How to start a successful coffee shop

5 mn read

How to start a successful coffee shop Starting a coffee shop can be very profitable if you do it right. Pass by any bustling specialty coffee shop, and you’ll likely see customers drinking coffee, espresso, latte, tea, various pastries, and other goodies. Wifi and other work-friendly features are also becoming popular, with cafes often serving as meeting centers.

Serving high-quality coffee and snacks in a modern, relaxing atmosphere can be a very successful endeavor – a business model pioneered by Starbucks, which as of 2021, has grown to nearly 33,000 coffee shops around the world.

Consider your options for coffee shops

There are three fundamental alternatives for opening a coffee shop.

  • Buying a franchise: To enter into a combined business model, you might consider a franchise, where most major business decisions will be made. In addition, you will be provided with turnkey work at a location chosen by the franchisor for a fee.
  • Buying an existing business: Investing in a store for sale or needing renovation is another way to get a turnkey. However, it is not simple to find a profitable business for sale.
  • Begin from nothing: Stuffing your own business from the ground up requires the most effort, but it also offers the most flexibility and potential to maximize profits.

Whichever option you choose, the same basics for success apply. In addition, your business plan for starting a coffee shop should include key factors.

Looking for a good location with reasonable rent

Before opening a coffee shop, understand why it is so popular. St. Cafés are also popular for casual business meetings or for students who want to catch up on school work. In addition, realtors reviewing listings with clients and groups of students collaborating on school projects are common sights in popular coffee shops.

Choose a location for your coffee shop that is convenient and appropriate for the types of customers it will attract.

Location for rent

Note that the most centralized locations are not necessarily the best for your bottom line. For example, malls and other high-traffic locations usually have the highest rents and the most competition. On the other hand, storefronts are excellent locations for coffee shops – they have the highest visibility, rents are usually lower than in malls, and you can set your business hours rather than dictate them to yourself.

Vehicle traffic and parking

Unless you locate in a mall or other location with a lot of pedestrian traffic, you’ll need to consider accessibility and parking. If a customer has to turn off a busy street difficulty to get to your establishment, or has trouble finding available parking, they will likely take their business elsewhere. 

Consistently deliver a high-quality product

Start a successful coffee shop business When opening a coffee shop, keep in mind that coffee and tea drinkers want more than a regular cup of coffee or a teabag in a foamy cup.

In fact, over the past few years, “specialty” coffees have grown in their range from traditional espresso variations and cold blended drinks to include new trends such as CBD infusions, cold brew, nitro, and ready-to-drink (RTD), and with all kinds of non-dairy additives. Consumers also value sustainability more than ever, which means fair trade beans, eco-friendly packaging, and practices in the coffee industry. How to start a successful coffee shop business

Due to the requirements of discerning customers, there is little chance that the coffee shop business will attract regular customers and thrive unless it can consistently provide high-quality products and keep pace with growing trends and consumer values. This means that you will need:

  • Keep up with industry culture
  • Source of a variety of freshly roasted beans
  • Invest in quality equipment (espresso machine, grinders, water purification systems, etc.)
  • Serve fresh pastries and snacks
  • Maintain well-trained and knowledgeable staff
  • Serve a mix of customer favorites, trendy drinks, and your unique creations

Provide great customer service

Most successful coffee shops use counter service. Having customers order, pay in advance and call them when their drinks and snacks are ready reduces labor costs and enables you to better handle busy periods. However, this is not an option. Instead, offering table service offers more opportunities to sell and may fit your business model.

Create a modern and relaxed cafe atmosphere

When opening a coffee shop, it is essential to create an inviting atmosphere to attract customers. According to surveys, most consumers cite comfort, familiarity, and atmosphere as the primary attractions of coffee shops. 6 In addition to the service model, Starbucks’ relaxed, modern and comfortable atmosphere is one of the main contributors to its success. The now infamous “third place” principle established the idea of ​​a café occupying a special place outside the home or office – the environment is paramount, while the drinks are almost accidental.

The perfect atmosphere is clean and bright, with plenty of natural light and comfortable sitting space. Utilize various seating and table configurations to accommodate individuals and groups of varying sizes. During the warmer months, an outdoor patio space is a major attraction and greatly increases the visibility of your business.

Unless you have some design experience, consider hiring a professional interior designer to handle the design, furniture, flooring, etc. You want a distinctive and personal ambiance that attracts customers.

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Offer a variety of snacks

Another key to success when planning to start a coffee shop is to realize that although coffee and tea are highly coded, a coffee shop cannot survive on coffee sales alone. Most successful foodservice and retail establishments know how to diversify their offerings.

Can you form a partnership with a local bakery or sandwich shop? Local bakeries are frequently sourced for large quantities of baked goods, as many customers are eager to support small businesses. Does the appearance of your coffee shop lend itself to a trademark?

For efficiency, food items must be either pre-prepared or purchased from vendors. However, preparing food to order takes a long time and reduces the overall sales volume, especially in busy periods.

Offer a loyalty program

Assuming you offer a great product in a good location, having a customer loyalty program can help you build customers. Customers love to feel appreciated, and occasional rewards motivate them to return.

Loyalty cards improve your bottom line by:

  • Encouraging regular customers to come more often
  • Improve the odds of a non-recurring customer choosing your business over competitors
  • Encouraging customers to increase spending

You can configure your loyalty program in many ways. If you follow the traditional path with cards that earn stamps for every purchase, be sure to use high-quality cards that have your business name and logo prominently visible and won’t fall apart easily from being in wallets or purses. Alternatively, newer digital software can automatically save customer information at the point of sale, giving customers something less to carry in their wallets.

See the numbers

As much fun as it can be to focus on coffee, decor, and your customers, remember that you have to keep a close eye on operations and profits to run a successful business. When coffee shops fail, it is largely due to financial reasons, such as overestimating profit, underestimating required cash flow, excessive overheads, lack of financial planning, poor debt management, etc., and not bad coffee. You will need to continually acquire industry and product knowledge, but you will also need to learn how to compete in the market. Like most casual food service establishments, coffee shops have tight profit margins of around 5%-8%.10 This means you’ll keep 5-8 cents per dollar of sales once the expenses are factored in.

To maintain this meager profit margin, you must manage the costs of goods, supplies, labor, permits, and any other expenses and increase the attractiveness of your coffee shop. The business plan will help you anticipate profits and identify areas that may need modification. How to start a successful coffee shop business

Be behind the bar

As with any business that relies heavily on customer service, the owner of a coffee shop must be as present and engaged as possible. For many clients, a good business is seeing the owner front and center, taking orders, submitting, and talking to buyers.

Practical presence also helps motivate employees to perform at their best. This is especially important when starting your coffee shop.

 

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