Things to know when opening Coffee Shop
If you are reading this article, you have considered opening Coffee Shop by yourself. We wish to share important points and steps for you to follow and make the business journey easier than it seems to be.
Due to the high competition and high demand, there is always little quality product. Therefore, before moving on to creating your own coffee shop, you need to be not just a coffee lover and be able to distinguish between its bitter or sour taste, but also delve into the sphere. As with starting any business, you need to understand the product that you will be selling.
The next question that bothers every entrepreneur is the drawbacks of opening your own coffee shop.
The coffee business has more advantages than disadvantages. Coffee is gaining momentum and people are just beginning to understand it. It is now very easy to scale and promote. People did not stop drinking coffee, and coffee beans sales are growing every year. Coffee shops that are set up correctly: with good branding, great positioning, good concept, and product, have a great future.
Start with a concept
Start with a concept, the approach should be as thorough as in any business project formation. With a coffee shop, it is even more difficult, since you will have many competitors and faceless, similar projects. In order to stand out from the huge crowd of existing coffee shops, the concept should take most of your time and inspiration.
So what does it take to open a coffee shop? In order to understand what kind of concept you want to create, you need to answer several vital questions.
Let’s say you can open just a coffee shop, coffee to go, a bakery, a coffee island in a shopping center, etc. At the moment of choice, you set yourself up for all future development. The rest of the points will follow from the first answer to this question.
What exactly are we doing?
You can brew the most delicious coffee with natural syrups or coffee in an unusual and non-standard way. But you should definitely write what you are doing: “We make coffee and prepare delicious desserts.” But do you cook or buy themyourself? Approach this question very carefully. Because if you sell purchased desserts, then already at the stage of forming the concept, you will need to decide on the suppliers.
Choose who you want to see as your partners and in the shop window, see their conditions, prices and understand what value you can set.
To understand whether this cost is in the concept.
Who are we doing this for?
Be clear about your target audience profile.
First of all, select your anchor guest to target and additional audience groups. It is very convenient to work out the model of your guest’s behavior using an example: morning, afternoon, and evening. You can take one guest as a prototype and find their Instagram account, or simply “copy” the behavior model from a friend. When you start working this question out, you will have a lot of introductory information to further shape the project, both in design and in choosing a location. You will be guided everywhere by your guest’s behavior model.
A proper Coffee Shop business plan.
When your concept is all ready, it is time to prepare a proper coffee shop business plan.
First of all, you need to understand how much you want to earn. Because the construction of the entire coffee shop business plan will depend on this amount. In general terms, it can be described as follows: you take 100% of your planned turnover and divide it by percentage. You take 30% of these for yourself as net income.
On average, the markup for coffee is 3 times, so, your food cost will be approximately 30%.
If you will be selling desserts, you need to go back to your concept and see what product you prescribed, who your suppliers are, what prices they give, and from this supply food cost of an additional product.
How to choose the location for a Coffee Shop?
Walk and search. You must research the locations that interest you very carefully. And what locations you need, you will find out after carefully working out the concept and target audience. When you understand what you are building and for whom. And thus, you will immediately generate a request for location.
It is important to draw up a list of requirements for the premises. For example, it should be:
- Central District,
- place near the metro station, or within easy reach for public transport,
- separate entrance, with facade and stairs
- 20 square meters area,
- at least 15 kW of the power grid,
- high ceilings.
To stand out in the market, you need branding.
Most coffee shops are similar by their names and designs. If you want to somehow differentiate yourself from all this huge mass, hire a good branding specialist. This is your visual language. Even the smallest coffee shop or kiosk with a small budget can be made incredibly bright and expressive. It is better to spend on a designer right away than to spend more on correcting your own mistakes later.
Remember, there is no such concept as popular design. There is a design that harmonizes with your concept. You don’t need to be guided by what’s hot, trending, or what others are doing. Create a design for your concept to convey the atmosphere that you planned to your guest through corporate color, decoration materials, lighting, interior details.
How much would it cost to open a coffee shop?
You can expect on average from $ 1000 per 1 square meter. It includes equipment, repairs, furniture, inventory, first purchase, consulting services, graphic and interior design services.
You can do it cheaper, but then, you will most likely be the same as everyone else. Therefore, if you want to stand out, be different in the market and have a large number of loyal customers, you need to spend a little more.
Financial planning should also be included in your steps. There are a lot of platforms to make this part of your business easier than it seems. Just imagine, that instead of calculating every sum manually, you can just use a financial model designed specifically for your type of business. It is also able to calculate the profit, no matter the season. All you need is to input your data into the system and observe everything be calculated for you. Coffee shops require a lot of details to be taken into account. One of the most important things to consider is the right supplier.
Today there are a huge number of coffee bean suppliers on the market. Collect market data, analyze suppliers who offer any solutions. Chat with managers, find out all the conditions, grain prices and conduct a tasting. If you are new to this business, we recommend contacting some large aggregators of the coffee business that will help you fully, on a turnkey basis, close the issue of creating your coffee shop. A good idea will be working with suppliers who have been on the market for many years, as experience here will be helpful in saving time and money when making decisions.