The Ultimate Guide: How to Start a Coffee Stand Drive-Thru Business
Alright then, so you’ve been thinking about starting a coffee drive-thru stand and you are not sure where to begin, right?
You have probably scoured the internet with not much luck in finding the right resources to start your coffee stand. We get it. We already know what's out there.
Well, today’s your lucky day, as we hope to provide you with some good insight into what it’s going to take to start your coffee stand business successfully! Of course, some of these tips will also apply to a coffee cart business, coffee kiosk startup, or even coffee bar business too!
We’re going to discuss the general recommendations that we believe you should consider before you begin your coffee stand business journey. Certainly, there are always more issues that you will need to focus on in much greater detail as you move towards opening your coffee shop.
However, since each coffee business and location will be different from the next, the recommendations and their insights will vary from coffee stand to coffee stand. We trust that you'll be able to use what's important for you from our discussion and leave out what doesn't apply, and focus on developing your coffee business budget. Still, it always helps to consider elements of a coffee shop startup that were not on your radar.
Your Coffee Stand Business Opportunity
Certainly, a coffee drive-thru stand can be an excellent business opportunity in big cities and even smaller towns. Much like the burger stand two generations ago, a coffee stand caters to the same demographic: people on the move.
Demographic studies indicate that “rushed” consumers will continue to want, and often do, treat themselves to their daily “on-the-go” splurges of small luxuries, including their Americanos and Vanilla Lattes.
While the economy is improving and healing in many parts of the country, and generally looking positive for many who were balled by the economic downturn a few years ago, consumers are still very wary of spending a lot of money on far away vacations and high-end luxuries.
Instead, they “treat” themselves daily with many small rewards – like with a Chai latte or a specialized coffee drink of their choice.
Visiting a coffee stand and enjoying an espresso-based drink is something that they can afford to splurge on, even when they are keeping a careful eye on their monthly budgets.
To be sure, now has never been a better time to start your coffee business. The market base has grown and it continues to grow beyond anything we've seen before.
Today, coffee consumers are more accustomed to paying for their espresso-based drinks than at any other time in history. This trend, of course, is a real benefit as a coffee stand business owner – and an integral part of your coffee business’s formula of success: to attract and keep coffee drinkers!
Before We Begin: Take The Informal Poll:
Your 15-Step Guide To Starting Your Coffee Stand Business Successfully
Coffee business owners fail to adequately plan out their business and anticipate some pretty common hurdles with coffee establishments.
The lure, the very seduction, of opening and setting up a coffee stand, is that it is small – so tiny, in fact – that the owner somehow convinces himself (or herself) that no real planning needs to get done.
This is far from the truth. Many people… many smart people… think that they can simply “wing it” when it comes to starting and opening a coffee stand business.
However, this appealing illusion seduces you into believing that you don’t have to plan out even the basic elements of a coffee business and often leads the business towards failure.
The unfortunate thing is that many of these would-be successful business owners are simply too stubborn to convince prior to jumping into their business with both feet. And so, as we say, we all got to live and learn, right?
The lack of planning often leaves businesses with a lack of knowledge, funding or enough money to get them to profitability.
But, of course, I'm not talking about you!
The fact that you are reading this article means that you are very interested in researching and planning out your coffee stand business from the very beginning, right?
No doubt, you belong to a different breed of soon-to-be business owners. Because your success matters! You understand just how important it is to learn all you can and prepare for your coffee business startup right from the beginning.
While we'll be offering these smart steps to starting your coffee business, as well as other resources for your coffee drive-thru stand, you may want to take an additional look at our Complete Coffee Shop Startup Kit to help increase your knowledge base and give you the tools to start your coffee business successfully.
So, let’s get started!
1. Get Your Coffee Drive-Thru Stand's Vision Down on Paper
What is your coffee drive-thru stand going to look like? What will it be called? What are your ideas on your logo and branding? What kind of coffee experience would you like to provide you coffee customers?
Developing your vision and concept of your coffee stand will be a big first step that develops and changes over time. By writing your random thoughts down on paper, you will begin to slowly craft and mold your ideas into something more real and cohesive before you start a coffee stand. You will be slowly formulating your coffee stand's mission and vision.
In the beginning your thoughts will be literally all over the place – that’s okay! Write all of it down. You will be able come back later and flesh out your ideas. But for Goodness Sake, don’t think you’ve got it all figured out and locked up “in here” (pointing to your head!). Writing things down helps to organize your thoughts, and if you are going to have any type of successful coffee stand business, you will need to stay organized right from the beginning!
Putting something down on paper can really make “something out of nothing.” I recommend getting a journal, or one of those composition books, or simply keep a file with your thoughts and ideas on your computer, as you move forward.
This is different from an organized business plan, which will be more structured. However, many of the thoughts that you capture on paper will be used as a part of your business plan in the near future – so make it readily available. In other words, don’t write it down and then throw it in some drawer! If you don't know where to start, consider visiting some local coffee stands in your area. Pay attention to their location, equipment, product offerings, and branding. You can learn a lot from simply visiting coffee stands of all shapes and sizes, family friendly locations, or bikini barista coffee stands.
We encourage you to write a coffee shop business plan, taking into account that you'll need it to borrow money or rent your space. Our coffee business plan template will help you get your coffee shop business plan started as well as simply explain what needs to go into your actual plan & planning. This will save you hours of work and research.
2. Decide on Your Coffee Stand's Menu & Product Offerings
Your coffee stand menu really decides everything. Here's why: Your coffee stand menu determines your equipment requirements, your specific space needs, and even your labor needs. Of course, knowing your menu means you've also taken some time to understand what your customers want.
When thinking about your menu, write it down. In fact, write everything down – from the ingredients that you will use, to the package goods you will serve. By creating a sample menu, you will be well on your way to constructing your successful coffee stand.
Additionally, some property owners (if you decide to lease), as well as health departments will require a menu from you. Your menu also determines your relationship with your local health department, possible zoning issues, etc. So, get your menu down early!
When it comes to your sample menu, don’t simply write down:
…and simply call it a day!!!
Spend a little time being creative with your coffee stand menu. After all, this is YOUR business. So ask yourself:
- What will YOUR business have that other coffee stands will not have?
- What will your signature drink be?
- What will your signature snack or food offering be?
- What will your customers get excited about?
- Why will your customers make a U-turn to visit your coffee stand versus just heading over to Starbucks?
- What menu options can you provide that is ultimately going to keep them coming back again and again?
Your products will be one element (and an important one) that you will use to differentiate yourself among your competitors. Your menu will be an integral part of your business planning. It's worth it to really think about what you plan on serving and move forward with it. If you need help, visit other coffee shops, coffee stands, coffee carts, or similar businesses. What are they serving that you like? Could you do a better job serving a better product? Starting a coffee stand means developing a list of menu items you would like to serve to your customers.
3. Start Writing Your Coffee Stand Business Plan
“Zzzzzzzzz.” That’s me snoring after hearing the words “business plan”. Just thinking about
toiling writing a coffee stand business plan puts me nearly to sleep, right? Trust me, the idea of sitting down in front of a blank screen and writing a business plan is paralyzing, not to mention boring and tedious for most people too!
Business plans feel like homework – something that you need to get done, but really wouldn’t you rather be watching Netflix?
(Well, I’m not a miracle worker, but I can tell you that we here at CoffeeShopStartups.com, we have pretty much solved the “coffee shop business plan thing” for your coffee business with our affordable coffee startup business plan guide – saving you tons of hours of mind-numbing work.)
But seriously, making your business plan an intimate – yes, an intimate – part of your coffee business, will only serve to help you develop, execute, and launch a coffee stand business as you envisioned it to be – and it will save you money!
Yes, having a coffee stand business plan will save you money. It will also save you time and it could save you thousands in potential mistakes. So, start your business plan early – actually, you should start today. If nothing else, writing your business plan for you coffee stand will move you from the “just dreaming” category to the “I am a real entrepreneur” category.
By the way, if you need help with your coffee shop business plan, you know where to find it (Hint: Check out our Coffee Shop Startup Kit).
4. Decide on Your Coffee Drive-Thru Stand Location
When it comes to opening a drive-thru coffee stand business, your location means just about everything to your profitability. The fate of your entire drive-thru business will rest on you getting the optimal business location. So, really, there’s no pressure, right? Finding the “right location” actually depends on many inter-related factors (It’s not just about the price of your monthly rent).
Additionally, it’s not just about the square footage. It's not just about foot and vehicular traffic (though that's a major factor, as a good location for your coffee stand can often be determined about the traffic in the mornings or evenings). It’s also about the ability to find a suitable commissary. For nearly 100% of the coffee stands in the U.S. a commissary is necessary and required by local health departments.
Having the right location involves assessing your competition, your substitutes, your general market, and target customer, etc. Additionally it will also require you to review the area's laws, taxes, regulations, and permitting requirements. All of these things will (or at least should) impact your final decision on where you decide to call your business home.
Start a coffee stand by aiming for that sweet spot – the “perfect location”. Take a look at the graphic above. You have three important factors when it comes choosing a location when you decide to open a coffee stand business.
The “perfect” location, as briefly discussed, can mean anything from the right ratio of competitors and substitute businesses to the right price. For a coffee stand, this could mean anything from a local coffee shop to a gas station serving coffee.
Deciding on the right location significantly matters to your coffee shop or drive-thru stand. Having the appropriate space within an ideal geographic location is important. Depending on your municipality, you may need to offer parking, you may need to have a certain amount of physical space for cars to be able to turn around, and you might have to be accessible to disabled individuals.
You should research all of these points when it comes to your specific state and city. And finally, it has to be within the right place. If the space is too expensive or if the lease requires additional resources or commitments, you should think twice before moving forward with opening a coffee stand at that specific location.
There is no doubt, you will see that the “right” location for your coffee drive-thru stand overlaps all of these areas.
5. You'll Want to Scope Out The Coffee Competition
Sizing up the competition matters. You need to know what’s available (and what’s not available) to your customers.
And you have to figure out you have to ask: “Wadda they got, dat you aint got?”
Customers are price sensitive, yes, but customers are also sensitive to convenience (location), type of customer service you offer (your baristas), the kind of offerings you provide (AKA your coffee, snacks, and general coffee/transactional experience).
Start a coffee stand by checking out your competition within a three-mile radius. What's your competition doing right? What are they doing wrong? What do customer in your area want? What are the emerging trends? Where are the customers coming from (the local college, the town factory, the local movie theater, etc.)?
Figuring out your competition is a critical element to your coffee stand success. So start checking things out early. By finding the need in your market and putting your efforts to working the hardest and smartest to meet those needs, your will soon dominate the coffee business within your target market. But it takes time and deliberate planning.
6. Research, Research, & More Research Will Serve You Well!
Starting a coffee stand requires a lot of planning, studying, figuring out new things, and even learning some old things over again. Your research will start from day one and will continue long after you open. A good business owner never stops evolving and never stops learning, researching, and changing things up.
Fortunately, our Coffee Shop Startup Kit does a lot of the hard lifting when it comes to researching the retail coffee industry.
Research your customers: what motivates them to come to your business, what options do they have, what do they like, what are their patterns? All of this plays into your decision making. In other words, get to know your customers! A retail coffee business requires a winning customer service relationship 100% of the time! Researching will help you launch your business as well as keep it profitable. And this is a good thing! After all, we’re not going into business to throw our money away!
The more research and planning you do, the more you'll reduce your costs and increase your success rate. Additionally, we have found that during your “research how to start a coffee business” time period, you may have found that opening a coffee shop may not be for you. This is okay too! We believe that finding out whether you are ready to open a coffee drive-thru stand (or not) during your research phase is important as well.
Part of your research and planning is to figure out if you are ready to move forward. This includes setting up a budget for your coffee shop. A small investment in research can literally save you tens of thousands of dollars in the long run.
7. Prepare Yourself Financially For Your Coffee Stand Business
No one really likes to talk about the MONEY that is needed to start up a business. But it’s the white elephant in the room – and MONEY needs to be “out there” in the open with you to manage and talk freely about.
Figuring out your coffee shop startup costs will help you determine how much money you may need to ask for (via loan or personal financing) and will help you determine your break-even point. So just start talking about it. Even if you have very little, where is the most effective place to put your money?
Where will the money for your business come from?
As you continue to mold your vision and develop your business plan, determine your location, your menu, etc., you will begin to see what your financial requirements will be to open your coffee stand. All I can say is this: Take ownership of the costs of your coffee stand from the beginning! If you own it, then you control it. It doesn't control you.
Take the costs by the horns and ride that bull, baby! Use your estimates in your business plan to determine your pro forma estimates. (I don’t like repeating myself, but hey, if you need a little help with your business plan, check out our affordable coffee shop startup kit.) While working out the costs, you can and should be honest with your estimates. This will help you approach your rich uncle or figure out how much to ask your investors, bankers, etc.
8. Begin Looking at Vendors You'll Be Working With
If you figured out your menu, you will know exactly what you will need to serve your customers. Your vendors play an important role in your business! Without your vendors you will be stuck twiddling your thumbs when your customers drive up to your coffee stand!
Where will you get your coffee from? Will your coffee roaster provide training to your employees? Where will you get your paper products from?
Aside from your labor, coffee, and rent, your lids, straws, napkins, plates, and cups are among the biggest month-to-month costs for any coffee stand business. Getting your vendors lined up is VITAL to your success. Is your coffee stand plumbed? If not, where will you get your water from? The costs of daily water tanks add up – so consider the cost-benefit analysis of finding a location that can be plumbed!
9. Choose Your Coffee Equipment Carefully (and not on Craigslist!) Do your Coffee Equipment Research
Sweet Baby James, do not buy your coffee equipment off Craigslist! I don’t understand why you would buy old, rusted, and EXPENSIVE espresso machines (that may have never been maintained) from Craigslist!
But hey, people do it every day and suffer the dire consequences… Don’t get me wrong, I know there are diamonds out there… but there are a lot of coal briquettes too!
If you do buy your items on Craigslist, it's buyer beware. Espresso machines will possibly be the biggest equipment investment you will make – they are a big one-time purchase – but they will be worth it. Take time to research your coffee equipment with the knowledge of your needs. For starters, spend a few bucks and get our Coffee Equipment Audio Interview... the knowledge you gain from taking the time to research your coffee equipment will be worth it!
Seriously, buying coffee equipment requires some thought. Our coffee equipment interview will help you make better decisions and will give you a breath of knowledge that you'll want to have before spending a pretty penny on your equipment. It is really worth it to know what you're getting into when it comes to your coffee stand equipment.
10. Know Your Local Laws and Health Department Requirements
Knowing your local business requirements and regulations is critical to getting your coffee stand to open. Additionally, your laws impact your payroll costs, your taxes, and your health code requirements.
Don’t be afraid to make calls to various departments (Hint: You will be making repetitive calls, so start early and keep a list of who you need to call).
If you have your own free standing coffee stand, you will need a commissary that satisfies your local health and building requirements – check that out too. Every locale is different – but working with all these agencies are the same: stay focused, stay organized, and always follow up.
11. Your Drive-Thru Stand & Signing Your Business Lease
How will you start a coffee stand? Are you going to buy the coffee stand separately and lease or purchase the property? Are you going to make your own espresso stand? Or are you simply going to rent or buy a stand on an existing site?
These are all possible and probable ways to get your coffee stand up and running. Since this is a huge part of your coffee business, taking well-thought steps is important.
We strongly recommend that if you buy or create your own coffee stand, you will want to have several discussions with your local building department. They can provide you greater details on the permitting process in your area. This may also apply to pre-fabricated coffee stands or concession trailers. For example, in the Seattle area, your coffee concession stand may require a permit as well.
Depending on which way you go, your costs will be impacted by your decision making. Of course, if you choose to buy one outright or make your own – the startup costs will increase up front. But then, you can appropriately amortize the cost over the next several years on your taxes (but you'll need to speak to a tax professional for specifics).
The moment of truth: Signing your lease can be scary! Are you ready? Are you prepared? Do you know what you’re getting yourself into? The devil is in the details, right? Well, don’t go into your “lease signing” blind by your inability to research and get help on this most important matter.
Your coffee business property lease will probably “lock you in” for a period of time (usually years so creating an option to leave may be important) and can bankrupt you if you are not careful. That’s why we offer an important and affordable Coffee Business Lease Audio Interview – a must for any new coffee business owner to hear before they sign on the dotted line!
12. Determine Your Coffee Drink and Snack Prices
Start a coffee stand business with the goal to make a profit as quickly as possible. This is where your pricing comes in! This is where you either make a profit or go broke! Most coffee business owners, simply “Wing It” when it comes to their pricing.
You don’t have to be a genius to know that if you take an important exam with the strategy of “winging it” – you are not going to do very well. You have to get this right! After all, people are depending on you to succeed – your landlord, your vendors, your creditors, your family, all need and want you to succeed – Don’t throw it away by not even attempting to figure out your pricing!
Okay, so that was a little dramatic but I am buzzed on coffee and an un-quenchable passion for your success! Oh, and if that’s not enough, here is a shameless plug: Don’t know how to price your coffee items? We offer a Retail Pricing Guide that will help introduce you to all the important pricing variables you need to maximize your profitability. It's recommended that you investment the equivalent of a few Vanilla Lattes and invest in the guide.
13. Start Looking for Good Employees & Baristas Early
No one likes to talk about this, but we have been advocates of this simple tenet: Your employees will make your business or destroy your business! You must choose!
If you talk to any coffee business owner, what would they say about their hiring decisions? Usually it’s something like this: “Hiring is among the most difficult challenges for my business.”
Repeat 10 times aloud:
My employees are essential to my success!
A good employee can make you money. An excellent employee can make your business profitable. A horrible employee can slowly sink your business to the depths of disaster. Theft or giving away drinks to friends, not maintaining the equipment, or delivering poor customer service. Many coffee stand owners get everything right, except hiring the right employees. Even if owners see the red flags, they put off dealing with employees because they don't like to fire or are afraid to be confrontational.
Don’t settle for mediocre employees!
Okay, so where do you get
good great employees? There is no doubt that is often a crap shoot. What you find “on paper” through their resumes is not often what you get. The truth is that “good to excellent” employees take time to cultivate and train, so start early.
Don’t leave the important task of finding good baristas to the day prior to your grand opening! You should start looking for your employees long before you even have a location. Take your time, follow up on references, and choose personality over experience! You can train nearly anyone to serve coffee, but you can't train for personality.
Repeat 3 times:
I will choose a barista's personality over experience!
As a coffee business owner, you will be doing a lot of hiring and occasionally firing baristas. Hiring for personality, likability, and whether or not the employee “fits” in the culture and the vision for your business is supremely important (trust me, I hardly use the word “supremely”.) Of course, you want to follow local, state, and federal hiring and termination practices throughout your business.
Finding good baristas who are reliable may seem like an easy thing to do, but it's not always the case, especially if you live in a community that doesn't have many potential baristas. The positives for hiring an experienced barista is that he or she already knows much of what the job entails.
Start a coffee stand with the idea of providing excellent customer service. Many un-experienced employees might think its “fun to work at a coffee stand”, but when the reality of just how busy things can get, the enthusiasm may wane, and they might be off looking for another job. However, chances are that you can train an employee who is eager to learn and has the personality to engage your customers.
Engaged customers are repeat customers. Here's another tip: Be supportive, encouraging, and treat your employees well and they will often reward you back with providing great customer service!
14. Plan Your Marketing & Outreach Early: Your Coffee Stand Business Is Worth It!
Not many coffee business owners actively think of a “marketing campaign”. Skipping out on your coffee business’ marketing is understandable – but it’s not good business.
Somewhere in our culture, many of have been seduced – or suckered – into thinking: Build it and they will come. Building a business does not guarantee that you will have any customers at all. Heck, even Starbucks had to close 600 of their stores a few years ago!
Take time to plan out your grand opening: You are, after all, announcing your baby project to the world! Talk to local newspapers, bloggers (the most under-utilized strategy ever!), and television stations. Buy balloons, signs, etc. Invite local schools, businesses, or groups to your coffee stand. Jeez, make it a party and have fun with it!
Start a coffee stand with a well-planned marketing campaign will help you streamline your efforts (saving you time), and saving you tons of money in the long run. If you welcome in your customers, shower them with love and great coffee, they will help spread the word for you!
Relatively simple actions can be easy to start, like starting your own coffee shop website to help you get the word out, market to potential customers, and help you develop your branding platform. Setting up a coffee shop website is an easy, affordable, and very effective way to get your marketing off the ground.
15. Hold Your Grand Opening – Your Coffee Business Is Now Open!
Your espresso stand’s Grand Opening will be an important event! Make it count! Your grand opening marks not the end – but the beginning of your business planning – and your business success!
You don’t have to spend tons of money to make your grand opening effective, but you to have to spend adequate time in planning and utilizing the resources available to you.
Your grand opening can generate excitement, buzz, and sales! And that means profits! That means you have the ability to pay for your light bill! If you aren't sure you want to have a cold-opening, consider a soft start by opening the week or two prior for shorter hours.
Allow yourself to learn from your “soft opening”. Figure out your weaknesses, your strengths, and opportunities – and make the appropriate changes.
Choose a Coffee Shop POS System
You will need to process your coffee shop transactions. So, deciding on a Cafe POS System for your coffee business will be important. We've written extensively about this subject in the past. If you want more information on how to choose your Coffee Shop POS System, you can read about it on our coffee blog here.
Your Coffee Stand Business Is Waiting…
Your coffee stand business can become a reality. Many people are starting their own personal journey every day.
So, what are you waiting for?
Your future coffee stand is just waiting for you! Go and start your coffee stand business. You can begin with planning, researching, and scoping out locations while you get your money together. And if you're looking for where to get started, let us help… explore our resources and learn as much as you can about retail coffee.
We believe our complete coffee shop startup audio kit is great because it allows you to hear directly from coffee business owners and other professionals. They answer how they got started, what their mistakes had been, and what they would do differently. From success to failure, listening to real-world stories is important for anyone seeking to get into business.
There has never been a better time to start a coffee business. There has never been a better resource than our audio streaming kit. Now is the time to take action to realize your dream and potential profits. This is where we stop. Only you can take action now.
Want to Learn More About Setting Up Your Coffee Stand?
The Quick & Easy 3-Step Plan to Start Your Coffee Stand:
Learn about the retail coffee business from existing or former coffee shop and coffee stand owners. This is by far the best way to invest your initial time and effort when you want to start a coffee stand. (Our Coffee Business Startup Kit below is a GREAT and affordable option to begin.).
Answer the following questions:
1. What is your vision for your coffee stand?
2. What will you serve? (Be specific)
3. What location will you open your coffee stand?
4. Who are the competitors at your planned location?
5. Determine your personal and business budget
6. Which vendors will you be working with?
7. What equipment will you need?
8. Speak with your local health department
9. Determine your pricing (We offer a great pricing guide)
10. Start looking for great baristas early.
Start Writing Your Coffee Shop Business Plan (Takes you from a coffee business dreamer to an coffee entrepreneur.)
Additional Reading: For a further in-depth article on Steps to Starting Your Coffee Shop Business, continue reading here.
Coffee Shop Startups provides affordable informational resources for would-be coffee business owners who wish to start a coffee stand business. If you are interested in starting an espresso stand or coffee kiosk, we provide resources by utilizing the wisdom and knowledge of coffee business veterans. If you need more help, consider browsing our growing list of FREE articles.
So…What Questions Would YOU Ask a Successful Coffee Shop Owner?
The Complete Coffee Business Startup Kit