How to Start a Coffee Shop in Los Angeles

How to Start a Coffee Shop in Los Angeles

L.A. Has a Vast Market and Room For Retail Coffee Growth

Starting a coffee shop in the most sprawling and most immense urban area in the United States can be exciting. There's no doubt that with several million cars on the road each day, coffee is what makes this city run!

If you live in the Greater Los Angeles area, you know that coffee keeps many people like you and me going. Indeed, it makes the idea of starting a coffee shop an exciting prospect.

Angelinos love coffee. 

A recent study noted that Los Angeles had the most coffee shops anywhere in the United States – 727 total coffee shops. I am pretty sure that this number does not include the dozens of neighboring cities around L.A. that make up greater Los Angeles.

In any case, that's a lot of L.A. coffee shops. However, compared to the number of people within L.A. city proper (nearly 4 million people alone), Los Angeles ranks 37^th per capita in American cities.*

Translation: Los Angeles needs more coffee shops! It has a lot of catching up to be the number one ranked city to the north. The city of San Francisco has the most per capita, 588 for 867,000 people.* (*Zomasleep.com did the coffee study.) 

This also makes Los Angeles a great place to start a California Drive-Thru Coffee Stand.

Open a Coffee Business in Los Angeles

So, how do you open a coffee shop in Los Angeles?

While starting a coffee shop in Los Angeles is no different than any other American city, there are some unique challenges. Los Angeles has a higher-than-average real estate cost, for starters, making the financial stakes much higher. Additionally, the cost of doing business is also more expensive. However, this is offset by the number of potential customers and opportunities.

The higher coffee shop startup costs mean it's super important to do more upfront research and planning – and write everything down in a coffee shop business plan.

Since Los Angeles has the most coffee shops than any other city, you will run into some competition. Therefore, you want to do a competitor analysis. This would include understanding what the customers are buying from your soon-to-be competitors – and at what location.

After you understand your target market, you will want to develop an attractive coffee shop concept. Your coffee shop concept will appeal to your target market.

As a part of this appeal, you will need to create a coffee shop menu that tantalizes their tastes buds and pads your bottom line. Your concept, menu, prices, and ambiance will need to be focused on your target customer.

Next comes developing your coffee shop brand – this would include choosing your coffee shop name, developing your coffee shop logo, and other things. Indeed, branding is essential to help your coffee shop stand out in such a crowded market space.

 Further Reading: How to Start a Coffee Shop in California.

How to Start a Coffee Shop in Los Angeles

 How to Start a Coffee Shop in Los Angeles (Permit and License Requirements)

If you are ready to take the next step, you want to create your legal business structure. Again, there are various ways to establish your legal business structure, so you want to make sure you do the research. Finally, you want to register a business structure that will work best for you and your business.

I will say that many coffee shop businesses are formed as limited liability companies or LLCs.

You will need to apply for your LLC through the California Secretary of State's office. There are a lot of benefits of forming an LLC or a corporation.

For starters, it generally protects you from personal liability in case of an unfortunate event. Additionally, this will help you apply for your EIN and open a business banking account.

Doing business in Los Angeles (and California in general) means that you will need to acquire various permits and licenses. While taking care of the initial legal setup might seem overwhelming, it's pretty straightforward.

My recommendation is to browse the agency websites and click on the relevant links to your coffee shop business formation. You will need to have several different permits and licenses before you can actually open your doors.

Let's take a look at a few of the requirements below:

• Business formation (LLC or Corporation)
• EIN (Employee Identification Number)
• City License
• State Reseller's License
• Fire Department Permit
• County Health Permit
• Department of Building and Safety

In Los Angeles, you will have to work with the L.A. County Department of Public Health and the Department of Building and Safety.

These are two critical governmental agencies entrusted to protect customers and workers of foodborne illness and structural safety issues.

Setting Up Your L.A. Coffee Shop

(Requirements, Permits, and Licenses)

Start with a Coffee Shop Business Plan

Before starting a coffee shop in Los Angeles, I strongly recommend that you write a business plan. A coffee shop business plan is the best way to articulate your vision – your concept, budget, and determine your coffee business's needs.

Additionally, it can help you with getting the funding you need for your budget. It's going to be an essential tool as you look at your coffee shop funding mix. Finally, a business plan is helpful when trying to raise funds and introducing yourself to prospective property managers.

Your Coffee Shop Business Plan covers:

• Description of your coffee business
• The Business Team & Ownership
• Your Coffee Shop's Vision
• Your Coffee Shop Menu
• Target Market & Customer Base
• Market Analysis
• Competitor Analysis
• Budget and Financial Projections
• Operations
• Calendar & Timeline
• Marketing & Promotional Strategies
• Exit Strategies

Your coffee shop business plan will serve as your action plan. When starting your business, you'll encounter many distractions that can take you in multiple directions. Your business plan will help keep you centered and focused.

We offer a Coffee Shop Business Plan Template to save you time and headaches. For more information, read our post, How to Write a Coffee Shop Business Plan.

How to Start a Coffee Shop in Los Angeles

(Permit Requirements)

Determine Your Coffee Shop Concept

What type of coffee shop would you like to start? Would you like to start a coffee shop bakery, bookstore, or coffee bar that serves alcohol? You'll want to tailor your coffee shop concept to the needs of your target market.

Whichever you choose, you can be sure that you have a broad spectrum of coffee shop ideas! In addition, your coffee shop business plan will help you better cohesively describe your concept – for your potential investors or property owners.

To be sure, your coffee business concept may determine the type of permits you will need. For example, you may need an alcohol or wine and beer license. If you decide to have a mobile coffee trailer, you may need a Department of Transportation permit.

Your Delicious Coffee Shop Menu

Los Angeles has excellent food options. Indeed, in terms of the competition, the culinary possibilities are something your coffee shop will have to contend with. L.A. is no joke when it comes to food. Therefore, your coffee shop menu needs to be well-developed. That's why I recommend you take the time to develop your menu.

Do the necessary customer research: Find out what your customers want and what your competitors are serving.

Get the Help You Need

As you set up your coffee shop in Los Angeles, you will need the help of others. I recommend reaching out to a variety of people and increasing your network. While you can hire coffee business consultants, I say get your friends to read your coffee shop business plan, business concept, and logo development. Then, network to find the necessary skilled help you need, including electricians, plumbers, coffee equipment engineers, accountants, etc.

Hire The Best Baristas You Can Find

One of the best ways to improve your coffee shop sales is to hire excellent baristas. You want to find the best baristas and hire them to work for your coffee shop – not for the competition. Additionally, I recommend hiring for trainability, reliability, and personality.

Develop a Coffee Shop Marketing Strategy

Promote the heck out of your business. Next, you need to develop a marketing strategy that will appeal to those you want to sell to. For example, if you're going to sell to students at a local university, tailor your marketing and promotion toward them in various channels. Along with your marketing, you will develop a coffee brand.

Promote your coffee shop using:

• Exterior and interior signs
• Your social media accounts
• Your website
• Loyalty program

Further Reading: How to Start a Coffee Shop in California.

How to Start a Coffee Shop in Los Angeles

Open a Coffee Shop in L.A.

Permit Requirements to Open a Coffee Shop in Los Angeles

It's an exciting time to start thinking about opening a coffee shop in the greater Los Angeles area. Los Angeles – and Southern Californians in general – loves coffee. As a result, the market is primed for growth in retail coffee. You will need to decide which location is best for your L.A. coffee business.

Promising areas for development in Los Angeles are:

Van Nuys, Torrance, Long Beach, Whittier, La Habra, Huntington Beach, El Segundo, Pasadena, Sherman Oaks, Burbank, Orange, West Covina, Diamond Bar, East Los Angeles, Boyle Heights, Korea Town, La Brea, Santa Monica, Mar Vista, Venice, Inglewood, Manhattan Beach, North Hollywood, Silver Lake, Mission Viejo, Alisa Viejo, Bellflower, Lakewood, Chino, Montclair, Claremont, Pico Rivera, Norwalk, Riverside, Valencia, Glendale, San Pedro, Seal Beach, and many others!

Further Reading: Permits and Licenses Need to Open a Coffee Shop

Indeed, a new crop of customers who crave high-quality coffee, offered in elaborate spaces along with excellent customers service, change the way we consume coffee. So the demand for high-quality coffee and service is there. This means that your coffee shop has the potential to be very profitable.

But you have to do the research. Without the do the planning, your potential for profitability decreases, and your potential for failure increases.

How to Start a Coffee Shop in Los Angeles

City of Los Angeles Business Links:

California Business Structure

Register Your Business in Los Angeles

L.A. County Department of Health

L.A. County Department of Building and Safety

Further Reading: How to Start a Coffee Shop in California.

Start a Coffee Shop in L.A.

How Do You Start a Coffee Shop Business?

Starting a coffee shop in Los Angeles can be an exciting and challenging venture that can be very successful. So, how do you start?

First, decide on your coffee shop concept and start writing your coffee shop business plan.

Our Complete Coffee Shop Startups Kit comes with a business plan template and guide to help you finish your plan very quickly.

Without a well-written business plan, you'll likely spend more money and be frustrated with the development of your L.A. based coffee business. Additionally, finding additional funding or capital will be more challenging.

Conclusion:

Starting a coffee shop in Los Angeles is exciting and very promising. There is no place quite like L.A. Its diversity and high concentration of people can create a good demand for coffee in nearly every neighborhood. 

With its gorgeous weather, tourist destinations, large population, and thirst for coffee, Los Angeles make setting up a coffee shop well worth the effort. But we want to emphasize, planning matters. In fact, starting a coffee shop in California can be a real winner too.  However, we highly recommend that you start with a plan. Thoroughly develop your concept and your menu with an eye towards the competition. Work hard to focus on your customer base and you'll be on the right track.

Starting Your Coffee Shop in Los Angeles

First Steps To Open a Coffee Shop in Los Angles

• Study Your Target Market
• Settle on Your Coffee Shop Concept
• Workout your Anticipated Budget
• Create a Funding Mix and Strategy to Pay for Your Business
• Write Your Coffee Shop Business Plan
• Create an Action Plan

We offer a lot of resources here at Coffee Shop Startups. We encourage you to visit our blog and read our coffee shop business articles.

For more information on how to start a coffee shop, read our 30 Steps to Opening a Coffee Shop.

Additional Questions:

What is the best neighborhood in Los Angeles to start a coffee shop?

I recommend that the best neighborhood to start a coffee shop is in your neighborhood. Los Angeles is so diverse with people and neighborhoods – all of which crave specialty coffee. You have potential coffee customers everywhere in Los Angeles.

However, the best location starts with defining who your target market is. For example, do you want to serve local college students or commuters on their way to work? Will you want to serve students at UCLA or Long Beach state? Do you want to be in the fashion district or serve tourists on Venice Beach?

Still, you can answer this question by looking at the underserved markets. For example, there're a lot of coffee shops in Santa Monica, Beverly Hills, and Pasadena – what parts of the city are you overlooking? What parts of the town are customers having to drive 30 minutes or more to get good coffee?

The trick is to make your coffee shop location address the right customers with the right sales volume and be convenient for you.

How much does it cost to start a coffee shop in Los Angeles?

The costs of starting a coffee shop in Los Angeles can slide widely on the spectrum. Various essential factors impact cost – including location, your coffee shop concept, and menu.

On the whole real estate costs are generally higher than most of the rest of the country. The exception is maybe starting a coffee shop in New York. Nevertheless, the hope is that the real estate costs will be offset by the sales volume and your price point.

For a more in-depth look at the costs of starting a coffee, please read, The Costs of Starting a Coffee Shop.

Get The Complete Coffee Shop Startup Kit &

Start Your Coffee Shop Planning

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Our Complete Coffee Shop Startups Kit is packed with everything you need to know before you open your coffee shop business. With hours and hours of one-on-one interviews, you'll hear from real-world coffee shop business owners and experts.

When you purchase The Complete Coffee Shop Startups Kit, you receive an invaluable collection of exclusive resources designed to help your coffee shop business grow.

These tools will get your coffee business on the right track and give you the motivation to move forward with confidence.

There’s never been a better time to start a coffee shop business. And there’s never been a better resource to help you get started the right way.

Now’s the time to take action – but only you can do that.

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