Starting a coffee shop can be profitable if done the right way. Pass by any coffee shop and you will find it filled with customers enjoying coffee, lattes, teas, and espresso and various kinds of bakery items. Serving high-quality products in a trendy and relaxing environment is a successful business model. If you are a coffee lover and want to start a business, then here are a few tips to start a coffee shop and make it a success.
Generally, there are three basic options for starting a coffee shop.
- Buying a franchise, in which most of the important decisions will be made for you. For a franchise charge, you will be offered with a turnkey business in a place chosen by the provider of the franchise.
- Purchasing an existing business- This is another way to attain a turnkey operation. However, finding a profitable business for sale is not a simple task.
- Starting from scratch- This option needs the hardest work but has more flexibility and the best potential to increase profits.
Whichever option you select, the same fundamentals for success are applicable. Your business plan for starting a coffee shop should include these important tips.
Tips to start a coffee shop
Research the coffee business
One of the important tips to start a coffee shop is to research about the coffee business. Opening a cafe is a huge investment in terms of both money and time. It is important that you spend some time understanding the things required to run a successful coffee business. This means you need to reach out to coffee business veterans and learning from their experiences, finding out what works and what does not. The best part of this is you get the chance to visit lots of cafes. Think about what you will take from other businesses and what will you do differently from them. Learn about your customer base. Who will be your customers? What do they need? What time of the day is the busiest? Knowing your customers well will help you to plan, create a menu, and price points.
Write a coffee shop business plan
One of the most important steps you will take towards starting your coffee shop is to write a business plan. This document will include:
- What is your business and whom does it serve?
- How it will be profitable?
- Your target markets
- Your competitors
- Revenue and sales projections
- Goals and milestones
- Try to keep your business plan lean
Before you dive into cleaning a traditional, long business plan, it is recommended to create a one-page pitch. This will allow you to validate your business idea and get the right sense of who your market is, what is your plan to reach them and find methods to differentiate yourself from your competitors. Will you just use high-end coffee grinders and varieties of coffee beans? Will you include baked goods on your menu also?
Find a good location
One of the most important tips to start a coffee shop is to find the right location. Before starting a coffee shop, understand why they are becoming so popular day by day. First, coffee shops are one of the best places to socialize. Several statistics show that coffee shops are the most popular to meet colleagues and friends. They are a preferred spot for people who want to pass their time reading a magazine or book or surfing the internet while enjoying a snack or beverage.
Coffee shops are a popular place for informal business meetings or maybe for students to catch up and discuss their schoolwork. Visit any popular coffee shop, and you may see a realtor reviewing listing with a group of students or a client collaborating on a project.
Given the above, finding a great location plays an important role in attracting customers when you are starting a coffee shop. If you are buying or franchising a current business, the site is preselected, but you must still do your research and decide whether the current or chosen location is a good one.
Location vs rent- Keep in mind that the most central locations are not always the best one. Malls and other high-traffic sites typically have high rents and competition. Storefronts are great locations for coffee shops, they have high visibility and the rent is generally lesser compared to malls. Moreover, you can set your own business hours.
Vehicle traffic and parking- Unless you locate your coffee shop in a mall or other high-pedestrian traffic place, you must think about the parking and accessibility. If a customer must make a tough turn in a busy street to reach your coffee shop or they have difficulty in parking, they are likely to take their business somewhere else. Ideally, you want a highly visible, convenient location on a busy street with a proper parking facility.
Find the best supplier
Wondering how to open a coffee shop and bakery? Finding a good, reliable supplier is an important component of business success. Based on the type of coffee shop, the major suppliers are generally milk, coffee, groceries, bread, and other bakery items. You will require cups, coffee stirrers, napkins, syrups, teapots, and many other things. You must start by making a list of all the essentials you require. The list may seem overwhelming but adding items like napkin holders and toothpicks will ensure you are prepared for everything. From there, you can start researching suppliers until you find ones you like and who fit your business.
Provide great customer service
Excellent customer service is the hallmark of a successful business, mainly in the food industry. Combine a great location, high-quality products, and great customer service, and chances are, you will ultimately have a successful coffee shop business. If you are thinking about how to improve the coffee business, then the answer is by providing great customer service. Surveys show that 4 out of 5 customers consider customer service as important. One of the secrets behind Starbucks’ success is its efficient and professional customer service. Every coffee shop must follow their business model.
Counter service vs table service
Most of the coffee shops use counter service. Having customers order calling them when their order is ready lessens labor costs and enables you to handle busy periods like lunch and breakfast better. Generally, table service is slower, labor-intensive, and better suitable for restaurants where customers order full meals and spend more time in the shop. On the positive side, having a table service gives more chance to upsell the customer with delicious snacks or desserts.
Create a menu that complements your coffee shop
Your coffee shop’s menu must express your vision and theme of your coffee shop. Everything must be considered, from food choices, to design, fonts, and color, to product descriptions, pricing, and pictures. Think of a signature dish and how that will shape the style of your menu. Try to keep it simple. One of the common mistakes’ coffee owners make is they try to please every customer. This can leave you with dozens of products that are hardly ordered. Try to focus on more than 10 to 12 killer choices that will please everyone. Make sure to include vegan, gluten-free options. Your menu must be profitable. Calculate the ingredient expenses and margin of each product. As a rule of thumb to get started, the ingredient costs must be more than 35% of the retail price.
Create a relaxing and trendy atmosphere
Several studies have shown that many people believe the atmosphere is the biggest attraction in a cafe. On top of its customer service model, Starbucks’ cozy, comfortable, and relaxing atmosphere is one of the main contributors to its success.
When opening a cafe with no experience, having the correct environment is important for attracting customers who love to hang out with business associates or friends. Visit any popular coffee shop on a weekday afternoon and there are chances that you will see a huge group of students completing their assignments or business associates discussing their project.
The ideal atmosphere of a coffee shop is bright and clean with lots of natural light and lots of seats. You can use a mix of seating and table, like bench tables so that you can easily accommodate single customers and big groups too. Be sure to fix plenty of lights for dull days and evenings. Having an outdoor patio space increases the visibility of your business.
Unless you are a design expert, consider using an interior decorator who will design the interior of your coffee shop. You want a personalized, distinctive ambiance that will attract customers. This involves all design elements including furniture, layout, lighting, decorations, and flooring.
Create a marketing plan for your coffee shop business
After months of hard work, once your cafe is ready, you must start advertising it online. Use different social media platforms for your business. Make sure your Google Platform Listings are accurate and consider claiming your page on review sites like Tripadvisor and many other sites so that you can respond fast to feedbacks. Make online promotions interactive, engaging, and personal. Try to use videos and images to encourage more engagement and shares. When customers visit your café, request them to follow your page and in return, give them freebies and updates.
The opening ceremony of your cafe
Opening your coffee shop is an incredible achievement and will mark the starting of an exciting journey. After several months or years of planning, hard work, and appointing the best people, your “grand opening” is an opportunity to show your hard work and skills. This is one of the important tips to start a coffee shop that every business owner must keep in mind. To arrange a successful grand opening ceremony, start planning early. Ensure you have enough workers for the event. With your shop opening, you can be your own boss, build profits, and make new relationships across the community. And, most significantly, you will enjoy sharing your desire for one of life’s biggest pleasures…. Coffee!