Thinking about starting a coffee shop or SOME KIND of coffee business?
Well, if so, it’s really time to start getting EXCITED!
Another new year is upon us and with it comes another great opportunity to start a coffee shop!
The good news is that there has never been a better time to start a coffee shop than now. We’ve said it before, and it’s even more so today.
Over the last few years, every community across the country has seen a growth of independent coffee business spring up. Communities that our rebounding from the crushing job losses a few years ago, are making a comeback.
Thriving coffee businesses, which stimulate the local economy, hire local workers, and provide a sense of community, all contribute to the greater good.
Similar to starting a coffee shop in 2016, the positive news in today’s economy is just as strong:
The recent uptick in wage growth, lower unemployment numbers, and the average person busier than ever, all means that your retail coffee business opportunities never looked so good!
Additionally, an expanding market base of millennials who have grown up with coffee and “fraps”, propel the need for good coffee on every busy corner.
If you have been flirting with the idea of starting a coffee shop these past few years, but have decided that 2017 will be the year for you to get more serious about it, then you are in luck!
Ultimately, starting a coffee shop or opening a coffee shop begins with research. Developing your own coffee business requires you to take the time and investment in studying the existing market place and figure out your position in that market area. This means taking a good look at what other coffee shops have already done and what customers are flocking to already.
Fortunately, there are so many great examples of good coffee businesses that we want to encourage you to take a hard look them. Study them. Learn from them.
After working with several hundred business startups, here’s what we determined:
When you start a coffee shop, you don’t necessarily need to reinvent the wheel. Chances are there have been many coffee businesses who have already tried a number of (creative) things that may or may not work for you as you develop your own coffee business concept.
Most importantly, you can learn from them.
It’s a great proposition that we ask here all the time: If you want to open a coffee shop, why not learn from other coffee shop owners?
If you want to open a coffee drive-thru stand, why not hear from other coffee stand operators?
This is our simple, but powerful perspective: expertise is gained from other’s experiences, wisdom, and knowledge.
Learning from seasoned experts can help you successfully plan, budget, and launch your own coffee business.
So, the question remains: how should you start your coffee business in 2017?
Well, it may seem that you will have to do many things all at once. And with that, it can be very easy to be overwhelmed.
So, let’s take a different approach.
We recommend that if you want to move forward with opening a coffee shop, simply take one thing on at a time. Opening your coffee stand sequential manner can ensure that you reach your goal.
Of course, “how” and “when” you start your coffee shop depends on where you are professionally, personally, and what your general experience with coffee happens to be.
Taking on a business venture like opening a coffee shop is quite an amazing but it can also be tough! Consider reading about the questions you should ask yourself BEFORE you start your coffee shop here.
Here at Coffee Shop Startups, we’ve dedicated ourselves to providing you with the best online resource that you need to get your coffee shop running.
When you are ready, consider getting our Coffee Shop Startups Kit, which contains hours of relevant audio interviews with coffee shop owners, in addition to some essential coffee shop startup guides, you will want to read before writing your business plan.
So let’s get started!
How to Start Your Coffee Shop in 2017
Step 1: Learn from Other Coffee Shop Owners
While there is no right way to start a coffee shop, there are often plenty of examples everywhere that can help you figure out the direction you would like to take with your own coffee business.
Ultimately, we believe that learning from other coffee shop owners will help you take the first steps in the right direction when it comes to setting up your own coffee shop or coffee stand.
I think it’s important for us to state from the beginning that there is no need to reinvent the wheel here or make things too complicated when you are just starting to think about your coffee shop’s business plan.
Of course, you will probably want to create a unique coffee business and create an atmosphere or setting that is special for you and your customers.
The truth is that many coffee shop business ideas have probably already been tried.
That’s why we think that if you want to start a coffee shop or coffee stand that you may want to learn from other coffee shop owners.
After all, what better way to learn about a business or industry than to talk with actual business owners and industry experts?
This is especially true for the retail coffee industry!
What insights could you garner from a good conversation with a coffee shop owner?
We know that by taking a coffee shop owner (or two) out to lunch and picking their brain, you would be able to learn a lot about the coffee business.
Don’t have the time for asking a coffee shop owner questions?
Consider getting our Complete Coffee Shop Startup Kit. It contains nearly 15 hours of audio interviews with coffee shop owners and retail coffee business experts.
In addition to our audio interviews, you’ll receive nearly 600 pages of retail coffee business information to help you plan and start your business!
Step 2: Decide on Your Coffee Shop Business Concept
Take some time to daydream for a bit! This is the fun part of planning your coffee shop. Determine what kind of coffee shop or coffee business you want and mentally tinker with it.
Go ahead and daydream! (Take morning walks to a local coffee shop, paint, or anything to stimulate thoughts of you owning your own coffee business!)
What’s your concept shaping up to be?
Would you like to open a café-bakery? Would you like to set up a coffee stand? Do you think that starting a coffee cart would be the best option for you at this time?
Perhaps you want to have a café that offers live music on the weekends?
All of these are great options!
Since there are certainly plenty of choices to choose from, determining what will work for you and which option falls within your budget will be essential.
It’s okay to dream big. And it’s also okay to start small.
We’ve known plenty of coffee business who started as a basic coffee kiosk, selling coffee and beans at farmer’s markets and then slowly worked to their way to opening up a ‘brick and mortar’ location. It happens all the time.
It’s also natural to go back and forth with your decision making. Day dreams should be big, push the limits of your imagination.
Take your time.
Our recommendation is that you settle into a coffee shop concept that works for you, your budget, and that makes you happy.
Once you decide on the concept, you can start building out your coffee business.
Step 3: Start Writing Your Business Plan
Day dreaming is essential to developing your coffee business concept. To make proper use your day dreaming, we need to articulate those dreamy ideas on paper.
One of the best ways to grab all those great ideas that are swimming around your head is to turn them into a tangible, well-thought vision, and write put them into a coffee shop business plan.
Your coffee shop business plan is an essential part of your business startup. Not only will it help you flesh out your coffee business concept and branding, but it will help you develop your budget. Your coffee shop budget is the lifeblood of your business and getting on top of it early will help you start your coffee shop right from the beginning!
Just the actual thought process, thinking, fleshing out ideas, and then writing and articulating them your ideas on paper will help you when you approach your support network, investors or property managers.
Additionally, writing out your business plan will also make you a better negotiator, because instead of learning and making decisions on the fly, you will actually know what you want before you approach others.
Before allowing your business to rent or lease their space, most diligent property managers will require a business plan.
It’s also in their interest for your coffee business to be well-thought through and ultimately be successful.
A business plan will divulge to your property manager what kind of economic activity will fall within their leasing space.
Some of you might be asking: Is a business plan really needed for my coffee shop?
The answer is yes!
A coffee shop business plan requires thoughtful decision making and some number crunching, but it will ultimate save you time and money.
I will say it again: A coffee shop business plan will save you time and money.
The more you plan out your business before you spend any money, the less mistakes and budgetary blunders you will make.
Start writing your coffee shop business plan and don’t be afraid to tweak, change, or edit your plan as you move forward with your coffee business.
The good news is that writing a business plan doesn’t have to be too hard. In our Coffee Shop Startup Kit, we offer an editable MS Word template with detailed explanations for each section. All you have to do is read and answer the questions, and print!
Step 4: Form Your Business Structure
Determine the type of business formation you want for your coffee shop. As a coffee business you will have several options regardless of which state you’re in, such as forming a corporation or a limited liability company (LLC).
Certainly, you should make the best decision that works for you and your tax situation after doing some initial research.
With that being said, many coffee shop business owners often elect to create a limited liability company, or an LLC.
An LLC provides you with certain protections and legal cover that separates your business activity from your personal assets. It also allows you to open a bank account and other accounts that would otherwise be in your personal name.
Forming your coffee shop business in your state is often relatively painless and can often be done simply online through your state’s website, however if you want, you could also employ a business attorney or service to help you with the formation.
Once you form your LLC (or other business structure), you will be able to apply for your business license and worker’s compensation insurance.
Step 5: Develop Your Coffee Shop’s Identity Through Branding
Branding your coffee business can help you stand out in a competitive market place. Consider the success of Starbucks, Dunkin’ Donuts, and McDonald’s McCafe.
The branding that each of them has, undeniably plays important role in helping their business attract and keep customers.
Why invest in your business branding early?
Customers are often loyal to their brands because they usually feel a connection with them. They identify and gravitate towards what they know. Your branding provides your business a recognizable face in a crowded market place.
As a new coffee shop or coffee business, you will have the perfect opportunity to develop your own branding.
Branding interweaves your concept, vision, name, colors, level of communication and wraps it all together to deliver a positive, memorable customer experience.
Step 6: Get Your Website/Social Media Running
It’s been said that if you don’t exist online, you don’t exist. Your website is a great investment.
In today’s connected world, it’s true.
It doesn’t matter how small you are, having a website presence online in an age where everyone is online (nearly all the time), having a strong website presence is essential.
Your website will be the central hub for your online networking, providing your customers with vital information. Additionally, you can use your website to start an online coffee business to boost your revenue.
If you are looking for a website hosting provider, we recommend Blue Host for a coffee shop business.
Fortunately, getting and setting up your website has never been easier!
To launch your own website, you will need a web hosting service. We recommend Blue Host.
In addition to building your website out, you will want to get your Facebook page up and running.
Developing an online presence even before you actually start your business can generate local interest, attract potential employees, and serve as perfect way to promote your grand opening.
Get your FREE WEBSITE DOMAIN with BLUE HOST Here.
Step 7: Determine Your Coffee Shop Location
The ultimate success of your coffee business will be determined by where you decide to plant your coffee shop roots. Where will you set up shop?
Foot traffic, parking spaces, adjacent businesses, positioning on the “right” side of the street, and your space requirements all form an equation that needs to positively add up.
To make the location work for your coffee shop, you will need to have a favorable (or fair) leasing terms. These may include your access to parking, signage, patio or balcony space, restrictions of food, and other fixed or variable costs.
Here is simple equation to think about:
Your location + your leasing terms + your service = 90% of your success.
Just as your quality service matters, so too does your location and leasing terms for your coffee shop.
So, how do you find the right location?
Determining the best location for your business is an art and science. It’s a process that can take some time, so start early!
In our Coffee Shop Startup Kit, we offer an incredible interview with a national leasing expert that you cannot afford to miss.
Step 8: Determine Your Target Market
Who is your ideal customer? Why will your customer be coming to your coffee shop or coffee stand?
Are they local students who want to spend the evenings in study groups? Are they hurried commuters on their way to work?
While your customer base may be diverse and generally different, you may want to figure out who at least 80% of them are.
Once you know who the majority of your customers will be, then you can start to craft your business around solving their needs.
Just like any business, knowing and understand your customer base will provide you with a competitive advantage.
Ideally, you will spend more time working out the details in your coffee shop business plan. If you need help writing a business plan for your coffee shop, you can get access to our coffee shop business plan template, which offers detailed explanations and discussions. When you are done filling it out, you can simply edit and print! Voila!
Step 9: Look at Competitors & Substitutes
Studying your competition and the service they provide is something that you need to do. It’s simply part of the research that goes into opening any business, and an important one!
Consider what people are currently enjoying in your community when it comes to coffee. Why are they visiting their local cafes, neighborhood coffeehouses, coffee drive-thru stands, or other even the 7-Eleven in your area?
Is there a niche or segment that is not being reached?
Visit each of these locations and order their number one thing on their menu. Determine the taste, quality, and price.
How can you deliver better service or a better product? What would you change in your product mix that you don’t necessarily have to directly compete with those coffee business already in existence?
Consider how your level of competition will impact your business concept. How can you adapt or tweak your branding, product offering, location, or marketing?
Step 10: What Permits Will You Need?
Every municipality and county government has their own set of regulations for opening a restaurant, opening up a coffee shop or setting up a drive-thru coffee stand.
Your job is to determine early on, which departments you will need to speak to. You will work with your local health department, as well as your building department. These agencies may fall under your county or city government agencies. Either way, they are used to calls about business startups and will usually connect you to the right person.
It can seem daunting to speak with local agencies about your coffee business. The truth is that they exist to help you (though sometimes it wont seem that way!)
Yet, be persistent, take notes, and make sure that you get all the answers you are searching for.
Step 11: Determine Your Coffee Shop Budget
It’s nearly impossible to start a coffee shop and succeed without a budget. Still, many smart people never seriously develop one for their business!
We don’t want to speculate why people don’t invest in the time to create a budget, but we have a hunch that many believe that they can simply gloss over the financial details and “wing it.” Yet, the probability of success actually depends on the budgetary details.
Failure to plan a coffee shop budget, often leads to large financial losses and delays in getting their business off the ground.
This is why we recommend that before your coffee shop business begins to take shape, you should develop a budget.
We recommend that your budget be an integral part of your business plan.
If you’re looking for help to develop your budgetary goals, consider getting our Complete Coffee Shop Startup Kit. Our business plan will help you look at the cost and budgetary outlays that will be most common in a small coffee shop business.
Step 12: Settle on Your Menu
Your menu determines everything about your business. It is essentially the lynchpin that ties your whole operation together.
Your menu determines what equipment you’ll need. Your equipment will determine how much space that is necessary.
And finally, your menu, your equipment, and your space will determine the amount of labor, supplies, and capital you will need to start your coffee shop business.
This all impacts your budget for your coffee shop.
That is why having your menu is so important. It also determines what type of vendors you will be working with.
If you don’t know where to begin, visit your local competitors. Check out local bakeries. You can also do small surveys on your website or social media accounts and get suggestions from the people who will be buying your goods.
Step 13: Look at Your Vendors
The vendors you work with are essentially your business partners. Choosing the right vendors will ensure that you are providing your customers with quality products and the right price.
After you determine your menu, be proactive in determining who you vendors are. Visit them. Try their product offerings. Speak with their manager or owner and see if you can set up a meeting.
Choosing your vendors should be done on the basis of:
- Your customers’ needs
- Your profit margins
If you aren’t sure that any vendors can satisfy your customer’s needs, consider your options from doing it yourself.
Consider casting a wide-net of potential vendors and consider trying out a variety of products that might appeal to your target market.
Start early and have fun!
Step 14: Determine Your Coffee Roaster
Coffee is your business. Therefore, the coffee you choose shouldn’t be a light decision. Start searching for local coffee roasters and visit with them.
Each coffee roaster will utilize their passion and expertise to create coffee profiles that they love. Try them. Buy a bag or two of beans or ask for some samples.
Many coffee roasters will have public cuppings that offer a closer look at their offerings. Find out when and where, and then go.
If they don’t have public cuppings, consider visiting with them and ask them if you can come by and try their coffee. Most independent roasters would be happy to talk with you about opening a new account.
Like your search for vendors, determining who your coffee roaster will can be a lot of fun!
Step 15: Prepare Yourself for Hiring
As your coffee shop business plan starts coming together, you will start thinking about your hours of operation and how much hourly help you will need to deliver excellent customer service.
If you have a coffee shop or even a coffee stand, you will most likely be hiring a few part-time baristas. Hiring the right people is one of your important jobs as a coffee shop owner.
Great baristas will ultimately work to develop your customer base, loyalty, and repeat business – if they are the right people for the job.
On the other hand, the wrong barista hires can slowly destroy your business, erode your branding, and even steal from you.
Don’t put off hiring good baristas till the last moment. Determine before your interview what you need your baristas to do successfully. Sure, they need to make coffee, but do they also need to do light food prep? Do they need to be able to count and manage inventory?
Hiring smart starts by understanding what “the job” entails before you interview potential new hires. You will want to determine what skills you need and when you need it.
Additionally, make sure you are set up with your state and local governmental agencies to hire. Check
Step 16: Jump on Your Marketing
The marketing of your business will play an important role in motivating the local customer base to patronize your coffee shop.
If you are a new coffee shop, generating the customer awareness that you exist to the surrounding community will be important.
Don’t just wait for customers to stumble upon you!
Work hard to generate a buzz that you are here for them to enjoy great coffee. Reach out to local news agencies, blogs, and even your nearest neighbors.
Talk with local organizations like schools, churches, businesses and invite them to come out to sample your coffee.
In our Coffee Shop Startup Kit, we provide a special marketing section in our Coffee Shop Guide Flow to help get you started with your business.
Step 17: Choose Your Coffee Shop POS
How will your coffee shop process the money you bring in? Having the right “Point of Sale” system for your coffee shop or coffee stand will be critical to your money management and organization.
Having the right POS system for your coffee business means that you will be able to securely process credit cards, manage inventory, and stay on top of your accounting.
For many small businesses, including coffee shops and bakeries, the mismanagement of money starts the second it reaches the cash register. So getting the right POS is essential for your coffee business.
So which POS system is the right one? While you will have plenty of good choices, we recommend the POS system Shop Keep for coffee shops. As POS system they are one of the most respected and highly reviewed POS systems available.
Click here to start your first trial with Shop Keep.
Step 18: Determine Your Date of Opening and Go For It!
Putting the grand opening of your business on the calendar is a powerful thing. Having a date set for your opening is the ultimate benchmark for you.
After you start piecing all of the above elements together, you will start to formulate an appropriate and realistic date for opening your coffee shop.
Get it on the calendar! Once you determine a date, you will then start to market your grand opening, hire your baristas, test your equipment, and make any necessary changes or tweaks before the date arrives.
Consider having a “soft opening” prior to your grand opening. This is a great way to figure out where the “weak spots” are and fortify them before you open your coffee shop!
Start Your Coffee Shop Plan With Us!
There are many elements to starting a coffee shop. It can certainly be overwhelming at times. We want to provide you with a thorough resource to open your coffee business.
Our Coffee Shop Startup Kit has 15 hours of streaming audio interviews that should be heard by every new coffee shop business owner.
Our coffee shop guide will help you learn what you need to know to start your business. By listening to other successful coffee business owner, you will be better prepared to open and set up your business.