Opening a successful coffee shop can be a rewarding experience. Coffee shops are essential to our communities. They enable friends and family to have great conversations, make mornings brighter and afternoons less stressful. Starting a coffee shop can be challenging, however, we've outlined 11 focus areas to help you get on the right track.
1.) Research and understand the coffee business
Opening any new business takes time and money. You must understand what it takes to run a coffee shop before you start the process. Fortunately, there are great resources available to you. These include:
- Reaching out to coffee business owners and learning about their experiences.
- Visiting local coffee shops in your area (what do you like, dislike, etc.)
- Think about who you want to serve (examples: business professionals, neighborhood residents, etc.)
- Consider taking a course (example: 3 Day Coffee Business Class @ Texas Coffee School)
- Join coffee organizations like the Specialty Coffee Association (SCA) and National Coffee Association
2.) Define your vision and goals
You likely have an idea of what you want your coffee shop to look like! Now is the time to write down your ideas. You can start by collecting photos, design ideas, menu ideas, and other inspiration to how you want your coffee shop to look. Having these ideas tucked away somewhere that you can reference will help you when it comes to choosing a business name, brand identity, menu, decor, and so-on. Having a few key goals is also important, especially when the going gets tough. You can reference these goals and remember why you started this process.
3.) Create a business plan and outline
Do I need a business plan? We get it, they can be a lot of work and take a lot of time. Plus, who’s going to read it? Our opinion is that coffee shop owners generally get more out of the process of writing a business plan than the final document. The process of writing a business plan helps you understand your local market and take a close look at the numbers you need to make the business successful. A business plan will guide you through each stage of developing and managing your coffee shop and will serve as a road map for how to structure, run, and grow your new business. Plus, if you are considering any type of business financing, the bank may ask for this document.
A business plan should include:
- Summary (What this business stands for, and how it’s going to stand out)
- Market Analysis (Who are your regular customers? Who are your competitors?)
- Team (What are you going to do yourself, what team are you hiring to do the rest)
- Marketing Plan (How are you going to get the word out?)
- How much cash you need to get started and where it’s coming from
- Financial Projections (Profit & Loss, Cash Flow)
- Physical Location & Lease Strategy
- There’s a lot here, however, this document can be a great resource for you and your team once you're off and running.
4.) Choose a location
We've all heard the saying: Location … location … location. It's for good reason, your location may be the most important aspect of your coffee shop. We recommend, before making any decision, make sure to spend some time in the area you are considering (at all times of day/evening). Pay close attention to how many people are moving about on foot, and how much parking is available. Is the location visible enough? Is there enough foot traffic around to sustain your shop? What does the location mean in terms of demographics? What kind of things do the local community like to do? Remember you’re going to be spending a lot of time here, so you want to make sure you understand the area and the residents. It’s also vital to understand the details of the retail lease, the terms of this document will affect the profitability and the resale value of your business down the track. It’s wise to talk to a professional and/or lawyer who specializes in retail leases before you sign anything.
5.) Find the best suppliers
Finding reliable suppliers is a key component of any business’s success. Depending on the type of coffee shop you’re opening, the major consumable suppliers you will look to course include coffee and espresso, milk products, tea bags or loose teas, chai, hot chocolate, flavoring syrups, sweeteners, food products (scones, muffins, breakfast foods, etc.).
Disposable coffee shop supplies include paper hot cups, cold cups, lids, straws, coffee sleeves, napkins, coffee filters, take-out cups and food carriers, bulk coffee-to-go boxes, and flatware.
The list may seem overwhelming, but getting down to the nitty-gritty (from pastries to cup carriers) will ensure you’re prepared for anything. From there, you can begin researching suppliers until you find ones you love and who fit with your business philosophy.
6.) Source commercial equipment
When it comes to sourcing equipment, you have a few options:
- Buy equipment outright using your own financing
- Finance equipment through a partner like Navitas Credit Corp. or Credit Key
- Lease equipment through a partner like TimePayment
In addition to an espresso machine, grinders, brewers, and water filtration you will want to source a commercial blender, refrigerator, dishwasher, cash register, or another type of payment system, etc. We suggest making a list and being as detailed as you can. You may not need all these items right away, so prioritize and keep in mind what’s coming.
7.) Design your coffee shop
The design of your coffee shop is crucial for attracting customers and enticing them to return time after time. Your design concept will largely depend on your target audience, location, and overall vibe you're going for. For instance, will the look and feel be modern, retro, homey, sophisticated, and so on. You don’t have to please everyone, but it is important to choose a theme and stick with it so customers can understand your shop's identity.
One of the most important design aspects is ensuring customers know where to line up, order, pick up, etc. The general flow of your shop should be organic and comfortable.
8.) Create a menu
Your menu should express your vision and the theme of your coffee shop. We recommend keeping it simple while offering a little something for everyone (ex. gluten-free, vegan, and vegetarian options). Keep in mind, your menu should be profitable. Calculate the ingredient costs and margin of each item. As a rough rule of thumb to get you started, the ingredient costs should be no more than 35% of the retail price.
9.) Hire the right people
Ask any experienced business owner what the major challenges of owning and operating a business are and they will likely have feedback on employees. You can approach hiring the right people a few different ways, for example, a lot of shop owners look for experienced baristas, which can be great. However, finding someone with a great attitude and less experience can also work out great. Skills can be learned, whereas attitude...well, not so much. You will want some experience, particularly in the early stages. However, developing a great team culture only happens by hiring the right people, so make sure you put the work in to find people who are the best fit for your business. Additionally, when it comes time to hire, make sure you are well versed in taxes and other regulatory requirements. Your local chamber of commerce or small business organization is a great resource.
10.) Market your coffee shop
We recommend marketing your new coffee shop before opening! Fortunately, there are several low-cost and/or free tools you can use to start this process. For example, use social media to start building your reputation. Create a profile on Instagram, Facebook, LinkedIn, etc. and start to tease what customers can expect from your new shop (highlight employees, menu items, sneak peeks at your design). Additionally, make sure to create and claim your listings on sites like Google Maps, Google My Business, Bing, Tripadvisor, Yelp, NextDoor, BBB, etc. Also, reach out to your local small business hub to get your business listed.
11.) Open your coffee shop
Opening your coffee shop is an incredible achievement and will mark the beginning of an exciting new adventure. After planning, preparing, and hiring the best staff, your ‘grand opening’ is a chance to show off your hard work. It’s also a great opportunity to start building long-lasting relationships with your customers. Before your official opening, consider having a ‘soft opening’ - allowing you to learn the basics before you open fully to the public. This is a great way to test staff, workflow, and the atmosphere of your coffee shop, and it also allows you to iron out kinks. Once your shop is open, you can enjoy being your own boss, build your profits and make new relationships throughout the community. Plus, you’ll enjoy sharing your passion for one of life’s greatest pleasures… coffee!
About Voltage Coffee Supply
Voltage Coffee Supply has been serving the specialty coffee industry since 2015. We've created relationships with our customers and manufacturers based on trust and a commitment to quality. We strive to be the best place to purchase coffee and espresso equipment on the Internet.
Our mission is to provide superior customer service and premium products at the best price.