How To Choose The Best Location For Your Coffee Stand Business
Location matters. It always has! Especially for coffee stands. Most importantly, location matters for YOUR coffee stand business.
So, where should you set up your coffee stand business?
With your money and your business at stake, it’s not a question to take lightly. Whether you are purchasing an existing coffee stand or you are starting a new coffee business altogether, you are going to be evaluating several locations to answer the ultimate question:
“Which location is best?”
Often, “better” coffee stand locations will cost more because of ideal traffic, access to plumbing, and the availability of electrical outlets, restrooms, and a commissary.
But are all these elements worth the additional cost? Maybe. (That’s what we’re going to try and figure out!)
There are two things that we find extremely valuable when you evaluate your coffee stand location:
- Your Lease Terms.
- The existing vehicle (and foot) traffic.
The terms of your lease plays an important role in the ultimate success of your coffee business. Sign a bad lease, and no matter how “good” that location is… your business could be doomed.
Likewise, if your landlord is difficult to deal with, getting things fixed or addressed could be a money-busting hassle. And downright unpleasant.
Of course, without traffic, your coffee stand will have little chance of succeeding, regardless of how favorable your lease is. So, the quality of the traffic needs to be heavily figured in your equation when selecting the right location for your coffee stand.
Why Identifying Your Customer Is Essential
When it comes to your coffee stand business, ask yourself one question:
Who will be your ideal customer?
When looking at the “best location” for your coffee stand, we first want to identify who will be your customers.
Are they part of the early morning rush crowd that you want to serve on their way to work? Are they college students on the way to their morning class? Are they the road-weary traveler or truck driver filling their tanks with gas and looking for their caffeine jolt?
Take a moment to determine who 80% of your customers will be. This will help you determine where you should place your coffee stand and what you will ultimately serve them.
The Chicken or The Egg?
Remember, a successful business solves a problem. Always consider whose “coffee problem” you are solving when you consider your location.
When it comes to your location and your customers, understand that it’s a lot like the “Chicken and Egg” Scenario.
Which comes first? The location or the customer?
One cannot be considered without the other.
To better understand your customer, take a second to fill in the next statement regarding the location of YOUR coffee stand business?
My typical coffee stand customer will be BLANK on their way to BLANK.
When you fill in the blanks, really think about who your customers will be and where they will be going as they pass your coffee stand. For example, will you be on the “right” side of the street as people are heading to work? Will you be on the “right” side of the street as students are walking or driving to their university classes?
Here’s an exercise you can do today (and takes no money to do!):
Action Step 1: Consider 3 locations in your community that you would consider establishing a business. Determine why they would be great locations.
Action Step 2: Determine who your customer will be. Complete the statement and fill in the blanks.
My typical coffee stand customer will be BLANK on their way to BLANK.
Addressing Your Needs and Amenities For Your Coffee Stand
Let’s focus on your actual needs as a coffee stand owner. This requires looking at your amenities and your Leasing terms for your coffee stand.
First, let’s start with the basics. Your coffee stand will need a few things for you do deliver your coffee:
- Power (electrical, gas, or propane)
- Water (plumbed or self-contained
- You will need a commissary
- You will need a restroom for you and your employees
Without these four basic things, you will not be able to serve coffee.
If you have already considered several spots you may have determined whether or not you will have access to water and power.
Even if you don’t have water or power on the premises, you can certainly bring your own but this requires planning and may require additional permitting.
You will need a commissary as mandated by your local health department.
You may find a commissary on the premises or you may have to look for one. The type of commissary you need ultimately depends on you what you will be serving. For the most part, your commissary will require multiple sinks, a place to wash your dishes, as well as prepare and store your food.
Finally, you will need to provide yourself and your employees a restroom nearby. Having a restroom is important and is often required to do business. It is fairly common that restrooms are within 200 feet of a business of your coffee stand.
As you begin to narrow down your location options and plan your coffee shop, make sure that these basic issues can be satisfied before you move forward with choosing a spot. If they can’t satisfied, look elsewhere.
Your Coffee Stand: Counting Customers (& Sales) Before You Settle on a Location
Let’s talk about counting customers. This is something that we strongly recommend that you do before choosing a location.
“Counting Customers” is just that….actually counting perspective customers to your business.
While it’s not magic, the results can be revealing.
The idea is to see how many customers (real or potential) will access your coffee stand business.
Ultimately, counting customers is important because you want to be able to determine your potential sales.
If you are buying an existing stand and staying at that location, then this is a bit easier because you already have an existing business to work with. You will be able to actually determine how many customers enter your business.
If you are proposing to build or move a new stand in a new location, it may be a little more difficult.
Let’s start with an existing business.
Let’s assume that you are buying an existing stand and your intention is to remain at that specific location.
You should consider picking several times during the week for 90 minutes or so (about 1-2 hours) and count how many customer enter the business.
You will want to do this several times, perhaps at the same time on different days of the week and get an average customer count during those times.
This number will help you determine your potential customer base and potential sales.
If you are putting in a stand in a completely new location you will have to be more creative.
You may have to count cars passing by or count customers to existing businesses nearby. If there is a coffee stand on the same road, you may consider counting their customers. Whichever method you choose, you want to be consistent in your counting by picking the same times of day to compare your numbers with.
Right off the bat, you’ll get a good idea as to what the numbers you will be working with. Additionally, your final numbers will be entered into your coffee shop business plan and will help you determine your estimate sales and income statements.
Counting customers may not seem like a “high-tech” way to determining your sales, but you will be surprised just how well it can determine IF “your location” is the best location for your coffee stand business.
Your Coffee Stand Business: Addressing The Competition
Picking the right location means that you have analyzed your competition and assessed that you can be successful anyway.
First, we believe that you shouldn’t be completely threatened by your competition. Another coffee business that existed in an area for more than a year means that there is a market for people who are interested in espresso-based drinks.
Second, you have to believe that your coffee business can compete with any other café or coffee shop chain. Yes, that means even the big guys!
Here’s how to compete with your competition:
Stay laser-focused on your customer. By staying customer-focused (satisfying what they want and what they need and how they need it) then your coffee business has an excellent opportunity to thrive in any competitive environment.
Lean on your competitive advantage. As you develop your coffee business, you should figure out what’s going to make your coffee business unique or special. Whether it’s the choice of your coffee beans, your drink options, or your customer service, you should focus on that “one thing” which makes you special.
Anticipate competition. There will always be competition. Whether it’s an existing coffee shop or new coffee business coming in. Competition is part of the game. This places pressure on you to deliver delicious coffee and great customer service, every single day.
Additionally, anticipate that your competition will adapt to your entrance into “their” market. Whether they decide to lower prices, offer new products, or they re-focus on their competitive advantage, you should know that your entrance will generate a response by your competitors.
Adapt to a changing market. Whether you have a changing customer base or you are experiencing new coffee trends and tastes, you will need to adapt. Listen to your customers and what they are asking for. Now, don’t adapt to be more like the competition, adapt to satisfy your customers.
Be thoughtful before choosing a location. Placing your business right in the middle of a major coffee chain location and a well-established independent coffee house may not be the best idea. Ask yourself, are customers in this are looking for coffee? Are there their needs already being met in one way or the other?
How to Make the Most of Your Location
Getting the “perfect” location is only half the story. It’s what you do with the location that also matters.
We’ve seen many potentially great locations go bust, because the coffee business owner never really leveraged their location to serve their customers in the most optimal way.
It starts with your lease and your lease terms.
Your lease will often determine what you can (and can’t) do with your space. Negotiating a lease that offers you favorable terms is essential to your success.
Consider listening to our one-hour interview on your coffee business lease with a national expert on leasing coffee business.
Reach out to all your commercial and residential neighbors within 200 yards.
As the owner of your coffee stand, physically introduce yourself to your neighbors. Bring fliers and a special “neighbor” coupon. Shake their hand, smile, bring along one of your baristas if you want to.
Third, make sure that you have proper signage placed outside. Give passing cars the opportunity to plan and safely stop by your coffee stand. This may require anything from A-frame signs to larger billboards.
Fourth, utilize colors, lights, and signage that draws attention to your coffee stand. A bright colored stand with lights and clear signage that let’s those who pass by who and what you serve will be beneficial.
- Finding the perfect location for your coffee stand business may mix a little science and art. Yet it also requires a little thought and reflection. By putting yourself in the position of your potential customers, you will be able to better draw them to your business.
- But getting them is half the battle. Remember, staying focused on your customer will be the most powerful way for you to earn a good reputation and repeat business.
- Get our Coffee Shop Startup Kit and hear directly from coffee shop business owners. Learn how to start your coffee shop with less money and avoid common mistakes.
Starting Your Coffee Business: With The Right Answers You Need
Have you ever wanted to ask successful coffee business owners how they started their business?
If you are going to invest your hard-earned savings in a coffee stand…would you want to know how they started their business?
You would probably have many other questions, such as:
- How do I start my coffee stand?
- How can I save money starting my business?
- What equipment should I buy?
- How should I figure out my budget?
All these questions, and more are answered in our Complete Coffee Shop Startups Kit.
With over 14 hours of audio interviews with coffee shop owners and coffee business experts, you will get the most comprehensive guide for starting your coffee stand.
In addition, you’ll have access to several helpful guides that will give you the knowledge you need to get your business planning off the ground.
With the Coffee Shop Business Plan guide and template, you will be able to start and finish your coffee stand business plan quickly and easily. Save time, money, and get the information you need to start your coffee stand business today.