On the road to success in specialty coffee, you must look under every rock along the way. Few things you will uncover are more important than finding the right location and signing an advantageous lease.

The Right Location
The location you choose for your store should fit your concept and the customers you plan to attract. Before you sign a lease, you will need to have a crystal- clear understanding of your business and who will make up your customer base.

The type of operation you choose to open — in-line store, drive-thru or kiosk — also will play a major role in where you look and whom you work with in the process. It’s advisable to find a commercial real estate expert to help you. Do not expect your friend who sells houses to help you find a great location. One caveat: Often there is little financial reward for the commercial broker to help a small entrepreneur find a location. They are usually looking for the big-deal client who wants to sign a 10-year lease on an entire floor of a new office building. You must realize that you need the help, insight and expertise of these brokers and that you may need to be persistent in your dealings with them.

Before you set foot in a broker’s office, you must have an excellent business plan in hand. Failure to do this will negate any professionalism on your part. You do not need to show the broker the financial breakdown of your business, but you do need to give them a presentation business plan that conveys your thoughts and describes the nuts and bolts of the project.

First, realize that — no matter what your concept is — your business is a numbers game. In coffee or tea, your per-customer ticket average may be three dollars, so you must find a location that will provide you with an adequate number of customers at all hours in order to reach your break-even point and make a profit. Also, realize that your products are often impulse buys, so you must find a location with adequate passing traffic.

Second: small is beautiful. Your concept will dictate the exact size of the space you seek, but most coffee and tea shops can operate in 1,000 to 1,400 square feet. If your café is in a business district and most of your drinks will be ordered to go, you may be able to operate in far less square footage. If you will be in an outlying community where seating is a major attraction, you may need more space.

Inking a Great Deal
The lease you sign can make or break you. When negotiating the terms, remember you are the buyer and the landlord is the seller. Often, future business owners are so anxious about securing a location they forget they are the buyer and therefore don’t negotiate.

The horror that can result could fill this magazine, but the bottom line is that you need to find the best business attorney you can — possibly someone who deals with commercial leases on a weekly basis — and someone who has been in the retail arena long enough to have a skeptical eye and know what to look for in a lease.

I once reviewed a lease for a client who was sub-leasing an existing operation. Two coffee bars had failed in this location, and this lease had been changed by at least four attorneys. I was amazed to find more than 20 items in the lease that if left unchanged would prevent me from signing. Some were small in nature. but others could have put my client out of business.

Few know that it is unusual to be presented with a lease that was written for the space — or the even the shopping center — in which they are looking to rent. Many leases are often thick-as-a-book generic retail outlet formulas. Much of what is contained in them covers any and all scenarios, including the landlord’s requirements for a department store.

If paragraphs or pages do not apply to your concept, run a slash through them and make sure both you and the landlord initial the change. The lease that is first presented to you is only a starting point — no more no less. Almost everything is negotiable.

Take the time to find the perfect location, making sure your rent factor is in line with your area and the product mix you plan to offer. If this formula is out of whack, you may never have a fighting chance at success, no matter how many other parts of your business you do well.

And even with the right location, if you are unable to negotiate a great lease, you may need to keep looking. Any business can fail without a great location or an advantageously negotiated lease, even if everything else is done right.