When you are planning to open your coffee shop, you are probably looking at all kinds of different information and details. Some of them are ones you may have never considered until you became a business owner.
You need to find staff, create a brand, and look for equipment and a quality location for your company to get its start. On top of all of these considerations, you must decide how many hours a day to stay open.
This can be a tough call to make and set your operating hours can seem too complex to figure out at first. You probably already know that you need to be open early in the morning for those who are looking to get their day started with a caffeine fix, but what about being open late at night? Will this be profitable?
Figuring out how profitable is a 24-hour coffee shop will help you determine whether staying open all day and all night makes sense for your business.
What Are Standard Coffee Shop Hours?
Smaller coffee locations will often operate their shops from 5 or 6 am to about 4 pm. This is because there is not enough traffic to justify longer hours than this. In some cases, such as kiosks or carts that are in parking lots, the coffee shop might only be open from 6 am to about noon.
Larger chain stores like Starbucks will offer variable hours at their stores depending upon the location. They might be open very early until late at night, or they might have truncated hours, just like smaller stores around the US that are not part of a chain. There are very few 24-hour coffee locations that are operated by large corporations due to the lack of demand for this need.
If you are considering operating a 24-hour coffee shop business, you need to think about your location and consider if there will be enough demand for you to keep your stand open at all hours. In some locations, this might make really good sense and could be well worth the investment of time and money to make this possible.
What Kind of Locations Might be Great for a 24-Hour Coffee Shop?
If you are not sure if the 24-hour model for your shop is the right one for your needs, you should consider some factors related to your business model. Your location will have everything to do with the answer to this question, but there are other things that you need to consider as well.
Businesses that operate 24 hours a day are becoming less and less common. People are less willing to work nights, and there is less need due to working from home and changes to the way that we shop, eat out, and more.
1. Location
The location where you have opened your shop is key when it comes to determining if you should have a 24-hour coffee shop. Are you located in the busy parking lot of a gas station that is open 24 hours a day? Are you located by other 24-hour businesses?
Obviously, you cannot have your coffee shop open in a mall-type location for any longer than the mall’s operating hours. The same might go for locations that have locked parking lots that are protected by being closed at night.
However, if you are operating a free-standing coffee location that is in an area where there will be customers at all hours of the day, this might make good sense for your business model. You will need to look at the data before you make this kind of choice based on your location.
You might need to spend some time at one of the other 24-hour locations near you and see how busy these businesses are during the middle of the night before you make your final decision.
Ultimately, you need to remember that you need to make money when you are open, so the middle of the night might not generate enough traffic through your store to justify this choice.
Shops located by campuses or places where young people like to hang out are often much more likely to make the most of the 24-hour business model. At least when compared to shops that are in other locations that do not benefit from this kind of customer.
2. Staffing
One of the major issues that many 24-hour businesses run into with this business model is staffing. People usually do not want to work nights and it can be really hard to fill in the gaps in the schedule if you have problems with your staffing at night.
You yourself might have to work the night shift from time to time since it can be hard to have backup staff who can handle coming to work in the middle of the night on short notice. Staffing can also be tough if you are looking for people who are really self-sufficient and can run the stand-alone, or close to alone.
These people will often want to work the morning shift to make the most of tips, and they will not appreciate being asked to work the night shift with fewer customers. Staffing challenges are often at the heart of the reason that most major coffee stores do not operate on a 24-hour-a-day basis.
3. Safety
There are many reasons that 24-hour businesses are challenging to run, and safety can be a big issue for these companies. Your staff will be exposed to more risk of being robbed or attacked when they are operating a coffee shop that is open all night long.
This is especially true if your store is brick-and-mortar and people can walk in for service. This can be a really tough pill to swallow in areas where there is a lot of traffic at night, like truck stops and gas stations.
However, the safety of your business and your staff needs to come first, ahead of profits. If you think that safety will be a big issue at your shop due to the 24-hour business model you have in mind, you need to let that idea go.
4. Pay
You will have to pay your overnight staff more than your daytime staff. They are going to do more work per hour since they are all alone or have limited other employees there. There are also labor laws that impact the amount that you have to pay night shift workers, and in some states, there are requirements for this kind of staffing related to pay that you have to follow.
The cost of making this kind of job attractive can be too steep for coffee shops to afford it. If you yourself do not want to work the night shift at your coffee shop, you know why your staff doesn’t feel excited about that prospect either. Being able to afford to be open so many hours of the day can be really tough when it comes to paying your workers for this kind of effort.
5. Stock and Supplies
When you are open 24 hours a day means that you will have to rework your supplies and stocking plans. You will not have downtime to stock your store or your coffee stand, which can lead to complexities that many people are not prepared for.
You are also more likely to run out of items since your business will vary more from night to night. Operating a shop 24 hours a day can lead to all kinds of supply chain issues that you might not have expected and which can cost you a lot of money to remedy. When you are trying to find out how profitable is a 24-hour coffee shop, then you have to keep the cost of stock and supplies low.
Coffee Shops Can be Profitable 24 Hours a Day Under Limited Circumstances
Coffee shops can be profitable when opening 24 hours a day, but only in very limited situations. You need to look at the costs to operate your store each hour and then decide if you are making enough to continue to have your shop open overnight.
In many cases, there is not enough nighttime business to justify operating a coffee shop for that many hours of the day. There are also issues with risk to the safety of employees in some areas, and supply and stocking problems can crop up as well.
You should consider things carefully before you choose to keep your coffee shop open for this many hours of the day. You will probably find right off that you would not make a profit. However, if you have done the math and you think that you will be able to earn a profit with extended hours, you might be able to make a 24-hour coffee shop business work.
Your location and your staffing needs will often dictate the success of this kind of business model. Not every coffee shop can meet the demands of this kind of operating style. Do some research to make sure you see whether this is a smart business decision for you or not and to learn how profitable is a 24-hour coffee shop.