The Pros and Cons of Starting a Coffee Shop Business
The Pros and Cons of Starting a Coffee Shop
Starting a coffee shop can be an exciting and profitable venture for an entrepreneur with a passion and love for coffee and customer service.
As with any business opportunity, many people are left undecided on whether or not to move forward with their coffee shop plans for any number of reasons. It's important to balance the positives and negatives when thinking about opening a coffee shop.
Here are a few reasons why people struggle with opening a coffee shop:
- Self-doubt
- Unsure of the market
- Money concerns
- Fear of failure
- Not sure where to start
These are all legitimate reasons to not open a coffee shop. They all point to the fact that there is a lot at stake. Your time, effort, and, more importantly, money is at risk.
We spend lots of time here at Coffee Shop Startups, analyzing both the Pros and Cons of starting a coffee shop business. Ultimately, addressing your fears, money concerns, confidence levels, and, most importantly, figuring out where to start your coffee business is our goal. Our aim is your success – and that includes avoiding a failing coffee shop.
Before You Start a Coffee Shop
Understand The Advantages and Disadvantages
If you are still on the fence about starting a coffee shop, we’d like to start by saying that this is a common feeling. You are not alone.
You are probably weighing the benefits of moving forward and have some questions before you jump in with both feet. We have certainly seen our share of advantages in starting a coffee shop, but we also want to be fair and talk about some of the disadvantages and advantages.
How do you decide to move forward and take steps to start your coffee shop?
The best thing you can do before moving forward and starting your coffee business is to familiarize yourself with the entire process. You'll also want to read our other post, How to Prepare Yourself For The Challenge of Opening Up a Coffee Business.
We always advise doing a personal inventory that assesses much more than just the “coffee business” itself. Additionally, you also want to analyze your personal support network and financial factors to start a coffee business. Your family or personal support network’s ability to support you during this time, as well as other variables, can personally influence your successful ability to start a coffee shop.
Below, we outline the pros and cons of starting a coffee shop. You will have to assess how these advantages and disadvantages of starting a coffee shop impact you directly before you get started.
Weighing Your Options When Deciding to
Open a Coffee Shop
On Starting Your Coffee Shop
Advantages of Starting a Coffee Shop Business
Advantage #1: Profits!
The ability to start a successful coffee business and generate revenue leads to profitability is a huge benefit. Depending on the accounting of your costs and your break-even point, it's your goal to reach profitability as soon as you can. This is obviously one of the biggest pros of starting your own coffee business.
The profits you generate from your coffee business can do wonders for your life quality and lifestyle and even push you to open a second coffee business. You are creating a “value machine,” which can then create a pile of future cash earnings.
You can also leverage your future profits to start another coffee shop, buy a home, or cash out when the time is right.
Advantage #2: Fulfilling your Vision
Profits are great, but fulfilling a personal dream that you want to reach is priceless. Setting and achieving a goal is a wonderful experience. Let's face it: being successful isn't always about the money. Realizing your personal dream and creating a successful business may ultimately be the end goal for many coffee entrepreneurs.
If starting a successful coffee business is a part of your personal vision, then reaching it with a coffee shop business (or multiple coffee shops) is absolutely worth it.
Advantage #3: The Ability to Create Your Own Schedule
If you have kids, you know that having the ability to create your own schedule is a huge plus and life changer. When you have your own business and employees, you’ll be able to create your own schedule.
Sure, you'll probably be busy and most likely will work well over 40 hours a week, but you'll have the flexibility to determine the hours you work – and that's incredibly valuable.
Having the ability to leave town when you want to, visit your mother during the week, or volunteer at your child's school is possible when owning your own coffee business. This affirms our ability to have the freedom you want and a richer, empowering lifestyle. And of course, when we're talking about your freedom, it's hard to put a price tag on that!
Advantage #4: Being a Part of a Community
A coffeehouse can be an incredible resource in any community. By establishing a successful coffee shop, you will bring people together and generate the sense of community we all want in the area we live in. There is no doubt that we all need to feel connected – in our work, in our communities, and personal lives. Coffeehouses have been bringing people together for hundreds of years. Perhaps your coffee business will add to this grand tradition in your own community.
Certainly, we can all think of our favorite cafe or coffee spot where we like to meet friends and family (If you can't think of one in your community, you may want to create one!). Such private-public spaces or “third spaces” are quite valuable to any neighborhood. Creating a location for your neighbors to meet and socialize and be a part of building up your neighborhood is certainly a positive aspect of starting a coffee business.
Advantage #5: Create the Lifestyle You Want
Like other business owners, you will have the ability to grow your coffee business and/or generate the lifestyle that most interests you. Of course, you will incorporate your passion (coffee) with developing the means (a successful and profitable business) to enjoy the things that matter most to you to create the lifestyle you want.
We touched on this before, but really, this is advantageous: Having a coffee business or any successful business can be a transformative element to our lives. By leveraging the success of your coffee business, you can go on to do many other things.
The Pros and Cons of Starting a Coffee Shop
On Starting Your Coffee Shop
Disadvantages of Starting a Coffee Shop Business
Disadvantage #1: You’re The Boss (The Weight of Responsibility Is Yours)
When you are the boss, everything starts and ends with you.
All the decisions, all the treasure, and all the pain that comes with your business are all yours. This might not be a good experience for many people.
Not everyone is a good manager or boss and handle the weight of responsibility. Consider your personality when moving forward with your business because the buck will stop with you. This means that you will be making all the decisions. For many, the level of responsibility is difficult to manage.
Disadvantage #2: Always Looking For Money
If you are struggling to get your business off the ground, you may also struggle to look for financial sources to keep your business afloat. Until it is profitable, sustaining your coffee business can be a real challenge for many coffee shop business owners.
Money shortages can plague a coffee shop or coffee stand business until it gets off the ground. After all, your rent will always be due, and you will need to pay your employees and your vendors.
You may want to have a contingency plan or reserves for emergency funding in case you need it. Many people max out their personal credit cards in a pinch. Before you get started, you will want to determine your coffee shop funding mix and understand just how much money you will need until your coffee shop is sustainable.
This is probably something you don't want to do and that I recommend against. Planning out your coffee shop budget and listening to what other coffee shop owners say about their business planning can help formulate a better, well-thought-out budget and coffee shop business plan.
Disadvantage #3: Hiring and Firing
Hiring and firing employees and baristas will be a big part of your coffee business. Do you have the stomach for it? Dealing with personnel issues can be hard for many people. Understanding your rights, needs, and existing laws will protect yourself, your coffee business, and your reputation. Having well-trained baristas is important.
Hiring may be exciting, but the process of firing someone under the legal framework of your state can be taxing on your emotions. Additionally, this incorporates getting to know the laws of your state – from the legal protections your employees have to the taxes and workers' compensation insurance you will need to provide.
Disadvantage #4: If the Ship Goes Down…
We wouldn’t be honest here to mention the obvious: if your coffee business fails, much of the money and investment you will have made will be lost – not to mention your own time, effort, etc. When the ship goes down, many times, so does all the investment.
The risk you assume is also your reward when/if you become a profitable coffee shop business.
Business owners reap the rewards of having a successful coffee business, a good trade-off considering the significant risk coffee shop owners take. After all, coffee shop owners put everything on the table – time, money, passion, and effort. Sometimes, despite the best effort and planning, a coffee shop business can fail. It is a substantial risk any business owner takes.
Disadvantage #5: It's Time-Consuming
It takes time to launch a coffee business. If you don’t have the time, then we would strongly ask you to analyze why you think you want to have a coffee business in the first place. Launching a successful business takes time, sometimes even more time than you may imagine. You may need to re-evaluate your time constraints before moving forward with your coffee business.
Planning is essential and often time-consuming. Writing a business plan, for example, takes time and effort too. Following through and making sure all the pieces fit together takes time. Ask yourself if you are ready and if you have the time to start your coffee business.
Additionally, you have to deal with paperwork, taxes, and a whole host of demanding issues that you are “the hook” for. And it never ends.
Summing Up The Pros and Cons:
The pros and cons of starting a coffee business can all be appropriately managed, planned for, and either maximized or minimized. Each of the cons, for example, can be addressed by thoughtful business planning, preparation, and consistent execution. We recommend that you get the knowledge you need by considering investing in our Complete Coffee Shop Startup Kit.
Learning How to Open a Coffee Shop
So, we’ve mentioned a few advantages and disadvantages of starting a coffee shop business. Of course, as we mentioned earlier, there are many more. Each person is different. Each situation is different, and you will need to assess your situation before launching your business thoroughly.
In the process of doing your research – such as writing your coffee business plan – you will begin to shed light on the expectations that you have (for example, your vision, your finances, your lifestyle). Additionally, with your planning and preparation insight, you will be able to better execute that planning – potentially saving you tons of money.
Start Your Coffee Business Planning By:
- Start visiting your favorite café or coffee shop
- Explore your favorite coffee drinks (What would you serve?)
- Explore your favorite local coffee roasters
- Look into local tax rates, minimum wage
All of these things can be free of charge! You can do them today – and it will cost you nothing but a few hours.
You don't need to spend any money to do everything mentioned above to get started today. If you're passionate about coffee, you are already probably doing some of these things.
What I have found, however, is that by doing these, you will be able to think about the advantages and disadvantages of starting a coffee business. At the same time, you are actually engaged in an activity revolving around your coffee shop startup.
Pros and Cons of Starting a Coffee Shop
Start Your Coffee Shop Planning Today
We've created an easy way to start your coffee shop business planning. We provide you with a great place to start with our Complete Coffee Shop Startup Kit – with hours and hours of real-world interviews you will want to hear before starting your coffee shop business.
However, if you plan to hire an expensive consultant anyway, we strongly recommend our coffee business startup kit so that you can achieve better results and utilize your hired consultant's expertise with your growing knowledge base.
We believe our Сomplete Coffee Shop Startup Kit, which includes hours and hours of interviews with experts and coffee shop owners, will help you make the most of your work with a coffee consultant if that is what you choose to do.
Recommendations for Starting a Coffee Shop:
Dedicate yourself to doing three things every day to open your coffee shop business:
- Learn everything you can about the retail coffee business
- Develop your coffee shop business plan
- Visit your competition and see what they are doing right and wrong – and learn from them.
Do these things, and you'll develop the momentum, knowledge, and confidence to move forward with your coffee business. While it is that easy, it will take some work. But we know that if you broaden your knowledge, confidence, and eagerness to learn, you'll be in a better position to start the coffee shop business you want.
Pros and Cons of Starting a Coffee Shop
Preparation Is The Key to Your Success
People always ask us, “What’s the first thing I should do if I want to start a coffee shop business?” We always recommend writing their own personal Pros and Cons list on paper.
If they decide that they would like to move forward…or are still not sure about their coffee business, we always recommend that they start a coffee business plan.
Writing a coffee shop business plan will certainly provide you with much of what you need to consider before starting your coffee business. If you're interested, consider our coffee business plan guide and audio interviews.
Our digital Сomplete Coffee Shop Startup Kit is an essential prerequisite in starting a coffee shop business. It provides you with the background of many aspects of running a coffee business that you should know before you write a coffee shop business plan.
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:
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* The information on this page is for educational purposes only. We do not offer legal advice.
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.
