Open Your Coffee Business in 100 Easy Steps
100 Tips To Starting Your Coffee Shop (Continued):
Want to start a coffee business? Carefully consider each one and how they might pertain to your coffee business startup. Starting a coffee shop requires you to consider many different items which all must get done for all of the parts to work. While you are busy planning and strategizing the opening of your coffee shop, consider the following additional tips and recommendations:
Tip #52: Visit coffee equipment vendors
Your coffee shop equipment will make up a significant percentage of your startup costs. Picking the right equipment for your coffee business will be essential. Depending on the coffee business you have you will also need structural equipment, such as a commissary or mop closet. We offer an informative coffee shop equipment audio interview with our coffee shop startup kit.
Tip #53: Explore teas and other items you may serve
A significant percentage of your patrons will also order tea. Which tea will you provide. How will you serve it? Determining where you will get your tea from will be an important part of your decisions as you plan out your menu items.
Tip #54: Spend money on strengthening your coffee business expertise
Invest in your knowledge. Read books. Review case studies. Talk to business owners. Our Coffee Shop Business Startup Kit provides you with an excellent resource to help you learn about coffee and about the retail coffee business. Investing in your coffee business knowledge will help save you time and potentially lots of money down the road.
Tip #55: Understand that each decision has a cost
Each decision you make usually has a price tag. Planning before you make each decision will save you money. But where do you get the information to know what decision to make? How do you been an expertise-based framework to make decisions? We believe that you should interview as many coffee shop business owners as possible. Interviewing and reflecting on the knowledge you gain, really matters. Save money, research first, plan, and then execute on your plan.
Tip #56: Don’t spend like a sailor, hold on to your money as long as possible
You will be tempted to buy little things here and there for your business. Coffee tables, cups, paintings, etc – things that may be less important to the foundation of establishing your business, than say, an espresso machine or a security deposit. If you feel like you need to start spending money, invest in exploring, researching, and learning about the coffee retail business.
Tip #57: Finalize your menu (and your ingredients that make up your menu)
If you been following us here at CoffeeShopStartups.com, you'll know that we can stress this enough: Your menu will determine everything about your business. So, figure out what you are going to serve – and then move forward from there.
Tip #58: Don’t choose your equipment before you understand your menu
Your coffee equipment is important. And it can play a significant factor in your startup expenses. We strongly encourage you to determine what you plan on serving before you get your coffee equipment.
Tip #59: Determine your electrical, plumbing, and remodeling expenses before signing a lease for a specific location
Some costs due to remodeling or providing your basic services may cost you significant amounts of money. Much of the costs will come from the state of the space you plan on leasing. Will you have the funds to build out your cafe? If you don't you may need to figure out how to access more money or look elsewhere. Either way, you should figure out your costs before you sign your lease, because once you do sign you are committed.
Tip #60: Understand your USP (Unique Sales Proposition)
When you start a business (even a retail coffee business), you want to know what your competitive advantage is. You want to be able to understand what your unique sales proposition is, or USP. In our Coffee Shop Business Plan Template, and our other guides that we provide in our coffee shop startup kit, we explore this topic in more detail. Figuring out your USP will help better position yourself (your business) in the market place.
Tip #61: Look at flows of traffic in your proposed location (foot, vehicular)
Your business location will be important (but you already know that). But how do you determine the best location? Part of the equation to determining which location is right for you is making the quantitative calculations of food traffic and vehicular traffic. Is your coffee shop or coffee stand going to be on the “correct” side of the street or highway during the morning rush hour? Is your coffee business going be on the correction corner to capture foot traffic? Taking a look at the flow of customer traffic will be important to your business
Tip #62: Know where you are going to get your paper supplies (cups, napkins, etc.)
Your cups, lids, napkins, and stirrers will be important to get a competitive price. If you don't shop around for the best prices, you could decrease your bottom line. Depending on your city, you may or may not have a variety of options or choices. Shop around early in the process and add your costs to your financial determinations. While you're at it, if you plan to have people sit down at your coffee shop or coffee stand, consider if you will need any ceramic mugs.
Tip #63: Send updates to your early supporters via social media and your blog
Establish your social media accounts early and get the local community excited at your upcoming business. By getting your followers early you can tap them during your grand opening announcement or crowdfunding efforts. Your social media efforts will help to increase your brand awareness and help you hone your communication skills. Additionally, you can also utilize social media for job announcements, etc.
Tip #64: Determine where and how you will get hot/cold water (coffee stands)
If you plan on opening a coffee stand, you may have a small hurdle: where will you get your water? Some stands have a foundation is set up for easily plumbing and electricity. Others arent' so lucky. You will need to determine how you will get your water. Most self-contained coffee stands will need to haul their water. In addition, you will need determine where/how you will get hot water, which will be important for your stand.
Tip #65: Have a friend look over your business plan (be accountable to someone)
Starting and updating your business plan as you move forward with your coffee business will be important. Have a friend look at it – thoroughly. Have them give you an honest opinion. Does your concept match your budget? Is your timeline, right? Are you missing anything? A person who can give you an objective opinion will be valuable because he or she will help keep you accountable to your own business planning. If you are serious about your coffee shop business success, you will start your business plan and update it as you move forward.
Tip #66: Coffee Stands: Determine how you will transport and store your coffee stand before opening
Before you open your coffee stand, you will need to come up with two important pieces: your physical stand and its location. You will need to make sure that your plumbing and electrical issues are figures out, and how you will store and transfer your stand to your location. The cost of transporting the coffee stand should be explored long before hand.
Tip #67: If you are buying an existing coffee business: Look closely at the future lease options
While the coffee shop or espresso stand you by might have some value (in physical assets, branding, and customer goodwill), the heart of the business is your lease. Many people do not realize that your lease (and its terms) is often a separate negotiation – with the actual property owner. Getting everything in writing, especially the terms of the lease. Additionally, you should meet with the property owner separately from the current owner. Figure out where he or she stands with the existing business and whether they have any future plans for the location.
Tip #68: Determine your exterior and interior signage options (make sure favorable options are noted in your lease)
Before or during your lease negotiations you should have a general plan or idea about the signage in front of your business. You would be wise to get that degree of options that provide you the flexibility to implement the signs you want. Signs can be expensive, so pricing out your options early can make a big difference when comparing companies to work with. Additionally, you want to ensure that you have the flexibly that you need from your property owner that ensures you have wide options for your signs.
Tip #69: Determine your hours based on customer traffic, trends & research.
Scheduling can often be one of the most difficult things for coffee shop owners to implement on a daily or weekly basis. There are several variables to consider when developing your schedule. Studying traffic, trends, and other factors – in addition to being flexible – will help.
Keep in mind that labor costs can add up quickly. One hour a day, multiplied by the number of employees you have, can be significant over the course of the month. Having solid plan before opening your cafe will help save you money.
Tip #70: Learn How to Schedule Your Baristas
You can do this long before you buy or own your own coffee business. Simply visit your local cafes and coffee shops or drive-thru stands. Ask what time they open, close, and when the next shift starts. If you do this at 3 or 4 locations (with similar businesses) in your area, you'll begin to see a pattern. You don't need to reinvent the wheel, but you do want to understand WHY the schedules have been developed as such. Additionally, you will want to incorporate common sense, by considering the variants that each business faces. For example, a coffee shop that has a late shift to cater to the patrons of a busy laundry mat will be different for a coffee stand that caters to early morning workers.
Tip #71: Review city ordinances for exterior signage
Some municipalities, business districts, or property managers have restrictions on what kind of signs you can use. Everyday businesses invest a lot of money in their signs only to realize that they are not allowed to be mounted for whatever reason. Check with your city for signage regulations before you choose to buy a new sign. If you are buying an existing business, consider that your sign may cost you extra taxes. For example, in the city of Seattle, you can be taxed for a sign that is not directly connected to your building.
Tip #72: Double check if your location is zoned for a coffee/food establishment
Your building department will be able to confirm with you on whether or not your business is permitted in a specific location. You should check with them before you sign your lease. Again, there have been many coffee shop business who have signed a lease or rented out a spot for a coffee drive-thru stand only to be stopped by the building department because the location does not suit the proper zoning.
Tip #73: Create a timeline for you development and execution of your business plan
Having a timeline will be important for you and those you work with to open your coffee business. Whomever you approach will want to know approximately when you plan to open your coffee shop.
Tip #74: Determine what your competitors are serving (and charging)
You want to have a good idea of what your customers have access to – the coffee, experience, and what price. Though you shouldn't necessarily base your prices on the competition's pricing strategy, you still want to know what prices your customers are paying elsewhere.
Tip #75: Work on your pro-forma financials
Having your financials ready and thoughtfully composed before you spend any real money will be a financial life-saver. Determining your financial in advance always seems a little tricky at first, but it can be done. In our Coffee Shop Startups Kit, we walk you through how to create your pro-forma financials.
Tip #76: Determine your pricing options
Your pricing strategy will determine just how quickly you reach your break-even point and thus, your profitability. You're pricing strategy should be an integral part of your business plan and growth strategy. In our Coffee Shop Startups Kit, we provide you the opportunity to learn the various price strategies available to all coffee shop business owners.
Tip #77: Finish your Business Plan, have it ready for Property Managers & Investors
Some of you might have started your coffee shop business plan already. But then… you never finished it! Go back and dust it off and finish your coffee shop business plan. It will play an important role for property managers, owners, and investors. But most importantly, it will play an important part of your strategy and implementation.
Tip #78: Speak to an insurance agent (Determine your insurance costs)
As a coffee shop business owner, you will need to get insurance for your coffee business. Find a local insurance agent to help you obtain the insurance you need for your coffee shop.
Tip #79: Reach out to potential hires early – determine who fits and who doesn’t
Hiring the right people for your coffee shop or coffee stand takes time. Sometimes it takes longer than you think! So start networking early and determine which potential baristas would complement the coffee culture you are trying to create at your coffee business.
Tip #80: Invest in barista training for yourself and baristas
Training your baristas will be important for the overall success of your coffee business. Invest in coffee education and training your baristas to consistently serve excellent coffee.
Tip #81: Continue to research your target market
Researching your target market can help you develop your overall strategy for success. This includes your menu offerings, price points, your hours of operation, business policies, hiring, adaptation to competition, etc.
Tip #82: Research a POS System (Point of Sale System)
Tip #83: Invest in accounting software
Consider getting accounting software that works in conjunction to your POS system. Having an accounting software early will help you
Tip #84: Consider getting a bookkeeper
Getting a bookkeeper early in your planning will be essential. Start searching for your bookkeeper early. Get recommendations from other small businesses or coffee shop owners and conduct some interviews.
Tip #85: Reassess & Analyze your cash flow
Building out your coffee business takes money. Oftentimes unexpected costs arise outstretching your budget and cash flow. Keep your eye on the anticipated funds you may have coming in – either through loans, credit, personal savings, income generated from your “day job”, or crowd-sourced funds.
Tip #86: Consider additional revenue streams (sales of cakes, coffee beans, etc.)
If you walk into a Starbucks coffee shop, you will notice that nearly everything but the espresso machines are for sale (and actually some Starbucks coffee shops actually do sell espresso machines – Just visit Roy Street Coffee on Seattle's Capital Hill neighborhood!) To boost your revenue do it the Starbucks way, add other types of revenue streams. My recommendation: know your customer and don't go crazy with inventory.
Tip #87: Revisit, add, and edit your business plan
Your business plan should constantly be reviewed and edited. Your Coffee Shop Business Plan is an organic document. That means, it changes as your business evolves. Keeping your business plan updated means that your constantly reviewing all aspects of your coffee business.
Tip #88: Apply for your local business license (Different than your LLC)
In addition to setting up your LLC (or business structure) you will need to apply for your business license. Usually this can be done at the same time as your LLC.
Tip #89: Get worker’s compensation insurance
Contact your state's worker's compensation insurance agency and get your worker's comp insurance set up. Often times, as you establish your business structure the state will send you additional information on setting up your worker's compensation insurance information.
Tip #90: Stay organized (Get help if needed)
Your coffee shop business can take on a life of its own. Keep organized from the beginning and hire the help if you need to keep your business and your life in order.
Tip #91: Choose a local coffee roaster
Earlier, we had you look at various coffee roasters to see what kind of profiles you like. If you are not going to roast your own coffee beans, choosing the right coffee roaster will be on the top of your list. Start early. Meet with roasters and ask them to have a coffee cupping for you. Taste their coffee as a straight shot of espresso, an Americano, and Latte.
Tip #92: Hire your baristas in advance
Baristas are an essential part of your business. Hire the right baristas for your business in advance of opening. Your baristas will help shape the culture of your business so they are worth the extra time to make the right decision.
Tip #93: Choose personality over experience (90:10)
Tip #94: Plan your grand opening
It's important to let your customers know when you're open. It's your job to get people excited about your new coffee business opening. Plan a grand opening and invite everyone. Your grand opening can last a couple of weeks, but you should have a specific day where you do something special for your customers. Reach out to bloggers, newspapers, neighbors and friends to join you.
Tip #95: Consider a “soft opening” before your launch
I recommend doing a “soft launch” before you have your grand opening. For example, you can have a soft launch weekend to practice and run through all of the things you need to go through. After you have your soft launch and before your grand opening, you should assess your strengths and weaknesses.
Tip #96: Be flexible and recalibrate if necessary
Many of the mistakes we have seen coffee shop owners make when opening their coffee business is a real reluctance to change course – even when they know its the best decision to make. Be flexible with your decision making. Opening a coffee shop involves a little art, a lot of adaptation, and an ever-growing knowledge base. Change course if necessary.
Tip #97: Don’t get involved with coffee equipment vendors, snack vendors, or contracts you don’t like or feel uncomfortable with
Your vendors are your business partners. For you to succeed, you need to develop a sense of trust with each of your partners. Search elsewhere if you are not getting a good feeling about your existing vendors.
Tip #98: Consider extra merchandise for your business (T-shirts, mugs), but don’t break the bank
People love to get local merchandise from coffee shops they like. Whether they are tourists or whether they want to support your business, people will often buy your branded merchandise. Search for affordable t-shirt companies and have them available before your grand opening. Many startup costs can lead to budgetary overruns. While it's good to have extra merchandise, you want to be able to stay within your budget as well.
Tip #99: Determine your weekly schedule (opening, closing, pickups, deliveries, etc.)
Expect that your weekly schedule will always be packed with something to do, something to pick up, a delivery to be ready for… try to create a calendar that supports your sanity.
Tip #100: Invest in the very affordable CSSU Business Startup Kit
We've put together an affordable coffee shop business startup kit that helps you develop your coffee shop business project. It will help you write your coffee shop business plan, but more importantly allow you to hear the tips, advice, and recommendations you will need to successfully start and run your coffee business.
Our Coffee Shop Startup Kit
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