By finding yourself on this blog, it’s safe to assume that you are looking to not only own your own coffee shop but also to ensure its success. Certainly, the most important information for you to know is what makes a coffee shop successful! Well luckily enough for you, you’ve found yourself in just the right place.
The keys to any successful coffee shop:
- Research: Make sure you understand your product demographic and how to effectively market to them.
- Efficiency: Maximize your productivity to increase profit and customer satisfaction.
- Customer retention: Keep customers coming back.
- Having an understanding of your products: Understand what you’re offering on a deeper level than just the names of your product.
As a new business, you can only get as far as your marketing will take you. If no one is aware of your existence then you won’t be able to stay open for long. Before you can start marketing, however, you have to know who you are marketing to.
Who are you marketing to?
As a coffee shop, you first have to understand who you want to be marketing towards. According to a study done by Next Gen Personal Finance, the millennial generation spends an average of $2008 per year on coffee!
As a new business owner, the smart move would of course be to aim where the money is at. You can market toward the baby boomer generation all you wish to, but no matter your tactic, they’re still not going to spend as much as the average millennial does!
Knowing that millennials are likely going to be your spenders, the best way for you to advertise is through the internet! Not only is significantly cheaper than most forms of advertising, if done correctly, it can also receive far more traffic than typical advertisements.
What need are you trying to fill?
The ideal next step is to find out what the demographic and location you’re entering into is missing or is need of. As a new business one of the biggest mistakes you could make is to join into an already over-saturated market. The top reason why startups fail is a lack of market need.
For example, if you’re looking to join a business community that already boasts four different modernistic coffee shops, instead of competing with these already established businesses, perhaps you could invest in a 1970’s throwback theme. Ideally, you are looking to fill a need in the community more than anything.
The best way to do the research necessary would be to visit the competition yourself! Visit the coffee shops in the area you’re trying to infiltrate as a customer and take notes as to what needs aren’t being met.
You should also do some research, ideally in the form of polls, with the local community. Find out if they’re satisfied with their local coffee shops. If the overwhelming result is that the community is content with their needs and there is nothing else they feel is missing, contemplate searching out for a new location.
Efficiency and the Tips to Make Sure Your Company Achieves it
As Americans, when compared to the rest of the world, we tend to move quickly. As such, we expect the same from our service industry. That being said, efficiency is key to a successful coffee shop.
Why is efficiency important?
Perhaps the biggest aspect as to the importance of efficiency is that it maximizes profit. By continually serving as many customers as you possibly can in as short of a time as possible, you will ensure that profits are as generous as possible.
A major concern for any business is customer satisfaction. By making sure your customers are receiving their orders efficiently, you will help ensure that they will leave that day happy and ready to return the next.
Dealing With a Rush
Assuming your business becomes successful and popular enough, you’ll often have to deal with a rush of business. Serving a large number of customers in a short time can be difficult. But if efficient enough, you’ll make it through with ease.
Top tips to maximize efficiency
While remaining efficient is incredibly important when running a coffee shop, nobody said it would be easy. Luckily enough, however, we have some of the top tips from the industry’s business leaders on maximizing efficiency.
Firstly, it’s important to make sure that your barista station has an efficient layout. It should allow your baristas to have access to all the necessary tools without having to move too far from where they stand, but they also shouldn’t be bumping into one another.
Limit Item Assortment
You should limit the assortment of your menu to a small number of variable items. By doing this, you allow your baristas to easily memorize your menu, as well as reducing how many different machines and ingredients they are responsible for, thus minimizing their creation time.
Pre-make as much as possible. Of course, you never want to be serving cold coffee, but when it comes to items such as scones or other foods, pre-making can effectively reduce the amount of time you spend on each order and help maximize efficiency.
This is a system now adopted by most coffee shops as well as global giant McDonalds.The main premise is to have the customer pay upfront, take a number, then wait for their order somewhere off to the side.
This system allows you to serve more customers per hour, an incredibly important aspect of your service when dealing with a large rush.
Keeping Customers Coming Back
Getting customers is one thing, keeping them coming back, however, is another. No small business can rely simply on new customers. A coffee shop is no different, and retaining customers is incredibly important.
A study by RJMetrics found that your top loyal 10% of customers spend three times as much as the bottom 90%! Even more drastic, is that your top 1% spends five times as much as the other 99% does!
Not only do repeat customers spend more, but they’re also far more likely to spread advertisements for you through word of mouth. This arguably the best form of advertisement, because not only is it free, but those who hear about your business from someone they’re close to are far more likely to visit than if they were to see it anywhere else because they trust their opinion!
Expert Tips on Keeping Customers Coming Back
By now we know we want customers coming back. But the question remains how do we do so? Here are five expert tips on keeping customers coming back:
- Stay in touch
Connect with your customers on social media, offer an email program with promo codes, or if you have the ability, create an app for your brand! The idea is to keep you on their minds at all times.
- Be socially responsible
Support local charities, attend walkathons or other events, or maybe even host your own! Just do something to make sure your customers know you care about more than just business.
- Create a loyalty program
Reward customers for their returned business with you, offering a free drink or any other item for every seven they purchase. It’s a great way to keep customers coming back looking forward to the day they finally get their sweet reward.
- Be more than just a destination
You want your shop to feel comfortable and inviting enough for customers to want to be there. If customers want to be there, they’re going to return, it’s as simple as that.
- Create a relationship with your customers.
Ideally, you want to be on a first-name basis with all of your regulars. You want them to feel like the two of you are friends, and who doesn’t want to support a friend and their business.
The importance of knowing your product
When a customer walks through the doors of your coffee shop, you become the expert. It doesn’t matter if that person has been drinking coffee for their entire life, you should know your product better than anyone.
As the owner of a coffee shop, you’re more than just a business owner. You’re also there to play the role of a salesman intent on selling your product. By ensuring you have a full understanding of your product, you can not only ensure that you present the product accurately, but that you also seem genuine in your understanding rather than simply reading off of a list.
- What are you selling?
As a coffee shop owner it’s important to understand what you’re selling. Your shop is more than just a place to buy coffee and baked goods, you want to be selling an experience.
Anyone can make coffee and some cookies at home, but the idea is to have them want to buy from you instead. The best way to do this is to offer a warm (figuratively), comfortable, and welcoming place for them to visit where they can have their basic needs met.
You want your shop to provide an escape from the stress of their busy lives. By doing so, you will effectively be providing an experience for your customers, rather than simply a coffee.
If you’re looking for some management tips for your coffee shop, this article will have some helpful info!
Frequently Asked Questions
That will completely depend on the needs of your area. If the area you’re looking to implement yourself into already has two Starbucks, maybe going for the incredibly intricate and fancy drinks isn’t the best idea. Include that aspect in your research, find out what the area needs, and how you can fill that hole.
Beyond coffee, however, you should also be selling baked goods such as cakes, cookies, brownies, and muffins. For many successful coffee shops, coffee doesn’t make it more than half of their sales.
In this day and age, the old school form of advertising is over. Taking out an ad in the paper or having a commercial placed on the local T.V station is going to be expensive and ineffective.
The best way to advertise is to utilize the power at your fingertips! Your mobile device can give you so much free advertising power that you would be a fool not to use.
Create an Instagram and Facebook page! Post on local forums! Make a website and write a blog! The internet can provide you with so much free advertising, use it!
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!