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Comment by jackdawed | Hacker News Reader

I got burnt out as a SWE at a startup from stress and health issues. Bought a cafe and turned it into a bookstore cafe. Annual revenue is around 600k. Seller's discretionary earnings is around 220k. In hindsight, I should have done this earlier. Not having to deal with office politics, insane on-call rotations, stress. On top of that, it helped me qualify for E-2 investor visa, which is far less of a headache than OPT/H-1B. It was a major help having an experienced business broker/commercial real estate agent.

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Interesting.

I'm a vegan and I've thought about opening a cafe that serves exclusively plant based drinks and food without explicitly/overtly advertising itself as "Vegan" (I find that even in progressive places like Bay Area, it brings out the worst in some people).

Branding it as a chill fun place to hang out and work, collaborate, etc.

I'm not hurting for money, so even if it can cover costs (hopefully returns some profit, but really just need to cover costs) that's fine with me.

Anyone down to try it out if they're on the same page as me? I'm down to commit at least $100k with 3-4 others, low key really serious.

Would be even more dope if we can get a building with a few studio apartments above it that we can turn into a 24/7 hacker cafe.

i’m vegan as well and would be interested in that, but i don’t have the money. would love to follow the process though if you have ever make a social media page for the cafe or something!

I'm currently working on my startup, but I'll definitely write a post about this if I ever do it!

It is one of my plans :)

220k earnings on 600k revenue? Does that mean your profit margin is 36% or am I missing something? I was under the impression that a successful coffeeshop runs like a ~3%-7% margin.

Must be the books!

650k avg revenue for past few years, COGS around 350k, Gross Profit 300k, 80k expenses, SDE 220k, EBITDA 170k. Catering is also a major source of revenue.

Im surprised that owning a cafe and operating it is less stressful than doing dev work.

You would know, right? How's Nobu doing?

If they have some decent money already from their previous life as a SWE it’s possible they don’t have to hit the same sort of numbers others in the cafe business are trying to hit. I’m guessing the stress comes from having to perform at a certain level sales wise.

The cafe doesn’t wake me up several nights in a row at 3am.

Can you share more about how you went about this? How did you learn what’s needed to go through with this? Beyond knowing things like time value of money and the goal of making more revenue than costs.

The business sale was a transfer of assets sale, so the previous owner taught me everything.

How did you find the business in the first place? Did you look at multiple options? etc.

BizBuySell. However, according to my broker, most business sales never make it to market. It's mostly through email lists and connections.

WOW, this is beautiful. Have you written publicly about this?

One of the things I am upset about is grocery prices and the fact that people buy unhealthy food to offset rising prices... I ask myself what an "open source grocery store" would look like.

Have you thought of "open sourcing" your business model so others can do something similar? Or learn from it? Either way, I'd love to hear more if you have anything public.

I can’t really talk much about this yet because legally, until my E2 visa is approved, I can only be in the owner role, not operator. Right now, I pay my friend to be the manager.

Once I am in the clear, I’d be happy to open source the process of acquiring a SMB and running it. I basically become a business broker myself for this one deal, thanks to the broker I worked with.

Like other commenter said would love to know about how to do this. I've had a similar idea for opening up a boardgame store but it's hard to find any public numbers about expected operating costs/expenses to know how to plan or budget for things and how much of a loan I'd need to take to make it happen.

if it was me, I’d sit in a café for 12 hours and track how much they earn to get an idea

Best way is to go work at a cafe and ask a lot of questions about how things work

Funny enough I am also planning to convert this cafe into a bookstore/board game shop. The best way to find these numbers is to work in a similar shop or be friends with the owner. Naturally, during business brokerage, you will also get these numbers after signing an NDA.

a board game store might be challenging if you are doing it as bricks & mortar retail and competing against online sellers. i think it can work but you would want to be somewhere with a lot of retail foot traffic. you are going to need to set your prices higher than online sellers to pay for rent. i don't have any numbers/insight.

as someone who enjoys playing boardgames, what i would caution against is trying to run some kind of boardgame cafe. the problem with that is you end up with customers like me playing a long game occupying a table for 3-4 hours. maybe everyone buys a drink and half the players buy a meal. the revenue per table per hour will be low compared to a normal cafe or restaurant where you could cycle multiple groups through the table in the same time, and where the expected revenue per customer would be higher.

the places where board game events thrive are where the fixed costs (rent, wages to staff a bar/kitchen, etc) are subsidised by something that isn't board games. i.e. where the venue is open anyway and has spare capacity to fill a few tables with board game players who stay for hours and do not spend money quickly. in australia this is often at a pub/club which has an old spacious venue with lots of tables, where the business is kept afloat by income from a room full of people losing money playing the pokies (slot machines).

Just buy a cafe!

I think they left out the “…” bit before the “profit!”

Awesome man! I am curious to know more about it though. I am thinking to take back my grand parent hotel but i am worried about the small town life

Adding to others wanting to know more! Maybe just the kind of city? I’m curious if that’s only viable in a big city.

Yes, this is really only viable in a major city. I wouldn’t consider doing this without at least 200k population in a major metro area. The area I’m in is 600k people with a heavy Laptop & Lattes ESRI tapestry segment. Basically it’s filled with software engineers.

jackdawed has shared a gem of actionable advice here for anyone reading the thread and thinking "i will also quit my terrible SWE job and pursue my dream of being a bookstore cafe owner/operator"

> Laptop & Lattes ESRI tapestry segment

https://www.esri.com/en-us/arcgis/products/data/data-portfol...

do market research!

"profitable bookstore cafe" is not the input, it is an output of a process of understanding the market and considering different business ideas.

don't anchor on a single kind of business idea, e.g. blindly executing a dream idea of "bookstore cafe owner/operator" without understanding the market and if there's enough demand to support a new bookstore cafe business in the area.

do market research and understand the market segments in areas you are considering opening a business in. understand the market segments and what they each demand and what the existing competition is. consider a bunch of different business ideas and focus on one that serves a particular market segment and meets some underserved demand that isn't being met by existing competitors.

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