People love coffee. In fact, many people would argue that they can’t live without coffee. And if you’re thinking about opening a coffee shop, all of those people? They’re potential customers.
Opening a coffee shop can be an incredible business opportunity—but only if you do it right. Let’s take a look at the strategies you need to know to open a successful coffee shop:
Draft a business plan to set your coffee shop up for success
Before you even think about opening the doors of your coffee shop, you need a business plan. Just like opening any other small business, a business plan will help you get clear on the market, the financial opportunity, and how to get from where you are now (a soon-to-be business owner) to where you’re trying to go (owning a profitable coffee shop).
Your business plan should include a breadth of information about your soon-to-launch coffee business, including:
- The core components of your business (for example, are you opening an upscale espresso bar or a casual grab-and-go coffee spot?)
- Your target demographic
- Your competitors
- Projected costs, pricing, and profit margin
- Sales and revenue goals
- Profitability projections (how long will it take your coffee business to be profitable—and how do you plan to get there?)
The more detailed you can get with your business plan, the more information you’ll have to guide your business decisions as you’re opening your coffee shop. As the old saying goes, failing to plan is planning to fail—before you take any steps to launch your coffee shop, it’s important that you do the planning work necessary to set yourself up for success.
Establish your point of difference
There are plenty of coffee houses (both national chains like Starbucks and local, independent coffee shops) for your target customers to choose from—and when you open your doors, you’re going to be competing against all of those other coffee shops for your customers’ business.
If you want to win that business, you need to find a way to break through the clutter, grab your customers’ attention, and show them that your coffee shop is the only place they want to get their morning cup of joe. And the way to do that? A strong point of difference.
Your point of difference is what makes your coffee house different, unique, and special. It’s what’s going to convince your customers to frequent your coffee shop instead of the other places in town—and it needs to be front and center in your branding, marketing, and planning from the beginning.
If you’re not sure what your point of difference is, you’re going to want to do some digging. Ask yourself:
- What makes our coffee shop business unique?
- What do we do better than any of the competition?
- What makes us different from the other coffee houses out there?
- Why would a customer choose to get their coffee here instead of anywhere else?
So, for example, your point of difference might be that you source coffee beans from all over the world and have a larger selection than any of the other shops in town. Or maybe you have a menu of unique signature coffee drinks that are sure to attract the more adventurous coffee drinker. Or maybe you want to provide the best customer experience in town.
Whatever it is that makes your coffee shop unique, different, and special? That’s what’s going to attract customers—so it’s important to get clear on your point of difference from the very beginning.
Focus on quality
Quality is like the foundation of your coffee shop; if you don’t have a strong foundation, it doesn’t matter what you build on top of it—the entire thing will eventually come crashing down. Without a commitment to quality, it’s going to be hard—if not impossible—to build a sustainable, successful business.
For example, when you’re sourcing beans for your shop, you want to get a variety of high quality coffee options for your customers. If you’re buying chairs for your seating area, make sure they’re stylish and comfortable for your guests. Carry that same commitment to quality to all areas of your business, including supplies (like your espresso machine and coffee grinder), products (like baked goods or flavored syrups), and customer service.
As mentioned, your customers have plenty of options when it comes to buying coffee—and if you want them to buy their coffee from you, it’s important to make sure you’re delivering a quality experience across the board.
Lock in the right location
In order for your coffee shop to succeed, you need to find the right space. And while the “right” space will depend on a variety of factors (including your location and ideal customers), there are a few universal things you’ll want to look for when choosing a space for your new coffee shop, including:
- Visibility. You want to open your coffee shop in a fairly high-traffic location. An area that has a good amount of foot traffic will ensure people actually see your new coffee shop—and will entice them to come in and grab a coffee.
- Convenience. You also want to open your coffee shop business in a place that’s convenient for your customers. Make sure your location is easy to find, has plenty of parking (both for cars and bikes), and isn’t too far out of the way.
- Affordability. It doesn’t matter how much you do in coffee sales—if your rent is through the roof, you’re going to have a hard time making a profit. Choose a location that’s affordable and will leave you with the working capital you need to keep your coffee shop moving forward.
Offer a variety of service options
Different customers want different things. Some will want to pop into your coffee shop, grab a drink, and be on their way. Others will want to settle in and enjoy their coffee on site. Others might be looking for a drive-thru or coffee delivery.
The point is, there are a lot of different ways to enjoy coffee—and if you want to connect with as many customers as possible, you’ll need to offer a variety of service options.
A few service options you should definitely consider for your new business include:
- Table service
- To-go service
- Drive-through service
- Curbside pickup service
- Delivery service
Now, there are definitely ways to be successful without offering all of these service options; for example, there are plenty of successful coffee franchises that just offer drive-through service. But the more service options you offer, the more customers your coffee shop will appeal to—and the more successful you stand to be as a result.
Whatever service options you decide to offer, it’s also important to make your interior functional and comfortable—for both your customers and your staff members.
When you’re planning your counter area, make sure to position your point of sale system in a way that makes it easy for your customers to order their coffee—and for your staff to take those orders. Behind the counter, make sure your barista is able to access everything they’ll need to fulfill those coffee orders quickly and easily. On the floor, make sure your tables are spaced out so your guests are comfortable and there’s plenty of room for the maximum number of people allowed in your shop at any time.
The more functional and comfortable your space, the easier it will be for your staff to do their job and your customers to enjoy their coffee—and the better your coffee shop will perform as a result.
Hire the right staff members—and then manage them the right way
Your staff will play a huge role in creating a positive customer experience and driving business—so who you hire for your coffee shop is extremely important.
You can hire baristas with experience or you can hire people without any direct coffee experience who are enthusiastic and willing to learn. But the most important thing to hire for? Customer service skills.
Because a coffee shop is such a customer-facing business, you want to hire a team that’s friendly, accommodating, and will create a positive atmosphere for your customers. When you’re going through the hiring process, make sure you’re looking for people you can trust will deliver a high level of service to your customers.
Hiring the right team is the first part of the equation. But how you manage that team is just as important.
Invest in training your baristas and front of house staff. Make sure they’re knowledgeable on your product offerings (and coffee in general). Make the process of scheduling and paychecks as simple and straightforward as possible.
When you manage your team well, they’ll be more invested in their job—and your business (and customers!) will benefit as a result.
Encourage repeat business with a loyalty program
When you open your coffee shop, you want to get first-time customers in the door. But if you want your business to be sustainable over the long term, you need to transform those first-time customers into regular customers. And a great way to encourage repeat business? A loyalty program.
A loyalty program rewards customers the more they shop at your coffee house. So, for example, you might offer a free coffee for every 10 coffees purchased or a special loyalty coupon each month (like 15 percent off baked goods or a free coffee upgrade).
Loyalty programs incentivize your customers to frequent your coffee shop over your competitors. And the more regular customers you have, the more money you’ll make—and the more successful your coffee shop will be overall.
Get out there and build a successful coffee shop
There’s a lot to think about when it comes to opening a coffee shop. But now that you know the steps to take to build a successful coffee shop business, all that’s left to do? Open that coffee shop and get brewing!