The last few years have been a bumpy ride for many. But even a pandemic wasn’t enough to break the stride of coffee shops in the United States. The number of coffee shops in the U.S. grew by 2.4 percent to 65,410 over the last five years, and that number’s expected to increase by approximately 17,537 by 2025.
With the resilience of these establishments in volatile markets, and with projections of healthy growth over the next couple of years, the time is ripe for you to consider launching and running a coffee shop of your own.
Not sure where to begin? Our guide for going from beans to business will put you on the right track. Let’s get to the grind.
Consider Your Coffee Shop Options
In communities, the “third place” or “third space” is a space that’s neither work nor home, where community members can go to socialize, do some work, network, or simply relax for a few minutes (or hours). Coffee shops are one of the best examples of a “third place.”
Of course, setting up and launching a coffee shop takes a lot of work. Before going any further, consider your options. There are three options you can look at as an entrepreneur:
Start from scratch: While starting your own venture from scratch takes the most time and effort, this option offers the greatest flexibility and potential for maximizing profits.
Purchase an existing business: Purchasing an existing coffee shop offers you an easier route into the industry, although it’s not always easy to find profitable businesses that are for sale.
Purchase a franchise: By purchasing a franchise, you can start with a built-in business model. Thanks to this model, most of your major business decisions will be made for you, plus you get a turnkey business in a location chosen by the franchise provider.
Whichever option you choose, it’s important that you take every step to set yourself up for success.
Write A Business Plan
Regardless of whether you choose to open a coffee shop of your very own, purchase an existing business, or buy a franchise, you should incorporate the same key elements. After making your decision, the first thing you should do is write a business plan.
Your business plan should include the nature of your business and who it serves, your target market (primary customer demographics), how your coffee shop will be profitable, your competitors, projections for sales and revenue, and milestones and goals. This can be a lot of work, so start by creating a one-page pitch or a lean plan before bulking it up with additional information.
Find The Perfect Location For Your Coffee Shop
The right location is essential for the success of your business. Make sure you look for a location that increases your chances of seeing a steady stream of customers pass through your coffee shop’s doors. The location you choose should be:
- Centrally located
- Easily accessible
- A space aligned with your vision
- A place that sees consistent foot traffic
Remember that even if finding the perfect location takes time, the wait is worth it. After all, coffee shops benefit from locations that offer casual traffic and easy access. Once you’ve found and secured a location for your new venture, you can start finding out about applying for the necessary licenses and permits.
Draw Up A Floor Plan For Your Shop
Once you’ve chosen your location, take the time to draw up an effective floor plan for your coffee shop. Start by imagining every possible scenario. Think about what needs to be within easy reach when making coffee, what customers want from a seating area, and how kitchen and counter staff as well as servers need quick access to the various materials they need.
Consider how you would like customers to queue within your shop, and where those who ordered takeout can wait comfortably. Write your ideas down, and then use them to create the best layout for the space.
Create A Marketing Plan
Don’t leave creating a marketing plan to the last minute. Develop your marketing strategy and start advertising your new coffee shop to potential customers a few months before opening. Consider marketing options such as:
- Participating in local events where you can offer free specialty coffee samples before your shop’s grand opening
- Partnering with local businesses, providing them with free coffee in exchange for advertising on their premises
- Using social media to communicate directly with customers
- Letting local media know about your plans to open a new coffee shop in the area
- Running a small email or direct mail campaign through which to send coupons to residents or businesses in the area
- Doing something special to the shop’s exterior before the launch to build excitement and begin establishing your brand
Get To Grips With Business Basics
If you’ve never run your own business, familiarize yourself with a few business basics. Get to know every aspect of your prospective business, from kitchen procedures and health and safety protocols to office admin, HR, basic accounting, and managerial functions.
Learn how to make an invoice, hire and fire employees, prepare various menu items, order stock, do end-of-day/month/year cash-up, and do stocktaking.
Hire Slowly And Train Your Employees
Don’t be tempted to hire too many people too quickly. Consider hiring a few family members or friends who can help you out for a few weeks while you slowly interview, hire, and onboard employees.
When you’ve hired staff, make sure they’re properly trained—and this should go beyond the basics of taking and serving orders. Train your employees about the various coffees and other menu items on offer and encourage them to taste the various coffees regularly. They should have solid product knowledge, which will enable them to answer customers’ questions, make good recommendations, and upsell other menu items.
Steps To Success
The steps we described above aren’t exhaustive, but they should get you and your new coffee shop off to a good start. Give time and attention to setting yourself up for success, and you’ll enjoy a much smoother opening. Good luck!