So, you’re feeling the nudge to open a coffee house! You’ve got the perfect location in mind, and you have a knack for putting together great coffee beverages! But, you’ve never been a coffee shop owner before, so you may be unsure if that’s the right path for you. Let’s explore some of the pros and cons of coffee shop ownership to give you a better picture.
The top 5 pros and cons of starting a coffee house are being your own boss, making your own schedule, meeting people, providing a high-demand product, and reaching a dream goal. All of these elements can be positive, but also have a down side. Although they will be discussed briefly, each deserves significant consideration as you contemplate opening a shop.
Similar to the “glass half full/half empty” phrase, whether something is a pro or con is often based on perspective. Each of the following aspects related to opening a coffeehouse can be seen as a pro, a con, or both! It is in the eye of the beholder or, in this case, the perception of the reader. We’ll look at each aspect of being the owner of a coffee house in three ways — the good side of it, the down side of it, and something to consider that could make it lean one way or the other.
YOU ARE THE BOSS
Pro: No more dragging in to face the boss in the morning. YOU, now, make all the decisions. You have a creative idea of what you’d like the shop to do and be, and no one stands in the way! You will know and learn what your customers want and will work to make that happen. What a sense of empowerment!
Con: All the decisions are yours — the big ones (finding suppliers), the little ones (biscotti flavors), and all the ones in between (marketing, décor, business hours). With your previous employment, you were able to go to someone for help when something went off-track. Now, it’s just you. For some people, this can get old real quick and leave you with a sense of being overwhelmed.
Consider: Are you cut out to be in charge and be the key decision-maker at all times? If not, you may want to consider a partner who can bear part of the responsibility. It’s also possible to look for a manager who could take that roll, or you may decide to delegate certain responsibilities and decisions to key staff members.
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YOUR OWN DAILY SCHEDULE
Pro: If you’ve been working for years, you’ve had a variety of schedules which have constituted your “work day”. If you were lucky, the hours stayed consistent from day to day; however, many workers deal with crazy shift changes that can throw body clocks into a tailspin! Wouldn’t it be nice, as the owner of your own shop, to decide the operating hours and, thus, the time for your alarm clock?
You will have complete control over the days and hours your place is open, as well as which staff members work each part of the day. This allows you flexibility in your own schedule to run errands, meet family needs, and get a little downtime.
Con: If you’ve never owned a coffeehouse before, then you have to admit you don’t know all that is involved —- the amount of paperwork, the bank appointments, the negotiating with suppliers, the time to hire and train staff —- the list goes on. Most likely, you will be working 40+ hour weeks. For the first few years, you may find the schedule to be more of a ‘con’ — but, in time, with proper staffing, you should be moving toward a daily schedule that makes it one of the ‘pros’ of your job as a coffeehouse owner.
Consider: Before opening the shop, you’ll need to determine how involved you want to be in the daily operations. Do you want to be there to open every day and get things off to a good start, or do you want to leave daily operations to a manager and just stop to see how it’s going? (If this is your plan, you will want to read on to see how difficult staffing can be!) Knowing your involvement expectations at the start will allow you to make decisions that will lead to the schedule you want.
DAILY HUMAN INTERACTION
Pro: Without even knowing you, the bets are that you are a people-person. Wanting to run a coffee shop comes with the understanding that you will be working with customers from opening to close each day —- and not only working with them, but working to make them happy! Every day, you will have the opportunity to please customer after customer with your outstanding service and awesome beverage offerings. What a never-ending sense of satisfaction that will bring you!
Con: Of course, we all know you can’t please all of the people all of the time. Every person walking into your store is carrying some unseen “baggage” from his life that can be sparked into fury over something as simple as the wrong coffee flavoring.
On top of that, the same applies to the people you hire. You’ve worked diligently to put a staff in place, but keeping the staff happy and motivated can be a struggle. You will need to be ready for the day someone doesn’t show up for work, walks off the job, or argues with you in front of customers.
Consider: Some industries lean toward having disgruntled customers (i.e., cable companies, car repair, tax preparation). A coffee shop is, usually, a “feel-good” place where people walk in expecting to be happy when they walk out. Training your staff to handle the occasional rude or dissatisfied consumer will help get past that occasional hiccup when it arises.
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COFFEE – HIGH MARKET DEMAND
Pro: Coffee is a habitual demand product – meaning, for those of us who love our ‘cuppa Joe’ each day, it’s a tough thing to go without. It’s part of our daily routine. In the U.S., coffee consumption continues to remain at about 2 cups per day per capita (statista.com), with all age groups 18 and up being represented! So, for you – the coffee shop owner, you know you have a highly-desired product! And, if you do it well, you will hook your customers and can count on seeing them on a regular basis.
Con: Since the high demand is no secret, coffee is available nearly everywhere you turn – gas stations, supermarkets, fast-food drive-thrus, etc. It’s easy to make, which allows for easy access at home or in the office. On top of that, when national economic trends turn downward, it’s common to hear the suggestion to start skipping the coffeehouse coffee as a means of saving money!
Consider: You will need to find a way to set yourself apart from others. It can be a theme you embrace, a specific coffee you supply, or a community connection you develop. Something beyond the beverage will need to be part of your customers’ experience to keep them returning to your shop.
YOUR SENSE OF SUCCESS
Pro: How many people get a chance to fulfill their dreams? If this is a possibility for you, the opportunity is priceless! You know it won’t all be peaches and cream, but one day you could look around your laid-out coffee spot and see tables full of contented customers. That feeling could be worth its weight in gold!
Con: On the down side, any new business owner should face the facts going into it —- this may not work out. It’s not uncommon to start out with debts in the hundreds of thousands of dollars. Some owners have mortgaged their homes or borrowed from relatives. Can your financial stability AND your mental well-being handle all that would come with a failing business?
Consider: Do your homework. It may cost you upfront to work with a financial planner and put together a strong business plan, but it may be the ticket to getting off the ground in a solid manner. Also, keep the worst-case scenario in mind as you set up your funding. Know your limits. Know when enough is enough.
No one can tell you whether you should open a coffeehouse or not — only you will know that answer. Going into it, however, needs to be done with eyes wide open — considering the ups and downs of every element you’ll encounter. Investigating the ‘cons’ before you get started could help smooth out some of those bumps before they ever become an issue. Then you can focus on that “glass half full” feeling that comes with reaching a goal and a job well-done!
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Frequently Asked Questions
Multiple factors contribute to whether a coffee shop is profitable or not. How many customers can your shop serve at a time? What’s the profit margin on your biggest-selling drink? After expensive start-up costs, you can expect monthly operating expenses to be 75-85% of your sales.
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Coffee shops run risks which include being poorly located, having low cash flow, and struggling to find competent and reliable staffing. According to some statistics, start-up shops run a 50% chance of not making it past Year 2 of operation.
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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
