Requirements to Open a Coffee Shop

Requirements to Open a Coffee Shop

Start a Coffee Shop Successfully

Requirements to Open a Coffee Shop

Opening a coffee shop is an exciting prospect. Never before has there been a better time to get into the retail coffee industry. With growing demand and interest in espresso-based drinks, retail coffee has lots of room to grow. That means opening a coffee shop offers a reasonable probability of making good money while doing something fun, creative, and essential for your community.

If you are thinking about starting a coffee shop, you may wonder about the specific requirements. Regardless of the coffee shop concept you choose, you'll have particular requirements to complete before you open your doors – and requirements to keep them open.

In today's post, we're going to review these specific requirements to open a coffee shop. And those requirements to keep your coffee shop open.

Some of the requirements to open a coffee shop are based on statutes, while others are based on regulatory practice. Other requirements are just essential for good business.

Keep in mind that every state, city (and country) has various requirements between them. However, if you follow our list, you'll probably account for most of the requirements needed to open a coffee shop successfully.

What are the Requirements to Open a Coffee Shop?

To open a coffee shop, you will want to take specific steps to ensure a higher probability of success and profitability.

If you take the time to plan and address all the requirements on this list – as well as others that are specific to your region – your coffee shop will be less likely to fail.

Below are the essential requirements to open a coffee shop:

• Establish your coffee business structure
• Develop a business plan
• Understand your target market
• Develop a budget
• Find a suitable location
• Have enough capital to succeed
• Sign a good lease
• ADA-approved café design
• Get the proper coffee training
• Develop a unique coffee brand
• Approved permits and licensing
• Hire amazing baristas
• Market and promote your coffee shop
• Offer fantastic customer service (Consistently)

These requirements to open a coffee shop are steps to ensure your success. None of these requirements should be considered busy work. Instead, these requirements are essential for starting the best coffee business you can – and maintaining it for as long as you own your business.

Keep in mind that these requirements also pertain to other coffee business concepts. For example, these concepts include starting a drive-thru coffee stand or mobile coffee business. However, your requirements may change depending on the type of business you open.

Let's discuss these coffee shop requirements in detail below.

What's Needed to Start a Coffee Shop

Requirements to Open a Coffee Shop Successfully

1. Establish your Coffee Business Structure

Establishing your coffee shop business structure is the first legal requirement you will need to undertake. In addition to being the first step to having an official coffee business, there are many benefits to a coffee shop LLC or other structures.

Starting a business structure in your state (or local government) will let you do the business of opening your coffee shop. For example, it allows you to legally open a separate bank account, apply for worker's comp insurance, and apply for a reseller's license. It also protects your assets and money from negligence or accidents.

2. Develop a Coffee Shop Business Plan

Having a coffee shop business is the smart thing to do. A coffee shop business plan ensures that you've addressed all the areas of business diligently. Every coffee shop is different. Therefore, every plan will be different – but there are some excellent coffee shop business plan templates that you can use to start right away. (We offer one in any of our Coffee Shop Startups Kit)

While writing a coffee shop business plan may be the smart thing to do, it is commonly required by your investors and property owners. Your investors want to see whether their money will be innovative business owners who understand their vision and eventually be profitable.

On the other hand, a property manager will often require a business plan before approving the lease for your physical space. This is usually because they want to see what type of business operation will occur on their property. For a more in-depth look at writing your business plan, please read How to Write a Coffee Shop Business Plan.

Your Coffee Shop Business Plan:

3. Understand your Target Market

To have a successful coffee shop, you will need to understand who your target market is. It is among the first requirements necessary to plan your coffee business thoughtfully.

Who will your customers be?

If you want to open a high-end café that serves specialty coffee and wine and offers live music, your clientele will be found within a particular target market in your community.

Understanding your target market will allow you to build an appealing coffee shop menu with the appropriate price point. Additionally, it will help craft your brand, customer experience, messaging, and marketing.

4. Develop your Coffee Shop Budget

Developing a realistic coffee shop budget is a requirement for most serious coffee entrepreneurs. But, first, you need to determine how much money you need to start a coffee shop in your region.

Your budget will be determined by several important factors that can drive up costs or reduce your costs.

They include:

• Coffee shop concept
• Your chosen location
• Buildout costs
• Menu items
• Equipment choices
• Property lease
• Wages and salaries

An initial coffee shop budget is comprised of two distinct budgets. The first budget is the startup budget. The next is your operational budget.

For more information on planning your coffee shop budget, please read How to Create a Your Coffee Shop Budget.

5. Choose a Great Coffee Shop Location

Your coffee shop success ultimately depends on your chosen location. Unfortunately, finding the right location for your coffee shop can be challenging – so consider starting early.

For a location to be suitable, you'll have a few essential requirements. First, the location needs to be correctly zoned. That is, your location needs to be designated in a commercial zone that is approved by your local city, department of transportation, and health department for food businesses or retail vending.

Additionally, you should require your coffee shop's location to have:

• A steady stream of customers
• Be accessible for pedestrians and cars
• Be on the “right side” of the road (customer traffic)
• Easy to find
• Be well-lit at night
• Have the appropriate space for your concept, menu, and operations

For more information on picking the right location, please read our post How to Choose the Right Location for Your Coffee Shop.

Requirements to Open a Coffee Shop

6. Have Enough Capital to Succeed

You will need enough money for your coffee shop to succeed. But how much money is required to start a coffee shop successfully?

Ultimately, you will need to determine your budget and find the required funds to implement your concept and operations. Once you figure out how much money is required, you will assess your coffee shop funding mix. Your funding mix will provide you with a roadmap for getting the funds you need until your coffee shop is sustainable.

For more information on how much a coffee shop costs, please read How Much Does a Coffee Shop Cost?

7. Sign a Good Coffee Shop Lease

Having a traditional coffee shop requires you to sign a property lease for your space. Of course, if you own a commercially zoned building that you plan on using for your coffee shop, you won't be required to have a lease. However, if you are like most coffee retailers, you'll be required to have a signed lease before you can start remodeling and building out your coffee shop.

Your lease is among the essential elements of your coffee shop. Your coffee shop lease can either help your business grow or it can crush you financially. A poor lease can place incredible burdens on your coffee shop management and success.

For more information, read our post, Things to Consider Before Signing Your Lease.

8. ADA-approved Café Design

Designing your coffee shop will be a fun challenge. However, your overall look and feel will create the type of ambiance your customers will be coming back for again and again.

But with any design and buildout, you are required to get approval. Often, your health department and buildings department will require you to get permits before work is done. You will need to submit your scaled plans and designs that detail the square footage, kitchen, coffee bar, etc., to your buildings department.

Additionally, if you open your coffee shop in the U.S., you will be required to have an ADA-compliant coffee shop design. Abiding by ADA guidelines is a federal law, but it is also the right thing to do.

9. Get the Proper Coffee Training

While not an official requirement, getting proper coffee training makes good sense. If you have never worked in a coffee shop before, you may want to get barista training or take a barista course. You'll find that many barista training programs provide an excellent foundation to operate a coffee bar and build delicious espresso-based beverages.

Delivering delicious coffee consistently will be one of the best things for your business. That is why we recommend that you get fundamental barista training for you and every new hire.

Your barista training may include:

• Coffee equipment maintenance
• Dialing-in espresso
• Steaming milk
• Building drinks
• Manual brewing

10. Develop a Unique Coffee Shop Menu

Developing a unique coffee shop menu will be a pillar of your success. You want a menu that will cater to the needs of your particular target market.

For example, suppose you plan to open a coffee shop in a particularly competitive environment. In that case, you will want to develop a unique menu that offers hard-to-get or hard-to-find items.

Your menu can be a part of your unique selling proposition that ultimately sets you apart from your competitors. This will help increase sales, avoid direct competition, and improve your coffee shop profits.

For an in-depth look at how your coffee shop menu can help, please read how to Revamp Your Coffee Menu and Improve Profits.

Requirements to Start a Coffee Shop

Legal requirements for a coffee shop

11. Approved Permits and Licensing

Before you open a coffee shop, you are required to have several permits and licenses. Your coffee business concept, location, and menu will impact the required permits and licensing.

You must have a health department permit, a building permit, and perhaps an occupancy permit from your local fire department. If your coffee shop serves wine, beer, or spirits, then you'll need a wine and beer license.

Additionally, your business requires you to form a structure to operate legally, meaning you may need to set up something like a coffee shop LLC. Finally, you will be required to have a business license issued by your city and renew it annually.

13. Hire Amazing Baristas

Having a coffee shop means that you will probably hire staff to help you. One of your main jobs as a coffee shop owner is hiring amazing baristas and ensuring they get the barista training they need.

Hiring baristas and other staff now makes you an employer. And as an employer, you are not legally required to do several important things.

You are legally required to hire without bias and ensure a safe workplace for every employee. You are legally required to provide specific accommodations for employees with disabilities and other health conditions. Additionally, you will want to ensure that you pay them the legally mandated minimum wage in your state and ensure an equitable gratuity disbursement. Additionally, you will be required to provide every employee's eligibility to work and hold their records for a specific number of years.

As a coffee shop owner, you're in the hospitality business. Therefore, you'll want to hire the best employees to help you sell and generate goodwill towards your coffee brand. Indeed, your employees will be the face of your coffee business and often be the catalyst for more significant revenue and profits.

For more information, please read How to Hire Great Baristas for Your Coffee Shop.

14. Develop a Coffee Brand, Promote & Market Your Coffee Shop

Your coffee shop brand will play an essential role in your communication with your customers.

Your brand is more than your coffee logo, though your logo plays a significant role in your branding. Ultimately, your brand represents an emotional connection to your customers.

Spend time choosing the right name for your coffee shop, develop a logo, and create a theme that resonates with your target market. Additionally, you will want to make early investments to market and promote your coffee shop.

For more information, read how to Promote and Market Your Coffee Shop.

15. Offer Fantastic Customer Service (Consistently)

Offering fantastic customer service consistently will be an essential part of your customer's overall experience. It's the ultimate requirement to open and operate a successful coffee shop business.

Developing systems that allow you and your baristas to deliver excellent coffee – every time – as well as a pleasant experience will be necessary to grow and achieve the profits you want. The retail coffee industry is highly competitive in many cities, and having exemplary customer service will affect repeat business.

Your customer service quality really comes from the top. That means you! Ensure that you get the training you need and hire the right people to deliver the best customer service, food, and beverages possible.

Legal requirements for a coffee shop

What's Needed to Start a Coffee Shop

 Conclusion

The requirements to start a successful coffee business ultimately vary depending on the concept. Several conditions are required to satisfy a variety of state, county, and local agencies before you pour your first coffee.

With continued research and planning, you can fulfill the requirements of each agency and governmental entity. Therefore, my recommendation is that you dedicate yourself to being thorough with your research and planning.

Learn as much as you can about the retail coffee industry, no matter which coffee shop concept you decide to open. Look at all the rules and requirements before you spend any real money or sign any lease. Invest in your education and knowledge, and it will pay off – in savings, headaches, and avoiding terrible financial losses.

Further Reading: How to Start a Coffee Shop Successfully

What's Needed to Open a Coffee Shop

Open a Coffee Shop Successfully

Requirements to Open a Coffee Shop

Additional Questions:

How do the traditional coffee shop requirements differ for mobile coffee businesses?

Setting up a mobile coffee business will require a different set of regulations. However, the overall requirements will be the same: to protect you, your workers, and your customers from injury or foodborne illnesses.

While some believe that getting your permit from your local building departments might be easier with a mobile food vehicle, you still have to install the interior electrical and plumbing professionally. Other rules and requirements will also be necessary for your mobile coffee vehicle.

For example, as a mobile coffee truck owner, you will need to have a relationship with a commercial commissary and be close to a restroom wherever you work. My recommendation is to choose your concept and dive into all the requirements of each agency before you buy your mobile coffee unit. Then, plan and develop your mobile coffee shop startup budget.

For more information, please read How to Start a Coffee Trailer Successfully.

Are the drive-thru coffee shop requirements different from a coffee shop?

While it may seem that there are significant differences between a drive-thru coffee stand and a full-blown coffee shop, in the eyes of the local agencies, there aren't a lot of differences in the requirements. For example, your building's department will still require your structure to be built “up to code,” and your plumbing and electrical will need to be installed by a licensed contractor.

What are the requirements of a coffee shop owner?

Coffee shop ownership carries some significant responsibilities. From paperwork to paying vendors, investors, or employees, you'll need to ensure timely payments and wages.

Additionally, coffee shop owners are required to be in good standing with each license and permit issuer. For example, you will need to annually pay for your health department permit and be required to be available for spot health checks.

Other requirements include paying income tax as well as quarterly sales taxes. Failure to meet these requirements will shut down your coffee shop and lead to significant fines.

These requirements are vital but not unreasonable. Understanding that, like anything else with your coffee business, they simply need to get done. Having a plan, honoring the time it takes to fulfill your requirements, training your employees, and maintaining a clean coffee shop, you'll be just fine.

How do I open a coffee shop on a budget?

If you want to open a coffee shop, you'll find several excellent coffee shop concepts. However, even if you lack the money, you can open a coffee shop on a budget. You can start a coffee business on a budget, from espresso catering to a coffee cart to a mobile coffee trailer.

If you want to start a lower-cost coffee shop, you'll have to plan out your business with the low-cost priority in mind. Your business plan should remove all of the high-cost elements found in a typical coffee shop business plan. Your ultimate costs can depend on where you are located. For example, if you want to open a coffee shop in Los Angeles or in Ohio, your costs will be different due to the costs of real estate. Other cost factors include available prime location, coffee equipment, labor, etc.

For more information on opening a coffee shop on a budget, please read How to Open a Coffee Shop on a Budget.

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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.