So you want to start your coffee shop in the Philippines? Whether this has been something you’ve wanted to do for 10 years or 10 minutes, it’s something that needs hours upon hours of research and if you’re reading this article, pat yourself on the back: you’re researching.
There are six factors to consider when opening up a coffee shop in the Philippines:
- Study and research the market.
- Find the most suitable location.
- Establish your budget.
- Hire the right workers.
- Get the best suppliers.
- Consider promotions and loyalty programs.
Starting a coffee shop not only takes a ton of research, but within that research, you will be educating yourself about everything from budgeting, potential locations, and every piece of equipment needed to run a successful coffee shop. There are a countless number of coffee lovers out there; just pass by any busy coffee shop and you’ll be shocked by the number of coffee lovers streaming in and out of the venue.
To franchise, or to open your own?
Before you even think of where you are going to set up your shop, decide whether you want to buy an already existing business or if you want to start from scratch. These two options have their unique pros and cons.
Here are some perks and drawbacks of opening a franchise coffee shop.
- Buying an already existing business is a great way of acquiring a turn-key operation.
- A franchise will do all the promoting for you.
- You will already have a customer base that’s committed to that specific shop.
- You follow the recipes from the franchise. You cannot make your own and sell them.
- You cannot change the design of the restaurant or the menu without the franchise’s permission.
Open Your Own Shop
Here are some perks and drawbacks of opening your own coffee shop.
- Starting everything from scratch offers great flexibility and provides maximum profit.
- With your own, independent shop, you’re the one calling the shots in every aspect of the term.
- You have the ability to change and keep anything about your own shop.
- You have to be sure your coffee shop is in line with all business laws. A franchise will not be there to help you through this process.
- You can hire the specific staff you want and work with your desired vendors.
- You call the shots in the interior design of the place.
- Long hours may be required to get some extra components ready for a new menu item or a new promotion.
It’s Your Decision
Decide on which type of business you want. There is a wide range of options to pick from like inexpensive coffee carts or sit-in coffee shops. Explore your options by visiting each of the options you have available in your area and making pros and cons lists of what you enjoy or what wasn’t really up your alley. You’d be surprised by how much a coffee kiosk can differ from a coffee truck and how much a coffee truck can differ from a brick and mortar location. After making up your mind, you can follow these steps to turn your goal into reality.
Factors to Consider Before Starting a Coffee Shop
1. Study and research the market
Your business plan should stipulate your clients. Knowing who your potential clients are before starting the business is essential. Know who they are, where they are located, and exactly what they are looking for in the way of their coffee shop experience.
If you find an area you’re keen on putting your shop, observe when the high foot traffic is during the day and who are the ones in that area. Different people require different needs at a coffee shop. For example, if you have more teenagers in your area, you might look into offer sweeter drink options than you would if you had mostly adult customers.
Understanding the market will give you a clue on how and where to set your coffee shop. Understanding your customers will help you price your items and craft the perfect menu.
2. Find the most suitable location.
Your market research will tell you where your potential customers are located and this will make it very easy for you to determine where you should set up your coffee shop. Most of your customers will be students and professionals. This means the right location can be around schools and business centers.
There are a number of factors that you need to consider when selecting a suitable location, including visibility, traffic, and parking. Check on the number of already existing coffee shops around the place and their mode of operation. If there aren’t any, you’re in luck. However, if there are already many, make a good plan on how to beat the competition. If there are too many shops similar to the one you want to open, it may not a good place for you.
The location should be easy to access and have enough parking. Most of the time, customers don’t want to waste time looking for parking or making a turn to your shop. A highly visible busy street that has plenty of parking spaces would be the best site.
3. Establish your budget.
Every business requires capital to run. Planning helps you to calculate your budget. Some people might not have a lot or enough money to start with, making a well-thought budget plan essential. Space renting and renovation can eat up a larger portion of your money so you need to budget because there are other essential things to consider.
Think of the cost of the equipment, marketing collateral, supplies, and the salaries of your employees. If you’re operating on a low budget, you can slash off expensive machines and look for better alternatives. In the beginning, buy only the equipment that you really need and can’t do without.
Social media is very cost-effective yet very helpful in marketing yourself. You can take advantage of this to make people aware of your shop while saving some money on marketing. There is also the possibility of seeking some financial help from your bank to make everything work out perfectly.
4. Hire the right workers.
Your employees are the ones who will be serving your customers meaning they have the power to retain them or chase them away. Cashiers and expeditors are the first people your customers see when they walk into your coffee shop. Train your employees on all of the elements necessary for providing customers an exemplary experience at your coffee shop. This creates repeat customers and increased profit over time.
5. Get the best suppliers.
There are a number of ingredients that will determine the taste of your coffee. You should gather all the necessary information about all these ingredients and look for the best and most reliable supplier around.
6. Consider promotions and loyalty programs.
You need to promote your coffee shop. If you pursued a coffee shop franchise, the main company will take care of the promotion. To gain the loyalty of most customers and retain them, you need to promote yourself and make sure they know about you.
You need to understand what a coffee shop is in order to be able to run it perfectly. A coffee shop is a great place to socialize and to have informal business meetings. Be organized and plan yourself very well and don’t forget that quality service and customer satisfaction is the key to your success.
Frequently Asked Questions
Seattle’s Best Coffee is a subsidiary of Starbucks. While an entrepreneur cannot open a Starbucks location in the Philippines, Seattle’s Best Coffee is available for franchising.
It possible to start a cafe with no money, but you have to be patient as you gather it. Glean startup funds by doing the following:
● Consider crowdfunding.
● Apply for business loans and/or grants.
● Think of creative fundraisers that will help you have more money for startup costs.
● Ask family and friends for help!
To learn more on how to start your own coffee shop checkout my 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.
Hi! I’m Shawn Chun
My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!
As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.
I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.
Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.
Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.
Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.
Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!