How to Start a Coffee Shop or Coffee Business
So you’ve decided to get into the World of Coffee! Coffee can provide a multitude of opportunities and can also apply to anyone wanting to start up a Sandwich Bar, Cafe or Deli. Infact anyone wanting to open any business that features Coffee. Many types of business serve coffee these days, with either a Traditional Espresso Machine or automatic Bean to Cup Machine. Bookshops, Bicycle Shops, Motor Cycle Dealers to name but a few. Any business that attracts like minded people who share common interests is a great place to start a Coffee Shop. It gives people the chance to socialise and talk about their shared interests. This business diversification also provides an additional income for these businesses that are not “out and out” Coffee Shops.
Like any business that people want to start up, it’s usually because they have an interest in some element of their chosen business idea. It’s always a good idea to do something you like doing or have a skill at, otherwise what’s the point? However, just because you have a “passion” and a dream of setting up your own Coffee Shop doesn’t mean that it will be automatically successful. The same rules apply for any business – Doesn’t matter how good your idea is, you need to make sure there is a “need” in your town or geographic area. This research will form part of your “Business Plan”. A business plan is more than just putting a few figures together to get finance. “Your Business Plan” is just that. It’s about getting your thoughts and ideas down on paper and creating a plan of action for business research, marketing research, project managing and forecasts for getting your business open. It should also be business planning for the future to make sure you stay open! There is an old saying in business; “If You Fail to Plan You Plan to Fail”. It’s a known fact that a large proportion of new businesses fail within the first 3 Years.
Get a clear vision of what you would like your business to be. Try and picture it in your mind. Where would you like it to be? What does it look like? What’s the decor and style? Who are your customers? Apart from Coffee what other offering will you have? What is your USP (Unique Selling Point)? Basically, you have to identify how you can be a bit different from any competition that will also appeal to your potential customers. The most important thing to find out from as many people as possible within your “market place” is; Do they agree with your “vision”? and; Are they prepared to become a customer and pay for it? Put a questionnaire together and go and talk to as many people as you can to find out if your coffee business idea is what they would spend their money on. Also ask open questions about what “they” would like to see in their area. They might suggest some things you never thought of. They may also criticise some of your ideas, don’t take it personally. If their criticism is valid learn by it. Remember, it’s not about what you want. Give them what they want and they will spend their money with you rather than someone else. Check out other Coffee Shops to see how they do it. Not only your local “competition” but further a field. Make several visits at different times of the day if possible. Also, try and look at them from a customers point of view. Make notes of not only the things they seem to do right, but what you think they do wrong. Do they have a steady stream of customers all day or just at lunchtimes? Make a note of prices. Once you are aware of the costs of products then you can guess their “mark up”. Do you think they have the customers they need to make a good return from their prices? Of course, this is not the whole profit story. You have to consider overheads and staff wages etc. You will have a better idea once you “cost out” your own business which we will come to shortly. Correlate all of the “plus” points you have found in the competition and combine them with your USP and VISION for your business and see if you think you can do things a bit better.
Once you have a clear picture about your business then apply what is known as the “Four P’s of Marketing”. Product, Price, Place and Promotion. This can expand to the seven P’s for the service industry. There’s lots of information online but basically all the P’s have to match to get the right “Marketing Mix” for the product and/or service. For example: A high cost perfume couldn’t be sold on a market stall. It’s unlikely that the correct pricing could be achieved and there’s a good chance that shoppers wouldn’t believe the perfume to be the “real” thing anyway. The “marketing mix” is all wrong. If you consider the four P’s when seeing how an expensive perfume is sold you will see what I mean. The Product (a top brand), Place (where – high class perfumeries and shops in some of the worlds most exclusive Cities). Promotion (TV, Cinema, Product placement and the Worlds most exclusive media magazines). Therefore the Price is set according to the social and financial level of the customer being promoted to. Basically, it’s that old saying that “If you have to ask the price then you can’t afford it”. The fours P’s match and you have the right marketing mix. Decide what market sector you want your Coffee business to fit in to. If you want your business to be “classy” with a “stylish” decor and serving a range of “top quality” goodies served by immaculate, polite and efficient staff (Product) then to get the “Price” you need or want then you will have to ensure you are in the right upmarket area or Town (Place) that has an upmarket level of customers. The way your business looks on the High Street and your high level of service that would be expected by your upmarket clientele is the correct Promotion in itself. People tend to mix in the same circles as themselves thereby promoting your business by “word of mouth” within an exclusive group of people. These days this process is strengthened with “social media”.