Opening a coffee shop can be one of the most impactful choices that you ever decide to make. As such, there are a few things that you must consider before you decide to pursue this entrepreneurial journey.
Questions to ask yourself before opening a coffee shop:
- Am I mentally prepared to open a coffee shop?
- Am I financially ready to open a coffee shop and will I be able to survive if it fails?
- Do I have the time to operate a coffee shop as an owner?
- Do I know enough about coffee to operate a coffee shop?
Am I mentally prepared to operate a coffee shop?
Operating a coffee shop is a task that can be very straining on the mind and can lead to poor mental health if not dealt with well.
This mostly has to deal with the fact that operating a coffee shop is a job that requires incredibly long work hours with little chance for rest in many cases.
As a result, the job comes with a high rate of burnout for those in the industry.
What is burnout?
Burnout is a state of mental, physical, and emotional exhaustion caused by excessive and prolonged stress.
This is very common with those who operate a coffee shop because coffee shops require long hours and lots of fast-paced work to keep up with the demand.
The biggest problem with burnout is that if it is not treated quickly and effectively, then the mental health of the person experiencing it will only continue to deteriorate.
How do you help recover from and prevent burnout?
The best way to prevent and recover from burnout is to simply take a day every once in a while for yourself. Spend some time doing something that you love or something you find relaxing.
Whether this is physical exercise, spending time in nature, or gaming, spending time doing something that you enjoy is the best way to both prevent burnout before it happens and the best way to recover from it when it does happen.
How do you determine if you’re mentally well enough to operate a coffee shop?
Before you open a coffee shop, it’s important to determine if you are mentally well enough to do so.
The best way to do this is to take some time and ask yourself the following questions:
- Do you experience a significant amount of stress in your daily life?
- Are those around you a negative influence in your life?
- Do you ever suffer from panic or anxiety attacks?
- Do you ever feel intense and powerful feelings such as intense rage or deep sadness?
- Do you feel as though you are constantly tired no matter how much sleep you seem to get?
If you answered yes to any of these questions, you may want to spend some time focusing on yourself before you open a coffee shop.
You may also want to think about seeing a mental health professional help improve your current situation.
But opening a coffee shop can be a major strain on your mental health, so before you do so, you want to ensure that you improve where you mentally.
The truth is however, this is a good thing! Mental health is something that can be changed and improved with some help from a professional and personal dedication.
Am I financially stable enough to open a coffee shop?
Opening a coffee shop is a major financial ordeal, with an average cost ranging between $200,000 and $375,000.
Therefore, before you decide to open a coffee shop, you should spend some time deciding as to whether or not you are financially stable enough to undertake such a task.
What options do you have for financing?
Realistically, you are not going to have all of the necessary funds to open a coffee shop in your bank account.
As a result, you are going to have to secure funding from one of a few sources:
- A local bank or credit union
- A local investor
- Family and friends
Of course, all of these options have both advantages and disadvantages over the others.
For example, a local investor will likely have a much lower interest rate than a bank, but you will likely be able to secure far more funding from a bank.
Deciding which is right for you is a decision that will require much research and thought.
Can you afford to make a loan payment consistently?
While a loan may provide you with enough funding to cover the up-front cost of a coffee shop, you also have to consider whether or not you can pay that loan back consistently.
This means being able to cover a loan payment every month even if the coffee shop is not making a profit.
If you believe you will be unable to do so, it may be a good idea to wait until you are sure that you can cover this payment out of your pocket.
If your shop is to fail, will you be able to survive?
We’ve all heard the old cliche, “don’t put all of your eggs in one basket”. While this may simply old saying, its importance can not be overstated.
When opening a coffee shop, you never want to put yourself in a situation where if that shop were to fail, you would not be able to provide for your family.
If you asked yourself this question and the answer is no, you wouldn’t be able to survive if your coffee shop failed, then you may want to spend some time rethinking your decision.
Do I have time to operate a coffee shop as an owner?
Operating a coffee shop is a long and grueling operation that requires plenty of early mornings and late nights.
As the owner, you will be expected to be on the front lines of your coffee shop’s operations.
Thus, you must first ask yourself if you have the time required to operate a coffee shop as an owner, and if you don’t you may not want to open a coffee shop at all.
To learn about how long it takes to start a coffee shop, click here.
Is delegating responsibilities an option?
While delegating responsibilities is an option when owning and operating a coffee shop, you must be careful in doing so.
This is especially the case when your shop is fairly new and decisions and constantly being made regarding the shop.
By delegating responsibilities, you are saving yourself time, but you are also giving someone else the power to make decisions based on their own opinions and judgment.
So if you are going to delegate responsibilities, make sure it’s at a time where most of the decisions about your coffee shop are already made.
You should also be sure that the person you are delegating responsibilities too is someone who has experience operating coffee shops.
This will ensure that they know what they are doing and that you will enjoy more success as a result.
Do I know enough about coffee to operate a coffee shop?
The coffee business is one that thrives on the knowledge of employees and owners.
Therefore, it’s important that before you open a coffee shop, you ask yourself, “do I know enough about coffee to operate a coffee shop?”
What do you need to know before owning a coffee shop?
There are several things that you will need to know before opening a coffee shop, some of which come from the business aspect and others that come from the coffee aspect.
The business aspect:
- How many employees you will need
- How much operating cost will be
- Effective marketing tools
- Sourcing suppliers
- Managing finances
The coffee aspect:
- What products go best together
- What supplies you need
- What products to recommend to customers
- How to make certain drinks
- Which products to serve and when throughout the year
A coffee shop thrives on the knowledge of its employees and owners. If you as an owner aren’t familiar enough with the coffee industry to effectively run a coffee shop, then you may want to look into hiring someone else who has this knowledge to make your shop run effectively.
Do you have enough knowledge to train employees?
Training employees is a major aspect of owning a coffee shop because realistically, you won’t be able to operate a shop by yourself.
Consequently, you have to hire employees to help keep up with the demand of your shop.
The thing is, employees require training, but if you don’t have enough knowledge to train the employees on the running of your shop and all of the operations it requires, you may run into an obstacle.
Is it too late to gain the knowledge required to operate a coffee shop?
The best thing about not having enough knowledge is that it’s never too late to learn!
If you don’t think you have enough knowledge to operate a coffee shop, nothing is stopping you from researching and learning the ropes required to do so!
The internet has all kinds of resources just for that sort of thing. So if you think you may not be ready to operate a coffee shop, get up and learn!
Frequently Asked Questions
Deciding on a location for a coffee shop can be one of the most crucial aspects of operating a coffee shop.
If you select an effective location, you can increase your profits greatly. This also true, however, for the opposite end of the spectrum, as if you select a poor location, you can see your coffee shop struggle.
There a few important aspects to keep in mind when deciding the location of a coffee shop to ensure that the shop will see success.
● Selecting an area with little competition
● Making sure there is high foot traffic
● Selecting a space with high visibility
● Ensuring the location has a decent number of customers
When selecting a coffee shop, ensuring that all four of these standards are met can help ensure that your coffee shop is a success.
For a coffee shop, especially a new one, marketing is everything.
Being able to run an effective marketing campaign can make a coffee shop more successful than you may have ever thought possible.
An effective marketing campaign should consist of several ads all aimed at a target audience to increase sales revenue and therefore increase profits.
If you as a coffee shop owner are not very familiar with marketing, it may be a good idea to hire either a marketing consultant or a marketing firm to take over your marketing strategy.
These experts will ensure that your marketing campaign will be as successful as possible.
Although these experts can be rather costly, the value they bring to your business is invaluable.
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!