So, your passion for coffee has reached the extent that you want to live and breathe the stuff. Help other people fulfil their caffeine requirements while earning a living. Want to escape the rat race and do business on your own terms.
For many people, coffee shop visits are just as important as finding the best coffee machine for their home use, which is great for anyone who owns one. But starting your own isn’t as easy as renting a space, buying a coffee machine and a few cups and seating areas. There is so much to think about before you even get the idea off the ground.
Unfortunately, no single shop, location or business can follow an ‘ultimate guide’. Not every coffee shop will cost the same amount to open, nor will they all be able to run in the same way. But there are some universal considerations:
Is It A Good Idea?
First of all – opening a business of any kind is a big risk, and financial commitment and the current economic climate are two factors which can put a lot of people off.
The good news is, with a coffee shop, the odds are in your favour.
Over two billion cups of coffee are sold in the UK every year. An individual visits coffee shops 152 times per year on average and spends over £2,100, and it is thought that this all brings over £14 billion to the economy annually.
Independent coffee shops outnumber the big chains two to one, and there are now over 21,000 outlets throughout the UK compared to the measly 9,000 in 2006. People also seem to be opting for the small independents over the chains for various reasons, too.
Why Are Independent Coffee Shops Growing In Popularity?
We have seen a lot of businesses and chains close or go bust over the past few years. There is no denying the high street is changing rapidly. But coffee shops seem to be bucking the trend.
You no longer walk in and only have the choice of a black or white coffee. Time has even moved on from the relatively olden days of lattes and flat whites.
Nitro-coffee, flavoured coffee and iced frappuccinos are now commonly on menus. A lot have dairy-free milk alternatives, and you can often select your favourite blend right down to a specific method of roasting or even a single-origin farm in Vietnam/Colombia/Hawaii. Certainly more exotic and stronger than the instant blend you use every morning, and more enjoyable.
Our toy, clothes and even food shopping habits may have moved online, but our coffee love remains firmly in our local cafès. And the day when nobody needs coffee is probably never going to come.
So…Where Do I Start?
There are some essentials to bear in mind first:
- Are you *truly* passionate and knowledgeable about coffee? You know the difference between a latte macchiato and a cappuccino but what about the new trends? Are you able to sift the good blends from the bad? Even if you think you know it all, there will be more to learn. It is essential for any business owner to have a high level of expertise in what they offer.
- Be realistic – Food and drink retail is hard. It isn’t 9-5, and success doesn’t soar to great heights within the first few weeks. You need to be relentless and not give in at the first sign of a problem arising. You need to love customers, working in a team and building relationships as much as you love coffee.
- Find a unique selling point. The only problem with a booming market is that there can be high competition. Scope this out. Nobody will switch allegiances and come to your shop if you do the exact same things as the shop they have already established as their favourite. Whether you source beans which nowhere else in town has, offer cold brew or turn into a coffee-based cocktail bar in the evening, you need to bring something pretty new to your area. If this means providing a limiting niche of focused products, so be it.
- But learn about your demographics. To know if vegan cakes would go down a treat, or if your final menu item should be a caramel iced frappe or a good old pot of tea, you need to scope out your potential customer base too. A small traditional market town with a lot of residents who don’t know what micro-foam is and just want a good old slice of Victoria sponge with a cappuccino will not need the same type of cafè as Brick Lane in Shoreditch. There is a fine balance between finding a USP and going overboard.
- There is a lot of legislation. HMRC business rules, insurance, VAT, tax. Nobody likes them. As a business owner though, you must get to grips with them before you even start. Coffee shops aren’t just about coffee; there is a lot of entrepreneurship and business too. Oh, and scrape up on your knowledge of food hygiene laws put in place by the FSA.
Okay, I Think I Am Good To Go…
Great! Here are some pointers to help you on your way:
- Be honest about your budget – You want to offer a bean from Colombia which nobody within a 60-mile radius has their hands on, but it is more expensive than your limit. Don’t go over until you are doing well and can easily afford it. Going over-budget before you’ve even opened can spell disaster. Remember you have decor, machinery and overheads, too.
- Don’t forego quality – You have loads of single-origin coffees on offer as this is your USP. The coffee connoisseurs come flocking to try one. A good way to get them in, right? Well, they will only come back if it actually tastes nice. There is a chance that the majority of customers will probably not even care that their coffee was hand-picked, sun-dried and roasted to a precise degree, so the taste will be the most important thing. This is where your knowledge comes into play. Likewise, don’t buy beans that taste like dishwater ‘cos they’re cheap.
- The team is important – Not only will they make your job easier and the service flow better, but a lot of customers see staff as a defining point in whether they will go back to a shop, and there is a wide range of things they will look for. Think about whether you want to hire somebody who knows everything about coffee, or somebody you have to train up but has 10/10 customer service skills.
- And so is the atmosphere – We aren’t saying that you need to have decor which wouldn’t look out of place in one of those edgy city centre pop-up cafès, but it needs to feel welcoming and suited to the location. Statistics suggest that over 80% of sit-in customers will buy at least two coffees, but this won’t happen if they don’t feel comfortable. Nor will they choose to trek to your shop if they actually prefer the option of their own front room. Be inviting.
- Suppliers are essential – You need them more than they need you. Keep on good terms with them.
- Keep the data from day one – Loss and profits. Price alterations. Any changes you need to make. Any problems which arise. Log them all and keep track, so you know what works and what doesn’t, and can sort future problems.
- Try a course or two – Whether it be online through a site like Udemy, barista training in the nearest city, or even reading books and guides on how others did it, utilise the help that is out there. Improve your knowledge about everything, from the licensing, location and equipment to the paperwork, profit margins and reaching sales targets.
- Encourage repeat custom and advertise – Whether it be a loyalty scheme, discounts, extras or simply just offering a personal experience. A business only runs if people keep coming. Likewise, they will only come in the first place if they know you’re there. Remember that it isn’t only A-boards and posters which get people intrigued nowadays. Google My Business, local listings and online websites can be vital.
If you have read this, feel like you could cope but need a bit of guidance, you could probably find that you can grab a few weeks work experience in a local cafè to learn some basics. As long as they know you won’t be a direct competitor, there is a chance that the owner will allow you to help out. Even if you only come away having learnt how to display a fresh cream cake at the right temperature, it is still something.
Remember that there is nothing wrong with starting small, either. Getting permission to start up a small food truck outside a local garage or town centre offices may see you earn some much-needed finances. You’d create a name for yourself, but also keep the costs of overheads down while getting to grips with the basics of business.