Financials

We hope to get a copy of the lease agreement for review by tomorrow or early next week at the latest. Because of this, we are really hitting our financials again to make sure we have not missed anything and that they are as accurate as can get them at this point. We have begun, as I wrote before, fixing the financials to reflect the smaller space in the following areas..rent, flooring, fixtures, lighting, and general construction (which we are estimating at about $25.00 per square foot.) We now need to figure out some prices for our coffee and food. We have made contact with the roaster we hope to use and also the tea company. We are still weeding out the tea companies but we want to see what our estimated costs will be. We are also in heavy search for a lawyer to help us with the legal aspects including taxes and structure. This will need to be estimated on our financials as well. We are pushing ahead and trying not to get in front of ourselves. One step at a time. ~~be bold

State of the Industry

Timothy J. Castle and Joan Reis Nielsen write about the State of the Industry in this article and things are looking good. While some may take exception, it can be pretty fairly stated that there has never been a better time to be a specialty coffee retailer, whether you are thinking of opening your first store, or about to open your one-hundredth or even your one-thousandth. As an industry on the whole, we have far exceeded the number of stores that many observers 10 years ago would have said constitute saturation in the North American market. And most specialty coffee retailers today are still on a track of aggressive growth for the next several years. Some chains are opening more than a store a week and you-know-who hopes to expand from 9,100 stores now, to more than 30,000 world-wide over the next several years. " Many people are saying this is the time to get in the business. The Specialty Coffee Association of America are trying to get all the independent coffeehouse, almont 50% of the market, signed up as members as to set an industry wide standard for growing, roasting, and brewing. This is an excited time for the industry and I think we will continue to see this growth. Castle and Nielsen also talk about the importantance of educating staff at this point in the industry, how customers are becoming smarter, and people are searching the globe for the best coffee they can find. "Despite the obvious challenges of opening and operating a specialty coffee retail operation today, the rewards are very much there for dedicated businesspeople who love coffee and tea—not least of which is being around the stuff day in and day out. If that sounds good to you, then chances are good you’ll find some customers that agree with you. Or, as Chad Trewick says so passionately, “I hope that people continue to break into this industry—their fresh perspectives and ideas are what teach us all and keep us on our toes!” ~~be bold

Update...

We got a call from the property manager yesterday saying that he was working on our lease and would have something in writing by the end of the week. I was very impressed as he has yet to take the ball and run with it! What this means is that we will have something to look over and help us gather the rest of the information we have been trying to get for the past weeks. This includes...parking, signage, and bathrooms...for the most part but also gives us a handle on what the owner is expecting from us. We hope to have this information in hand by Friday so we can begin to determine what things are going to have to be amended and brought to the table in order for us all to be happy. This has also lit the flame under my large posterior forcing me to begin the meetings with bankers and also try and find a lawyer to help me sift through the different structure options we have. Really, we just got very busy after that phone call. ~~be bold

Staffing

Staffing is about to be the key thing we are working on at Evoke in the next several weeks. Dr. Cornwall tells us how to attract key staff in this post from the Entrerpeneurial Mind. It isn't always the best salary that helps you compete in the market place. It is also the way you treat your employees and the benefits you can extend to them. Cornwall mentions that fact that listening might be the key concept we must learn as we begin looking to staff Cafe Evoke. ~~be bold

It's Your Very Own Coffee Hour

Dane over at Business Opportunities Weblog directed me to this post that he published about a coffee happy hour. "This morning Kerwin and I walked into a Prescott Starbucks and both ordered their strong-brew coffee of the day to then find it was free. The barista at the cash register motioned over to a gentleman sitting in an animated discussion with a group of about six others, and said, "Your coffee is on Mr. Perez this morning." This was what Rosa Say wrote about in a post talking about the creative ways to use marketing dollars. We at Cafe Evoke have been talking about the different programs that we hope to offer. (I plan to post a list with descriptions soon). I wish we would have thought of this one! Perez was sponsoring a coffee hour at a local Starbucks which is a perfect way to strike a conversation and get your word out! Is this a new thing that we can do at Cafe Evoke? Gather local businesses to sponsor these events? We will see what we can do! Go read these articles and see how it all works! It is a very interesting concept. (Thank you Dane for bringing this to my attention and pointing out some ideas for us to use this to our advantage!) ~~be bold

Newest Plight..

Well, we were at the airport here in Oklahoma City last night waiting to head to Denver and on to Bozeman when the lady came on the PA telling us she had good and bad news. She started with the good news saying that this plane would take off today...the bad news was that it would not take off until 10:30pm...a mere 2.5 hours after our connection from Denver left. She said we had options..which I like. We could go on to Denver at this later time or we could re-book for a different flight tomorrow, as no other carrier could get us there. I thought we could just go ahead to Denver but then she told me the catch..there were no hotels in the area to stay in once we got there. We decided to re-book. Here is the great thing..no flights until Tuesday morning.. Nice huh? So, while I will be missing a total of 6 work days and also not have the chance to meet with anyone about Evoke, I will get an extra day to spend with family here in OKC. So that is where we are at this point. I have emailed the property manager to see about the measuring they did last week and I will make some calls to bankers and also start the search for a lawyer to help us with the registration process. ~~be bold

Update...

We had great news from our bank advisor about our business plan and now are very excited to begin working on finding money. When we return to Bozeman on Sunday night, we will begin to cut down the lenght of the plan from about 38 pages to nearly 10 and set up some meetings with the SBDC and local bankers. The measurements for the space should also be complete now and when we I have a chance to call the property manager, we will know what the numbers look like and be able to reconstruct our financial projections and also deal with the parking and bathroom issues that we have encoutered. Other than that, this will be my last post for the weekend. We are moving into a hotel in downtown Oklahoma City to celebrate my cousins wedding tomorrow night. Have a great weekend and we will be back online on Monday. ~~be bold

"Where to turn..."

In July's edition of Entrepreneur Magazine, they have a graph charting places small business owners turn when seeking advice.... Individual mentors..........52% Social networks................51% Trade associations...........44% Business advisors............36% Internet..........................31% Chambers of Commerce....27% This seems to be pretty accurate as far as my experience has shown. We have needed lots of advice and will need much more as we go forward. And I'll would fit in to that 52% on top with individual mentors as that is where most of my help comes from. ~~be bold

Registration

We are going to begin the process of creating the S-corp and reserving our name with the proper government offices when we return from our long weekend in Oklahoma. I am going to make some calls and get the names of some local lawyers that work with small businesses and set up a meeting. I also plan to meet with our local SBDC in hopes of gaining some more valuable insight on where I need to turn next. When I return, I hope to have the plans created for trying to find funding. I am working right now on recreated our financials and having our board of advisors go through them due to the new space size. It is looking good so far with a savings on our capital budget sheet of nearly $10,000 across the board. We have many ideas for marketing and promotion as we move forward which we will present on this site and at CafeEvoke.com. Some of the items we are trying to work out would be stickers, t-shirts, messenger bags (hopefully Timbuk 2 Design), and journals, along with cups and mugs featuring our logo. Right now, the important thing for us to work on is our own financials and securing funding and the space. The formation of the S-corp will fall in these actions as well. ~~be bold

"Tips for Small Business Start-ups"

Business Opportunities provides us with a nice list of tips that the IRS has compiled to help us begin our small businesses. Among these tips are.. 1. Is it a Business or a Hobby? 2. Selecting a Business Structure 3. Employer Identification Number (EIN) 4. Business Taxes 5. Recordkeeping 6. Checklist for Starting a Business Each of one of these is linked to a nice write up with helpful hints for completing the process. Head over and check out the links.. ~~be bold..

A Space Split

I talked with the property manager today and he told me they were still on board with wanting us in the space and that he was heading over there to take measurements. It looks like this plan is running forward. There are now a few things that are going to be crucial in getting this going.. 1. Draw up what it will take for us to comply with the laws and regulations for parking and bathrooms. 2. Registar the name with the local government 3. Begin shopping banks full speed 4. Start thinking about singage and have it approved by the planning commission. 5. Begin contacting reps for coffee machines and get coffee nailed down with Bongo Java Roasting Company These are the things that I am working on right now. I head to Oklahoma tomorrow for a few days but the work will not stop. We will meet with our banking advisor and our financial advisor while we are there and we will also talk with some other people about bringing in product to the cafe. ~~be bold

Update

This will be a short work week for me this week. I'm heading to Oklahoma City on Wednesday to be in my cousin's wedding. It should be a great time. I am still trying to get some information on the space from the property manager before I leave and still have not been called back or emailed. There is activity over at the space that means it has either been rented to someone else or they are preparing to do construction to split it into two different places. I'm hoping it is the second option. New business cards should arrive today. The old ones that we had printed had a a word spelled wrong which was not caught be the printers before printing. Everything else is moving slowing but steadily. I'm going to try and meet with the banker here in Bozeman when I return from Oklahoma and while I'm there, hope to meet with some other people about some opportunities we might have to help expand Cafe Evoke. I'm get into some detail very soon. My goal for this short week is to get in contact with the property manager. I'm not putting anything else on my plate. ~~be bold

ICSB World Conference

The Entrepreneuial Mind has been posting all week from the ICSB World Conference. He has linked to many great speeches and trends from across the world. If you have a second, there is some great reading from the conference that you can access from his site. His posts are the nexts best thing to being there for all of us that could not make this trip. It is worth the time to read through these stories.. ~~be bold

New Coffee Place in Bozeman

Back when we first began to think downtown Bozeman would be a perfect place for a late night, artsy place, we found a great location next to a late night pita place that was always jammed packed with students into the late hours. We were told this was one of the few non bar places in town to hang out after 10.00pm. We set a time in March to go look at a location that was for lease next door.. When we got there, we saw that, in the windows, was a "coming soon" sign for a Homepage Cafe. It looked more like an internet cafe than anything but to us, this sign said..."look for places away from main street." That cafe is now opened. We ventured in last night to check it out and it is a very well decorated internet cafe with 10 or more workstations (small desks) to sit at, nice furniture, and a sort of New York..meets Seattle...meets Bozeman feel. They are also Fair Trade, Organic coffee retailers. Althought it appears it will be a fantastic place to hold lunch meetings, shoot quick emails, and do work, it seems that the art is not going to happen there, at least not yet. They are opened 6 am to 11 pm and I think are a good addition to the coffee scene here in Bozeman.

An Apology

After reading over some of my last posts, my wife brought it to my attention that I have been misspelling words and using bad grammar. I wanted to cast my apology for these mistakes and promise a more concentrated approach to my postings from now on. It has been a crazy few weeks since we moved from Nashville, TN and I have felt hurried even on days where nothing was going on. Thanks for reading. ~~be bold

More Information

We gathered most of the information we had decided to try and get fot this week yesterday. My wonderful wife took the time to make some calls and we learned quite a bit. Maybe more than we wanted to hear.. We talked with the building committee who told us that you have to divide to total square feet of the space by 15 and if it under 50. you can have one bathroom. If it is more than that, which ours came out at 66, you have to have two. Now this is a problem. We can try to find even smaller space but that would be tough. The guy at the committee said that the best thing to do is try and work a deal to have common bathrooms between the space if it is split. I like that idea but don't know if it will go over well. Here is the other problem, this, again, is based on size. We have tried and failed again with phone calls and emails to the property manager yesterday. We are really bitting the bullet not know where the owner stands on his decision to at least split the space. I'm not asking for a yes or no just a "we are leaning in your direction" so I can get some more of this leg work finished up. That is where we are. Our only goal for the next few days is to get ahold of the property manager. PS. Our bank advisor should have our financials back to us early next week and we begin to head down the road of finding money....hopefully this road is lined with yellow! ~~be bole

Another Thought on Business Plans

After I wrote this post linking to another post over at New Dog, Old Trick I had some responses that disagreed. While I think this makes for much more interesting reading, for many of you know I'm not expert, I think I want to flesh this out a bit. The idea of having a business plan that is written by the entrepreneur alone is not to produce some 30 page document with pretty photoes, graphs, and charts, but to generate thoughts, ideas, and creativity. This is alowing the entrepreneur to put these thoughts on paper and go through the process that is going to help him or her succeed. Thats it. You don't have to have a binded document. This is a living piece of work that will change, maybe and hopefully dramaticly, over the years of business. As my friend and professor Dr. Jeffery Cornwall keeps telling me, even still..."this is your chance to fail on paper first." This isn't about creating some law of business. Its about getting the ideas out of your head and moving forward. It provides flexbility and creativity as your business moves through the stages... ~~be bold

Update...

Still no word from the space owner or property manager for the hopeful site of Cafe Evoke. I have somewhat put off further work on getting this off the ground due to a full time job and a struggle trying to bring in enough money to even support my wife and I and continue to live here. We are, today, however going to push forward with the planning. Here is our list of things we are going to try and get done today: 1. Call the property manager and see where we stand and where the owner is leaning on his decision for renters. 2. We found a bakery that we would love to have cater Cafe Evoke with at least pastires and other sweets and breads. We are going to give them a call and see what we can work ou. 3. We have contacted the city planners about parking and singage (whos information still needs to be really read through) and we now need to call the Health department to find out about having only 1 bathroom in the cafe. It shouldn't be a problem. That is what is on our plate right now. We are hopeful for the future of this cafe and anxious to see what form it takes on.. ~~be bold

Business Plans

New Dog Old Trick talks today about the importance of the business plan and how it shoujld work with small business. He also talks about how important this aspect of planning is for the entrepreneur. He says that this... "job can't be outsourced to some consultant. Yes, outside consultants can help as knowledge experts in providing market data or other information. And yes, consultants or other third parties can help to edit and shape the presentation of the plan to a degree. But the substance of the plan - the vision of what is to be done and why, the basic energy and passion for the venture, must be provided by the entrepreneur." He links to an article featured in this weeks Carnival of the Capitalists.. Drakeview : Business plan planning that should be read by all. If you are in the middle of planning your buisness, this is a great read. Believe me, information like this is priceless.. ~~be bold

World Conference on Small Business

My friend, Dr. Cornwal of The Entrepreneurial Mind posts here about the World Conference on Small Business. He will be blogging live from the conference this year. "The International Council for Small Business founded in 1955 is the oldest and largest global membership organization dedicated to examining and discussing issues affecting the teaching, research and delivery of entrepreneurship and small and medium enterprise world-wide. Collectively, the over 2,000 members of the ICSB through their eleven national affiliates work and assist tens of thousands of individual currently in business or desiring to start a business relatively soon." ~~Be Bold

Update

I called the property manager in charge of getting this space rented a few days ago after 3 failed attempts to reach him via email. I got his voice mail and finallly his real voice. He is in Nappa Valley, which I would love to be also, and is supposed to call me Tuesday about the standings at the space. I'm excited and anxious altogether not knowing exactly what our outcome will be. I have an 8-5 job, no money, and rent to pay. We will get it all worked out though. We are trying ot set up a meeting with the first banker on the 22nd of this month. In a perfect world, this would be all we need. I'm "banking" on needed to set up many meetings with many bankers along the way. Another thing we have run into is a mis print of our business cards. Coffee was spelled wrong so we are in the process of getting those fixed so we can use them and not look like 1st graders. ~~be bold

Carnival of the Capitalists

I haven't been linking to the Carnival much lately but wanted to get back to visiting it throughout the week. So, grab your cup and head over to this weeks Carnival over at Byrne's MarketView. ~~be bold

Quote of the Day

"Suave molecules of Mocha stir up your blood, without causing excess heat; the organ of thought receives from it a feeling of sympathy; work becomes easier and you will sit down without distress to your principal repast which will restore your body and afford you a calm, delicious night." ~Prince Tallyrand

It,s Alive.....Maybe

As we were heading to our local Staples here in Bozeman, we dropped by the space to see if there was any action inside that might hint towards a constuction split of the space and eventually the new home to Cafe Evoke. I had emailed the property manager as I said the other day and also called yesterday without a response so I was a bit nervous that the space had been rented out and was done with. As we drove by, the sign was still up which was nice to see and cabinets, the oven, and the shelving from the back of the space had been taken off the wall and were scattered throughout the building. This was a good sign, or at least I'm going to take it that way. I hope to hear back from the property manager today about where we are going with the space. Today is my first day working over at Zearth.com Corporation and I'm excited about the chance. I will keep you updated on how that is going. I am sensing that there will be alot of hard times going forward as I work an 8-5 job and try to have meetings, etc for Evoke. ~~be bold

Business Update..

We are still waiting to hear back from the space owner about the possiblities of splitting the space for Cafe Evoke. As I have written before, I have contacted the planning commission here in Bozeman to figure out parking and singage regulations and have to now wait to see how many square feet we have avaiable to us if any at all. At this point, I'm going to have to go ahead and set up a meeting with the bank to begin finding money to help capitalize this space. The only problem will be knowing how much to get. My plan is to present the financials for the larger space just in case. We are working on other opportunties as well including online sales, getting beans in shoe stores and other "artsy" outlets. The other goal for today and tomorrow is to call the property manager and try and gain some insight our our situations. I have sent two emails with no response this week and hope that with a call, I can find something out. That is where we are at this point. This is a crucial time in our planning for Cafe Evoke and we are fighting through it... ~~be bold

Community Invovlement

Community is a major part of our values and mission at Cafe EVoke. I wanted to take this post, somewhat of a divance from my normal ranting, to somewhat go over the couple of groups we are planning to be invovled with as partners as we move forward with Cafe Evoke. Here are a few.... One.org " is a new effort by Americans to rally Americans – ONE by ONE – to fight the emergency of global AIDS and extreme poverty. The ONE Campaign is engaging Americans through a diverse coalition of faith-based and anti-poverty organizers to show the steps people can take, ONE by ONE, to fight global AIDS and poverty." This will be important for us to give our share of time and a voice for our community. Coffee kids strives "to improve the quality of life for children and families who live in coffee-growing communities around the world. Thsi will go in hand with our effort to support the Fair Trade movement in all types of products. These are two groups that we are going to support as a business and hopefully as a community of friends who drink coffee together. ~~be bold

"Think Different"

I came across a post from Ben Casnocha's blog entitled, It's, like, Ben's Blog, a great blog from a seventeen year old highschool student who has already impacted the worlds of politics, media, small business, and others. Think Different is Ben's mantra and he posts this from his site..... "Think Different" (Apple Computer Ad Campaign) Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels? We make tools for these kinds of people. While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do. Well put.. ~~be bold

Wouldn't it be Nice

I'm hoping that people come to Cafe Evoke and enjoy the atmosphere of art, friends, and conversation. We also want to the the communities coffeehouse, a place that the customer feels in control and has ownership. Wouldn't it be nice to have customers that were educated about yoru product and where truely good customers? I found this post over at Church of the Customer which outlines a list of traits that one must pocess to be a "good customer" and follows this list by a discussion of how to prepare for these customers. This is a great post for any small business owner to read. Customers are key to making it. Be able to think like them and serve them! ~~be bold

As the old joke goes...

The Entrepreneurial Mind posts today about the entrepreneurial opportunity that can be found even in declinding markets. He ends his post with this... "As the old joke goes: When the entrepreneur was a young lad growing up on the family farm, he had asked Santa for a pony one Christmas. After all the presents were opened that Christmas morning--no pony! I little while later his parents spotted him in the back yard digging in a large pile of manure. His parents shouted, "What are you doing out there??!!" The future entrepreneur looked up, smiled, and replied, "I just know if I dig deep enough there is a pony in here somewhere!!"" ~~be bold

Top 10 Wireless Cities

CNN Money reports here on a research study conducted by Intel looking into the nations cities and the avaiblity of wireless connections. "The survey for 2005's "Most Unwired Cities" was based on the number of access points at commercial, pubic, airport, and other locations among the top 100 metropolitan areas in the United States." Here is their 'Top-10"..... 1. Seattle 2. San Francisco-San Jose-Oakland, Calif. 3. Austin, Texas 4. Portland, Ore.-Vancouver, Wash. 5. Toledo, Ohio 6. Atlanta 7. Denver 8. Raleigh-Durham, N.C. 9. Minneapolis-St. Paul, Minn. 10. Orange County, Calif I don't think that this springs any surprise on any of us. Seattle is the home of Starbucks, Seattles Best, and is very close to Microsoft. Also, the California connection seems obvious. What I am excited about is the Austin, TX ranking. My buddy over at Progress Coffee on Austin's East Side is using wireless to gain customers loyalty.. Nice list, can we see Montana in the near future?? Depends on how long this Future is! ~~Be bold

Regulations

We have encountered some regulations that might very well close the doors on this deal on the space. The planning department of Bozeman Montana mandates that you need 1 parking spot for every 50 square feet of indoor public serving space (not counting bathrooms/kitchens/etc.) and 1 spot for every 100 square feet of outdoor public serving space. Here is where it gets interesting.. These spaces must be off-street and the current lot only have 3-5 spaces set aside for us. We would need 9 to build the outdoor patio we wanted innitially (a 30x30 patio) and probably 15ish for the indoor space. We are hoping to gain a nice allowence for foot traffice, as the downtown businesses do, and work a plan with the city to help us comply with these rules. We are also working the sign so as to comply but that will not be hard. We are not looking for anything fancy or crazy for our sign, it just has to be the correct size and form. No problem there. We will also need to file a re-use/change of use application and permit to use the space. These are the things we are working on right now and for the rest of the week. Things are still moving forward and we are keeping in contact with the property manager to make sure that he knows how serious we are about the space. I also hope to schedule a meeting with my banker here in Bozeman to pitch my ideas. This will require that I summarize our business plan to about 10 pages this week, as suggested by my friend Dr. Jeffery Cornwall, writer of The Entrepreneurial Mind. ~~be bold

Quote of the Day

"Having a cup of coffee by a piece of art, you begin to dream" I took this quote from a post over at What's In The Bag. They have been on a wifi tour and the last stop was at a local Cleveland library in which a staff member, Cathy, said this explaining the atmosphere of her library. I like it and think it describes our thoughts for Evoke perfectly... ~~be bold

Be Flexible, Have Options

We have been exploring oher possible locations for Cafe EVoke here in Bozeman Montana due to the simple fact that this space might not work out. There are many things that are piling up and trying to break down that chance so are are branching out in our thoughts. We have extended our search for space out into the very near neighborhoods looking for a house that can be home for our Cafe, giving it the real community coffeehouse feel. Another option that we are now working on is going to a coffee trailor in Big Sky. This was part of our growth plan but now that we are faced with the difficulty in finding a location, brick and mortar style, we think this might be a great chance for us to open our doors and get in the business withouth having to rent space. This would allow us to pay cash (hopefully) and also gain valuable expirence while watching the market for openings near our target market down in Bozeman. These things are still in the early stages but we are activly working on opportunity assessments on each, allowing us to be flexible and able to move with the markets. ~~be bold

Quote of the Day

"You are busy but you are happy." ~~unknown..taken from my fortune cookie at Chinatown in Bozeman Montana

Job Interview Today...

Today I have an interview over at Zearth.com, an online retailer of everything from books to furniture to kids stuff. I hope that this will give me an edge financially and some stablity as we push towards the opening of Cafe Evoke. They are a small start-up company, only 5 years old, with 25 employees. I am interviewing for one of the positions on their new customer service team. What I like about their staffing model is that you interview with one person, then you get referred to the CEO and Founder at which time you meet with them to talk about how the business runs and is built. Nice model. ~~Be bold

Pushing Forward...

I'm not sure if I mentioned a few days ago that if this space goes through (I will explain why it wouldn't in a minute) we will take over the lease in September. That is a short 4 months away in which we have much to do. The kicker here is if the space owner, Joe, wants to split the space in half. He has made it pretty clear that he does not want to rent us that large of a space which we are happy about. There is another business interested in this space so he has to figure out if he can split it and make it rentable for two different businesses.. I have to keep pushing on as though this will happen in September so I have set up presentations to a few student groups around two for late July early August. Along with this, I will be heading to The American Coffee and Barista School in Portland OR. These are all events that I hope will jump start us to opening day. We have set up accounts with at least one, looks like two, local churches to supply coffee for Sunday mornings and also for their own resell which is a start already. We have some other ideas if this space does not work out for us which I will talk about as they come to the table. We will begin a campaign here at A Thought Over Coffee to try and raise the money for the first month's rent. I will keep you updated as this time draws near. It will be a safe, secure way to donate through Amazon.com. That is where we are.... ~~be bold

What's This Buisness Worth?

We talked alot in our entrepreneurship classes at Belmont University about valuating our businesses as part of our exit strategies. Now, it might seem strange to already be thinking about exiting but you are going to have to get out somtime..either by selling, going broke, or dieing... Valuating is as simple understanding EBITDA and key to selling your business, not gross sales. In Norm Brodsky's article over at INC.com, he writes that most people inflate their what their companies are actually worth and that... "Inc. 500 companies are prime examples. I recently looked at Inc. 500 applications from about 20 of the companies on the current list. One had lost money on sales of about $60 million, and yet its owners thought it was worth between $50 million and $100 million. Evidently they hadn't heard what happened to all those profitless Internet companies of the 1990s. Another company had a net profit of less than $335,000 on sales of about $6.5 million -- and still the owners somehow came to believe it was worth between $100 million and $200 million. In fact, of the 20 companies, I'd say that about half reported absurdly high valuations. Most of the others were just extremely high." We need to understand that people looking to buy wany to make money in the future. It has nothing to do with gross sales! Only potential to bring in money in the future! "But let's assume you have a well-run company. What you can get for it will probably be somewhere between five and eight times EBITDA. (I'm excluding Internet-based "concept" companies here, or at least those with the potential for explosive growth, which get valued according to a set of rules all their own.) The exact multiple depends on various factors, such as interest rates. As they go up -- and money becomes more expensive -- the multiple tends to fall. If they go down, the multiple rises. It can also be affected by the amount of competition among potential acquirers and the number of good businesses available, as well as other factors related to your particular company. Unused capacity, for example, might boost the price. But in the end it will be somewhere between five and eight times EBITDA no matter what industry you're in." I think this is a challenge to us at Cafe Evoke to make sure and keep tight financials in order to gain insight on our EBITDA so we will have a chance at this exit possibility in the future. ~~be bold