How to start a coffee shop

by Startacus Admin

How to start a coffee shop

Coffee - it’s one of our absolute, top of the pile, couldn't live without, favourite things - in fact, it's fair to say that the Startacus office runs on the stuff.

We love it all; the bitter darkness, the intoxicating vapours, the comforting warmth, I could go on and on but the point is if Startacus didn’t run a website we would definitely run a coffee shop! (I wonder what said coffee shop would be named...Cofficus perhaps? Or maybe Startacoffee? Suggestions on a postcard please!)

So, in honour of our beloved black liquor (and our entrepreneurial plan B) this week we are going to take you through some of the things you'll need to think about before you start a coffee sshop of your very own.

Market Research

As with any business, before you decide to open a coffee shop it is very important that you undertake proper market research, some of the things you should consider in it are;

• Where exactly will it be best for you to open your coffee shop?
• Coffee shops are heavily dependent on passing trade so does the location you have chosen have good footfall? Visit on several days at different times to gauge this accurately.
• How does the footfall of the area change throughout the year? For example, a location close to a university or college may experience very high levels of people walking by at some points in the year, but be a near ghost town at others. You may wish to speak to nearby businesses to learn more.
• What kind of coffee shop are you going to open? (One that sells coffee...duh!) but will you have a specific speciality or theme? Is there a market for this kind of coffee shop in your chosen area?
• Do you have experience of working in a coffee shop or other customer service role?
• Are there any coffee shops, tea rooms or cafés located nearby? If so, you should visit them also at different times to see how busy they are, identify who their main market is and see how much they charge. How are you going to make your coffee shop more appealing than theirs?
• Do you plan to be an independent venture or are you considering setting up a franchise coffee shop? (For more info on the pros and cons of buying into a franchise, check out our recent article)
• Are there any grants or startup business loans available in your area that could help you get started?

Planning and Development

Besides learning to be an expert barista, some other things you need to think about are...

• Have you written a business plan? If you haven’t is there anyone who could help you with this? It might be worth speaking to someone who already runs a coffee shop (though obviously not a competitor, that could end badly!)
• Have you found a premises for your coffee shop? If so, does it fit your requirements? Is there easy access for the public and stock deliveries?
• Will you be able to have on street signage to encourage passers by?
• If you are going to have a speciality or theme you need to solidify this now. How will you go about ensuring that it is clear?
• Think about the equipment and furnishings you will need for the store, how much will this cost and where will you get it from? Many coffee shops and cafés use second hand furniture because A)It’s cheap and B)It can lend a warm, homely feel.
• Do you plan on working in the coffee shop full time from the get go? Will you need to hire anyone else? How much will you pay them and how will they be recruited?
• What will you call your coffee shop? Can you think of a catchy name that will make your business stand out from the rest?
• What other products beside coffee will you sell in the shop e.g. cakes, fruit drinks etc?
• Start thinking about where you will advertise your new coffee shop. Are there any local papers or journals that you could write for about your experiences of setting up a coffee shop? Startacus would be very happy to hear from you.
• Do you have any existing contacts with suppliers? If not, how to do you plan to build this up?

Finance

You don't have to be a bean counter, but you do need to have a clear idea of the figures

• How much is your coffee shop going to cost to set up? Be realistic with this figure and make sure that you build in a contingency fund so that you have something to fall back on.
• If you are going to buy into a franchise be sure that you consider how much money is involved in the agreement.
• Once established, how much are your monthly overheads going to be, remembering to include all outgoings associated with the business.
• It is more than likely that there will be some renovation work needed at your chosen location in order to ready it for being a coffee shop, how much will this work cost?
• Will you have a contingency fund in place just in case the business is slower to take off than you imagine?
• How much money will you need to bring in each month in order to break even/hopefully make a profit?
• Do you plan on looking after the business finances yourself or will you require the help of an accountant?
• Are there any qualifications/certificates that you can get in order to better equip you to run a coffee shop?
• How much is your staffing going to cost?
• Do you have an idea of how much your marketing budget will be?
• Do you plan on giving yourself a salary from the start or will you wait until the business is sufficiently in profit?
• There will be quite a few insurance costs to consider, make sure that you incorporate these into your plan.
• How can you make the most of any grants or startup business funds/loans available in your area?

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Published on: 30th September 2013

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