We have let the cat out the bag!

The most significant and visible(to the world) development is of course the banner that is put up in front of the store. The banner is the first time we communicated with the Town of Stouffville and the announcement means that the clock has officially started for us – there will be expectations and anticipation, and we are no longer just a concept anymore. We are happy that we have received some really positive messages, giving us more impetus to work harder.

The renovation efforts has been spearheaded by Sching. With her architectural background and creative eye, she is certainly doing a far better job than if the rest of the team is doing it. It is an understatement to say that renovations is a complicated and costly affair; there are so many things to consider and everything costs money – but if that’s what it takes to brew a great cup of coffee in a nice setting, that’s what we have to do. Progress has been good so far with Mike(our contractor), and if we are able to get the necessary permits from the Town, we should be in good shape for opening day in July.

This is what the building looks like 100 years ago(ScotiaBank)

The green building is the home of Red Bulb in Summer

After 9 months and 3 days, countless viewing, and several lease/purchase offers, we have finally secured our location for RedBulb. It was a process that was worth enduring, despite the frustration and anxiety, as we could not have asked for a better location for an espresso bar in Stouffville. Situated on the north side of Main Street, steps away from the GO train station, and about 850 sq ft, it is just the right starter place for Red Bulb.

Stouffville is the place we want to be after starting our location research from downtown in June 2009. It brought us through some interesting neighbourhoods in Toronto, including Mid-town, Richmond Hill, Vaughan, Markham. Stouffville, while smaller than the other areas, is growing leaps and bounds and it is definitely able to support more caffeine spots in the town.  Moreover,we lived in Stouffville and this is really where we want to be, being part of the Stouffville community.

Side view - great to have windows by the side.

Throughout the whole hunting process, Tammi, our real estate agent, has shown great support and perseverance. She has drafted countless documents, done numerous viewings, conducted multiple negotiations, and knocked on all the doors on Main Street Stouffville. We are thankful to have known her and she will always be linked to Red Bulb’s first location.

I will be lying if I said that I have been optimistic about finding a location in Stouffville. It is inevitable that you start asking questions as weeks drag into months,  and there was with no results in sight. The worst thing is the inability to push things along, because it is not like I could force someone to rent/sell their place.  But as Herb(one of my customer from Starbucks)has been telling me, things happen for reason and sometimes, you just need to dig your heels in and keep moving forward.

The most crucial element is decided – now the hard work begins. These are exciting times!!

The La Marzocco FB80 - does this not make you yearn for a latte?

La Marzocco and Synesso are generally regarded by the coffee folks to be the 2 leading brands for espresso machines – an important principle of Red Bulb is to ensure the best quality in our product offerings, and even though it costs a fair bit more to go for the best machines, it will provide our customers with the best espresso. Talks are still ongoing and hopefully we can reach a fair deal with La Marzocco. The other area I have to settle on is the drip coffee brewing machines – again I am focusing on quality and it will either be the Twin Infusion Bunn or the Fetco Extraction series with pulse brewing. I could not wait to serve out the coffee to Red Bulb’s customers.

I have also been discussing extensively with coffee suppliers, including areas like the syrups, teas, chai, disposable cups etc. A cafe looks really simple to set up but the list of inventory runs and runs, and then runs some more. Great machines must go with great coffee and I have obtained plenty of samples this week to test out the right product mix to bring into Red Bulb, in addition to all the coffee that I have drank while visiting cafes around the city.

Another big area is the non-coffee equipment that has to be brought in. This includes the oven, pastry case, coolers(kitchen and undercounter), blenders, ice-machine, kitchen sink, freezer, dishwasher, panini press, cash register, water softener, water filtration – this is of course only a partial list of items. I have been visiting both old and new equipment places and they have been an eye-opening experience, especially the price tags associated with the commercial equipment. To say that they are not cheap is the biggest understatement – I have to figure out how we can get some of these equipment used to stay within our budget.

Last but not least, we bought a bulb making tool that basically allows us to create hanging lamps from discarded bulbs.

Hanging Lamp with discarded bulbs

We intend to build 3 of these hanging lamps above our coffee bar counter and I think it fits in so nicely with Red Bulb. If you have any unused or spoilt E27 bulbs, please give us a shout and we will come and pick them up – we need loads of them.

Although it has been an extremely busy and stressful week, I have not enjoyed myself so much in a long time – I guess the passion has fueled me and it is exciting to see my seven-year cafe dream slowly turn into tangibles.  I guess it is somewhat disappointing and frustrating to find out over the past 2 days that we are not moving forward with 6130 as there are additional leasehold improvement costs that we have been asked to pay. Hey, nobody says this is easy – life always throws you a sidewinder when you least expect it and it is a matter of picking myself up and try some other place again.

Let’s move on and forward…

We are optimistic that we could reach a deal(Sabrina has been reasonable so far and we can definitely see her being our landlord)  but we also understand that we have to walk away if the final numbers are unable to justify the business plan.The lease, after all, is the single most critical fixed overhead over the entire life of Red Bulb and we simply have to get it right at the beginning to give ourselves the platform to succeed – meaning that we cannot be subsidizing the rents for the upstairs unit.  My sense is that the various businesses (Moksha Yoga, Red Bulb, and new tenants upstairs) at 6128-6130 Main Street will play off each other, and Sabrina(or Tammi) will be able to generate a lot of interest for upstairs once the dust settles and the economy recovers fully.

September 1 marks officially the 4-months milestone of me leaving Telus and starting on the Red Bulb journey.  Looking back over the last few months, I am thankful I have rediscovered myself and also my passion for work again. Regardless of the financial penalties(it is not nice not seeing your paycheck every 2 weeks and there is definitely a lot of stress), it is a small price to pay in the grand scheme of things and hopefully the next 4 months will see the first customers of Red Bulb Cafe.

p/s: On a different note, I came across the company Big Ass Fans when I was flipping through the Elemente magazine. Bet it caught your attention when i mentioned Big Ass. Anyway this is a great example of a marketing tactic of using an outrageous name to promote something as boring as a ceiling fan. True, some folks may be turned off by the words chosen, but regardless, it generates attention and captures the essence of the product. Brilliant!

There is obviously a lot of potential about the place but as we work closer to the realistic numbers, the burden of supporting 2797 sq ft of lease space on both levels becomes painfully clear – we would need to achieve downtown Toronto sales numbers to ensure some profits, and even with the bigger chains like Starbucks, the space to be leased would be difficult to justified.

We are pretty confident that we will make it work with just the lower level – even though the size is bigger than we wanted (about 1400 as opposed to 1000 sq ft), we would be able to overcome that through our products and services. One thing we discovered when speaking to businesses around Main St is that rental rates in general are low on Main St, and that is why most businesses are still surviving despite reduced hours and limited marketing.

We have asked Tammi(our agent) to speak with Sabrina(landlord) about the possibility of just leasing the lower level but it is clear that Sabrina wants to rent out the entire unit. I could definitely understand the rationale of that. But if there is anything I learned from my previous own business and corporate training, it is to trust the numbers and not emotions, particularly in the area of cash flow. I think at the end of the day, I must be able to meet my lease obligations while turning a profit, calculated risk instead of careless risk based on hopeful optimism.

Alas, looks like it is going back to the location hunt again

Sching and I must have passed by this old Victorian building more than a thousand times since we move to Stouffville, and we have been describing how it would be such a cool site for a cafe.  It was only recently we noticed a ‘For Lease’ sign at the door and the opening of a Yoga Studio on Sep 1.  Even though I called the listing number, I did not really pay much attention to it.

6130 Main Street, Stouffville

However, things sometimes fall into place. Tammi, our real estate agent whom I get to know as I was interested in another place that she was representing, called on Saturday and we arranged to meet up to check out the place. And check out we did – we managed to get Sabrina(the listing agent), Sching and even Kay at the building on a rainy Saturday afternoon.

anyway got to run to pick up Kay from the babysitter.  Will write more details about the location as Sching and I saw the place again with Sabrina and Tammi on Monday – they have been really great people to work with.

• Folks outside Toronto are less willing to walk and drive everywhere, including drive-throughs
• They are more averse to new and unfamiliar things, and tend to stick to comfortable brands like Starbucks and Tim Hortons
• Population density is not enough to create the traffic for independents.

This may be a case of  ‘chicken or egg first’ scenario. Maybe if I set up Red Bulb in markham or stouffville, the people will come afterall. I am actually leaning towards this option after reviewing cafes at Leslieville, Eglington Ave West, Yonge&Lawrence – those areas are just too saturated with cafes. Real Estate hunting in Markham and Stouffville has already began and I will report more on the progress in future posts.

Thoughts on where we need cafes are welcomed!

1. Lease space VS buying a business The location hunt is somewhat affected by business owners who want to sell their entire branding and chattles (new term that I learn, it refer to a moveable object that has not been “annexed” to the property in a legal sense) and on top of that, transfer over the current lease arrangements. For someone like me who want to start from scratch, it actually reduces the number of leasing choices I have as it roots out great locations with existing businesses.
2. BIG names matter My thought has always leaned towards  having  the cafe somewhere in the Rosedale district of Toronto. However I found out that landlords in the popular areas are reluctant(and some even plainly state) that they will not entertain anyone who does not have a track record. Hence the stretch along Yonge are difficult locations to secure. I have to be prepared to fight against the big boys to get good locations.
3. Lease rates range from cheap to ridiculous I have seen rates as low as $12/sq ft to $60/sq ft. To put it differently, this means for a space of 1000 sq ft, the lease will range from $1200 per year to $60K per year. It is a delicate balance to identify the right location to gain the business dollars, versus over-paying for lease without the business to sustain it.
4. TMI This stands for taxes, maintenance, and insurance. The overheads does not stop after the lease payments and sometimes TMI could double the amount of money that are required for real estate.
5. Luck & timing matters Leases are always constantly renewed or forfeited, and sometimes it is a matter of luck that allows you to spot, see, review and secure the right lease. For instance, I was considering Rutherford Market Place in Richmond Hill but even though it is still under construction, the lease opportunities are already gone.
6. Parking spaces I personally do not like to stop at a location where it is difficult to find parking; this is particularly true during winter. Hence, outside of Toronto, it is not just the location selection for walk-in traffic but one must also consider whether people could park and come inside easily.
7. Competition The landlord is right to protect their current tenants – this means no competing businesses within a small proximity.  Thinking of the number of   Timmies and Starbucks around, it is extemely tough to actually locate an empty store to set up shop.
8. Demographics The Red Bulb cafe will appeal to folks who wants to have great coffee and healthy but delicious pastries. The location needs to have demographics that align with the concept and sometimes, the location is available but not the people and vice versa.

Visited this at Bathurst and 16th

I actually spend a few hours in Richmond Hill last Friday checking on a few locations but the stars have not exactly aligned like above.

Securing a location increasingly looks like the main consideration for Red Bulb Cafe, and hopefully we can get lucky and nail a location real soon.