Opening a brand new coffee shop requires taking an enormous number of risks. Naturally, as an aspiring business owner, you want to ensure that those risks will be worth the reward in the end. Even if there is no way to absolutely guarantee success for your cafe, if you follow these tips you’ll be well on your way to having a startup that is prepared to endure any of the problems that usually plague coffee shops in their earliest stages.
The 10 success secrets for coffee shop startups are:
- Invest in your employees
- Establish your philosophy
- Become a coffee expert
- Immerse yourself in “coffee shop culture”
- Have an excellent website and social media profiles
- Do your research
- Go in with a plan
- Build relationships
- Consult experts
- Keep looking ahead
This list looks overwhelming at first glance, but you are probably well aware that startups can be harrowing work. Pushing through these beginning stages may be tough, but they’ll give you more control over the fruit of your labor when your coffee shop gets off the ground. Read on for more details on how to incorporate these tips into your coffee shop startup.
Invest in your Employees
Coffee shops have a notoriously high barista turnover rate. This could be related to the age group of typical baristas (they’re often college students with schedules that change several times a year), employees wanting to move on to better-paid positions, or simply that the service industry is tough and not everyone is cut out for it. Whatever the reason, constantly hiring and firing baristas gets expensive. Look for ways to make it worth it for your baristas to stay employed with you longer. Higher pay and more vacation time might seem like big expenses up front, but in the long run, they will prevent hiring woes later. Also, when your employees are happy to come to work every day, your customers will notice, and these interactions will make them want to come back.
Establish Your Philosophy (and stick to it)
Never lose sight of what made you want to start your coffee shop business in the first place. Make it a priority to write up a mission statement that underlines what your business is all about and makes your values clear. Going forward, when you are making decisions you can evaluate them against your mission statement to ensure that you are making choices that are in line with what you set out to do from day one. It will also give your employees and customers an idea of what you are about. Keeping what you value about the business in sight will make you less likely to burn out and help you assess your long-term goals. Additionally, take this opportunity to think through where you see your business going. Do you have dreams of being acquired and turning into a franchise? Or do you simply desire to become a cherished neighborhood space? These distinctions are crucial when you make decisions in these early stages.
Become a Coffee Expert
Chances are if you’re looking to get into the coffee shop business you are already somewhat familiar with the finer points of brewing a good cup of coffee. Don’t stop learning about your product. Being able to hold your own as a respectable coffee shop business has a lot to do with catering to people who REALLY know coffee. This does not mean that you have to be snobby, in fact, I would not recommend anything that risks alienating the customer who just wants his caffeine in the morning regardless of how it’s made. But be prepared for high-level conversations about growing, roasting, and technique by reading books, watching documentaries on the coffee supply chain, and talking to other people who are passionate about those topics. This knowledge will help you make informed decisions about products, or if nothing else, it will allow you to step in behind the counter and prepare drinks if your shop gets busy or one of your employees goes home sick.
You should also be sure to pass on the knowledge you are gaining to your employees. Cultivate a culture of learning in your business. You and your baristas will find it more engaging and exciting to work in an atmosphere that is dynamic than one in which nobody is improving and things stay the same. So if you find that certain aspects of your business are outdated or ineffective, do the extra work of researching new products or techniques.
Immerse Yourself in “Coffee Shop Culture”
Research events in your area that might allow you to see and be seen in the coffee shop world. Go to latte art competitions, attend conferences for coffee shop owners, or just sit in a cafe and observe for a few hours. It’ll help you get acquainted and make friends with people who know the business. You may even want to take cupping classes if you don’t already know how to identify tasting notes or distinguish between various roasts and origins. When you step into this world, you’ll find out what really appeals to customers other than just a great brew. Coffee shops sell low-stress workplaces, places where baristas know just how you like your coffee in the morning, or a setting for business meetings that isn’t too stiff. Learn how other cafes manage to offer this whole package successfully while meeting your new coffee community. Get a head start with our newbie’s guide to coffee shop terms here.
Have an excellent website and social media profiles
Nothing will turn off potential customers before you even open your doors more than a shady website. Regardless of the actual quality of your shop, the way you present yourself online directly affects how people will view you as a whole, so a sloppy website spells a bad first impression right from the start. Even if it takes hiring experts to create attractive and compelling profiles for your business, it is worth every penny to engage customers before they even walk into your store. Once you get up and running, these resources will also prove to be invaluable for promoting specials and generating more interest in your shop. Customers tend to be very willing to interact with businesses on social media, for example tagging them in photos they have taken at the location or leaving (hopefully positive) reviews. Word of mouth can be especially constructive for gaining you traction in the first few months after you open.
Do your Research
Don’t get blindsided by any information you could have been prepared for. Educate yourself on the boring but essential details like tax information, how much competition is in your area, or how to price your products strategically. What kills many coffee shop startups is a vague passion for coffee that isn’t backed up with solid information about the hard work and resources required to actually make it feasible. Don’t get me wrong, there will be enjoyable and rewarding aspects to this process, but only if you know what you are getting into. A passion project can turn into a nightmare very quickly if you’re not prepared for the drudgery that goes on behind the scenes.
Go in with a Plan
It can be tempting when taking on a project as exciting as opening a cafe to jump in headfirst right away. But before you take any real actions, put together a schedule of how you’re going to proceed with starting your business. Following doing sufficient research, you’ll want to make a checklist of what needs to happen and in what order. Start with a loose trajectory of larger, most important needs to be completed and give yourself deadlines. These could be items like finding and securing your location, identifying your roaster, purchasing equipment, etc. Once you have a loose idea of how to proceed, add in the tasks that are necessary to make those happen like getting in touch with real estate agents or taking out loans. Having a solid business plan will not only help you stay organized and not overlook anything, but it will also show potential investors that you are professional, serious, and trustworthy.
Build Relationships in the Community
If you already know where your shop will be located, take the time to get acquainted with the neighborhood. Talk to residents and other business owners to get a feel for how you might fit in. Not only will this help you market better to potential customers, but it will also let them know you are coming and that you want to be invested. You may also be able to determine if there is competition for business and how to stand out. Perhaps you had planned to specialize in roasting your own coffee beans and selling them retail in addition to your beverages but found that there is already a popular roaster in the area that customers seem attached to. This might necessitate a change in strategy.
Wherever you can, get experts involved at every level of your business. From top-notch contractors for building needs to business lawyers, having support on all sides gives you a safety net if something is to go wrong. Try to avoid a do-it-yourself mindset when it comes to the more specialized elements of the business. Whether that be repairing the espresso machine or looking over your contracts, it is much better to spend money consulting a professional than risk making a much more expensive mistake.
On another level, make friends with other coffee shop owners, local roasters, anyone whose expertise in specific areas might prove valuable. Some of the most helpful advice you get may be from these friends you make and you won’t even need to pay them.
Keep Thinking Ahead
Don’t stop pursuing the best next steps for your shop after your first couple of successful months. Even if you’re able to make it out of the rockier stages of your startup, don’t leave the next few years up to chance. The average coffee shop has a life span of 3 years, and it isn’t always clear whether an initially booming shop will continue getting good enough business to be sustainable. With the building blocks you created in the previous steps, go back to your business plan and think about what you’ve learned since beginning this process. What has worked well for you, and what should you rethink? Use the mistakes as well as the victories you’ve made to inform how you will run your business in its next stages.
Laying out all of the steps it takes to launch a startup can make the project seem intimidating. But if you’re truly dedicated to making your coffee shop prosperous, the effort you put forth will be well worth it. Above all, be diligent and enjoy the process. The passion that you put into your shop will be evident to customers and can truly be a driving force for your success.
Frequently Asked Questions
There are tons of trustworthy websites with well thought out business plans specifically for new coffee shops. Resources like Forbes can connect you with the best of these templates, and many of them are free. After you identify one that is a good fit for your business, you can tweak it so it fits your goals if needed. You can also get our top tips on how to write a coffee shop business plan here.
The philosophy that you have for your shop should be the guiding principle for how you run the business. While philosophy should influence your brand and how you present to the world, at its core it is the rationale behind every decision that you make about your shop. For inspiration, Blue Bottle Coffee is an excellent example of a shop that makes its values public.
Loyalty or reward programs are a great way to generate interest after someone makes their first purchase at your establishment. Whether it be an old-fashioned punch card or electronically through a point-of-sale system, make customers feel that their repeated patronage is worth it. Another not-so-secret secret to repeat business is just providing excellent customer service.
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!