Why not start a coffee shop at home. Nobody’s stopping you from doing that

$300k sounds like an obsurd amount of money to pour into a coffee shop.

Yes, unless you are a coffee brand titan in your area, this is madness.

I feel like a coffee shop cant make that much money. Most people go to Dunkin’ or Starbucks anyways

There’s a lot of missing context here. Have you done a traffic study? How is the competition in the market? Is this business even needed/wanted? Is there enough of a customer population to sustain the business? Have you defined who your customer is? How will you reach them? Do you know how many products you have to turn over every day to be profitable? Is this a feasible number long-term? So on and so forth.

Judging by your vague description here, it sounds like you’re flying by the seat of your pants, so I’m going to take a gander that the answer is no, it’s likely not a good idea.

Honestly, your best bet is to have a solid plan with artists renderings, traffic data, marketing plan, and demographic information and secure investors. It’s always better to use someone else’s money. Especially when the business starts to scale and they are willing to invest more.

The only drive thru coffee shop? On a busy road? There might be a reason for that.

I’ve seen Starbucks reconfigure entire city intersections in order to place a well thought out drive thru.

If you go the loan route be clear about the repayments and factor that into your daily revenue needs. Above all else make sure you will not need that loan money to keep yourself afloat, so you will need your own money while the business makes nothing for the first 2 years or more.

The economy can take a turn and suddenly $8 coffees aren’t in the budget anymore.

If it’s your dream, go for it. Do it smart though. Go to the chamber of commerce and ask for time to pitch your investment to local business owners. People that can attend a breakfast at 10 am and not be at their own business are the people you want.

At the end of your presentation ask for constructive criticism, and take note of every question they ask. It will take time.

Other people are giving good feedback.

I will say I own a coffee shop and you can dm me with more specific questions or to talk numbers.

My advice will be if you haven’t worked in the industry as barista and have truly mastered that craft, it’s incredibly hard to learn and even harder to train correctly. If you’re competing with other specialty shops that’s know what they’re doing, your quality won’t even come close and you will be relying solely on the “vibe” you create to draw people in.

Sounds like the drive through might be a bonus too but not if quality and speed isn’t there.

Banks are very adverse to loaning that kind of money for food service establishments.

100% yes. Start small instead and use profits to grow your business instead of overleveraging yourself with debt. 90% of food services fail within 3 years because they run out of money.

Yes, horrible idea. I can’t imagine the first step for someone opening a coffee shop to be a $300K loan.

Have you don’t a business plan and feasibility study? That will give you the best answer.

$300k is a crazy huge amount of money for setting up a coffee shop.

I would suggest finding a way to keep it under $100k, and then if the business is successful then you can dump more into it at that point.

The problem is that coffee shops don’t usually make a ton of money, and you’re still going to have normal overhead to deal with (lease, payroll, insurance, etc) while you’re paying off this massive loan. With that kind of debt it could take over a decade before you’re finally paid off and can take some profit for yourself, and by then it might already be time to renovate again.

Try to break down exactly how much profit you’ll make from each cup of coffee, and how many you hope to sell each day, then use that to determine how long it would take to repay the debt. As an overly-simplified example example:

• $5 per cup of coffee, -$1 cost of ingredients + materials (cups, etc), -$1 business overhead
• $3 profit per cup of coffee
• 100 cups of coffee per day = $300 profit per day
• Assume you need to pay yourself $200/day to survive, leaving $100/day remaining.
• Loan is $300k, assume total cost of loan is $450k after interest.
• $450k / $100 = 4,500 days (12.3 years) until loan is paid off

I’m not trying to scare you away from starting this cafe, I just want you to be realistic about how much money you borrow in the beginning and how long it’s going to take to pay it back.

I would highly recommend you sit down and list out what all these costs actually are, that are amounting to $300k, and start trimming out things you don’t absolutely need, or finding cheaper options. As an example, do you really need $5,000 tables, or could you get by with some $250 tables for a few years? Do you need original oil paintings hanging on the walls right away, or could you just use some cheaper prints for a while? And so on.

What are your projected revenue expectations per day? Are there any local examples of coffee shops that seem to be doing well? I sat outside of a coffee shop a few years ago and watched how many people ordered within 1 hour in the morning and 1 hour in the afternoon, did that several times throughout the next few months and developed revenue projections. What I found was that although the margins on coffee and pastries is very strong (as long as your making in house), the profitability of a coffee shop isn’t a strong investment. There is a reason why they are referred to as “lifestyle” businesses. The only people that own and operate coffee shops/restaurants/etc, are people that can not live without one. Scaling is also challenging since it’s brick and mortar…just means it very expensive to grow.

Just remember that a looming recession of some sort is coming. Your costs will not go down (inflation is here to stay), but consumer spending will have either major or minor hiccups and that $15 breakfast burrito and 16oz Latte I recently purchased doesn’t sound as tempting each week.

Double check yourself that you didn’t fall into the trap of looking at smaller locations and slowly changing your “ceiling” as the broker guides you to larger locations.

The place and the consumer traffic sounds awesome, until starbucks sees that a lot of credit cards are being spent on food services in that zip code and they build a new location in the same area (they are aiming to build more).

Rewards don’t come with risk, but this one smells like a money trap where you aren’t taking a salary for a few years.

Most new businesses fail. I wouldn’t do it unless you’re willing to lose it all.