It is no secret that many people love coffee. It can be hard to imagine getting through a day without coffee for most of us. This helps to explain why there are so many coffee shops all over the US that enjoy profitable success every year.
However, no matter how much we all like coffee, the coffee shop that you want to open needs to stand out from the crowd to survive. Because coffee is a popular amenity in the US, there are many other coffee shops competing with each new business that is opened in this niche. Here are some important things to know before starting a coffee shop business.
What is the Secret to a Successful Coffee Shop?
There is no one secret to a successful coffee shop. The combination that works the best for most companies, even those that are not in the coffee niche, is coming up with a really good product and backing it with a really unique and memorable branding effort. Everything from the logo to the drink styles to the sourcing of your products can be part of your brand messaging and outreach.
Companies that stand for something and know who they are for sure are much more likely to survive than companies that are not sure about who they are or what they want people to know about them. Think about your company like a person who needs to make friends in order to get a job. You want to be sure that your company is relatable, welcoming, and relevant to the people to whom you need to sell coffee to. Just offering coffee is not enough, as there are so many places where people can get coffee these days. You will need to stand out from the crowd if you want your business to make it.
Standing out can be done in so many ways that you will need to sit down and decide which avenue you want to follow. You might choose to offer a part of every drink to a charity, or maybe you want to use coffee beans from sustainable farms. Perhaps your theme is about beachy coffee or coffees that have unique flavors. No matter what you choose, make sure that you can market it to people and be clear about why it benefits your customers to seek out your coffee shop above other options they might have.
Things to Know Before You Open a Coffee Shop
These are the things that you should have in mind before you open a coffee shop. Each person’s journey to make a coffee shop a success will be different, but you can plan for anything that might come your way if you know what to think about before you really do open your shop.
1. You Need A Business Plan
There are many reasons that you should take the time to make a complete and well-constructed business plan for your coffee shop. The first reason is that you will have a roadmap to guide you through the first week, months, and years that your shop is open if you take the time to create this plan. You will not have to guess if you are on target or not with a business plan in your hands.
Second of all, you will almost always need to be able to give a copy of your business plan to the state when you apply for your business license. There are not many states that do not require this, and you will be really frustrated if you assume that you don’t need this document and then find out that it is required.
The last reason that you need a business plan is to define what roles you and your partners will play in the operations of the shop. This plan will also define profits and other monetary considerations that can lead to conflict down the road. Avoiding common pitfalls is key, and you will want to be certain that you and your business partners do not get into trouble because you did not clarify who is responsible for what.
2. Your Location is Key
You will want to be sure that you do not take the process of picking the location of your shop lightly. You should take the time to analyze the market in your area and figure out where your shop needs to be opened to have the most success. You cannot just pick a location that you like or that is close to your house and just hope for the best.
You will want to make sure that the location that you have picked out will be beneficial for your business needs over the long term. There are going to be placed in your area that will be inundated with coffee shops already. You should not add your coffee shop to the noise in these areas if you want your coffee to make it. Knowing where to locate your shop can be the difference between success and failure.
The other thing that you need to consider is whether you want to set up a brick-and-mortar location or a kiosk, or even a mobile coffee cart. There are pros and cons to each of these kinds of stores. You will want to look carefully at all the pros and cons of each of these kinds of locations before you decide which kind of store is right for the location that you have in mind.
3. Funding Can be Complicated
It might seem like it will be really easy to get your funding sorted out for your coffee shop. After all, you probably are interested in getting into this business because it is easier to fund a coffee shop than many other kinds of businesses. However, even if you do not need lots of capital to start your coffee shop, you will still need to figure out your funding situation well in advance of sorting out some of the rest of your business details.
You will want to be sure that you do a business forecast that includes a budget so that you can be sure that you will get the right kind of loan for your needs. For those with partners, you will want to be sure that you figure out who is contributing to which amount of the funding and document this in your business plan. The clear your finances are, the less likely it will be that you will run into problems with your funding.
There can still be surprises that you do not expect, but you can cover some of these surprise costs by having a slush fund. If you have some cash on hand for these kinds of emergencies, you will not have to ruin the rest of your budget in response to these challenges. This can be the best way to make sure that you can balance the budget and proceed with your business planning.
4. Picking the Right Coffee Can be Tough
Many people actually think about the coffee part of their planning process the least. This can really sneak up and bite you later. You will need to be sure that you have coffee that is really good, or people will not come back to visit your shop over and over again. You do not have to pick a designer coffee brand or source your coffee from a specific place. You do need to be sure that you are offering up a really unique and delightful coffee-drinking experience so that you can stand out from the crowd.
Being sure that your coffee is better than average can involve some testing of different coffee options. You might also need to hire someone to help plan your menu. Not everyone knows about coffee specifically in great detail. This is something that you cannot compromise on, and if you need to hire an expert to help with this part of the planning process, you should do so.
Lots of people get caught up in worries about budget and end up picking a coffee that is budget-friendly, and they choose solely based on this and not flavor. This can lead to an unfortunate first few months for your business, and it can actually do lasting damage to your company’s reputation. The taste and variety of your drinks are essential for your business to succeed, and you cannot cut corners with this part of the business planning process.
5. Branding is Critical
Your business will live and die by the branding that you pick for it. This means that you need to be sure about what you want your business to stand for. You also need to be sure that you are making it clear what your business is all about right away. Ads and even visits to your business need to make it clear what your business is all about.
You need to be sure that you have the right brand colors, the right brand swag on offer at your store, and the right coffee products on your menu. These items all combine to make your branding identity, and they need to be unified enough to help paint a clear picture of your business and what it needs to mean to people. Branding is the most important part of your marketing and advertising plan, but it is also the face of your business.
You should give branding a lot of attention. You need this to work right from the start. You will not get another chance to make a change to this part of your business strategy.
6. Marketing
This is something that most people are not comfortable doing. Marketing can be really time-consuming, confusing, and expensive when it is not done right. You might want to plan to outsource this part of your business plan to ensure that you get the most out of your marketing dollars.
Marketing is key to making any business a success. You need to be sure as well that your social media presence, as well as your website, are set up correctly to draw in new business. Marketing can be a really critical aspect of operating a new business, and this is why sometimes it is smarter to have an expert take care of it for you.
Marketing cannot be avoided, and it is an ongoing part of taking care of your business. You cannot stop marketing your business, even once it is established. You will want to be sure that you are ready to take on this task and continue to handle it throughout the life of the business. Many people are not prepared for the process of taking care of marketing for a business, and this can be the reason that your coffee shop might fail.
7. Patience is the Game
Building a successful business is a long game. You will not end up with a business that is profitable within a few months. That is just not possible. Businesses take years to be truly profitable. You will need to look at how much money you have in the business, and you cannot consider the business profitable until all of your loans are paid off and you are operating free of debt.
Patience is required to make sure that you end up with a business that is profitable. You cannot expect to make a bunch of money immediately from any coffee shop, and even if you make money right off, you will need to plan on slow periods as well. Restaurants can have lots of ups and downs, especially in the beginning. You need to be sure that you do not want to cut and run the first time you run into a slump.
There is a lot of patience involved in the process of creating a business that will stand the test of time. Patience is key to success as a business owner, and you cannot have enough of it.
8. Things Will Change
Many people believe that they will set their business on a specific trajectory, and then it will just continue along this path for the rest of its life. Businesses have ups and downs, slow periods, and profitable periods, and have to change as the world around them changes. You will need to try and keep your finger on the pulse of the industry and adjust to the changes that are necessary to keep your business from falling off people’s radars.
You cannot just set it and forget it when it comes to a business. Businesses need to be attended to on a daily basis in the beginning, but you will need to make sure that you have eyes on your business at all times, even if you hand off a lot of the operations to a manager. There are so many things that only you can know about your business, and you should never forget that you built the business into what it has become.
Keeping your business on track requires that you do not forget that it will have to change over time. You might need to add or subtract staff, change your product line, or even move locations due to things that have changed in the world around your shop. Being willing to change is just as important as being willing to take the leap to start a business in the first place.
9. Coffee Alone Will Not be Enough
No coffee shop can make it on just coffee alone. You will want to be sure that you have bakery goods, snacks, or other kinds of products on offer for your customers. You can also choose to have a huge list of drink products or to just offer some coffee and a few other kinds of drinks. The market that you are trying to build a business in will help dictate what you need to offer to your clients.
Be sure that your plan is not to offer a few coffee drinks and nothing else when you open. Many people start out with either too large of a menu or too small of a menu. You might want to make sure that you work with an industry expert to help make your menu if you are not sure what to offer. This can be a big part of your business plan, and you should have sample menus included in your business plan that can be adjusted when you get closer to the opening date of your shop.
Coffee is the most important part of your coffee shop’s menu, but there are so many other products that you will probably want to add to your menu as well. Make sure that people have a reason to spend more money each time they stop in, and food can be a great way to do just that. Plus, thinking about products for kids can help to make sure that moms can drop in and take care of their whole family. This might not be your target audience for your customer base, but you will find that many of your customers will be moms with kids, so planning to make them happy is a good idea.
10. Know Your Limits
It can be exciting to think about offering new products, new drinks, or other kinds of services. In the beginning, however, you need to be sure that you know what you can and cannot do. You need to be sure that budget and branding are involved in all of your decisions. This is a key aspect of balancing your budget and keeping on target at the beginning of your business life.
Knowing your limits is a key part of managing a business responsibly. You will want to be sure that you are not getting past the stage that your business is in with your new ideas. New ideas can be great but can only be useful if your business is ready for them. You need to know what you have the staffing, the energy, and the money for at all times. Being sure that you know what your business can handle is just as important as taking care of day-to-day management concerns.
Knowing your limits is important for any business owner. You should always keep these limitations in mind and plan all of your business moves without being overconfident. Reaching too far can sink your business or can at least cause you to spend money that you do not have or push your business in directions it is not ready to go in.
There Are Many Key Things That You Need to Know to Start a Coffee Shop Business
When you have never planned a business, you need to be sure that you do not forget all the various important aspects that are required to get a business off the ground successfully. Make sure that you have a solid business plan and that you are prepared to handle marketing with care and attention to your budget. You also need to be certain that you know what your branding is and that you stick with it when you are planning anything to do with your business.
Running a coffee shop business can be really rewarding, and you will be able to make a profit off of this kind of business rapidly. Being sure that you have your funding in order is key to be sure that you have a budget that you are going to follow every day as your business gets established. There are so many other considerations, but funding and a business plan can make all the difference when it comes to creating a successful business.
This guide will help you to make sure that you are thinking about all the right things when you are planning your business and getting it off the ground. Being able to plot the course of your business correctly from the start can make all the difference in its success. Take a look at some of the important things to know before starting coffee shop business to help your business become a success.
