How to Start a Coffee Shop From Scratch

How to Start Your Coffee Shop Business From Scratch

Starting a Coffee Shop from Square One

How to Start a New Coffee Shop From Scratch

When you start a coffee shop, you will generally have three options:

• Invest in a proven coffee shop franchise.
• Buy an existing coffee shop business.
• Start a brand-new coffee shop from scratch.

Each choice to open your coffee shop will have its distinct advantages and disadvantages. Depending on your specific situation, location, and budget, you should review which option would work best for your right now.

In this post, we will specifically talk about starting a coffee shop from scratch.

To be sure, there is nothing quite more exciting than starting a coffee shop from scratch. It’s an incredible achievement to start any new business where there was none before.

A new coffee shop is no different.

Besides being very profitable, a new coffee business can liven up a community and provide a new and wonderful space for your neighbors to meet.

But it will take work.

Starting a new coffee shop from scratch (and a new coffee brand) requires diligent research and planning. If done right, however, the financial and personal rewards can be worthwhile.

The process could also be filled with challenges, pitfalls, and potential disasters, so it’s important than ever to plan.

As for today, your success is on our agenda.  

So, let’s move forward and talk about how you can start from zero to opening a new coffee shop that’s special for your community and profitable for your pocketbook.

Current Coffee Shop Market Growth

With nearly a 4% market growth over last year, there’s never been a better time to start a coffee shop. There are approximately 35,616 coffee shops in the United States, with more growth ahead. According to Beverage Daily, coffee industry leaders anticipate nearly 41,000 coffee shops in the U.S. by 2023.

What does this mean for you?

It means that opportunities are out there to create a coffee business that is profitable and impactful to your community. It's up to you to research, plan, and budget for your coffee business. Whether you want to start a mobile coffee business, a full cafe, or a coffee shop bakery, you can start dozens of coffee business concepts from scratch.

Advantages of Opening a Coffee Shop From Scratch

Establish a new coffee brand

When you start a new coffee shop, you also create a new brand. If successful, your coffee brand could appreciate over time. This may allow you to scale your coffee business in the future and open up new coffee shops. A valuable brand could also allow you to charge higher prices and eventually sell your coffee shop at a much higher price.  

No past entanglements

Starting a new coffee shop means you don’t have a history. In fact, the only thing you can do is create your future. This creates an enormous amount of opportunity, which is only held back by the limits of your imagination!

This means you have a clean slate with customers, the community, and vendors. 

There is a catch, however…While an existing coffee business may have already established trust and a relationship with customers, you must work hard to establish these relationships for your business.

It may be less expensive

Opening a coffee business takes a lot of detailed work and planning. Hours of research and working with various government agencies, contractors, and vendors all require time, money, and knowledge. The trade-off in “sweat equity” translates to potentially saving money and realizing your coffee concept in a way that satisfies you.

Depending on your concept and build-out requirements, you may be able to avoid expensive demolition and remodeling and set up your business in a less expensive way.

Disadvantages of Starting a Coffee Shop from Scratch

Finding the right location

Choosing the right coffee shop location for your business can be tricky and expensive in some real estate markets. This is especially true if we are talking about a brand-new coffee shop with no loyal customer base and no way of determining its success at a particular site.

It could be more expensive

Building out a coffee shop takes planning, permits, and licenses, and potentially working with a variety of contractors and sub-contractors. It’s easy to run into cost overruns and delays.

You may consider reviewing the various coffee shop business concepts that may be less expensive.

Inexperience at management

It can be hard to create a new management system for your coffee shop that runs smoothly and profitably. Every new coffee shop owner will need to climb along this learning curve and find a path toward success that works for them.

Sometimes, this learning curve can be tough – too tough. This can lead to failure. The better prepared a coffee shop owner is – before the start – the less likely they will fail.

Start a Coffee Shop from Scratch

Start a New Coffee Shop From Scratch

Starting a new, successful business is challenging, even for the most experienced entrepreneurs. No doubt, it requires discipline, research, study, and purposeful action.  

Below, we will review the ways you might consider opening a brand-new business:

#1 Commit to Research, Planning, and Adapting

Before you make your first move, you will want to research the entire process of opening a coffee shop. While this is exactly what you are doing now, go further! Go deeper!

Consider talking to existing or former coffee shop owners and other professionals in the business.

Introduce yourself to coffee roasters and other retail business owners who have experience opening a new business for themselves. Familiarize yourself with the steps to open a coffee shop regardless of the concept – which we will talk about next.

#2 Develop Your Coffee Shop Concept

In the earliest stages of planning your coffee business, you will likely have many competing coffee shop ideas.

Perhaps you are thinking of opening a coffee shop bookstore or a coffee and flower shop. You might consider a lower-cost coffee business option and set up a drive-thru coffee stand. Whichever coffee shop concept you decide, boil your thoughts down to one and develop it. Additionally, consider starting a drive-thru espresso stand or going mobile with setting up a coffee truck.

 #3 Develop Your Coffee Menu Ideas

Even before you sit down to write your coffee shop business plan, you will want to develop your coffee menu. Whichever items are up on your coffee shop menu board will then determine much of your pathway forward.

If you aren't sure what to serve in your coffee shop, consider taking the time to explore what other coffee shops are serving and visit local vendors in your area.

Be open to trying new things. Visit other coffee shops, cafes, and local restaurants. What are their customers ordering? What looks appealing to you?

Keep in mind that developing your coffee menu is a process. It never ends, even after you open your coffee shop! You’ll always need to stay flexible and adapt to the changing needs of your customers.

#4 Find a Great Location for Your New Coffee Shop

Find a great coffee shop location…

Sounds easy, right?

Even if you have a real estate broker helping you find a location, it can be a real challenge – especially in some cities and regions.

Finding the right coffee shop location means balancing your budget, concept, physical space, traffic, terms of the lease, neighbors, and access to customers.

How will you know if the location is right?

We’ve interviewed several coffee shop owners who thought they did everything right and still failed to find the right spot for their business. Unfortunately, this happens sometimes. As a result, their coffee shop struggled to make a profit.

For lack of a better description, finding the right coffee shop location is both a science and an art. You will have to depend on existing data, sometimes find your own data, and rely on your instincts to determine if your business will do well in a particular region, neighborhood, and space. 

Focus on the customers – your target customer. Who will they be? Base your entire business on serving them.

For more information, please read: Buying a Coffee Shop? Learn to Count Customers

#5 Explore Your Coffee Shop Equipment

You will have to invest in coffee equipment that allows you to serve what’s on your menu board.

Coffee equipment does not come cheap. However, if you invest in quality coffee equipment, take good care of it, and only buy what you need – your investment will go a long way.

When starting a new coffee shop from scratch, you will need to buy what seems like many things to get started. Developing a coffee equipment checklist is the best way to prepare for buying coffee equipment. You might also want to have a list of your menu items open.

After creating your coffee equipment list, search online for where you will get each piece of equipment. In some regions, the process can be tougher than in others.

Shop around a variety of coffee and restaurant supply stores. Fortunately, many of them are online.

If you are thinking about buying used coffee equipment, be careful. Before going out and buying a used piece of coffee equipment, determine how much these items retail for when they are actually new. You might find that a new piece of equipment is sometimes a better value.

You will also want to include a budget for your display cases, ice-makers, and your coffee shop POS system.

Next, determine if you can eliminate any equipment items or if you have to add anything else to your equipment checklist. As you continue to research how much each item retails for, write the cost down for each of them. Keep good notes! The process will help you develop your overall coffee shop budget, which we will talk about next.

#6 Write a coffee shop business plan

When you start your business, you'll have lots of competing thoughts. A business plan is among the best ways to organize your thoughts and save money. Our Complete Coffee Shop Startups Kit comes with a fully editable coffee shop business plan.

How to Start a Coffee Shop From Scratch

#7 Determine Your Coffee Shop Costs and Break-Even Point

Now that you know what you want to serve, where you want to be, and your coffee shop's vision, you will next need to determine your coffee shop startup costs and, ultimately, your break-even point.

One part of figuring these out will be developing your coffee shop budget.  We recommend doing this in the context of writing a coffee shop business plan.

When it comes to opening your coffee shop, your costs and break-even point will impact everything from securing financing and realigning your concept and menu as well as determining your location.

For a more in-depth article on determining your coffee shop break-even point, we recommend reading Calculating Your Coffee Shop Break-Even Point.

#8 Set Up Your Legal Business

Next, you’ll want to establish your coffee business legally within your state.

The most common form of setting up coffee shops in the United States is through a limited liability company or an LLC. There are various legal structures, and you will have to decide which one works for you. Consider talking to an accountant or attorney if you need help with this.

#9 Work With County and City Agencies

Every coffee shop requires some approval from various agencies, depending on the type of coffee shop it is. Without question, the health department in your county will be an important partner for you to work with to open.

Many new coffee business owners have to spend double the money to fix things, such as the design of a café, the materials used, and equipment is chosen, and that should have been done right the first time.

Consider reviewing just what is required of you from your local health department. Many health departments are used to dealing with prospective owners and current owners of coffee shops, cafes, and small restaurants. So, they'll probably have materials that you can easily access.

# 10 Coffee Shop Design, Layout, and Build Out

The design of your café enables the space for your customers to enjoy your coffee. The design and layout depends on some factors, including:

• The existing space limitations
• Lease terms
• Zoning requirement
• Budget

Consider speaking with your landlord and city buildings department before signing your lease.

You also want to understand any requirements that are needed through the Americans with Disabilities Act. The ADA requirements are federal regulations put in place to protect the civil liberties of millions of Americans.

The ADA requirements for your business will be essential to consider as you plan out the design of your café and your hiring practices. Designing your coffee shop in a manner that is accessible to more people is a winning business strategy.

#11 Hire Amazing Baristas

Baristas are the face of your coffee shop business. Finding and training baristas to provide excellent service will be one of your regular duties as a coffee shop owner.

Your customers are counting on you to hire great baristas. They want to have the very best experience. To deliver quality service, you need excellent staff. 

Your staff will ultimately make or break your coffee shop business. Start looking for great baristas early.  When you start your coffee shop from scratch, you may not know any baristas, so make it a habit to network and find the right staff members.

#12 Promote Your Coffee Shop Like Crazy

When you've signed the paperwork, started buying coffee equipment, building your space out, and interviewing baristas, it's time to let the world know about your coffee shop.

Dedicate yourself to promoting your new coffee business – every day.

Setup up your coffee shop website, open your social media accounts and print out flyers and business cards. Let the world know that you will be opening up soon. Put up signs, visit your neighbors, hand out coupons, and hold a coffee shop grand opening.

Start a Coffee Shop from Scratch

Related Questions:

How much money do you need to open a coffee shop?

The amount of money you need to start a coffee shop depends on several important factors. These include your coffee shop concept, your menu, and your location. If you are starting on a shoestring budget, you may consider one of the dozens of low-cost coffee shop ideas that can deliver significant profits.

For in-depth information, read The Costs of Starting a Coffee Shop.

Is owning a coffee shop profitable?

Yes!

If your coffee shop is in a good location, you serve what your customers want, and it’s managed well, your coffee shop stands a good chance of being very profitable.

Just how much a coffee shop makes depends on a few essential factors. The elements that drive your profitability are your sales volume, average receipt price, and overhead costs. Keep in mind there are several risks involved in starting any business. After all, some coffee shops can fail. The same is true for starting a coffee shop. Your goal is to prepare for your coffee shop startup, the more apt you will be to avoid costly mistakes.

For more information, read our article, How Much Money Does a Coffee Shop Owner Make?

How do I start a small coffee shop?

Starting a small coffee shop is a great way to enter into the retail coffee business. There are many different types of small coffee businesses to start. Rather than starting a small coffee shop, I would consider two things: who will be your target market, and what’s the minimum budget I need to set up a viable coffee business?

When you focus on a specific market and a coffee business budget to bring them coffee, things will start to take shape quickly.

Ask yourself, do I want to start a small coffee shop because of my budget, or do I want to start a small coffee business to reach this specific target market?

For further reading, please read our article, How to Start a Coffee Shop Business Successfully.

How much does it cost to start a drive-through coffee shop?

Starting a drive-thru coffee stand is another excellent way to get into the retail coffee industry. Like coffee shops and cafes, drive-thru coffee stands come in all shapes, sizes, and costs.

Depending on the size, location, and costs of your coffee stand structure, your cost will vary. There are also 101 ways to go about starting a stand. For example, you can rent a drive-thru stand, buy your own drive-thru structure, find a location to place it on, or buy an existing business.

For more information on steps to opening a drive-thru coffee stand, read How to Start a Drive-Thru Coffee Stand.

Start a Coffee Shop from Scratch

Invest In Your Coffee Shop Planning

Coffee shops rarely fail because of their coffee. They fail because of a lack of planning, poor management, and customer service. We recommend starting your coffee shop with the knowledge of real-world coffee shop owners and business leaders. 

As you can see, there are a lot of areas to consider when starting a new coffee shop. We will list the how-to start a coffee shop elements for you in the list below:

Remember:

• Consider the pros and cons of each scenario
• Consider your overall budget
• Write a coffee shop business plan

Below is a summary list of 12 steps to consider when starting a coffee shop from scratch. 

• Commit to research, planning, and adapting.
• Develop your coffee shop concept
• Develop your coffee shop menu ideas.
• Find a great location for your coffee shop.
• Choose your coffee shop equipment.
• Develop a business plan
• Determine your coffee shop costs and break-even point.
• Set up your legal business.
• Work with county and city agencies.
• Consider your coffee shop design, layout, and build-out.
• Hire amazing baristas.
• Promote your coffee shop like crazy.

Are You Ready To Get Started?

Unlock Your Dream Coffee Shop Business with Our Exclusive Coffee Shop Startups Kit!

Ready to transform your passion for coffee into a thriving business? Look no further! Our Coffee Shop Startups Kit is your key to brewing success. Here's why you can't miss this opportunity:

35-Lecture Coffee Shop Business Course: Our kit provides a comprehensive A-to-Z lecture series that covers what you should know and how to plan your coffee business. No more guesswork – follow our proven roadmap for success.

Comprehensive Coffee Shop Business Guide: Our kit includes a detailed, step-by-step guide that takes you from creating your concept to your grand opening.

Expert Interviews and Insights: Benefit from insider tips and industry secrets that successful coffee shop owners and experts share during one-on-one interviews. Learn from the best to stay ahead of the competition.

 Business Essentials: We provide business plan templates, checklists, and resources to streamline your startup process. From permits to menu planning, we've got you covered.

Cost-effective Solutions: Save time and money with our expert advice and budgeting tips. Maximize your ROI and minimize headaches.

 Adaptable to Any Setting: Our kit is designed to suit various locations and customer demographics, whether you're eyeing a trendy urban spot or a cozy corner in a suburban neighborhood.

Includes Exclusive BONUS Material!

👉 Order Now and Begin Your Journey!

Don't let the complexities of starting a coffee shop overwhelm you. Our Coffee Shop Startups Kit is your ticket to entrepreneurial success. Take the first step towards owning a profitable and fulfilling coffee business today.

Join the thousands of successful coffee entrepreneurs who started with a dream and a great plan. Your journey to coffee shop greatness begins right here!

Comprehensive. Proven. Affordable.

The Complete Coffee Shop Startup Kit

(Instantly Delivered To You)

Complete Coffee Shop Kit Sales Graphic

Coffee Shop Startups

Based in Seattle, Washington, USA, Coffee Shop Startups is dedicated to providing you with the most relevant information on how to start a coffee shop business successfully. Over the last 11 years, we've helped thousands of aspiring coffee business owners worldwide. We harness the experience, wisdom, and knowledge of many successful coffee shop owners to help you increase your chances of success and profits. We support business owners who want to start a coffee business by providing them with valuable information on starting their coffee business successfully.