Labor shortages, an increase in labor costs, or an inability to attract employees could harm our business.
Our employees and our ability to deliver an enjoyable cafe experience to our customers will be essential to our operations. If we are unable to attract and retain enough qualified coffee personnel at a reasonable cost, and if they do not deliver an enjoyable customer experience, our results may be negatively affected. Additionally, competition for qualified employees could require us to pay higher wages, which could result in higher labor costs.
The cafe business is highly competitive. Although we believe we have a strong brand and will have strategic locations, there are many existing coffee shops in our market. Some of these competitors have substantial financial and marketing resources as well as a longstanding customer base. As a result, these competitors may be able to devote greater resources to marketing and sales than us. While we continue to retain customers where our current cafes exist, there can be no assurance that we will compete successfully in other neighborhoods.
Our Success Is Dependent On Our Current Management
Our success depends on key contributions and continuing involvement of our current management team. Our success also depends in significant part on our ability to attract and retain additional management and other personnel. While we do plan for turnover, abnormal or excessive turnover in a short period of time, especially with our existing management team, may impair our ability to successfully implement our growth plan. This could have a materially adverse effect on our business.
Risks of Borrowing
We may have to seek loans from financial institutions or other Individuals in the future. Typical loan agreements might contain restrictive covenants which may impair our operating flexibility, and may require us to provide a security interest in our assets.
When dealing with a food product, there is always the risk of dealing with a product liability claim. Incurring such a claim could increase the cost of insurance. It could adversely affect our business operations and decrease sales.
Our retail locations have historically shown seasonal sales dipping in the Chicago winter and rising in the summer. These trends need to be planned and budgeted for our margins to remain sustainable. Abnormally adverse weather does have the ability to slightly impact our projected sales.
Small management team
Currently Tim Taylor is the sole person on the management team which could be limiting.
We have rent and lease agreements could easily change and is therefore risky to potential investors.
We have had to acquire local licenses and permits to operate so are at risk of these being terminated by local authorities.
Due to the nature of our business we are susceptible to fluctuating costs of goods sold
We have multiple loans outstanding and may, due to unforeseen circumstances, be unable to pay them.
We have historical operating losses which may be concerning for potential investors.