Recently, I did a search for a ’24 hour coffee shop near me’, and guess how many “shops” I found —- none. Instead, I received a list of gas stations and fast food restaurants. Why? Is it not profitable for a coffeehouse to be open around the clock? Is there nobody wanting a mocha cappuccino at 2:30 a.m. besides me?
In most locations, a coffeehouse does not have enough customers to stay open 24 hours and be profitable. On top of that, there are enough gas stations, all-night diners, and fast-food joints to handle the cup of brew most are seeking in the late night. One exception to this rule could be the coffeehouse near a university campus where coffee is needed at all hours.
WHAT’S THE PURPOSE?
Let’s look at what brings a person to a coffeehouse instead of the gas station. Both places offer a good cup of coffee, and in both places we can order it the way we want it. But, when I want to catch up on some work projects or meet my sister for a cup of coffee, I don’t even think about going to the corner gas station! I want the environment that comes with that cute little coffeehouse down the street!
Coffee shop consultant, Claire Bowen, stated “We tell our clients that their main business is not selling coffee; it is providing hospitality. The coffee shop business model has been based around selling a comfortable space for a period of time for the price of a cup of coffee for hundreds of years,” she adds. “Typically the more delightful the environment and food, the more frequently people will visit and the more they will spend.” https://money.com/dollar-scholar-coffee-shop-etiquette/
So, it seems I’m going to visit the gas station when I want fuel and a coffee. I’m going to the coffeehouse when I want environment and coffee. What’s the difference when it comes to 24 hour needs? There will be more people needing fuel in the middle of the night than needing a comfy little table with a latte.
With so many people working remotely these days, it’s not unusual to visit a coffee shop and see laptops open, phones in one hand, and coffees in the other. Away from the office, there is no longer a conference room, boss’s office, or water cooler. Meeting up with a client or co-worker will probably not happen at your house, but a coffee shop has become a socially acceptable place for that quick business meeting. In many cases, businesses will hold team meetings or sales presentations at a local coffeehouse.
With that being said, using a coffeehouse as a work space is usually done during regular business hours. You may find the occasional person who works well in the late-night hours, but he/she will probably not be meeting with a team in the middle of the night. There’s just no need for a coffeehouse to be open 24 hours for those who are using it as a work space.
What Cup Sizes Your Coffee Shop Should Offer
Maybe what we think of as the typical coffee shop will not have a steady flow of customers for 24 hours but, thank goodness, not every shop is typical! Every independent owner begins with a vision and a business plan that leads to a unique coffeehouse. Planning for a late-night or 24-hour establishment is not out of the question, it just takes ……. well, strong planning! A shop in Chicago can be used as an example:
Mexican-themed Quiote changes its focus every few hours: At 11 a.m., it’s a cafe with coffee and pastries along with a rotating lunch menu of tacos, tortas and salads. By 5 p.m., it shifts into an ambitious, authentic Oaxacan-style restaurant and opens its basement mezcal bar, which stays open until 2 a.m. during the week.
“We want to take advantage of the space as much as possible,” says Chef-partner Dan Salls. “We’re young guys trying to work hard and have an outlet for all of our crazy ideas. But it takes a huge staff and a lot of patience to keep this thing going all the time. It is basically nonstop.”https://www.usfoods.com/our-services/business-trends/fine-tuning-hours-of-operation-can-yield-serious-profits.html
Taking advantage of the space as much as possible is a point worth considering! Your expenses don’t stop because the shop is closed. The electric will still be on, the heat will still be running, the rent will still need paid, insurance coverage will need to stay active. How many hours do you need to be open to cover your expenses? Is it profitable to pay for extra shifts of workers to remain open?
How To Bloom Coffee: Everything You Need To Know For The Best Cup
LET’S STAY OPEN!
If you have determined that your area could sustain a 24-hour coffeehouse and be profitable, then part of your business planning should include hurdles that the daytime only shops might not face.
- Security – The well-being of your employees, customers, and property may need extra attention during the night shift – even if you’re located in a ‘good spot’. “High crime areas aren’t necessarily limited to “bad neighborhoods”. It can include areas with dense populations or lively nightlife and bars.”https://gissinternational.com/6-indicators-that-your-business-needs-night-shift-security-guards/
- Staffing – Finding workers for the graveyard shift is a challenge. Well-known 24-hour restaurants and stores are struggling to keep shops open around the clock due to staffing difficulties. Employees working night shifts can face health problems, both mental and physical, by working against their body’s natural clock over a period of time.
- Late-night Customers– Who’s coming into your coffeehouse at 2:30 a.m.? It could be late-night workers, homeless, night owls, bar-revelers, or moms taking time to themselves. Do some research here —– talk with neighboring businesses, call your local authorities, and spend time observing those hours of the night. You might want to do a trial run for a month and track the following on your late-night crowd: https://upserve.com/restaurant-insider/customer-demographics-that-every-restaurant-owner-should-dig-into/
- Who are they?
- What do they order?
- When do they visit?
- How long do they stay?
- Why do they come back?
- Operating Duties – Daytime shops may rely on the after-hours to handle the unseen business of running a shop. If you plan to stay open 24 hours, plan ahead for duties such as –
- Meetings with sales reps
- Deep cleaning
What Is Red Eye Coffee and How To Make It At Home
24 HOURS OR NOT?
Should you plan to keep your coffeehouse open 24 hours? There is not one right answer to that question. First, it depends heavily upon location — Are you in a business park where all offices are closed by 5:00, or are they open 24/7? Are you on a college campus where students need a place to study into the late night? Maybe you’re on a small town street where the sidewalks roll up at dark.
Secondly, will it be profitable for you? As a business strategy, a storefront should stay open for as long as they can cover operational costs, after the COGS (cost of goods sold) have been deducted. So long as you’re remaining in the black, it is strategic to remain open. If you don’t believe you can cover electricity, cost of goods, and personnel expenses in the afterhours then close up early.https://mocafeusa.com/how-cafes-can-profit-in-the-afternoon/
Lastly, will it be worth the extra expense and effort in staffing, providing security, and performing operating maintenance to stay open around the clock? Although you’re not paying the extra time for the building space, your expenses will still increase to keep the shop open. “Maybe those expenses are no big deal for the bigger budgets of franchisees, but for the middle class of business owners, those expenses add up quickly especially if all those extra hours don’t pay off.” https://upserve.com/restaurant-insider/stay-open-late/
CHECK IT OUT –
Still leaning toward that cool 24-hour café that will provide the community with something new and fresh? By doing some background reading on those establishments that have been successful with 24 hour business, you can learn the dos and don’ts that will help put your business plan together. From fast-food franchises to mom-and-pop diners, there have certainly been success stories that keep them reaching for those late-night spenders!
What Makes Spanish Cafés Unique
Frequently Asked Questions
It’s not atypical for a business to be open for an 8 or 9 hour stretch. Since coffeehouses need to open so early to meet their morning rush, an 8-hour business day would take them to 2:00-3:00 in the afternoon. Unless they are also in the business of serving dinners, this schedule is enough to cover the hours most people are looking for coffee.
The time you spend in a coffee shop will most likely depend upon how many customers are in the place. If the shop is half full, consider it ‘busy’ and treat it as you would going into a busy restaurant. As a rule of thumb, 30 minutes past finishing your order you should be ordering something else or getting up to leave.
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!