America is sinking.
Late August is traditionally a slow down for business as everyone and their mother heads off to the beach or some other vacation spot in a last-minute desperate attempt to savor and save their summer. It's normal. As we approached the middle of August, I scaled back the orders from our vendors with the intent of returning to normal volumes after the first weekend in September.
It's nearly the end of the month and our ordering levels have not returned to pre-August numbers.
Is the falling American economy starting to impact? I'm hesitant to say 'yes' but can't help but to feel it in my bones. And with the downturn in the economy, is this the wrong time to start new ventures? Isn't this the time to pull back and shore up defenses? Or is this the time to push forward and expand?
That's the issue I've been wrestling with this week.
Since mid-summer, I've been considering a space downtown for a second coffee shop. It's in an old, stone building and up a flight of stairs from one of the busiest streets (in terms of both vehicular and pedestrian traffic) in the Mount Vernon district of Baltimore. At 900 square feet, it's got some character and I think could turn into a very cool coffee and food experience and be a place where we really can get down to experimentation and exploring coffee and cuisine.
Granted, foot traffic isn't like Washington D.C.'s Eastern Market or San Francisco's Mission or Portland's Belmont, but it's gotta be one of Baltimore's busiest neighborhoods in terms of foot traffic - and I've been observing it at all times of the day and night. There's an equal footprint of floor space underneath the shop space for storage or development and the building also has nice apartments that I can rent to use as lab space slash crash space.
A number of my friends who are familiar with the space think it's a great space for a coffee shop. The problem is that some of my closest friends who are business owners, bar owners and restauranteurs are either lukewarm about the space or totally against it. I'm worried that perhaps I've spent all this time thinking about the space that I've lost perspective on its' suitability. Plus, the falling American economy is starting to worry.
All of which is coming to a head because the land lord called me earlier this week stating that he did his research into me and wants my group to be the tenant in the space. $1600 a month for 900 square feet. Plus the cost of building out the space, equipping it, stocking inventory and training new baristas and cooks. It's a daunting task for a space that some of my close friends are telling me that it isn't worth it.
When it rains, it pours.
Then there's the other offer - another restauranteur I know has offered me to take over part of one of his restaurants on weekends and offer Filipino food. A friend of mine is a great cook and is interested to break off from what he's doing now and give it a go. In reality, the financial downside of this venture is quite low. The restaurant is already fully equipped, they just need more business. There's a growing number of Filipinos in the area that need a place to eat and it could be a good way for us to hone our restaurant chops with almost no investment.
It won't be fine dining but it might be a way for us to play and experiment with traditional Filipino classics - something I've been thinking about for quite some time now because I've convinced myself that there's a way to marry sous vide and Kare Kare.
All week long, I've been pondering the possibilities and trying to figure out what to do. I'm not worried about the coffee end of the coffee shop. We make beautiful coffee and I'm excited at the prospect of training new baristas and introducing our flavor of coffee to a new neighborhood. But is it the "right" space for the project? Have I been seduced by the idea of opening a new space? Seduced by the idea of building a lab? Seduced by the lure of a new Pad For Seduction? I can't say that I haven't been seduced and that I'm looking at the whole thing with perspective, and that scares me. No one wants to sink tens of thousands of dollars into a place just to have it make ends meet.
Much to think about this weekend. I have to make a decision by the end of the month.
Your post is probably more introspective and rhetorical, but we'll throw in our two cents. Feel free to not post the comment.
ReplyDeleteWe were having a discussion this morning that at this time, it's good to have a business. You have an asset. And worst case scenario, you can get by working most of the shifts yourself. So in either case, another business is not necessarily a bad thing. Especially if the investment is low.
The conundrum you're going through is a bit more complicated. We can tell you that having a coffeehouse with good foot traffic in an upscale neighborhood probably offers more security than being in a strip mall or a standalone building (maybe even a library). There's a built in customer base from neighboring businesses and odds are pretty good that the residents are still going to be fairly well off and still want their coffee even if things get worse. We're still growing - September numbers have been very good. But it'll never be at a level that allows us the lifestyle we used to have. We'd probably need 10 shops to achieve that - and that's more like running a corporation than enjoying ownership.
The restaurant on the other hand - in your case - probably relies more on your passion for its success. In addition to the value equation (food quality/cost/satisfaction), people are going to want to know the owner is there most of the time, at least during the first couple of years. So that might require a lifestyle change - less travel, less distractions. This may especially true in your case because of your outsized personality.
Although we can't say we know you all that well, from what we do know, it seems you're often more driven by passion than the numbers. The number of food posts vs. coffee already indicate your heart has moved past coffee and the barista world, if not your head. So as long as you're well capitalized and can give it a couple of solid years of attention why not go with the resto?
If you do, we'll make a trip down for a taste.
Good luck with whatever you decide.
Great thoughts from Rich.
ReplyDeleteJay,
I've always thought of your venture to be what Navarre has done in Portland a couple of years running... but on a daily basis. Small selection of great, small dish cuisine, paired (or suggested pairings) of excellent coffee. Menu and coffee change with the seasons based on what you can/cannot get fresh.
I think it would be a winning combo.
Is the $1600 all inclusive, or is there CAM and tax on top of it?
I would offer $1425 all inclusive, OR stay at the $1600, with 60 day fixturing period, rent beginning at end of 60 days, first two months rent abated. I would do a 60 day fixturing period regardless... of course no rent during fixturing period, but I'm sure you've been down that road before.
Whether you do the Filipino food or the new coffee/restaurant, I think the coffee aspect is now second nature to you. The new venture will be exploring how the different foods pair with various coffees. Either way, I see a great new adventure. Life is short. Make a decision, just make an educated one, THEN let your passion take hold.
Good luck to you!