Finding the Space to Start & Open a Coffee Shop
We've all heard the phrase: Location! Location! Location!
Well, finding a good location is a central element of success for any coffee business – but the additional key is finding the right space within a good location. Additionally, finding the right place (space), within a given location – at the right price becomes even more challenging.
Finding the space to open a coffee shop, cafe, or a coffee drive-thru stand can be daunting. Don't be surprised if it takes you months or even a year to find to the perfect location in your vicinity. The location needs to be right, as does the space – and you have to be able to get it at the price that works for you and your budget. In reality, there is a very small space that all of these elements come together for you and your concept (see graphic and arrow below). Therefore, planning out your business matters before you set off searching for that “perfect spot” – as with anything, perfect may not come at the right price or have the right location.
In fact, consider the graphic below. Here you will find the “general” area that you would look to open a coffee business. This area might be the general vicinity of where you live – and may represent your driving range, time constraints, property rentals, pricing, etc. In this general space, any number of business will thrive – the question is finding the most ideal spot for starting your coffee shop. In the next spot, you've closed in on the area which you would like have your coffee shop.
You've determined through your market research observations, and analysis of the market and competitors, property prices, etc., that within this area, you believe your business should be in. Of course, some spots or commercial spaces are better than others – so the idea now is to find the right spot within this area.
Your Coffee Shop Business – Location, Space, & Customers
The important follow-up question is, how much space will you need exactly? The answer depends on your business concept and your coffee business menu. And still despite that, we'll venture to answer by saying, “not much space at all.” Over the last several years, we’ve seen some very creative spaces that have been turned into successful coffee shop start ups – or rather coffee businesses. All of them have succeeded despite having very little square footage. You'd be surprised what a little vision and creativity can do for your coffee business!
Of course, like other coffee businesses, you will have to envision your concept. Yet, there will be times where your concept will be bucked by the retail space available or perhaps a retail opportunity for you to start your coffee business. This is where you might need to be flexible and have the ability to adapt your business idea to get your coffee business off the ground. This may require you to “think out of the box” and determine whether your business viability and concept still has all the components for you to be happy with.
If you look at the graphic above, you'll see a purple circle, entitled: “The Best Area”. But what is the “best” area for you to start your coffee business? We believe that the very best area for your coffee shop business is a cross between whats subjective to you (and your concept), as well as the realities of the marketplace. This cross section is outlined below in the graphic, juxtaposed between the right location, right space, and the right price.
Why Not Throw Out The Traditional “Coffee Shop” Business Concept?
While you are in your planning/daydreaming phase about your coffee business feel free to go beyond the traditional parameters of what a coffee shop is supposed to be like. Take a look around in various corners in your community – where would or could people benefit from a well-served coffee? Think outside the box. Where are people naturally flowing or congregating to?
By experimenting with the concept, you might be able to unlock a success story waiting to happen. After all, a coffee business can succeed nearly anywhere there is a constant stream of people – foot or vehicular traffic. Additionally, you may also take a look at other businesses in your area – do they have more than enough space to house a small coffee shop with their store?
Perhaps, there is a struggling bookstore who can use an infusion of business (which your coffee business can provide) or there is a record store that may need to way to attract more customers, have them stay longer, and provide a greater banner to market the location. A coffee business can literally be anywhere you wish to set up shop! Our limitation can only be our ability to see a plan that works for your target market.
By the way, if you can't find the right space, consider creating your own with your very own coffee truck!
Consider the Possibilities of Starting Your Coffee Shop Business
One flower shop owner in Seattle had the extra space and needed more people to come into her business, so she asked another business owner to start a second café in her store: The result – plenty of new customers, a thriving café business which pays rent, and a fun place to work – not to mention all the great coffee she wants!
A drabby coin laundry business needed a pick me up. There was room next store, so why not had a second business to generate money from the customers who were simply sitting down waiting for the coffee. Genius!
An abandoned building was the blight of the neighborhood – only to be turned into a coffee and tea place. Today the business is successful and is used by the community as a hub to meet friends and family. Success!
So, How Much Space Do You Need to Start Your Coffee Business?
Well, we recently spent some time visiting on the popular cafes and coffee places around the Northwest and found a unique design carved out of a corner building. The actual square footage in the bar area is probably less the 90 square feet. Consider Caffe Vita's spot in Portland, which has a very competitive coffee scene. In their downtown location, you can see (from the pictures below) that their coffee shop is actually just a sliver of space that has everything you want: a great location, lots of foot traffic, and a world famous donut business just right across the street. In between the donut shop and their stand are several tables where customers can sit.
Here are the pictures:
Does this concept spark any ideas? Can you imagine a particular unit or building in your home town that can be remodeled like this? Let's get that creativity cranking! They took a seemingly impossible space and turned in into a thriving business. Another location, in Seattle, one coffee shop owner turned an unused and abandoned washroom and made it into a thriving – though small – coffee business.
Do You Need Even Less Space to Start Your Coffee Shop Business?
You might not need a lot of space to create your coffee shop. A little creativity, vision, and a coffee business plan can help you generate the thriving coffee business you've always wanted.
The same for an espresso stand in Seattle who’s under 140 square feet:
When you are trying to figure out where in the heck to put your coffee shop or coffee business, you should consider thinking outside the box. Coffee can literally be served anywhere. The picture above is from a popular espresso stand in Seattle. I believe it has less than 150 square feet. The space is perfectly situated to serve coffee on the go to busy office workers, tourists, etc.
More Thoughts on Your Coffee Shop Location
The bottom line for any retail business is that you need high volume of potential customers. Potential customers translate to greater sales. When you start your business, consider how the addition of your coffee business into a specific location will impact the needs of those people (or customers) around it. While you may be “in love” with a specific location at first glance – it is recommended that you ask yourself some basic questions before you even consider flirting with signing any lease:
- Who will your customers be at this location?
- Where will your customers be coming from? (a bus stop, university, theater, shopping center, etc.)
- Will you customers drive or arrive on foot?
- If they drive, what direction will they be coming from? Where will they park?
- How do other non-related business impact your business?
- Are there competitors or substitutes in the area?
- Will the neighborhood’s reputation impact your potential business?
- Are there any other factors (positives or negatives) that a reasonable person see?
Spend time mulling over each of your answers. You may consider moving forward or looking elsewhere. After honestly answering these questions and if you are satisfied that the location is promising, you can move on and do some further investigation. While you start contacting the property manager or owner of the space.
Remember, that prior to approaching any property manager or owner, you will want to have your business plan finished. A property owner or property manager will most likely want to meet with you and see your business plan.
Balancing Your Budget With Potential Sales
You will have to consider the balance between choosing a location that has the “perfect” price with the location that has high potential for generating greater sales due to its proximity to more potential customers.
For example, let’s say you are looking a nice space and think that the location can work for your coffee shop. Additionally, another similar space across the street is a little more expensive, but has better parking, a bus stop in front of it, and is within the flow of natural foot traffic in the vicinity. Perhaps the rent is $400 more a month. Do you choose the less expensive option? Or do you go with the more expensive option and try to make up the difference in volume and sales?
I can’t tell you what decision to make. You will have to make that determination on your own with the help of analyzing a variety of specific factors that pertain to your location. However, one way to analyze the situation is to simply put yourself in the shoes or behind the wheel of your potential customers: Where would you want have coffee? Where would you rather meet a friend for tea? If you had a toddler and a baby stroller, would you cross a busy street to get to your location? Additionally, how many more drop-in customers would you get at the prime location?
These aren’t easy decisions. When it comes to comparing two (or more locations), perhaps you can further inquire about both – at the same time. Meet with the property owners or managers and figure out what their requirements are. Two properties owned by different people might have two completely different schemes you will need to consider. After all, the details of a property lease is more than just the rent. For example, there are some leases that restrict specific menu items, signage, or hours of operation.
While, it is certainly important to stay within your estimated budget, you may have to alter your budget slightly for the added benefit of more sales volume or more flexible leasing terms.
What to do? I’m really into making lists and comparisons. If you are having difficulty seeing through the various options, make a list. What are the pros and cons? What is the difference in price or potential sales? It will be important that you don’t undermine the potential success of your business by picking a bad location based on the “better” price.
Note: If you haven’t already done so, consider listen to our very informative audio interview about leases.
What You Do Need: The Ability and Fortitude to Plan, Plan and Plan Your Business
We all know that planning is essential. There is no way around that. Without a viable plan, your business will struggle move forward. But where do you begin? By starting your business plan early and meticulously, you will be able to increase your chances of success! Of course, the ability to plan and mold your concept into a cohesive plan will impact the total start up costs for your coffee business.
This is information that you will want to know before delving into construction. There are certainly a number of considerations that you will want to jump into before signing a coffee business lease. These would include design issues, health department issues, any other municipal issues.
Look at the video below. Here's an interview with a coffee shop designer. In the video he discusses what the biggest mistakes people make when it comes to their cafe. Now designing your cafe or coffee business is only one (1) important aspect of your business. And yet, it plays a critical role in the overall planning of executing your concept. As with any business, you will need to make sure all the pieces fit together perfectly – and that takes planning!
Q: So, what is the biggest mistake people often make when it comes to starting a coffee shop? Watch the video:
Your Coffee Business Plan – while a business plan will not always guarantee success, planning out your business will certainly help you get your coffee shop business planning off on the right foot. In addition in helping you visualize and articulate your business, there is a high probability that it will be required by bankers, investors, and property managers. In other words, having your completed business plan in hand makes your business entity more legitimate to those potential stakeholders. It shows that you are a serious business person who is willing to do the homework and able to follow through on creating a viable business.
To help you with your coffee business plan, you might consider ordering our very affordable coffee shop starter kit: The Coffee Shop Business Plan Guide. It's an easy way to get the help you need to start your coffee business plan easily and effectively.