There are over 60,000 coffee shops across the United States, and the industry has grown 3.2% annually over the last five years. Cafes are perfect for working or relaxing with friends, and they can be the heart of the community.
Owning a coffee shop may seem like a smart business move, but 50% – 74% of small coffee shops fail within five years of opening.
With this in mind, you need to learn how to start a coffee shop that people will love.
Go anywhere in the world, and you will see that any individually-operated coffee shop is unique. From the people, place, and atmosphere, you will get a different experience no matter where you visit.
Before you open, you will need to decide how your shop will operate and what will make visiting it special.
Ask yourself these questions:
Half the fun of owning a business is seeing how it changes as you grow, but you will want to have some goals in mind at the very least.
No business can run without a solid plan. How much you prepare will directly affect your chance of success. By creating a business plan, you will get a deeper understanding of your market, management needs, and financials.
Make sure to cover these topics in your plan:
You will want to make sure all your affairs are in order before opening your coffee shop. Becoming a legal business is the most important step in this process.
Benefits of creating a business entity:
What type of entity you form depends on your situation. Here are the most common entity types for small businesses:
We advise speaking with a small business consultant if you have any questions about these entities.
Finances will be your biggest challenge as you plan how to start a coffee shop, especially since the average small business loan amount was $663,000 in recent years. However, your coffee shop may need much less or a great deal more depending on your goals.
As we stated earlier, your business plan should outline expected start-up costs and continuing expenses. You will need to show this plan to banks or investors so they can evaluate their
Here are some ways to fund your business:
Where you start your coffee shop can make or break your business. You want to choose a location that is easily accessible and has high visibility from passersby. If you have a specific motif in mind, your space should help you build that ambiance.
Since coffee shops can be community hubs and high-traffic areas, it helps to have a parking lot and bike racks. Even better, having a walk-up window or drive-thru lane can increase your appeal tremendously.
Many new coffee shop owners rent their space, but buying can also be helpful. If you plan to carry out major renovations, you may not be able to achieve your design goals with a lease. Also, leasing can lead to some uncertainty about the fate of your business. Even if your coffee shop is successful, you may have to relocate if your manager does not renew your lease or sell the building to someone else.
Lastly, whether you rent or buy, your location will dictate the price. A perfect location may put you in front of thousands of potential buyers, but it can also mean more competition. Make sure your market research covers expected revenue in various parts of your city to ensure you can afford your lease/mortgage.
The average coffee shop sells 230 cups of coffee per day, which means you will need a steady supply of beans for your business. Where will you buy your coffee beans, sweeteners, or food supplies?
There are many vendors that offer these goods, but you want to keep an eye out for the following factors:
Aside from food and drink, you need other supplies to keep your business running. You will have a few large one-time purchases and some recurring orders to consider.
Some basic equipment you need to start a coffee shop:
Since nearly half of Americans do not carry more than $20 in their wallets, you will want a point of sale to process cash and card payments. But your POS is not only useful for taking payments, and all devices are not made equally.
Look for a cloud POS that offers the following features:
Additionally, you want to consider the fees associated with your POS. Some companies offer “free” devices, but they end up charging you hidden transaction fees that can add up to large amounts.
Click here to schedule a demo of the Epos Now Cloud POS.
Want to know how to start a coffee shop that will keep people coming back? Choose employees who are committed to providing outstanding customer service from start to finish. But how can you find these people?
It starts with your management team. You will want to recruit individuals with expertise in a range of areas, especially daily operations, and personnel management. If you are not used to conducting interviews, partnering with someone who can lead hiring will alleviate stress and help your source the best talent.
As you onboard your employees, be sure to dedicate ample time to training and teamwork. You want everyone to know their job inside and out, and each staff member should feel comfortable working together. By investing in training, you can prepare for the unexpected and foster a productive environment.
Do you have a plan to spread the word about your grand opening? Will you need to hire outside help?
People love to try new places, and your coffee shop will see tremendous interest at its opening if you market correctly. It is easier to retain current customers than find new guests, so you investing in your advertising plan is well worth it.
Cover each of these channels as you spread the word about your new coffee shop:
Once you cross off each of these items, you will be able to handle anything that comes your way. With the right preparation and marketing, your staff will be trained and guests will be excited to try your offerings.
Now that you’ve figured out how to start a coffee shop, you can spend more time with guests and focus on building and growing your brand!
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