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Starting a Coffee ShopSo, you’re starting a coffee shop. Congratulations! You’ll be tapping into a 330 million cup a day national habit. There is money to be made and success to be had. However, that success will depend on how well you plan.
Starting a coffee shop starts with deciding what type of coffee shop you want. There are five basic scenarios to consider:
The business plan for each of these will vary, so you need to carefully define your objective and design your business plan around that objective. Take into account the demographics of your community and your target market. Who is likely to come into your business? Who do you want to attract?
The type of coffee shop you want to open will determine the next decision you make: the menu. That’s because the menu will determine what equipment you’ll need, what kind of build-out (cabinetry) will be necessary, and to a large degree, the layout of the your shop.
“Location, location, location.” This isn’t just a jazzy real estate quip. Location can make or break your coffee business. Do your research. Your location will depend on your concept. An up-scale sit down shop will require a different location from a drive through. The key is still traffic, however, be it foot traffic or car traffic. Look for locations with easy access, egress, and high visibility. People aren’t likely to go out of their way for what is usually an impulse purchase. In fact, that impulse is generally put in their heads by seeing a coffee shop. “Gee. An iced coffee sounds good.” Or “Hey, I could use a pick-me-up right about now.”
The type of coffee shop will also dictate the start up cost. For a coffee cart, you can expect to spend between $20,000 - $25,000. The average cost of a kiosk depending on the size and your menu can be $25,000 - $75,000. It is not unheard of for a small drive thru to open for less than $35,000. A large one can run $80,000 - $200,000. The average cost of a sit down with 1,200 square feet is generally around $200,000 - $375,000. While that may sound like a lot of money (and it is) it’s comparatively low when you consider that a small clothing store will cost a cool half million, minimum.
Become a student of the coffee business. Don’t be intimidated by what you don’t know. Ignorance is curable and there is no substitute for hands on learning. Attend tradeshows and subscribe to industry periodicals. There are several comprehensive books on the subject that are well worth the time invested in reading. (Perhaps in a quiet corner of a future competitor’s coffee shop.)
Don’t be discouraged by the idea of competing with a large coffee chain operation. Quality products and service are where the small business proprietor can really have the edge over the more impersonal cookie cutter variety shops. Marketing your uniqueness will be the key to your success at starting a coffee shop, and a reflection of the drive and determination that makes you a standout in your business community. |
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