Coffee Shop Business Risks: When Passion Won’t Cut It

by Djulia Montana ‘tahna’ de Veyra

“I opened a charming neighborhood coffee shop. Then it destroyed my life,” Michael Idov writes.

What was supposed to be a realization of Idov’s and his wife’s fantasies turned out to be a bitter brew. After just six months of running their charming little café, the couple closed down. They had to. Not only was the business going berserk in terms of finances, it was also threatening to ruin their marriage.  

“Within weeks, Lily and I—previously ensconced in an enviably stress-free marriage—were at each other’s throats… After four more months, we grew suspicious of each other’s motives, obsessively kept track of each other’s contributions to the cause (”You worked three days last week!”), and generally waltzed on the edge of divorce. The marriage appears to have been saved by a well-timed bankruptcy.”

Opening a small café in New York’s Lower East Side seems to be a rough business option, even at this age and day when the likes of Starbucks have managed to make unbelievable mark-ups on a cup of joe acceptable. I mean, who would have thought people would willingly spend $4 on a single cup of coffee? But even the enormous profit you make on each cup won’t cut it, not when you have to pay for rent and cover for the payroll (or leave your nice-paying job and take charge of the operations yourself).

Come to think of it, you can only actually make up for the expenses if you get heavy and fast-moving foot traffic. And because your coffee shop is just way too cozy, you can’t expect your customers to leave anytime soon, especially not when they are too ensconced in whatever it is they are doing with their laptops. Now even your greatest asset has become a liability.

Of course, small coffee shops are not always doomed to fail. Maybe you totally own the place and don’t have to pay for rent. Or you may be a full-time entrepreneur. Or you live in a country where labor comes in really cheap.

The point of the story is that you can’t just dive into a business because you have a liking for whatever it is you are into. Even having strong passion for it might not do you any good. You have to have everything figured out because whether you like it or not, businesses are not all about love. You will have to deal with finances and a host of technicalities.

“The most dangerous species of owner … is the one who gets into the business for love,” Anthony Bourdain puts it.

We always hear people say that you have to love the type of business you are getting into if you wish to succeed. Actually, they’re right. But you can never hope to operate on love alone. You should have the figures sorted out, lest you’d be in for a bankruptcy.

Business ventures are about taking risks. Still, you should only go for calculated risks.

Photo credits:  http://www.espressobusiness.com/business_plan.htm

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