23 and own shave ice shack, coffee shop, yet stuck

[fhs8]

What about the sales to rent ratio? What is the breakdown in expenses? How much more revenue would you need in order to always have an employee there and breakeven? Also did you check your monthly sales? Is there a trend? I'm sure you have these figures on hand since you likely had to charge sales tax and for income tax purposes.

We can and do ice anything upon request, as I do have a very small, non-commercial grade ice maker. Iced drinks aren't too popular, but when we run out of ice we have to close up while we run down the street to a convenience store and grab a bag of ice.

As for iced coffee/tea, are there any iced items on the menuboard? I'm sure sales of iced coffee would increase by a lot if it was on the menu. You already sell enough that you sometimes run out of ice. If you sell an item so much that it runs out then the solution is to increase capacity and not conceal the item by not putting it on the menuboard so that it sells less.

 

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[Ricoboxing]

The shop looks great. Nothing like what I had pictured in my head though. But honestly I don't think it matters how nice your shop looks if its located somewhere where people can't afford or are too cheap to go in and spend. Sometimes its hard to accept failure, but it's just a learning experience and the knowledge you gain from this will only make you stronger.

 

[Ryan Wolf]

What about the sales to rent ratio? What is the breakdown in expenses? How much more revenue would you need in order to always have an employee there and breakeven? Also did you check your monthly sales? Is there a trend? I'm sure you have these figures on hand since you likely had to charge sales tax and for income tax purposes.



As for iced coffee/tea, are there any iced items on the menuboard? I'm sure sales of iced coffee would increase by a lot if it was on the menu. You already sell enough that you sometimes run out of ice. If you sell an item so much that it runs out then the solution is to increase capacity and not conceal the item by not putting it on the menuboard so that it sells less.

I prefer to keep some of those numbers private, but it is a little over breaking even right now, hence why I'm hiring. To get to the point where I never need to be in there AND get some passive, it'd be about $50 more per day. Definitely not insurmountable, but $50 is a good chunk more to get and sustain each day. The previous two monthly sales are higher, but that is likely due to winter settling in.

There is a big sign that says we will ice any drink upon request. It's very noticeable. Even with this sign, iced drinks can be few and far between. Somedays each person who comes through gets iced, other days, none. I was told that sales trends in coffee shops are hard to pin down. I didn't really believe that, but it's actually quite difficult to predict what each day will bring.

 

[Excalibur]

I may start doing something like this in the new shave ice shack that I am building for next year.

Just read the entire thread. Sounds like you'd be happier doing shave ice instead of coffee?

I ran a shave ice business from 2003 to 2014. Wasn't a huge moneymaker, but I did okay. I also pondered getting into coffee, since so many customers said I should. In the end I decided it would be more hassle than I was willing to put up with.

Second year in business I added a drive thru window. That boosted sales quite a bit. Added Square to accept cards. That was a hit.

Are you 100% stationary with the shave ice? I was for the first few years. Once I went mobile is when the $$ really kicked in. Take a look at what Snowie, Kona Ice, Tikiz and others are doing on the mobile side of shave ice. There's a few people making 5 to 6 figures working the summer doing this.

What I love about this business is the margins and simplicity.

I may go back into the business at a later time. I miss the community.

 

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[MidwestLandlord]

She's lurking around $10/hour. She is worth so much more than that, but she doesn't care that I can't pay more than that because she loves what she does and wants the shop to succeed. I could sell and do a carry back type deal. I actually really like the idea that you just laid out, but... This is where it's a shitty idea to hire family. What would normally be so easy to execute, isn't easy in this situation.

If she's only pulling $20k-$25k yearly with her wages, you'll probably have a hard time selling the business anyway. That's not a full-time job wage. You wouldn't attract that "slowlaner that wants to be his own boss" type of purchaser. Plus they would have debt service on top of that, so the numbers don't work. $40k-$50k seems to be the magic number for attracting that kind of buyer in my experience.

If you do sell, don't sell to your mom. If you think it's bad that she works for you, wait until she owes you money!

If you'd have a hard time adding even $50 gross daily, which is about 15 customers in my estimation, that is some serious scaling issues. You might be able to sneak in some price increases without offending your regulars, and maybe you could get better at add-ons to increase your ticket average, but ultimately you're just picking up pennies.

The only other thing I can think of is to start making money with the brand, and not the actual location. Put your coffee in c-stores, corporate office breakrooms and breakfast/lunch carts, banks, corporate office lobbies, etc. My wife is friends with a gal that owns a local coffee shop where we live, and she does exactly that. She's got that brand name seemingly everywhere. Once she had good momentum she moved her main shop to an A+ location that has really good traffic. Your low overhead might end up being an asset to you if you can go mobile.

 

[amp0193]

The only other thing I can think of is to start making money with the brand, and not the actual location. Put your coffee in c-stores, corporate office breakrooms and breakfast/lunch carts, banks, corporate office lobbies, etc. My wife is friends with a gal that owns a local coffee shop where we live, and she does exactly that. She's got that brand name seemingly everywhere. Once she had good momentum she moved her main shop to an A+ location that has really good traffic. Your low overhead might end up being an asset to you if you can go mobile.

I like this idea.

The local ice cream shop in my town, has their ice cream packaged and being sold in locations around town. The city pool, the natatorium, other places. They are a go-to destination in the middle of downtown, now.

 

[Ryan Wolf]

Just read the entire thread. Sounds like you'd be happier doing shave ice instead of coffee?

I want more than just shave ice, so this is why I jumped into coffee.

Second year in business I added a drive thru window. That boosted sales quite a bit. Added Square to accept cards. That was a hit.

Are you 100% stationary with the shave ice? I was for the first few years. Once I went mobile is when the $$ really kicked in. Take a look at what Snowie, Kona Ice, Tikiz and others are doing on the mobile side of shave ice. There's a few people making 5 to 6 figures working the summer doing this.

My shave ice is mobile, but I have a set spot where I set up each day. I only move it for huge events like concerts and when Walmart rents it out for their annual company party. Adding another trailer this year though so that I can do more events. Already use Square to take cards. With the second trailer, grossing 6 figures will be cake.

If she's only pulling $20k-$25k yearly with her wages, you'll probably have a hard time selling the business anyway. That's not a full-time job wage. You wouldn't attract that "slowlaner that wants to be his own boss" type of purchaser. Plus they would have debt service on top of that, so the numbers don't work. $40k-$50k seems to be the magic number for attracting that kind of buyer in my experience.

I know. I'm prepared for just being able to sell the equipment, and I'd be fine with that.

If you'd have a hard time adding even $50 gross daily, which is about 15 customers in my estimation, that is some serious scaling issues. You might be able to sneak in some price increases without offending your regulars, and maybe you could get better at add-ons to increase your ticket average, but ultimately you're just picking up pennies.

The only other thing I can think of is to start making money with the brand, and not the actual location. Put your coffee in c-stores, corporate office breakrooms and breakfast/lunch carts, banks, corporate office lobbies, etc. My wife is friends with a gal that owns a local coffee shop where we live, and she does exactly that. She's got that brand name seemingly everywhere. Once she had good momentum she moved her main shop to an A+ location that has really good traffic. Your low overhead might end up being an asset to you if you can go mobile.

Already have increased prices once. A few were offended, but most understood. A second price increase so near the first wouldn't go over well. I'm walking around to some other businesses to see if they're interested in having us a deliver an urn of coffee for their shop each day. Only need to sell three urns of coffee to exceed $50/day. Some of the nearby businesses include a higher end barber shop, bike shop and a TV station headquarters. So selling $50 more in the shop each day is tough, but fairly easy when I think of delivery. Hmm... Delivery...

 

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