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Starting a business - Craft Coffee/Beer/Wine/Spirits Concept

4,820 Views | 31 Replies | Last: 4 mo ago by jja79
ceatm07
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We have noticed a trend in upper middle class suburban neighborhoods of the hybrid craft coffee, beer, wine and spirits concept. Think Slowpokes in Houston. Coffee all day with drinks in the afternoon/evening hours to make the concept viable.

A business partner and I have been throwing around the idea of opening something like this in our neighborhood that is full of upper middle class households ($205k+) with no real place for us to gather whether for coffee, happy hour or business meeting. Right now within a 1 mile radius of the space we have a chain coffee shop, local coffee shop and Applebee's none of which have a lounge feel.

This isn't an idea that would make millions, but rather a side business that could generate a decent amount of income.

Depending on what day you catch us, we don't know how it wouldn't work in our active and social community while on other days the skins of restaurant/lounge failures cast a dark shadow on the idea.

Is the neighborhood "Cheers" hangout a fad? I expect to hear a lot of you say it's a huge mistake, but I'd like to also hear about some wins that you are familiar with.

EclipseAg
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AG
I don't know about viability, but I would love a place like that close to me.

All we have are bubble tea places.
Anastasia Beaverhaven
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ceatm07 said:

We have noticed a trend in upper middle class suburban neighborhoods of the hybrid craft coffee, beer, wine and spirits concept. Think Slowpokes in Houston. Coffee all day with drinks in the afternoon/evening hours to make the concept viable.

A business partner and I have been throwing around the idea of opening something like this in our neighborhood that is full of upper middle class households ($205k+) with no real place for us to gather whether for coffee, happy hour or business meeting. Right now within a 1 mile radius of the space we have a chain coffee shop, local coffee shop and Applebee's none of which have a lounge feel.

This isn't an idea that would make millions, but rather a side business that could generate a decent amount of income.

Depending on what day you catch us, we don't know how it wouldn't work in our active and social community while on other days the skins of restaurant/lounge failures cast a dark shadow on the idea.

Is the neighborhood "Cheers" hangout a fad? I expect to hear a lot of you say it's a huge mistake, but I'd like to also hear about some wins that you are familiar with.


Cool idea. Where are you located or planning to put your concept. That might give us an idea of the viability of the business.
htxag09
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As someone who lives in Oak Forest and likes Slowpokes, I don't think I've ever realized it goes to a bar scene in the afternoon/evening.
Petrino1
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ceatm07 said:


This isn't an idea that would make millions, but rather a side business that could generate a decent amount of income.
Theres basically zero chance that you can run this as a side business. You or your business partner will have to physically be present there most of the time, at least for the first 6-9 months. These types of employees like to steal and call off work a lot, one of you will have to be there to make sure things are running smoothly.

Truthfully, with the amount of work and headache that will go into something like this, youre better off just investing your money into an S&P 500 fund and call it a day.
jja79
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This sounds like something that would require one of you to quit your job and devote 60-80 hours a week to and the other partner to devote 40 hours a week to. There's this exact thing near me and either husband, wife or both are there if you go at 7AM or 930PM
ceatm07
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Those are the tough love responses we needed. Let me clarify that this is squarely in the idea phase and we are sourcing this type of feedback.

The personal time commitment at the start was considered especially since this is an establishment that would be operating up to 14 hours per day. However, the thought was that you could possibly solve for part of this with a quality GM.

Like I mentioned above, I'm fully aware of the failure rate of F&B concepts, especially those started by folks with little to no experience in the industry which lends credence to the suggestion to pour money into the S&P instead.
Petrino1
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ceatm07 said:

Those are the tough love responses we needed. Let me clarify that this is squarely in the idea phase and we are sourcing this type of feedback.

The personal time commitment at the start was considered especially since this is an establishment that would be operating up to 14 hours per day. However, the thought was that you could possibly solve for part of this with a quality GM.

Like I mentioned above, I'm fully aware of the failure rate of F&B concepts, especially those started by folks with little to no experience in the industry which lends credence to the suggestion to pour money into the S&P instead.


Hiring a GM will significantly eat into your profit margins. GM's aren't cheap. Plus you have to make sure you can trust them and they're not robbing you blind.

Spoony Love
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Kind of along the same lines, a friend and I were looking at buying an existing business. We both had good paying jobs and considered that we didn't need an income from the venture. We settled on finding a GM that would run the place and basically print his own paycheck. We just wanted access to the service whenever we wanted.

It fell through because neither of us could find someone we thought we could trust to do it.
redag06
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Had a place like this in my previous neighborhood. That is a LONG day, to be coffee in the am, and open till say 10.
And what I have found with suburb bars, is they tend to have some very slow nights throughout the week.

Also consider the fact that craft beer seems to be in a bad spot right now, lots of craft beer bars and breweries closing.
one safe place
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As someone said (in another way), your venture is almost guaranteed to fail if all owners keep their regular job and neither are on site. Odds lessen even more if neither of you have ever run a business. A GM will be expensive, but required I'd think (if the owners keep their jobs) but what happens if he or she quits? Which one of you take over? Can you take extended time off work to search, interview, and hire a new GM?

Never heard of Slowpokes, so took a look at their website. Will you be serving food as well?

To each his or her own, but you couldn't give me a business that required inventory, particularly with at least some inventory that is subject to spoilage, has to have a lot of employees (at the lower end of the pay scale), and open for that many hours per day.

If you proceed, I suppose you will be renting a place. I'd be careful for how long I committed myself to a lease just in case it doesn't work out.

I do like the concept you are attempting, wish we had something like that near me, but I would never want to own one.
cab559
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AG
I look forward to the Bar Rescue episode 1-2 years after this opens.
Tex117
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The aversion people have to doing the boring thing and invest in funds that track the S&P over time sort of amazes me.

If history is any indicator, and you do the right things, you will be a millionaire (probably a few times over) by the time you finish working with just an average salary. Its not fun, or sexy, but its slow and steady.
jja79
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You mention craft beer, etc so I assume you'll also have a brewery component to this which will require additional investment of capital and time. The one in my area brews their own beer and root beer. I stop in for a coffee every now and again or a root beer float since they also do soft serve. This place does GF so they get some additional business that way but as a I said I can't ever recall going in there whether it's first thing in the morning or after hours and not seeing husband, wife or both there. It's great for HS kids in the neighborhood who hang out and take up the limited tables with 5 of them sharing 2 lattes and talking to their friends that work there.

This doesn't seem like a side hustle to me. It seems like a complete immersion into a new lifestyle of working, sleeping and nothing else.
Stat Monitor Repairman
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I'd think about a semi-private lounge area in the back where people can smoke and vape indoors in comfort without getting hassled.
ATM9000
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Tex117 said:

The aversion people have to doing the boring thing and invest in funds that track the S&P over time sort of amazes me.

If history is any indicator, and you do the right things, you will be a millionaire (probably a few times over) by the time you finish working with just an average salary. Its not fun, or sexy, but its slow and steady.

I know what you are saying but some diversification and carefully placed excess risk for excess return in alternative investments isn't a bad thing. I've invested in small businesses in various ways 4 times and it's netted me over S&P from a net perspective across the 4. Two worked out ok, one has surpassed anything I could have imagined and is still doing really well and the last one was a disaster.

The disaster for what it is worth was a small minority investment in a bar and grill with a similar premise ie no real place like it in an upper middle class area. All I'll say is you better know your demand rather than assume or speculate it. Loads of costs to set up and the working capital requirements and claws have to be pretty high. You gotta be ready to eat that sunk cost really quickly if the demand just isn't there else you just run a hamster wheel of losses.
Serotonin
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Quote:

All I'll say is you better know your demand rather than assume or speculate it.
+1

I know a lot of suburban dads in 30s and 40s. They make good income but rarely go out to a bar for drinks during the week. Too many kids activities, commute home from work, etc. If they are having a drink it is at home with the wife and Netflix after kids are in bed.

And if they are social on weekends its driveway drinks in the neighborhood or backyard BBQ and beers with other parents and kids running around.

So there might be a reason why there's nothing in the area; the footprint might not be big enough for a bar to work.
techno-ag
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Not quite apples to apples but a couple started a cigar/whiskey bar in downtown Brenham. I know they lined up financing first with a solid business plan then joined the Chamber of Commerce which helped with publicity in their grand opening.

But yeah one of them is always there on site. I imagine it's the same way with most small businesses.
Tex117
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ATM9000 said:

Tex117 said:

The aversion people have to doing the boring thing and invest in funds that track the S&P over time sort of amazes me.

If history is any indicator, and you do the right things, you will be a millionaire (probably a few times over) by the time you finish working with just an average salary. Its not fun, or sexy, but its slow and steady.

I know what you are saying but some diversification and carefully placed excess risk for excess return in alternative investments isn't a bad thing. I've invested in small businesses in various ways 4 times and it's netted me over S&P from a net perspective across the 4. Two worked out ok, one has surpassed anything I could have imagined and is still doing really well and the last one was a disaster.

The disaster for what it is worth was a small minority investment in a bar and grill with a similar premise ie no real place like it in an upper middle class area. All I'll say is you better know your demand rather than assume or speculate it. Loads of costs to set up and the working capital requirements and claws have to be pretty high. You gotta be ready to eat that sunk cost really quickly if the demand just isn't there else you just run a hamster wheel of losses.
From what I gathered from the OP, it didn't seem like he was already fully invested in market tracking funds at a rate that would net millions by retirement age. Once one does that (ie, once you hit about a million or so invested in market tracking funds....then everything becomes MUCH easier), sure, take some risk if you are feeling up for it.

But I don't think that's what the OP is really asking.

If anything, your post proves shows just how difficult and risky it is.

Obviously, everyone's situation is different. Some strategies work well for some, but not others depending on a host of factors. (But there is alot of sense in absolutely living like a collage kid investing everything you can in index tracking funds to hit a million as quick as you can).

Quinn
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Serotonin said:

Quote:

All I'll say is you better know your demand rather than assume or speculate it.
+1

I know a lot of suburban dads in 30s and 40s. They make good income but rarely go out to a bar for drinks during the week. Too many kids activities, commute home from work, etc. If they are having a drink it is at home with the wife and Netflix after kids are in bed.

And if they are social on weekends its driveway drinks in the neighborhood or backyard BBQ and beers with other parents and kids running around.

So there might be a reason why there's nothing in the area; the footprint might not be big enough for a bar to work.
This is the key right here. The type of place the OP describes sounds cool, but it's likely not going to make it. I live in the burbs now and would kill for a cool spot like this that I had in Dallas & New York, but in reality I would probably go maybe once a week.
Horse with No Name
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The small town I live in has a wine, cheese and gourmet food shop. They sell beer and high end liquor as well. You can buy a pour of about 20 different wines, 4 beers on tap with more in cans, 30-40 different bourbons and pay a corking fee to open any bottle in the place. You can drink it there or finish it at home. Not really a coffee house, but gathering for a casual drink and snack anytime from about 11-8 most days.

It struggled while it was just retail but took off as more options to drink on site opened up. We have a social district where you can take your drink down the street with you and he occasionally has food trucks in the parking lot. They focus on trying to sell things that are not available at the local grocery store or liquor store. I don't see how anything that's open from 6 am to 10 pm could possibly be a side gig.
Ridin' 'cross the desert. . .
ATM9000
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Tex117 said:

ATM9000 said:

Tex117 said:

The aversion people have to doing the boring thing and invest in funds that track the S&P over time sort of amazes me.

If history is any indicator, and you do the right things, you will be a millionaire (probably a few times over) by the time you finish working with just an average salary. Its not fun, or sexy, but its slow and steady.

I know what you are saying but some diversification and carefully placed excess risk for excess return in alternative investments isn't a bad thing. I've invested in small businesses in various ways 4 times and it's netted me over S&P from a net perspective across the 4. Two worked out ok, one has surpassed anything I could have imagined and is still doing really well and the last one was a disaster.

The disaster for what it is worth was a small minority investment in a bar and grill with a similar premise ie no real place like it in an upper middle class area. All I'll say is you better know your demand rather than assume or speculate it. Loads of costs to set up and the working capital requirements and claws have to be pretty high. You gotta be ready to eat that sunk cost really quickly if the demand just isn't there else you just run a hamster wheel of losses.
From what I gathered from the OP, it didn't seem like he was already fully invested in market tracking funds at a rate that would net millions by retirement age.



Quite a leap based on the OP but ok.
EclipseAg
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techno-ag said:

Not quite apples to apples but a couple started a cigar/whiskey bar in downtown Brenham. I know they lined up financing first with a solid business plan then joined the Chamber of Commerce which helped with publicity in their grand opening.

But yeah one of them is always there on site. I imagine it's the same way with most small businesses.
I think those same folks also own Main Street Uncorked, which is a very nice wine bar in Brenham. One of my favorite stops when we visit.

It's counter intuitive, but these places seem to do much better in smaller towns. Rent is much cheaper, and there is a "neighborhood" feeling among patrons that is tough to capture in a suburb.

Plus, small towns like Brenham attract older tourists with money in a way that suburbs don't. They aren't traveling with kids, so popping into a bar is easy.

Maybe OP would be better off focusing on either coffee in the mornings or wine/beer at night? If the latter, you could still offer specialty coffees at night for folks who don't want alcohol. There's a cool place in Waco (again, smaller market) called Dichotomy that does that. The shop is split into two, with coffee at one end and alcohol at the other.
n_touch
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Great idea, but there is a lot going into that. Mornings are different than evenings, liquor licenses, who will run it. Working with restaurants and being the coffee business as well, it is a really tough market. Margins are crazy slim and you have to determine the type of shop you want to be.

Are you high scale since you have the wine at night and you serve a higher quality coffee which limits your pool since most people just want a sugary coffee drink to start their day with names they can not pronounce. Or you go for sugary coffee crowd for volume and there is no reason for the wine at the end of the day.

Biggest suggestion would be to hope on FB and join some of the coffee owner groups and read and ask there. You will get first hand info on what it takes.
aggiesundevil4
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AG
Not sure where you live, but there is a Buzz & Bites that is exactly the business you are talking about in Katy. Opened 2-3 months ago. You could do recon and see what kind of business it really does to gauge potential. My wife did a weekend brunch there with girlfriends and loved it. Fancy coffee then a crapload of champagne and a little bit of food summarized her day. That kind of place isn't really for the dads though.
Al Bula
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KyleFM said:

In my opinion, starting a new venture is like a lottery; you never know whether people will like it or not.
Hello, Mr. AI Bot. How have you avoided getting banned for almost two years?
I bleed maroon
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Al Bula said:

KyleFM said:

In my opinion, starting a new venture is like a lottery; you never know whether people will like it or not.
Hello, Mr. AI Bot. How have you avoided getting banned for almost two years?
Wow! That's a good catch. One post a year, usually promoting an AI service. I don't even know what indicator to use for staff to ban it. Maybe promoting another service?
rilloaggie
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I bleed maroon said:

Al Bula said:

KyleFM said:

In my opinion, starting a new venture is like a lottery; you never know whether people will like it or not.
Hello, Mr. AI Bot. How have you avoided getting banned for almost two years?
Wow! That's a good catch. One post a year, usually promoting an AI service. I don't even know what indicator to use for staff to ban it. Maybe promoting another service?


I've flagged like 20 of these accounts. First few got nuked but staff doesn't seem to mind the rest.

https://texags.com/forums/69/topics/3343599/last#last
northeastag
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Just my 2 cents here, OP. I'd have either a plan to scale quickly, or an exit plan available if you decide to do this. Trendy concepts don't generally last long, and a single site will probably produce more headache than profit.

Had a friend who quit Wall Street to jump on the micro-brew train when it started rolling years ago. It only took a couple years for him to come back. He was making it, and it was a decent living, but he was working even harder than in his old job and for less money. And he said that the whole industry got so crowded so quickly that it was hard to stand out.

Try to find one of those "fro yo" shops now, eh?
Bayou City
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This plus +100. It's like running a food truck on steroids from every friend I know that's done it.
"I've lived through some terrible things in my life, some of which have actually happened."

Mark Twain
double aught
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Quote:

This place does GF so they get some additional business that way
What's GF?
jja79
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