Before you begin planning to open up your coffee shop, there are some obvious, and not so obvious, actions that you need to account for. This is not a simple feat, opening your coffee shop requires hard work, research, planning, and perseverance.

To create a prosperous business on your own, you must organize things such as a business plan the purchasing of equipment, and a marketing strategy. Reading this likely makes starting a coffee shop seem overwhelming, but it does not have to be.

Here is a simple 6-task guide detailing how to develop your coffee shop business without the confusion and hassle often faced by beginners.

  1. Research!
  2. Construct a Business Plan
  3. Establish Your Company
  4. Invest in Equipment and Prepare Your Supplies
  5. Gather a Reliable Team
  6. Develop a Marketing Strategy

Research!

Of course, you must have a solid understanding of what goes into running your own coffee shop business before you open. Approximately twenty percent of small businesses do not make it past their starting year as stated by the U.S. Bureau of Labor Statistics.

To make sure that your business is in the seventy percent that makes it, there are a few key points that you need to consider.

Who falls within your target market?

The ‘no market need’ is one of the most common reasons that startups fail. Therefore, it is necessary that you identify who your customers will be, and be positive that they need your services before you open your business.

To determine who your target clients are, you must examine the demographics, such as location, and psychographics, or needs and wants, of your ideal consumer.

Therefore, ask yourself questions such as, ‘How much do they have the ability to afford to pay to obtain coffee?’ ‘Would they rather have the option of buying a small snack with their drink of choice?’ ‘How early are they up?’.

Once you have established who your ideal target is, you must then determine ‘if’ and ‘how much’ this demographic is willing to pay to obtain what you have to offer.

 Where should your coffee shop be located?

Selecting your location deserves a heavy amount of consideration, as it has a significant impact iregardingseveral aspects related to the prosperity of your business.

When contemplating a location, obviously customer accessibility is most important. However, in addition to this, location also determines what type of licenses, permits, or legal responsibilities will affect your business. Additionally, taxes and labor costs are dependent in regards to the location of the business.

Be sure to analyze the competition in the area of your choice. If there is already a well-established coffee shop, the consumers in that area do not need your service. If you choose an area where there is competition, make sure that it is healthy, and will not drive you, the newer coffee shop, out of business.

You must do your research to be sure that you are well-prepared to run a coffee shop on your own. Delve deeply into the aforementioned research topics to be sure that you are making the most informed decisions about your own company.

Construct a Business Plan

Your business plan is the strategy of your company to obtain success. To get through the confusing startup beginning, it is important to identify your professional and long-term goals.

Often, business plans are constructed as detailed descriptions of a company and its direction, usually to obtain financial assistance. A business plan incorporates (but is not limited to):

  • Company Description
  • Financial Expectations  
  • Sales Projections
  • Marketing Strategies
  • Market Analysis

A minimal business plan, typically constructed by those not in need of outside funding, includes financial expectations, pricing strategy, company mission, and future goals.

A business plan is simply a plan, and therefore, it should be flexible enough to grow and develop with your coffee shop. You have the option of being able to redevelop it whenever and however, you would rather have it be. Read more about how to write your business plan here.

Establish Your Company

Establishing your company requires a great amount of consideration in the decision-making process. There are a great number of questions that you as a coffee shop owner must give thought to. First, you must select your business structure.

When selecting your business structure, you must consider how it will affect the size of your company, the amount of tax that you are responsible to pay, and your liability.

Your coffee shop can be declared as one of five types of business structures: a sole proprietorship, a partnership, a limited liability company (LLC), a cooperative, or an S Corporation.

After selecting your business structure, you must then register your coffee shop. This process has the potential to include the selection of a name for your business. Even though this can be the fun creative part, you should not cling too quickly to a name, as a name has a vital impact in regards to your company and reputation.

You must select a name that is appealing and unique. Avoid names that are too generic, as it is likely that those names are in use. Remember you want a name that sticks with your customers, but for the right reasons.

You have the option of being able to check the availability of your name with an internet search. You must check whether or not it infringes on existing copyright laws. Before finalizing your name, be sure to make sure the domain name is available for registration, as a website is useful for marketing.

After making these decisions and doing this research, you must file to obtain legal permits and licenses. The U.S. Small Business Administration page will allow you to check your area for required legal permits and licenses.

Finally, you must ensure that your business is insured. Insurance policies could potentially be costly, but generally, you have to have one, and to protect your business, they should be considered a priority. An insurance agent will have the ability to help you determine what type of insurance is best for the purposes necessary by you and the needs of your company.

Invest in Equipment and Prepare Your Supplies

You need supplies for your business. Consider what you wish to serve and what you need to serve it, this may include:

  • Coffee Beans
  • Coffee Cups
    • Reusable?
    • Mugs?
  • Straws (or not?)
  • Furniture for Customers
    • Tables
    • Chairs
  • Coffee Pot
  • Food
    • Pastries
    • Snacks
  • Napkins
  • Cleaning Supplies
    • Paper Towels/Wipes
    • Garbage Bags
    • Gloves
    • Hair Nets

It is up to you to decide exactly what your coffee shop will serve, but you need to be sure you have the necessary equipment and ingredients to produce what you wish to offer.

Additionally, you will have the ability to decide what type of furniture matches the aesthetic of your coffee shop and decorate it to your choosing. This has the potential to be an important part of establishing your brand.

Of course, cleanliness is vital, especially when it comes to handling people’s food and drinks, so be sure your coffee shop is clean!

An additional point worth noting, your ability to be sustainable in the society of today puts you in favor of the general public socially. This means that using not using plastic items and decreasing the amount of waste you produce, your customers might be more likely to support you over a less sustainable company.

In addition to this, the money you save using not having to buy disposable items is also a financial incentive for you as a business owner to use reusable items instead.

Gather a Reliable Team

In the beginning, you do not want to hire more employees than you can afford to. On the other hand, you also want to be sure that the employees you are hiring are hard-working, as they have a great effect on the environment of your coffee shop.

Do not be afraid to hire employees with little experience, as a bit of extra training could benefit your company, especially if you are hiring hardworking and responsible workers.

Ideal skills a good worker has:

  • Punctual
  • Detail-oriented
  • Solid communication skills
  • Respectful
  • Internally motivated
  • Dedicated

Your employees are the face of your company, you want it to be a friendly one. They interact with your customers firsthand you want them to be greeted using top-notch customer service and feel comfortable in your establishment. Learn how to hire the best baristas for your coffee shop.

Develop a Marketing Strategy

You have a new company! Now, how are people going to know about it? Here are a few ways:

Word of Mouth

Talking is a great way to spread the information! Tell your friends, family, and everyone you know. A coffee shop is a great place for meetings and events. Get the community to feel comfortable in your establishment.

Flyers/Brochure

Visualizes are a great way to get people in your area to take notice and begin talking about your coffee shop. They must be neat, eye-catching, and well-put together. Be sure that they properly represent your brand and distinguish your company from the competition.

Social Media

In today’s society, social media is a vital tool in marketing strategies. Your online presence needs to look professional and show that you are up with the times. In addition to this, it is also a great way to show off your brand style.

There are multiple social media platforms, and if you do not have a solid grasp on them, they can seem overwhelming. You may want to consider hiring a social media coordinator to handle the different outlets.

Again, your pages must be professional and properly represent your brand. Customer permission is legally vital before posting photos of them enjoying your coffee shop, and the image is everything so keep content relevant to your company and away from your thoughts and jokes.

Discounts/Coupons

Of course, customers want to pay the lowest amount possible to obtain the services and products that they desire. Therefore, coupons are a great incentive to attract new customers.

Now that you have all the information from our Six Task Outline regarding how to open your own coffee shop business, get started! You must do your research, create your business plan, establish your company, obtain the necessary equipment and supplies, build a solid team, and develop a strong marketing strategy.  

Frequently Asked Questions

How much money does it take to start a coffee shop?

According to a quick Google search, it could potentially take between fifty-thousand dollars and three hundred thousand dollars to open up your coffee shop. This estimate depends heavily on the type of business that you choose to develop, as there are many different ways to execute the coffee shop dream:

  • Stand
  • Mobile Kiosk / Truck
  • Shop
  • Drive-Thru

How long does it take for a coffee shop to break even?

This depends on a few factors:

  • The amount of time you invest in your company
  • The amount of money you have at the beginning of your development
  • The amount of money you invest in marketing
  • The amount of competition you have
  • The quality of your service, and how it meets the needs of your customers

To learn more on how to start your coffee shop ccheckmy startup documents here

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.