Thinking about the Coffee Shop Business

Friday, April 21, 2006

I bet you have probably thought a lot about how you are going to setup your coffee shop. I mean things such as what flavors of coffee you will provide, whether you will provide food or not, what type of furniture you will have and what will occupy the wall space. I would presume you have also thought a little about the entertainment on the weekend.

However, a lot of prospective coffee shop owners do not think about the capital structure of their business. How much equity is needed to make the business profitable? This is a very good question you need to ask yourself when considering the coffee business. While a banker may lend you money for the business based on your credit history, it may be dangerous to take out too large of a liability for a company because you will probably be personally responsible for paying off the loan.