Coffee Van Question....

Gypsy

Don't know if this is the right place to post, but I'm sure the Admin will move if it isn't...

Now, I'm looking at starting a mobile coffee busines, and my main question is this. Should I go independant or look at a franchise like Cafe2u? Pro's and Con's of each would be as follows :-

Franchise (Pro's) :- Initial support, marketing, training, full fitout, assitance with gettting your run established
Franchise (Con's) :- locked into contract, ongoing fees, must abide by any marketing initiatives, must charge and sell what they say, must use their suppliers (usually)

Ind (Pro's) :- no ongoing fees, lower startup costs, not limited to territory, not limited to expansion, complete say in business direction, etc
Ind (Con's) :- no initial support, no training, trial and error marketing, untested fitout.

I'm sure there are so many more people have thought of and experienced. I guess I'm just looking for some guidance and what might be the best direction to go. Any advice from those that have been thru similar situations would be invaluable. Any stories of what others went thru, what effected their decisions, any regrets, anything they would do differently, etc, etc, would be very much appreciated....

Cheers....

blanyon

Gypsy, In brief you have hit the nail on the head, I started up an independent coffee van 12 months ago and had a lot of fun doing it. I would throw a third option into the mix, you can go to one of several companies who will build you a van and you can call do what you like with it. This will save you lots of money but you will still have to start the business yourself. Now I am assuming that you have done your research and asked and answered these and many more questions. 1. Am I suited to running a business 2. Do I have a market 3. Can I afford to live for months before the money starts to come in 4. Am I suited to running a coffee van. Umm heaps more questions but if you get my drift deciding what setup you want is secondary to a good business plan. Hope I have helped you make a decision. As for regrets, none, had any issues, plenty, but coffee is a great business to be in and I wouldn't have it any other way!!! What area are you in?

Gypsy

Moto, Thanks for the quick reply. Really appreciate the support from those that have bean (pun intended) there before. To answer your questions, yes, I have done, and am still doing, my research. I have looked into the option you suggested. My biggest concern is how long can I survive before I start to generate some sort of income? How long has it taken some of those people out there to put some food on the table? If I go with the Cafe2u or Espresso To Go option, they give you some reassurance with their startup guarantees ($500 per day with Cafe2u, or 100 cups or day with ETG, before handing the business over to you). But obviously you pay for this support. Instead of doing it this way, what if I put aside the money and live off that while I generate a client base? How long will it be before this 'cushion' is eroded? I know there isn't a magical formula, but all I can do is judge by other people's experiences. I know clients are not going to just turn up, and I have to do my marketing etc, but how can Cafe2u give me some kind of assurance, that I can't do for myself? Anyway, I'm located in Western Sydney, just west of Parramatta. I think there is a few good areas around here that could be prime locations for this. I look forward to any further feedback.... Cheers.....

blanyon

Without going into too much detail the business is cash flow positive very early as your expenses track fairly closely your income due to the lack of ongoing rental, staff wages etc.  As for putting "food on the table" it depends on how big the table is and how much food you eat (to continue in the same vien) or how much do you need to make. My opinion (with a sample size of 1) is that the extra money you spend being part of a franchise (notwithstanding they are very successful and have a lot of successful franchisees so there is success in their model) will more than offset the slower startup of the independent. I am assuming you have searched this forum for other threads regarding coffee vans, there are some good ones I read when I was starting up. If you want more detail probably best to PM me.

askthecoffeeguy

Mate by the time you pay a super premium for you coffee cups, coffee etc, and something back to the franchise I'm thinking that you would be better off going it alone! Pat

blanyon

Going it alone is not for everyone though, there is value in being able to pick up the phone and get support. It depends on the resources of the individual, if you have just gotten a big check and have no background in the industry then I would seriously consider the franchise option. (mind you I would wonder about the sense of getting into the business in the first place if that was the case). Anyway I am off to go and make coffee for a bushfire appeal in Wagga, hoping to raise heaps of money (as well as the standard of coffee)

Coffee_on_the_Kerb

Hi Gypsy, I agree with Moto Coffee I started a coffee van 8 months ago and I went independant as well. I used a company to build my van so if you would like more feed back about this process PM me and I will be happy to helpout. Cheers Charlie

Gypsy

Thanks for the replies guys. I really appreciate the support from the coffee community as I try and work my way thru this decision. @COTK (Charlie) Thanks for the email. I have sent you a reply back. @AskTheCoffeeGuy The Franchise fees don't really bother me a whole lot. I could just put it down to the cost of doing business etc. Initially, the fees paid would be offest by the peace of mind you get for the support. However, my way of thinking is that, as time goes by, and I have less and less need for that support, I may start to resent the fees etc. The thing that would bother me most is the inability to make such business decisions as expanding territories, putting another van on, doing business in other areas, exit strategies, sale of name, etc. My way of thinking at this stage is that the money I save in initial start up, and the saving of ongoing fees, should offset the sleepless nights that I may come across. @moto coffee I agree, there is peace of mind in franchising, but there is cost saving in going it alone. I'm starting to lean towards independant for a couple reasons, please feel free to comment and share your opinions. First, there's the cost saving, both the immediate savings at the start, and then the future unrealised savings of franchise fees etc. The other reason that I'm leaning towards independant now is that I feel this community, you guys/gals out there, can provide me with some kind of support, as you are doing now, as I move forward. It's not the same support, I assume, but then again, maybe it is more valuable as it is honest and without prejudice. Anyway, any stories of successes and/or disasters from van operators? Things you wish you had done differently? Things you have done very well and would highly recommend someone in my position doing. Possible traps to avoid, etc.... Many thanks again for the replies. Cheers All.....

Greg41

I agree with the others. Go solo. then you have FREEDOM . In my opinion with a franchise you are still not your own boss. My setup is different where as i operate from a pantec trailer Which reduced the costs even further. I now operate from a permanent position in a park next to a highway. sure starting off looking for sites and events to go to can be daunting as some areas are saturated so marketing research is very important. Thats another thing. what are your intentions re: where you will go. Businesses, shows , sporting events. with shows and events commitees have to be applied to then They vote on whether they'll let you in.(some committees can be funny). With a franchise you would want to hope the coffee is consistenly fresh also. I went through 3 different brands before i decided on the coffee i liked and a supplier i could rely on. but at least i had the FREEDOM to choose. anyway hope that helps a little. Good luck with your venture. Its still an inexpensive way to start a business as far as a lot of other businesses are concerned.

blanyon

Sounds like you have already made your decision. Good luck, hope you end up enjoying yourself.

JC

Gypsy, I am where you were a few months ago (researching - questioning - praying for answers from the coffee gods). Can you let me know how things have gone for you? You wouldn't by any chance have a list of licences/permits etc that are required from either councils, dept fair trading, health inspectors etc. I too looked into franchises and going it alone. My major concern is the first few months (developing the client  base). I found an interesting web site that custom builds coffee vans at a much cheaper price that most competitors. Have a look and let me know what you think. (quality - unknown). www.customcoffeevans.com My goal is to set up my own van, working it weekends to begin with and when business gets better, go part time (ie 4 days a week) in the day job. Income to be supplimented by the coffee van. As business grows, reduce days in the 9-5 grind until fully out of the office job, controlling my own future. YEAHHHH. Look forward to hearing from you.

blanyon

Sounds like you have a lot of work to do. Here's a bit of info to help you along. 1. Councils are the health inspectors and they basically give you permission to operate, can't remember exactly what they call their permit but essentially you have to tick the boxes on their sheet. 2. Fair trading, they just register your business name so no biggie there. 3. Franchises my opinion on them is detail elsewhere in this forum but I am not a fan (opinion only). 4. Custom coffee vans seem like a good company, have spoken to them and they seem good. If I had my time over when I was building my van I probably would have used them (lineball decision). As for your business plan of starting slowly weekend work is a separate part of the coffee van world (sports, events etc) depending on your town/suburb it may not translate into weekday work. Also the idea of finding customers who want coffee one day a week at work is interesting, coffee drinkers are creatures of habit and need their fix everyday so I would wonder if that would work. You also have a large amount of capital invested in your van so I would suggest that you put it to work asap. All that said you know your situation and customer base better than I so good luck with your research.

floatncoffee

How is it all going Gypsy?? ive got to know

josiecrimmins

hey floatncoffee, Wow thanks for the advise about the money. I am a teacher and have always dreamed of running my own little coffee joint. wow an old horse van sounds great. how is it going? I was thinking of going around to schools to teachers. I have a few contacts. God I wish I could be handy to build a van. I am just starting to get my head around the idea of actually taking the risk to do it. I was thinking near railway station on one side- anyway early days- so you know anyone handy to build a van or look at that other site

blanyon

Sorry forget the teachers, they all want coffee at the same time so you can only hit up one or two schools a day, you need to extend your reach of businesses.

floatncoffee

i had a quick look at the custom coffee van site.... they dont mention any of the machinery or appliances they use??? strange in short, if your generator or deepcycle batt pack/inverter breaks down,,, income stops!! if your machine runs out of steam or pump over heats,,,income stops!!! in my mind they are two of the most important factors im guessing there starting price of $49,000 is with cheap equipment.. price with better equipment goes up from there?? i mean if they use say Honda or Onan/kubota generators then you would plaster that all over the site.. if you call them ask what machines are being used

Unknown

Is there any problem pulling up on roadside and selling coffees? Also what about at car parks at places like the beach and sending a runner along to take orders?  

blanyon

The pulling up on roadside thing differs from one local govt area to the next so depends is the answer, as for a runner I have always struggled to justify another wage coming out of the van but it depends on your situation, I have seen it work but not for me.