Finally, the fun begins and all that planning, well, leads to more planning.

During this next phase of your evolving coffeehouse concept, the store begins to take shape--quite literally. If planning was important in creating the initial concept--defining your target market, your menu, your projected revenues--it is absolutely crucial during the build-out.

It will vary depending on your needs, but generally the planning process includes lining up a team comprised of a designer, architect and contractors, and researching local health department requirements and building codes--ideally before you sign the bottom line on your new space.

"If you get your team lined up sooner than later, it greatly reduces the stress level," says architect Mark Connors, principal with Architectural InSite, Inc., in Stroudsburg, Pa.

It also helps to have a solid concept in mind from the beginning. You want to have an upscale shop with solid wood floors and trim, and rich granite countertops. Maybe you want more of a funky, artsy look with colorful murals or eclectic light fixtures. Or, maybe you want to go industrial with an exposed beam ceiling and concrete floors.

Whatever the style, keeping one concept in mind will improve the flow of work and the decision-making process, in addition to allowing you to better manage budget dollars--which these days can run well beyond a quarter of a million dollars for an upscale shop. Above all, it's important to remember your ultimate goal: creating an aesthetically pleasing place where customers feel welcome and want to return.

PLAN OFTEN AND EARLY

In order to gain maximum efficiency and save on those soon-to-be dwindling budget dollars, planning for the build-out should really begin during lease negotiation. That's the time to negotiate for improvements to plumbing, electrical and HVAC (heating, ventilating and air conditioning) systems--the fundamental building blocks of any retail, commercial or residential structure. Remember, you can change locations, but you can't bring these improvements with you--they're permanent to the building. The more you can get your landlord to cover the finances of these major expenses, the more you'll have in your budget to spend on other elements of your coffeehouse.

"It's been my experience that most people getting into the business for the first time really underestimate (the cost of) those three items, typically," says Rick Hubbard, president of Hubbard & Cravens Coffee Co., a chain of three coffee houses in the Indianapolis area.

Ideally, you'll want an architect or designer to review a space before renting it. A business operator and a designer or architect will look at a space from different perspectives. An operator may focus on the traffic count outside the door, notes Mark Connors, while an architect or designer will focus on the interior, deciding whether a 25-foot wide slot will restrict functionality.

Another reason to bring in a design team early is to avoid paying rent while the doors are not yet open to paying customers. Connors, who works on upscale coffee shops, says sometimes clients will spend four months getting all the terms of a lease just right, sign the lease, begin paying rent "...and they turn around and go `Wah! I need a design.' And they come to us and say, `I'm paying lots of rent starting now. I want to move in next month.'"

Instead, lining up the team early means the construction ball can begin rolling before the first rent check is due. Designers and architects can get an idea of how the floor plan should work and scope out potential problem areas. Contractors may be able to give preliminary figures on building, materials and labor costs. In fact, figure that the entire build-out will take at least three months, more likely four months, so try to plan for those months to be rent-free.

LAY IT OUT

One of the most important parts of the build-out is the floor plan. Placement of such pieces as the espresso machine, sinks and storage all can either impair or improve efficiency, which is the ultimate reason why a good floor plan is so crucial. Customer service will be directly affected by how each piece of equipment is situated behind the counter. An inadequate floor plan may result in longer waiting times and a loss of customers, says Tom Palm, who, as president of Design & Layout Services, Inc., in Wayzata, Minn., has worked on hundreds of layouts for coffee shops.

Palm says protecting profits is where the value of a professionally designed floor plan comes into play. His layout costs range from $3,000 to $5,000. Clients give Palm the dimensions and existing elements, such as the number of bathrooms, of their space, sometimes accompanied with pictures, and Palm gives them a floor plan.

"How can you justify spending, let's say $5,000, on paper? That's all they get," Palm says, referring to the floor plan. "Well, having to have another employee because of inefficiency could cost10 grand a year. What if 10 customers come in the front door and three of them never come back because it's taken too long three times in a row? How much is that? Another 10 grand."

Retailer Hubbard says the importance of the floor plan cannot be overestimated. "If your espresso machine is in the wrong location because you can't afford to have a drain in the middle of the floor because that would require you to core drill the floor, you're probably better off to core drill the floor and have your espresso machine positioned where it should be," Hubbard says. "That (floor plan) is really the most crucial part of the whole build out."

Some municipalities may require that the floor plans be stamped with the approval of an architect, which can cost thousands of dollars more, Palm says. In some cases, a specially qualified subcontractor, such as a master plumber, can provide the permits and stamped documents that the city requires, he says.

Architect Connors points out that equipment vendors may provide floor plans for free, but questions the usefulness of such plans. Most spaces probably require customized designs, which is why a professional is needed, he says.

According to Connors, the total cost of an architect's services may range between 7 percent and 15 percent of the build-out costs, depending on the level of expertise required by the client. An architect's input may begin with helping to negotiate improvements to the plumbing, electrical and HVAC systems, continue through the layout of the floor plan and extend to reviewing contractors' work and designing the decorative elements of the coffeehouse.

In general, for a 1,200-square-foot coffeehouse, the layout costs will run between $5,000 and $10,000, averaging around $7,000, according to Connors. For that price, the client gets initial drawings (the pre-design phase), a preliminary layout and technical drawings (showing where the plumbing, electrical and HVAC systems go).

"Those technical drawings become a very important basis for the contractor," Connors points out. The contractor agrees to build what's on the drawing, so if the drawings are wrong, that's what he's being paid to do, Connors says.

Keep in mind that the completed interior must be inspected and approved by the municipality's health and building departments before the coffeehouse can open. These departments are concerned with things like the number of bathrooms, electrical systems and availability of parking. So, it may not hurt to take drafts of the floor plan and/or technical drawings to each department for feedback. Even if the inspectors won't be able to grant approval based on the drawings, time is not wasted, Connors says. "They love it when you come in early because that lets them head off a potential problem down the road," he says.

Tom Palm says it's best to check out the requirements of these departments before the lease is signed so you know your space will be able to conform to the rules of each. Too often, Palm says, operators put off the inspectors and wait until the last minute to find out what's required.

WHERE THE MONEY GOES

No matter the size of the coffee shop, a major chunk of the budget usually goes toward coffee brewing and restaurant equipment. While some say that a coffee shop can be opened for as little as $50,000, some equipment packages run that high. Utilities--plumbing, electrical and HVAC--can represent one-third to one-half of the build-out costs, Connors says. "That's everything you don't see. And, gee, it's too bad that you're spending so much money on all that stuff that you don't see, but you certainly benefit by its use," he says.

Another good chunk of the budget goes toward what is visible--millwork, cabinetry, shelving and display cases. It's important, Connors notes, to get quality craftsmanship and materials because these elements go through a lot of wear and tear and have to look good.

According to retailer Hubbard, a typical Hubbard & Cravens store has about $40,000 to $45,000 worth of equipment and $50,000 to $70,000 worth of high-quality cabinetry and countertops. The build-out, including walls, floors, ceiling, plumbing, electricals and HVAC, adds $100,000 to $150,000.

Included in that are architectural fees of about $12,000 to $15,000. Hubbard says the architect usually provides blueprints to get approval from the city and also meets with the specialty subcontractors, such as the electrician, to explain the plans. The architect also stops in occasionally to review the progress of the build-out and designs the interior of the store.

Signage is another expense of the build-out. The exterior signage is usually determined by the landlord and building codes, Hubbard says, and they hire someone to work on interior signage, such as menu boards.

The whole idea of having a budget is to prevent overspending, but one part of the budget that is an absolute must is the contingency fund, says Connors. "And the attitude toward that contingency should be that it will be spent," he says. "You just don't know what it's gonna be spent on yet. And, if it doesn't happen to be design services, it will probably be construction, if not that it will be furnishings, if not that it will be some tax or building permit fee that wasn't anticipated."

Hubbard and his associates didn't know it at the time, but they needed $60,000 in contingency funds when the first Hubbard & Cravens coffeehouse was opened in 1991. They had at first budgeted $280,000 for their 1,800-square-foot coffee concept, hiked that to $300,000 and ended up spending $360,000, or nearly 30 percent over their initial projections.

Hubbard says the extra $60,000 was mainly due to construction overruns, but some of it was directly their fault because of change orders--when a client makes a change to the existing plans--which can be extremely costly, he says. By the time the third store was opened, the cost was whittled to $170,000. The next store, projected to open in May, is budgeted at $210,000 and will be 2,000 square feet, Hubbard says.

LOOKS COUNT

The build out may include a lot of elements that are not exactly glamorous--plumbing, heating and lighting--but are, of course, fundamental to the building. Yet that doesn't mean that what the walls look like is less important than what they're made of.

Mark Swanson, vice president of Stauf's Coffee Roasters and Cup o' Joe concepts in Columbus, Ohio, says the design of the coffeehouse is where an operator can make his mark and stand out from the rest. "That ties you to the community," Swanson says.

Swanson says layout and design costs can range from $5,000 or $10,000 all the up to $100,000, depending on the scope of the work. Whatever the budget, the goal is to make the coffee shop inviting, he says.

"The days of hunter green and dark cherry wood and an 800-square-foot shotgun space are over," Swanson continues. " I think finding character and making it a very comfortable and aesthetically pleasing space is very important."

For that reason, architect Mark Connors says it's important not to skimp on the interior design elements. Perhaps, he says, a less fancy electrical system can be substituted for a more expensive one, so that extra money can be spent on putting in granite countertops or real hardwood floors. The design, he says, should flow with the rest of the elements of the coffeehouse, such as the layout, lighting and cabinetry.

"All of those elements contribute to the symphony of your coffee shop," he says.

Rick Hubbard suggests working backwards. Take the budget and subtract the expenses for all the essentials, such as the mechanicals, equipment, shelving, cabinetry, and display cases. "If you ultimately end up with only $30,000 or $40,000 for flooring or ceiling," or other interior design work, Hubbard explains, "you can get real creative. I've seen some very cool things done with paint on concrete floors, that sort of thing. You don't have to have ceramic floors."

On the other hand, Hubbard says by not using a professional there's always the risk that the place will look amateurish. But, he says, a little money and a lot of creativity can go a long way.

"A professional may walk in and take it apart," he notes, "but there's no real right or wrong in this. It's what you like and what's comfortable."