First Quarter $ Catch-Up

Good Morning! Happy Wednesday! I’m listening to Sambassadeur’s Self Titled album, soft indie pop. I’m drinking an iced vanilla oat milk latte. This is my favorite drink, and we’re still coasting on some cool post-hurricane weather here. Feels great! I’ve got the door open, and a ton to talk about. Since this is a blog i’d like to look back on practically, and others may look on for reference, I want to try and honestly recap our first few months open as a cafe here, specifically around finances.

$ Expectations

To explain my expectations, I need to start with my estimated needs. So I read online and in a few books that to be sucessful your rent should be about 10% of your gross sales (everything before taxes and expenses). For simplicity I’m gonna say our rent is 1,500 a month. Meaning our gross sales need to be 15,000 a month. I gave us a year to get there and assumed we’d start at 30% of that, working our way incrementally up to 100%.

Meaning I’d hope our day 1 gross sales were like 4,500 a month (30%), and that by the end of Q1 we’d be hitting 47.5% or about $7,125 a month. I thought that $7,125 would be basically enough and if we could hit that we’d be coasting. I assumed $7,125 would be enough for everything I’d need as a one man cafe.

$ Reality

I think at my size, $15,000 a month was a good long term guess, but $7,125 was a little low for one guy. Because I bought so much in cheap bulk early on and now I’m buying things on the fly, it’s evolving, and evolving upwards! There’s so much upkeep too, I’m discovering new costs and things to account for that push that number ever higher. So really my one guy number is about 1k higher at $8,125. And pretty quickly it became two guys whether I wanted to hire or not.

I couldn’t see us succeeding at even a basic level as a one person cafe, because we need those weekend rushes to succeed and we need two people to handle them without people leaving or getting sick of waiting. That’s not even mentioning the cultural value of that investment, since by the end of the week I was dead tired and needed someone to support me and uplift guests. I really wanted to wait to hire until I could pay someone a full 40 hour work week, but the reality is that’s not what the cafe needed, and it’s not what my employee needed.

So month by month

Our Month 1 gross sales were quite good because we were new and people were checking us out or tipping really high to help us succeed. Then and now I’m counting tips as part of our income, and they account for maybe 15-20% of our total day to day. Counting tips we were at that 47.5% number ($7,125) immediately. Which was awesome. Because I had so much bulk storage I didn’t need to buy much, it was right where we needed to be. I was working late getting systems in place, eating out because it was fast and I had some money saved, and going straight to bed because I needed as much sleep as possible. My partner was helping on weekends, they were surprisingly super busy because that’s when new people had time to visit. Our 1 month grand opening party probably did 10% of the whole months sales in one day. Waiting for a month and doing a barista centered event was smart because it was filled out with a combination of early regulars and coffee fans from the area. People were talking about it for weeks which helped us coast out some more of that opening hype.

By Month 2 things were slowing down, we needed regulars and being in a pocket neighborhood on the outskirts of Jax, that was going to take time. Our first time visitors were still showing up here and there on weekends, and our super supportive early regulars were growing during weekdays, but by and large it was me the owner on solo bar sitting around. Number wise it was about the same. At first I wanted to look “ready” so I cleaned prepped and stood up on my laptop refinig admin documents. What I should have been doing was sitting down, and thinking of other ways to generate revenue, which I began seriously taking action on the following month.

Month 3 was a bit busier because we had more regulars filling in the gaps, and weekends were more than one person could handle! At first i had two people because I wanted weekend guests to have a speedy smooth experience, but by now I would have people leaving if I didn’t have 2 baristas on bar, with someone constantly holding front register to get new orders in immediately and greet people. Fall drinks were a big deal, we were selling merch, we had a couple of events that generated a tiny bit of revenue but built big community! We broke 60% of that gross goal, and it was again, just enough. Now we were regularly buying everything and we had one part time employee who would take up to 15 hours a week. The most I could afford at $15/hr.

Surprise good stuff

In the black! Mostly! I had my goals but I’d always heard not to expect a profit for the first year, so I thought things might be a lot worse. I had a second job to cover my personal bills, but I was able to quit that job after only a few weeks, which was great because I was working like 90 hours a week haha. I wouldn’t say we’re making a ton of profit, but we’re making enough for me to eat and exist. So I’d consider that success.

People have taken the design and concept really positively, I thought it might be more of an uphill battle with an older community who were used to super dark traditional cafe visuals. For the most part it’s a range of ages who all appreciate the space. I’m selling a lot of nice black coffees which is cool because we carry great coffee! I couldn’t have asked for a better community so far.

I launched an online store, in part, in case of an emergency. We had a hurricane, we closed, then we basically did a slow day in sales through our site, which rocked. That idea was something I invested some time and money into, and our community came through.

Hiring that weekend employee helped keep energy high, by Sunday I was half awake, and having someone on front counter concierge was helping us achieve our mission of giving people energy. In fact the whole weekend usually feels like a party in here, which is something I’ve never really experienced at other cafes and something I love about us.

Surprise bad stuff

Mo money more expenses, basically as I used more inventory I had to buy more and at a new pace. The increase in sales didn’t always translate directly to revenue, sometimes they meant strictly forecasting or buying in a new way that meant changing my whole workflow. Long term this stuff will pay off, but short term it’s a bunch more big investments.

Investing in things like merch or events was another scary time and money cost that i had to hope would pay off. Thankfully they generally did pay off! I had to make that mental adjustment to spend on such a crazy tight budget. I basically launched our entire merch line off spending all i had on the cost of a couple shirts. Stocking a few in the cafe, and having more available made to order online.

The burnout was real. I eventually did get sick and have to take a day off, thankfully I had an employee trained by then who could handle it. It sucked spending the money so soon since it basically equated to a full work day, but I put myself in that situation by not taking breaks or eating enough, sleeping enough, etc. So I took the break, and I’m feeling much better.

Broad Goals for the future

Of course the big goal is to keep growing towards that theoretical 100% 15k gross revenue! How do we achieve that? Beyond just giving it time, I’m continuing to listen and spend where it makes sense. The tough part about this time is having such a thin budget, like I can’t exactly invest in a big food program or a pickup service, anything that wasn’t in our original business plan; Both of those things I know could greatly increase revenue. Those just take more time and money to implement well than I have right this second.

So I’m operating in my space right now and just trying to master what we have and what we planned to do, bust out more iced oat milk vanilla lattes. I want to keep doing exciting things for our current audience while maintaining our basic concept for all the new people coming in daily. Bringing in new coffees / teas on bar, making seasonal stuff, holding events, etc.

I’m also trying to do what’s best for our internal culture, which means getting more hours to staff and making sure we’re confident in our current workflow so we’re not struggling on weekend bar. Rather than taking on new menu items or concepts I have some goals around adding things like new shelves or backup barware, minor construction that will make the space better for us as baristas.

Other Notes

I neglected to mention taxes, remaining construction bills, loans financing etc. There’s a ton of stuff that we’re working on paying off, that once we do will make the daily operating expenses way cheaper, and open us up for new investments. These things take time too, so when people say “it just takes time,” they’re right in a few ways. If you can get over some initial humps, it’ll be easier down the line.

I’d also like to reiterate that we’re doing well for a new cafe, a lot of places notably start with a slow year or two years, owners working two jobs or multiple owners working multiple jobs. Maybe I have low expectations but right now it feels pretty great, and I’m happy to be here as one guy.

I say one guy, but this wouldn’t be possible without my super supportive partner helping pay bills at home and buying food, doing stuff to make life at home easy so I can focus on the cafe. If you have friends or a partner while taking on a new small business, don’t be afraid to hang out and take a break. It can feel like you need to be on 100% of the time, but there are diminishing returns there, and you’re not going to put in a year of work more quickly by working a couple extra shifts.