Roasters & Registrations... done! Check! What about China? My eyes turned to the East.
Paul and Louis had been keeping busy in Wuhan. Louis searched for decent rental locations. He considered a dozen before finally deciding.
Rent in Wuhan is steep! (commonly 200-300 RMB per square meter per month) This makes a 100 sq.m. shop (thats 1,000 sq.ft.) cost 20,000-30,000 RMB ($3,500-4,500 USD) per month. Typically only restaurants or big brand shops can earn a profit. As a result at half to two-thirds of small businesses lose money and close within the first year.
More affordable rentals in small or old business plazas are held by old landlords (with whom you need "guanxi" relationship). Many are so bad that you don't dare do coffee business from them. Old restaurants covered in "you" oil and "yan" smoke are the norm. Often when you do find a decent place it is hard to locate (off the beaten path or has poor public transportation). You should ensure the neighbors aren't sketchy and you want to foresee any building issues that may exist (e.g. bad electric wiring, bad plumbing, a low point for flooding, etc.). Transportation, delivery and parking are issues to consideration as well when purchasing 60-70kg jute bags of green coffee or shipping boxes of fresh roasted espresso to customers.
Juggling all of these considerations, Louis narrowed down his search to a few locations. The one finally chosen won us over for a few reasons:
- Louis felt great about the landlady, Ms. Liu. She was kind and professional to work with endearing a sense of confidence and trust.
- The place was "hen fangbian" very convenient, for Paul's commute (about 2km walking distance).
- To the South (right if door) was a family owned teashop where the elderly grandfather sat daily offering advice and assurance that it was a decent location.
- To the North (left of door) was a family owned curtain shop. The husband wife duo were hard working and seemed good parents to their young daughter who often did homework or played among the piles of curtain rods and bolts of fabric.
- Though formerly a restaurant, the 100 sq.meter shop was very clean. Little oil remained from past "chaofan" food frying.
- The unit was 5 shops in from the entrance, close enough to have some visibility from the outside while being far enough in to be sheltered from torrential Wuhan rains by an overhang covering above.
- While feeling expensive, the shop was affordable at 3,200 RMB/month (about $500 USD).
While I was still in the US - after several late night phone calls (in the garage near the wifi router) Paul, Louis and I confirmed to Ms. Liu "women yao zu" we'd like to rent. With Louis' investment capital he signed off on the shop and with Paul began planning what renovations were needed to turn Unit 7 in Building 18, XiangLong Times Plaza on NingKangYuan Road into the ROCC Coffee Roastery.