How to Start a Coffee Shop
Give your neighbors a taste of the café lifestyle by starting a coffee shop
Coffee shops have become an important part of communities in recent years, and maybe that’s left you wondering how to start a coffee shop in your neighborhood. There’s good reason to consider starting a coffee shop, too: it’s a $12 billion industry.
Every morning, millions of Americans wake up, get dressed, and head to their neighborhood coffee shop for cup of coffee, a bagel, and a jumpstart to their day. The local coffee house also serves as a meeting place for friends, business associates, and pretty much anyone else in need of a quiet place to sit and have a discussion.
Visit any busy “big chain” coffee shop, and chances are your creative juices start flowing. Before long, chances are you’re like one of the 22,000 others in America who’ve decided, “Hey, I think it would be cool to start a coffee shop.” And guess what? It’s a pretty straightforward proposition.
Starting a coffee shop begins with planning
The first step of opening any new business is planning. Starting a coffee shop is no different, and by taking the time to form a strategy, you can help yourself avoid many of the common mistakes new coffee shop owners maker.
Here are just a few of the areas you need to begin to consider before you decide to start a coffee shop:
- What kind of coffee shop are you hoping to open?
- Where do you think will be a good location?
- What’s the ideal atmosphere you want to achieve, and how much will that cost?
- Where will you get your coffee?
- What about equipment and fixtures?
- What licenses, inspections, and insurances will you need?
It’s at this point many people find starting a notebook can help keep track of the details and ideas as they come. That way, you’ll be able to better navigate the process.
Deciding what kind of coffee shop to start
Generally speaking, there are three kinds of coffee shops. This is true of locally owned mom-and-pops, national chains, and franchise coffee shops. Taking just a moment to familiarize yourself with the industry helps form a solid foundation for what comes next.
The Drive-Thru Coffee Hut
The drive-thru coffee hut is a fixture at many a busy intersection. These are the “snowball stands” of the coffee world. They occupy a single corner with a drive-through window, and they specialize in quick, hot coffee. The coffee hut model is perfect for people who want to avoid the demands of a larger operation because they don’t have seating for guests to come and linger.
The Coffee Bar
Closely related to the drive-thru coffee hut is the kind of coffee shop that used to be the most prevalent: the coffee bar. Coffee bars are similar to the old neighborhood watering hole bar that serves more adult beverages. They serve coffee, and that’s it. Maybe they serve a few fancy coffees—espresso, cappuccino, or even a macchiato or two are on the menu. But don’t come to the coffee bar looking for a light lunch. The best you may get is a stale donut left over from the barista’s breakfast.
The Neighborhood Coffee Shop
The neighborhood coffee shop is the establishment most people think of today when they say, “I want to start a coffee shop.” These are places that become the community hub. Fun, vibrant atmospheres where people can come, open a laptop and do some emails, meet up with a potential new employee, or just hang out with friends. Neighborhood coffee shops usually serve a selection of foods in addition to a wide selection of coffees in flavors and preparations.
That’s the coffee shop landscape in a nutshell. Whether you’re going the independent route and starting from scratch or exploring purchasing a franchise coffee shop, your shop will most likely fit into one of those three categories.
Where will you open a new coffee shop?
Assuming you fall into that last category and want to become the neighborhood hub for all things coffee, the next question on your agenda will be “Where?”
First, make sure you choose a location with ample parking. Coffee shops are places people like to linger. If you have ten tables but only four parking spaces, chances are you won’t be successful. While considering parking, it’s now you’ll also need to consider one other important aspect: do you want to provide an outside seating area for your guests?
Another key decision will be to find a location that has the kind of visibility that makes people notice while also providing them with the convenience of being able to get in and out quickly. But be careful! It’s a delicate balance between “ideal traffic location” and a lease that’s too expensive. Contact a commercial real estate agent in your area and inquire about leasing space. A qualified real estate agent can help you determine how much you can expect to spend on your new space.
What kind of atmosphere do you want to create with your new coffee shop?
Like location, the kind of atmosphere of your new coffee shop is another important consideration driving costs. Some coffee shops are fresh and hip, while others focus on a more thrifty vibe. Do you want padded benches and booths? Or will a bunch of barn-board tables create a community dining atmosphere?
With coffee shops, the sky is the limit to the kind of place you want to open. You can be fancy or shabby chic, all chrome-and-metal or wood-and-burlap. It’s up to you. As you consider the atmosphere, though, be sure to keep notes about how much each of the elements you hope to add will cost.
When you combine the cost of décor with the price of your location, you’re more than half-way to establishing a budget for opening a new coffee shop. Now you can think about the important stuff – the coffee!
Where will you get your coffee?
Sourcing quality coffee beans is one of the most important decisions you’ll make as a new coffee shop owner. The upside of this process is you get to sample a lot of coffee. After all, people come to coffee shops for the coffee, so choosing that coffee is an important decision.
Are there local roasters in your area who can provide beans to give your customers a unique coffee experience? Would you prefer to work with a large, national brand to develop your coffee shop? Can the roaster you’re considering provide you with consistent quality and in the quantities you’ll need?
Successfully launching a new coffee shop will require that you pick a coffee bean that tastes the same day after day and prepared in a manner that accentuates flavors. Like décor, cost is also a factor. Make sure the roaster you choose is affordable for your business’s budget. Once you have your beans in hand, you can start looking at the equipment.
What equipment do you need to start a new coffee shop?
Brewing the perfect espresso is a science that requires the right equipment. A simple Google search for “commercial espresso machine” provides thousands of options, ranging in price from a couple of hundred bucks to tens of thousands of dollars. Which is right for you?
You’ll also need refrigerators, warming ovens, display cases, and drip machines. Don’t panic, because there is a resource in your area that can help you decide what you need. Go to your local restaurant supply house and talk through your options.
While you’re there, you can also discuss the cost of tables, display cabinets, and other fixtures you’ll need. The result is you’ll have the final key component to determine the cost of opening a new coffee shop.
What licenses and insurance do I need to start a coffee shop?
Any establishment serving food will need the right licenses and insurance. You’ll also need a health inspector’s OK, as well as fire marshal visits and other inspections before opening your doors. But these requirements can vary wildly from community to community.
To help navigate your local laws and regulations, reach out to the Chamber of Commerce or local economic development agency. These groups specialize in helping businesses succeed, and they’ll know where to point you for the licenses, insurance, and inspections you’ll have to have. Many will even provide a handy checklist created specifically for the food service industry, complete with contact information.
With just a little guidance and some forward planning, you’ll be well on your way to opening a new coffee shop.
Consider Starting a Coffee Shop with Just Love Coffee
You can cut through a lot of the hassle and mystery by becoming the next Just Love Coffee franchise owner. Just Love Coffee is an ideal franchise for individuals who want that indie coffee house feel while enjoying the support and guidance of a larger organization. For more information, or to become the newest Just Love Coffee owner, request our free Franchise Information Report.