HOW TO OPEN A CAFE WITH NO MONEY
This title looks a bit dramatic but it is not! We have been helping several of our cafe parterns to make this dream coming through so we know it can work.
You want to open a cafe that reflects the ideal place for your clients, where you can put your energy and life to transform any established or a new place into a good place with a lot of hard work and determination. Determination, dedication and creativity are a must to succeed.
What don’t you have? Money!
Do not panic, let’s think about it together.
It´s a problem but there is possible solutions to solve this question. Of course money is essential in any business but it´s not all, I mean, if you have a lot of money but no idea what´s the point? After all, having an idea is the heart of every business. And open a cafe is a good business idea, people drink coffee all over the world and not just that, they like to have a comfortable place with good space and great products to do their coffee drinking ritual.
But let´s talk about money, can you start a coffee business with zero capital? Well, the answer is YES.
Good Debt is the key!
For many people, making a new debt is a bad thing, however, it is important to understand the difference between a good debt and a bad debt. In this sense, all debt is the same: We take now and we give back in the future. But because debts can have positive or negative consequences, they are typically thought of as a good debt or a bad debt. Good debt is very normal in the corporate world, most of business use good debt to expand or to start up. In the coffee industry it is exactely the same.
If you haven’t yet heard about it we strong recommend you reading “Rich Dad Poor Dad Robert Kiyosaki”, that will help you undertanding the implications and benefits of doing it.
Good Debit aslo brings you great tax benefits, these tax benefits can be in many cases the difference of a business succeeding and failing. In your business plan development, we strong suggest you seeing a good accountant to help you drafting the financial projection of the new businesses.
How can we open a cafe with no money?
We gathered here some of the effecitve strategies that our cafe partners, including us, have successfully used in the past, this strategies enconpasses using good debt, but are only not limited to it:
- Make a COMPELLING BUSINESS PLAN possible, very detailed and organized (not just to open but make it for the first six months, first one year and a three year plan);
- JOIN ADVENTURE with another business that already exists and wants a special place for coffee, it´s a good way to begin and make your name in the market and not having to fully invest on a location, as the business you are looking at doing the join venture is already stablished. Some examples of businesses that you can look at doing this type of join adventure are: bakeries that are not serving coffee, book stores, hair dressing, waiting rooms, stores, flowershops, to name a few;
- FINANCE is definetly the biggest barrier for most of people. In Australia you can have access to several financial institutions that are bagging to lend you money, at higher rates but still work for the purpose. All you need to do is to find a business broker and sign up a shuttle mortgage to cover your machinery such as fridges, stoves, etc. Alternatively, if you have low credit score, you can use SilverChef or Flexi-finance. These companies can finance everything including the fitout of your cafe.
- CREDIT CARD is a great tool to use for cashflow at the beginning of the business, you can use to pay suppliers and other service providers until your business start to generate cashflow;
- PARTNERSHIP WITH A GREAT COFFEE SUPPLIER is one of the best ways to save money on machinery and acquiring expertise at the same time. Coffee is the heart of any coffee shop. If you have no funds to invest into a coffee machinery, you can partner with a coffee roasting business that is willing to help you to succeed and is looking for a market share into the location you are willing to open your cafe. Make sure you provide value to the coffee supplier in order to receive this type of benefit. Depending on the coffee roaster that you are partnering with will request to take a look on your business plan to ensure you have a sustainable plan and you are serious about your business.
- Share your idea with a CO-FOUNDER with money, get together to share a business plan for a cafe, combining the skills of both; with those who have the finances to invest in your cafe, it´s a cooperative strategy, they invest and in return receive a percentage of the profit;
In Sum, you can use a combination of these key strategies we have pinpointed above to ensure you business starts. Starting a cafe is not a easy thing and many times requires a lot more hours than we think. Putting a good thought on the business plan can prevent you of miss estimate your required investment. Make sure you consider costs related to legal fees, rental bond, accountant to open a entity, ASIC (trading name), domain for your website and few other things that may come along the way. We normaly leave a gap of 10% of the estimate budget to unforseen bills.
We really hope it helps.