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Today, somebody asked me how my cafe was progressing. You all are well familiar with my tendency to jump the gun - to get optimistic prematurely. I've been on here several times, 110% certain that I'm going to be starting soon. I was at my lowest just a month ago, but here's a cut and paste of the email I sent in reply. I was glad I felt like writing it, and I'm happy with myself for getting this far. Things really are looking good.
It's been a long road of mostly failures, but now the cafe is starting to see some success. The problem all along has been funding. I started with a plan requiring 150,000. My bank was rolling on the floor laughing. I was able to trim the fat to about 25,000 by downsizing and choosing a mall as our location. I hired a loan broker on a success/percentage basis (13% off the top of a successful loan). This was a string of failures that did nothing but worry me (I didn't trust the company 100%), and slightly damage my credit (because of the repeated inquiries on my score). Fortunately they did fail. It was a blessing in disguise. I managed to get my startup cost down to less than 15,000.
About a month ago, I emailed a professor from college. I had taken a social justice sort of class in 02 or 03 and the university did a big human rights campaign that same semester. They were offering grants, and the professor offered the class the opportunity to try. I offered to do the paper and legwork for anyone with an idea. In the end it was just the professor and I, and we got a grant to allow Equal Exchange to send a speaker down to talk about fair trade coffee. I had emailed the professor out of the blue to mention that my cafe is going to sell nothing but Equal Exchange coffee, and that the whole fairtrade/organic thing wouldn't have happened without his class. Also that the cafe is one built on conscience, where the workers get paid the same, the same as myself, and other things.
At any rate, he was overjoyed, and hooked me up with a half dozen grass roots organizations - the ones the class was about. Worker cooperatives, democratically organized. I got two consultants and a lender out of the deal. The lender is nonprofit, supporting democratically organized worker cooperatives. Once I register with the state, I have a loan, so long as I organize accordingly. She's helping me get myself setup in such a way that she can give me the loan. Every employee has to be part owner equally, with equal rights in the direction of the company. Fair enough. The interest rates would be around 5%. I'd need collateral, and collateral can be things we use the loan to buy, if it can be resold. Since I'm leasing to own on most of my supplies, my options were limited, and I feared having to come up with 12,000 in collateral. The consultant who is friends with the lender pointed me to a USDA rural development project that my cafe should qualify for. They apparently guarantee 80% of a loan for qualified applicants. So, if I qualify, I only need collateral for 20% of the loan. That's about the cost of my furniture. I also need 20% equity. That's about 3,000. This february, I can do my tax returns. I can sell my stocks. I can borrow my 401k. That's over 3,000. I'm golden in March.
That's where I stand. If you had asked me even a month ago, I'd have answered with false optimism - that it was going to work - that it was just going to work and I knew it, but I wouldn't have believed it, nor could I have been specific. I'd have said, "These loan brokers are pros, and they'll get a bank to loan me with their connections. I mean, they're still in business." But that wasn't the case. Now I have a real lender working at nonprofit levels of interest and flexibility. I have a large network of grassroots organizations and cooperatives interested in all sorts of beneficial deals and support. I have a real plan with real dates and figures. The Steampunk Kafe is actually going to happen, and I can't believe I've done it.
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Making limitless possibilities much more limited.