Are you considering opening a coffee shop? That sounds like a great idea! Especially considering coffee is the number one most-consumed morning beverage for Americans. Think about it, drive past a Starbucks any time of day and you'll likely find a long line at the drive-thru and a bunch of patrons inside.
While your dream of opening a coffee shop may be energizing your spirits (a little coffee humor), there are three things you need to consider when deciding how to start a coffee shop. Those three considerations are:
- Will you open your own coffee shop through something like an LLC?
- Will you purchase an existing coffee shop?
- Will you buy a franchise coffee shop?
If you buy into a franchise or purchase an existing business, almost all the processes, procedures, equipment and everything else needed is either already laid out for you per the terms or already there because it’s an existing business. So, for the sake of this article, let's focus solely on how to start a coffee shop from the ground up.
Opening a coffee shop is not going to be cheap. According to CrimsonCup, on average (according to data as of January 2019) it will cost you $80,000-$300,000 to open a coffee shop with seating, $80,000-$200,000 for a drive-thru-only coffee shop and $80,000-$300,000 when opening a coffee shop with seating and a drive-thru.
Here are seven steps to follow to open a coffee shop.
1. Find the Perfect Coffee Shop Location
It should go without saying when opening a coffee shop that you need to be somewhere that has a lot of traffic. If you're not in a central location, not only will it be hard to find your coffee shop, but the chances of people going out of their way (especially on their way to work) are slim.
Find a location that is high traffic, has high visibility and is easily accessible to get into and out of. If you’re opening a coffee shop with seating, you’re going to need to make sure you have enough parking spots to accommodate patrons.
Inside, your location should have adequate room for seating and tables if you are looking to have a physical location and not just a drive-thru. If you’re looking to have simply a drive-thru, you will generally need to purchase a freestanding location or buy or rent a location on an end of a strip where you can make a cut out for a drive-thru window.
2. Pick the Perfect Coffee Shop Name
What will you name your coffee shop? It needs to be something catchy and fun when considering coffee shop names. Bob’s Coffee Shop just isn’t going to cut it these days. If you have an idea for the perfect name, do yourself a favor and check out this free business name search to ensure the name you are looking to use isn’t already taken.
3. Create a Relaxing Café Environment
When opening a coffee shop where people can come in, get a cup of coffee, sit down, chat with friends, have meetings or get some work done on their laptop, you want a very relaxed and chill vibe. If you want to be a niche coffee shop that caters more to a certain demographic, by all means go for it, but you may limit the number of potential customers.
Comfy chairs, soothing background music, sturdy tables, plugs for electronics and free Wi-Fi are just some things to consider when opening a coffee shop. Think about how Starbucks has positioned itself in the market. Not only do people go there for coffee, but they go there to work and relax as well. Create an atmosphere that people can enjoy, regardless of the reason for them walking through your doors.
4. Decide What You'll Serve
When thinking about how to start a coffee shop, you need to think about what products you will sell. Will your main focus be only on coffee? Or will you also have other beverages such as tea? What makes your beverages different from everyone else?
How about food? Will you offer something like breakfast sandwiches? Or maybe some sort of breakfast pastries?
The sky is the limit with endless possibilities, but the fact of the matter is that you’re going to need to think all of this though before you open the doors.
5. Attract Customers
Opening your doors for the first time is absolutely a satisfying feeling, but what if no one walks through the doors? All the time, money and effort put into opening your dream and the cash register doesn’t ring even once. Have you thought about ways to attract customers?
Marketing your business is going to take some proper planning and strategy. Social media is always a great place to be. You could target your audience with ads specific to those in your town or city using Facebook. You can also contact your newspaper to see if they will do a story on the opening of your business. How about some signage that you can put near the street in front of your location to catch the eye of those driving and walking by?
You absolutely need to do some sort of marketing or advertising in order to get people walking through your doors.
6. Hire the Best Staff
You can read every book on this planet on how to start a coffee shop, but if you don’t hire good employees you’re doomed to fail. You can’t be there 24/7 and you can’t do everything yourself. You want happy, energetic and motivated people working at your business who can help you grow.
Put out some signs when opening a coffee shop saying you’re hiring and start vetting those who stop by to fill out an application. It’s their personality you should really focus on. How do they interact with you? How do they carry themselves? Are they more introverted or extroverted? Are they warm and bubbly or shy and reserved?
When people walk into your coffee shop, you want them to feel welcome and greeted with sincerity. You want the people working behind the counter to know how to make the beverage and food you serve. You want them to have sufficient customer service skills so that they are accommodating and helpful to those who walk into your business.
7. Create a Loyalty Program
Getting people in the door to try your new coffee shop is one thing, but how can you get them coming back time and time again? A loyalty program may be a great idea. The more loyal a customer is to you by purchasing from your coffee shop, the more “points” they earn toward either free beverages/food or some sort of discount or dollar amount off a future purchase.
Start Your Coffee Shop with Incfile's Help
How to start a coffee shop and strategically opening a coffee shop need to go hand-in-hand. Not only do you need the know-how, but you also need to have a solid plan in place to get things moving and keep them moving.
Incfile is here to help first-time business owners like you. Whether you need help picking a business name, choosing the right entity type or filing your business taxes, we're here to guide you every step of the way.