Evan Carmichael advises someone wanting to open a charity-focused coffee shop to first reach profitability before committing to donations. Start by partnering with an existing retail space to sell coffee and baked goods, test the market, and build systems. Once the business survives and generates capital, expand and increase charitable giving.
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Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. In today's episode, I'm going to answer a question from one of my newsletter readers who wants to start a coffee shop that donates a dollar from every coffee sale to support a local hospital and wanted my advice on how to get started. Doesn't have the money to launch the business and needed some help. So to help with this question, I think the first thing that you need to think about for your business is you need to get to the survival point. So it's great to be able to support charity, and I'm a big believer in, you know, giving back to the community. For us, we do a lot of work with an organization called Kiva that we've helped raise over $50,000 for. But the thing is, for your business, you have to make sure that it's going to be around for long term so that you're going to be able to help a lot more people through your company. So you have to be able to get your company to, you know, survival point where you're able to pay your bills, you know, live the lifestyle that you're going after, and then make extra money that you can hopefully, you know, give back to the charity. So if you're starting a business that's all around the charity, not that it's a bad idea, but you're less likely to be able to hit the success and have a big impact that I assume you're trying to have. So if you're starting a business and half the money goes to the charity, for example, and you're not able to build your business to that survival point, then if you close down in 3 months, how much of an impact have you had on that charity? Where if you were to build a business and maybe give a little less at the start, still have it as part of your marketing message, as part of your core beliefs, and you hire people around who want to help charities as well, but make sure that you have enough at the end of the day to keep that business going and pay everybody, and then as you start to build your business, you're able to give a lot more back to charity. So people will work with you and will buy from you because of the charity aspect. They might go, you know, a little bit further because you work with charity. They might support a little bit higher price because you work with charity, but it's not overwhelming. So you still have to have a business model, you know, run a really good business, have great coffee, have great service, and I just want to make sure that you have your systems in place so that you're providing that quality service and you're able to get past that survival point so you can have a much bigger impact when you are giving back to the charities that you believe in. So that's kind of number one to start with. If you don't have enough money to get the company started, what I would try to do is partner up with a local retail shop and just take over a little part of their store and say, can I come in and sell my coffee and baked goods on whatever day of the week, or maybe it's every day but just a small section of the shop. And you might have to pay a little bit of that, they might see it as value add to their customers, so they won't charge you, or they could take a percentage of the profit that comes in. But you don't have to start the business with your own location, because that can be really expensive. You'll make a lot of mistakes, so it's better to learn in a low-risk, low-cost way. And as you start to understand how to run this store, then you'll be better equipped to launch your own store. So try to start with, you know, within a local retail owner, learn the ins and outs, try to learn from that owner too how they run their business and, you know, dealing with staff and dealing with just a retail operation. Start, you know, small scale, and then you can also test the location. So, you know, retail location is huge. You can figure out pretty low risk if that location is going to work for you or not, and you start to build your following. And if it is a good location and you are building a following and you are starting to make money, then it's going to make sense to go open up your own store and you'll have the capital to be able to do it. So hopefully that helps. I'd love to hear what you guys have to think if you want to leave a comment under the video. And if you like the video, please give it a thumbs up. I love seeing those come in, so thank you. And we'll see you on the next episode.
