Have you ever thought about how great it would be to open up your own coffee shop? It is an exciting business venture that can make you money whether you stay in the same place or move with the times. All over the country, America’s love for coffee is growing, and now there are many opportunities for entrepreneurs who want to capitalize on how much Americans spend on this hot drink. From instant coffee to gourmet coffees, people are spending more than $130 million each day at coffee shops across the United States according.
What you should do before opening a coffee shop
If you want to open a coffee shop, there are several things that you should consider before moving forward. The first thing that you will need to do is decide how much money you want to spend on the business and how much investment capital that you have for this venture.
If your goal is to make the most amount of profit as possible, then it might be best if you went with a franchise opportunity because this eliminates all of the large costs associated with building your own space from scratch.
Another option would be to find an area in town where you can set up a movable cart, trailer, or truck where people can come by and order drinks from.
If starting from scratch seems too intimidating you can explore the option of buying an old coffee shop or an established shop that is being sold.
You should also think about how your shop will be run. Do you have enough room for a kitchen to make pastries or sandwiches? How big is the menu going to be- how many different types of coffee and how many options do you want to give your clientele? You may want to consult with someone who owns a similar business nearby – how much does it cost her per month, how much she makes, what were her biggest challenges in the beginning, etc.
When it comes time for potential coffee shop owners to start looking at where they want their shop to be they’re not looking just anywhere…they’re specifically looking in high traffic areas with lots of people walking around on a regular basis.
Before determining a location, you will also want to identify who your target market is and complete a competitor analysis of other coffee houses in the area.
Other Things You Should Know and Consider Before Opening
Carefully select your coffee beans: Know what taste and flavor you’re looking for – when you want it to be roasted (light, medium, or dark), the country of origin, and whether you want a blend of different coffees from different countries.
Learn about equipment: Understand the difference between various brewing methods and which filter is best for your environment (e.g., paper filter vs cloth filter). Be able to explain to customers why it’s better that they should choose this over that filter for their brewing method.
Understand coffee chemistry: the right coffee beans need to be ground at exactly the right time. Too early, and coffee can taste like grass or dirt. Too late, and coffee can taste burnt and bitter. The coffee spill tray needs to be cleaned after every use or coffee will taste sour; the espresso machine needs to be cleaned regularly too, especially if you want your coffee shop to serve customers without creating a bad image for yourself.
Durability is important: All equipment needs to be durable enough not only for day-to-day operations but also for longer periods of time such as holidays when there is less business activity, and customer volume in your coffee shop while still being cost-effective. Moreover, specialty coffee shops usually have coffee equipment that is exclusive to coffee shops, not found in other restaurants.
How to Develop a Business Plan for a Coffee Shop
Search online for business plan templates. This will help you outline how much the rent is going to be per month, how much it will cost to build out your space (or how much you have to invest in equipment), how much supplies are going to cost you, how many employees you’ll need and how much they’ll cost, and what the profit margins are on all of your baked goods and drinks.
It’s worth mentioning if you will be applying for a loan through a bank, they prefer a detailed business plan including projections and a budgeting plan.
RELATED: How Coffee Startups Have Changed the Coffee Industry
Planning Your Coffee Shop Menu
We know you will be serving java, but will you offer other items such as pastries, simple sandwiches, smoothies, or ice cream? Do you want to send your customers home with a box of pastries, coffee beans for home brewing, cooking utensils, clothing items such as hats or T-shirts?
Know that more variety on the menu comes with more costs, but could help draw in new customers if other establishments in the area don’t offer these things.
How much does it cost to start a coffee shop?
Determining the startup cost of a coffee shop can be tricky because there are many moving pieces therefore the range of costs is huge being $10,000 – $300,000!
Before deciding how much to spend on your coffee shop, you need to figure out what type of equipment you want to use. For example, a traditional coffee shop will need at least one espresso machine. These cost several hundred dollars and require some degree of technical knowledge or the help of an expert. If you’re interested in iced or blended drinks, you’ll also need a commercial blender and ice shaver, which will add about another $1500 to your investment.
The amount of money that you spend on equipment is not the only factor involved when it comes to investing in a coffee shop.
Space rental costs can range anywhere from $500 to over $10,000 per month depending on where you are located and how much space you must consider how large of an area you want to rent, how well the location is located for traffic and visibility, how long you want your lease agreement to be, how big of a staff you think that you can hire with your business profits after expenses (keep in mind if your expecting people working for minimum wage they probably won’t stay very long), what type of equipment do you need? etc.
These considerations should be noted beforehand so that when the appropriate time comes to sign on the dotted line everyone knows exactly what they are getting themselves into and has no surprises as far as cost goes later on
Check around town for how much things would cost for lighting, tables, chairs, baristas uniforms, coffee grinders, espresso machines etc..
How To Find Vendors for Your Coffee Shop
Obviously, as a coffee shop owner, you will need some connections when it comes to sourcing your products. Some small shops use local businesses, while others order through larger foodservice companies. To find your vendors, inquire with other similar businesses in the area. You can also place an ad in the local paper or ask around the neighborhood.
Sourcing & Serving Coffee Beans
When sourcing coffee beans for your business, keep in mind how many people you plan on serving. Will you be using a drip machine? A French Press? An espresso maker? What kinds of coffees will you offer (blends, decafs, flavored coffees?) and how much will each bag cost on average? Keep good records!
Usually, coffee beans are priced per pound and they should last about two weeks if you get them ground once a week.
Marketing Your New Coffee Shop
As a new establishment, how will you market yourself? Will you invest in digital and print marketing? Start a loyalty program?
What kind of specials will you offer (buy one, get one free?) and how often will it happen?
Don’t forget to be present on social media, Google My Business, and go after those 5 star reviews!
Attract More Coffee Lovers with a Great Atmosphere
When it comes to launching a new establishment you want to stand out from other competitors. So how can you do that in the coffee industry?
Offer a unique environment and cater to your target audience.
Choose coffee shop decorations that create an atmosphere that will attract your coffee-loving customers. That includes decorating with coffee cup art, coffee bean displays, and coffee bean grinders.
Keep them comfy with large sofas, but offer tables and chairs who come in for business-related meetings.
Turn on Pandora for easy listening, or choose a playlist that fits your clientele.
Employ baristas who know coffee well
If you want to provide a coffee experience that rivals the best coffee shops in Sydney then you need baristas who know coffee inside and out. This includes coffee bean origin, coffee bean storage, coffee roasting process, coffee brewing techniques, and coffee equipment maintenance. If you can’t find trained baristas, be sure to build a complete training program for them so your team can be the best!
Create coffee tasting events
Coffee tasters are often very knowledgeable about coffee beans, the different flavors you can create with them through the various blending preferences or coffee infusing, coffee preparation techniques like coffee extraction, coffee roasting, and coffee brewing methods.
Build a Customer Loyalty Program
Customers love coffee loyalty programs because they get rewarded for their coffee purchases. Build a coffee shop rewards program with coffee points that can be redeemed for free coffee or coffee equipment.
Offer free Wifi
If you’re a coffee shop then be sure to have free wifi at your coffee establishment. It’s just another coffee shop necessity since coffee drinkers can’t go more than a few minutes without their coffee fix and they often need to surf the web with their mobile devices.
Have caffeine-free options for kids and coffee novices
Coffee shops are a great place to meet with friends and family. If you want your coffee shop to have a family-friendly environment then you should offer coffee blends that are specifically designed for the palate of coffee drinkers who prefer coffee without caffeine or coffee drinks like iced coffee that do not contain added milk.
Offer dietary friendly options
This could be nondairy, vegan, gluten-free, and other dietary-friendly options that are not only healthy but safe for those who may have allergies to certain ingredients.
Make your customers feel special
Send thank-you notes, host contests, email them often and make sure your team knows how important each customer is to you! Do a little something extra for them and they’ll do a little something extra for you!
Find other ways to stand out from the crowd and make your store memorable to customers to keep them coming back and turn your coffee house into the preferred go-to.
Coffee shop owners have an enormous amount of decisions to make before they open their doors, so we are hoping this post gets you started in the right direction!