If you are a coffee aficionado, or simply have an entrepreneurial spirit, you may be considering opening up a coffee shop. These businesses can be incredibly successful, particularly if you are able to cultivate the kind of atmosphere that makes people want to spend time there. Coffee shops often have lower overhead than restaurants, which can make it an ideal choice for a new business owner.
Of course, opening up a coffee shop still requires a fair amount of planning and start-up funds. To ensure that your enterprise is a success, you will need to develop a well-crafted business plan and make quite a few decisions about exactly how you will operate.
Creating a business plan for your coffee shop requires considering a range of factors, from your physical space to your menu to décor and branding. Below, we outline what you need to think about before you open up a coffee shop of your own.
What Type of Coffee Shop Should I Open?
When you decide to start a coffee shop, you will need to choose what type of business you will run. Depending on your specific needs and what your community will support, you may choose to purchase a franchise coffee shop, take over an existing coffee shop, or start from scratch. There are advantages and disadvantages to each option.
Buying a franchise will require a more significant expenditure upfront, as you will be required to pay the franchise fee and associated costs. However, a franchise coffee shop is essentially a turnkey business, since most decisions will already be made for you – and you can capitalize on the branding, marketing, inventory and other items that the parent company provides.
Alternatively, you may choose to take over a coffee shop that already exists. This can make the process much simpler, as the equipment, décor, and location are in place, along with customers. However, these types of opportunities may be rare and owners looking to sell are often doing so as a result of poor financial performance.
Finally, you can build your coffee shop from the ground up. This option requires the most work, but it gives you the ability to truly make the business your own – and to maximize profits. For purposes of this article, we will focus on entrepreneurs who start a coffee shop from scratch.
Branding and Marketing
Before you open your shop, it is vital to think about how it will be marketed. After all, you can have the coolest little coffee shop with the best atmosphere and fantastic coffee, but have no customers if you don’t appropriately brand and advertise it.
Creating a brand is often very personal. After all, it is your coffee shop, so you want it to reflect you and your tastes. Of course, not everyone will like the same things that you do, so consider something that appeals to a wide range of people.
You can go almost any direction with your coffee shop’s branding. If you live in an interesting place, you could base your brand on your location – like Snow City Cafe in Anchorage, Alaska. Think about a slogan and logo design that will make it easier to develop a consistent, marketable brand.
This branding can carry through to all aspects of your business, from signage in your front window to the ads that you place online and in traditional media. Putting your brand directly on your disposable products (such as cups, coffee sleeves, and bags) is another great way to get your name out in the community.
Location, Location, Location
One of the most important factors in the success of a coffee shop is its location. Coffee shops that are located in a convenient place – like near office buildings or a college campus – will likely be popular. Of course, these types of prime locations can also be expensive, so you will need to balance location against your budget.
Think carefully about your community and its needs. Are there areas of town with a lot of foot traffic, or do most people drive to where they want to go? This information can help you decide where you want to open up your coffee shop.
For example, if you live in a town where lots of people work and shop downtown, renting a Main Street storefront may make sense. However, if your town doesn’t really have a “city center,” then you might be better off finding a place that is in a highly visible, easily accessible location, with ample parking.
Atmosphere Is Key
Once you have selected a location, the next step is to think about how you will furnish and decorate it. A comfortable atmosphere can make your coffee shop a destination. Adding some trendy elements – like a chalkboard wall – can further increase your shop’s appeal.
Ideally, your coffee shop should have a mix of furniture, such as couches and chairs for hanging out and reading and tables and chairs for reading. The space should be clean and bright, with distinctive décor. A coffee shop can be a bit eclectic as long as it is still cozy, so you have a lot of options when it comes to decorating your space.
The atmosphere of your coffee shop should also reflect your brand. For example, if your coffee shop is branded as a funky, unique place to find delicious treats, you may consider finding art that fits with your brand.
You should also consider adding elements that make customers want to stay a while. Bringing in some books, magazines and/or board games (such as chess) can go a long way towards making your customers feel welcome.
Planning Your Menu
Of course, no one will want to visit your coffee shop if your coffee isn’t any good. Finding high quality brews is critical to your bottom line. At the same time, you will need the right equipment and some easy-to-serve foods to attract and retain customers.
Offering a wide range of beverages is important. In particular, you should offer specialty coffee drinks like cold brews, lattes, and espressos, in addition to a good basic coffee. According to a survey by the National Coffee Association, 60% of coffee beverages sold are specialty drinks. If you don’t offer these options, customers will likely go elsewhere to find them.
Keep in mind that even people who don’t drink coffee will often visit a coffee shop – to meet friends or business associates, or just as a nice break from their routine. Be sure to have a range of beverages available, including tea, hot chocolate, juice, specialty sodas and golden milk.
Having options to suit individual dietary restrictions is also important, particularly because national chains like Starbucks tend to offer a range of vegan, dairy-free, sugar-free and other alternatives. Consider stocking milk alternatives, like oat milk (which is hugely popular), rice milk, or almond milk, along with sugar-free syrups.
Beyond the drink menu, you will want to think about a food menu. Your coffee shop doesn’t need a full kitchen, but offering pastries, sandwiches and other small items like yogurt parfaits, bagels, and shelf-stable snacks like chips and granola bars can boost your bottom line. Many coffee shops pre-make these foods, or purchase them directly from vendors to reduce overhead.
Part of planning your menu involves making sure that you have the supplies and equipment necessary. At a minimum, you will need:
- Fresh, high quality coffee beans and other beverages
- Necessary equipment, such as coffee grinders, espresso machines, milk frothers, a water filtration system, and a refrigerator
- Disposable coffee cups and sleeves, straws, stirrers, napkins, and take-out bags
- Plates, cups, and other dinnerware for in-store service
- Drink add-ins, like sugar, stevia, and cinnamon
- Milk containers and coffee carafes for self-service drinks
Sourcing these items can be a challenge, particularly when trying to stick to a budget. Some companies, like Budget Branders, specialize in offering inventory items in quantities and at prices that make sense for small to medium sized coffee shops. Finding these vendors will help you build your business without eating into your profits.
Consider Customer Perks
There is often stiff competition among coffee shops, particularly when a big name chain has a location nearby. As an independent coffee shop owner, you can encourage loyalty in little ways – like making your shop a relaxing and inviting place to visit, and working the counter yourself, so that customers get to know you. Certain perks may also help keep your business booming.
Loyalty cards are a great way to garner repeat business. The concept is simple: give customers an incentive to visit your shop regularly, and to spend more money. You can set it up as a simple punch card where a person gets a free drink after purchasing a set number of drinks, or use a loyalty card that is integrated into your point of sale system.
Another customer perk that many people enjoy is free Wi-Fi. A downside of making Wi-Fi available is that it may encourage customers to linger without spending a lot of money. Given that most major coffee shop chains – and many independent shops – offer free Wi-Fi, not having it may harm your business.
Ready to Take the Next Step? Contact Budget Branders.
Starting your own coffee shop is exciting – and a bit overwhelming. At Budget Branders, we are here to help. As small business owners ourselves, we understand the unique needs of entrepreneurs, and will work with you to make your business soar.
We offer a full range of custom disposables, all offered at prices and in quantities that work for small to medium sized businesses. This way, you can offer the same high quality coffee cups, coffee sleeves, bags, and more to your customers as the big brands do – without going into debt to do so. To learn more or to request a quote, call us at 888-373-4880 or fill out our online contact form.