cannot stand what it's turned into plus at my age (46) I'm already considered old.

I decided when looking at different businesses that I wanted to stay away from food. I'm actually quite a good cook myself but there are several different problems that a food related business involves. The fact that many restaurants around here (and everywhere I imagine) have closed due to the recession was one factor. During a recession people will cut back on everything they can and that includes food items like coffee, eating out and those smoothies. If I were to consider something in food I would go with a franchise since I believe if you've never run a business yourself and you do it on your own there's a much higher probability of failure. Another problem with food is once you poison someone you're finished. I also didn't like the fact that most food related businesses are open late. I have two small kids and would like to spend time with them.

I finally decided on a Pinch A Penny which is a pool supplies and services business. They have over 200 locations in FL and they have never closed a store which means a high probability of success. I have picked a market and store location and they are currently researching the area for approval. The key element in this type of market is demand and there are over 5000 pools in a 3 mile radius of my location. The other nice thing about this type of business is that it's fairly recession proof. When hard times hit people will stop their pool cleaning service (and maybe I'm providing that service) but they will then take care of it themselves and come into your store. People will put off buying a new heater but they'll just come in the next year when times are better and pick one up. The store does involve a lot of work but it does close at 6 and opens at 9. I can get some extra stuff done in the morning and be home by 6:30 usually. People always have to take care of their pool regardless of what the economy is doing.

As some have pointed out you usually sign a lease for several years. If your business fails you are going to have to pay the lease until the find a new renter. You may be able to negotiate this. If I cannot run my Pinch A Penny they have a 3rd party determines a value and buys the store from me. This is pretty important insurance for us. You do pay a portion of your gross net for the services they provide but I'm able to buy product much cheaper than an independent store (they have their own line of products) and I don't have to do my own advertising which would take up quite a bit of time. The initial fee is $37,500 but I am getting quite a bit of training and support which I will need since I'm not an expert in this industry. They will design my store, provide a POS system programmed for their stores, cheaper product, advertising, a yearly trade show specifically for Pinch A Penny owners and many other things I could not manage to do or have access to if I went out on my own.

I guess I'm just saying that my research has led me to settle on a franchised business. It's something you may want to consider. The initial fee and percentage of gross is something I'm willing to trade for a much higher probability of success, piece of mind and most likely a higher number of customers. Also, if you're going to talk to a bank, especially now, they're going to be more willing to lend for a proven business model. Either way I would do quite a bit of research before even looking for money to make sure this type of business is what you want to do.

If there's a similar business sit near it for a while and do a customer count. Try to get an idea of what numbers they're doing.

Do a full business plan including capital expenditures, a five year and an eighteen month projection.

Talk to other owners if possible. If you find one that's similar and a half an hour away they may be willing to give you some advice. I've had Pinch A Penny owners show me their books since they opened their doors. It really gives you a strong sense of the bottom line.

Sorry to babble on about my business venture in your thread but I am getting pretty excited about possibly doing this.

NSX-Stalker

That pool supply company sounds pretty good. There's a number of factors why I don't want to buy into a franchise. Mainly because I don't have THAT much cash floating around. I guess a main feature that I'll be promoting is an aspect every needs a healthy, easy, affordable option for food.

I haven't had coffee yet, but here's my advise.

1. The economy is still horrible. Lots of people are saying we're at the 1/2 way point. AKA, it's going to get a lot worse.

2. There are TONS of businesses forsale, for cheap. I saw the local 'pitapit' that was an awesome sub shop, in the best part of town in Richmond for sale for $30,000. The guy said he spent over $250,000 getting it off the ground.
IMO, I would wait 2-3 years, save your money and buy a business that's 15+ years old with a solid track record, and buy it in cash.

I know. The economy is still pretty bad. That's always on my mind, even at my current job. The thing with this location is it's a spot where ballet dance classes and fitness classes are going to be held plus other activities. These so called classes you pay for and are extra money on top of whatever gym you go too. If you were in a real tight spot on spending then you surely wouldn't be going to these classes but spending $10 a month for a gym membership at planet fitness.

I really don't want to own a pitapit or anything like that. This business is more driven off of bottle sales of drinks, protein shakes, and non perishables.

Stephen