If you don’t spend a considerable amount of time researching and developing your drive-thru coffee start-up, you are destined to fail. Creating a successful business requires knowing who your customer is going to be and providing what they are going to want. Success also comes from being in a prime location for serving your targeted demographic.
Things to consider before developing your drive-thru coffee start-up include the following key factors:
- How much workspace will I need in order to prepare my menu items and efficiently serve my customers?
- How much workspace can I afford to lease that fits into my projected budget without sacrificing profitability?
- How do I find a location that fits the requirements of factor 1 and factor 2?
The more time you spend on forging your brand, mapping out the business, and scouting out locations the more likely your drive-thru coffee startup will succeed. Surviving in the highly competitive world of coffee shops will require an exorbitant amount of hard work, especially in the beginning.
Workspace is Everything
Determining how much workspace your business needs will all depend on what menu items you plan to make and serve. Will your ingredients need refrigeration or freezer space? What types of coffee machines will you want to use? Are you serving food items? How much storage space will dry ingredients need?
Figuring out how much workspace you can afford will require knowing how much money you have available to cover the operating costs. It will require researching potential locations to see what the rate per square footage is for each spot. Choosing the right location will also require factoring in the busyness of the potential locations.
Picking a place that’s too small will reduce the number of services you can offer. Selecting a spot that is too expensive will make staying in business more difficult. Finding a location that meets both spatial needs and affordability will require research and flexibility.
Begin with the Basics
Developing a successful drive-thru coffee business requires four essential components: a secure business plan, a great location, affordable financing, and effective marketing. Having these key pieces in place will ensure a greater chance of creating a profitable business. Deficiencies in any one of the four major components will likely lead to the business failing.
Starting a business without accurate planning and solid construction is like building a house without proper blueprints and the correct building materials. Before a construction crew builds a house, an architect spends time drawing up the plans. If the architect measured right and plotted the lines accordingly, the house can be built. Likewise, if the construction crew follows the architect’s instructions and adherence to building codes, the final product will be a solidly built house.
What would happen to the house if either the architect failed to draw up accurate plans or the construction crew didn’t use the right materials during construction? In either instance, the house would begin to reveal the mistakes made by the architect or construction crew and need to be repaired. Costly errors that could have been prevented had the job been done right the first time.
Similar to constructing a house, building a business that will stand-up to the competition takes accurate plans and the right tools. Taking the time to sketch out ideas and brainstorm while creating a business blueprint will be time well spent. It will help you identify key factors in need of more research and keep the planning stages organized.
Business Plan
A business plan defines what your brand provides and how your brand stands out in the crowd of competition. It explains who the primary demographic market is that your brand will be serving. In addition, a business plan clarifies the means in which it will turn a profit with explicit milestones and goals.
Defining your brand will be a great help in making decisions about things like business logos and color schemes. It will lead to choosing what menu items you will serve and how the items will be prepared. Illustrating who your brand is will also play an important role when it comes time to market your drive-thru coffee start-up.
By identifying who your brand is designed to serve, other aspects of your business will be easier to choose. Knowing who your audience is will be extremely beneficial when it comes time to pick things like brand logo designs and color schemes. It will also make choosing menu items and the ingredients used simpler by knowing what your customer wants.
Developing your business plan will help you determine how big of a drive-thru shop you’re going to need. Deciding on things like what menu items your business offers will determine how much space you need to store ingredients, prepare orders, and provide efficient service. The menu also dictates what type of equipment you will need. Mapping out a floor plan will ensure there is room for it all.
One of the most important sections of a business plan forecasts the expected profits the business will make. It outlines the projected operating costs of the business, from rent and utilities to the cost of supplies and labor. Balancing the books in order to turn a profit requires knowing where changes can be made to save money without losing business.
Location
Finding the right location for a business is often the most difficult and time-consuming step. It requires searching for a prime location that has the desired amount of workspace with an affordable lease. Looking for the ideal spot includes researching the demographics of the neighborhood to find the customer base your business is designed to serve.
A drive-thru coffee business needs to be in an area of high volume traffic. It needs to provide easy in and out access for commuters on the go. Most importantly, a drive-thru coffee business has to be eye-catching to attract the attention of passersby.
Tracking down a location that fits all of the requirements of your business could take months or even years. Locating a place of business within a neighborhood of your brand’s target audience requires knowing where they reside. Spending the time to find the perfect place by knowing what your business needs and who it serves will lead to greater success.
Financing a Start-up
Every business needs to have starting capital in order to get off the ground. How much money your business needs to get underway can be determined from the well-written business plan. Start-up costs will include things like business license fees, establishing insurance, and buying equipment. Figures such as operating costs can be determined after establishing what the monthly expenses are and how much each one will be.
Some operating costs will remain steady from one month to the next. These are things like the monthly lease, insurance premiums, and utilities. Other operating costs like ingredient expenses and payroll will fluctuate each month. Plotting out estimates for a year will give you a clear picture of how much money your business will spend. From that, you can determine how much money your business will need to make to be profitable.
Once you have calculated all of your start-up costs and your monthly expense budget for the year, it’s time to find the money. Unless you already have a wealth of savings on hand, you’re going to need investors. Start with the people you know, like friends and family, who may be interested in helping your business.
Talking with investors will be easy when you can present them with a thorough business plan that shows potential profitability. Other finance options available include small business grants and specialty programs created by philanthropists who love helping to build money-making businesses. Banks and other financial institutions offer a variety of small business loans.
If your business chooses to borrow money, the monthly loan payment will add to the operating costs. This, of course, will require the business to make enough money to pay back those loans. The more money your business needs to borrow in the beginning, the longer it will take to be free of business debt. The less money you borrow, the sooner your business will turn a profit.
Marketing Your Brand
Developing a marketing strategy should be a big portion of your written business plan. A marketing plan is a synopsis of how your business will reach potential customers. It illustrates how the business will facilitate a relationship with those customers.
Marketing your brand is a long-term game plan that evolves and grows with your business. It begins with introducing your business to the public long before you open the doors. Marketing strategies require creativity and inventiveness. They express the identity of your brand in a way that connects with your audience.
In order to stay competitive, a marketing plan must incorporate meeting the needs of the customer. Learning what those needs are is far simpler these days with instant access to what’s trending via social media outlets. Truly successful businesses learn to predict the customer’s needs before the customer even knows they need it.
For ideas about food to offer in a coffee drive-thru, click here.
An open line of communication between a business and its customer is essential to learning about the customer and building rapport. Creating a positive relationship with your customers comes from listening to their needs and finding solutions to problems. A business that promptly responds by taking action will find more success than those who ignore their patrons.
Frequently Asked Questions
The key to reaching maximum profitability with a drive-thru coffee shop is the speed of the service. People on the go tend to be in a hurry with little time to wait. Being able to quickly serve customers means being able to serve more people in a day. A properly staffed drive-thru shop should be able to serve a customer every 60 seconds.
When done the right way, a drive-thru coffee shop has the potential to make $2000 a day in sales. How much profit that calculates to be all depends on the daily operating costs of the business. Making more money will rely on reducing operating costs and increasing the number of daily sales totals.
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!
Shawn
