Becoming an Entrepreneur
How to Start a Coffee Shops Business
What does it take to start a coffee shops business? Here is a summary of all the basic steps you ought to think about before starting a coffee shops business.
Thinking about opening a coffee shops business? We tell you what you need to know to get started.
Opening a coffee shop is a common goal. Here is how to open a coffee business of your very own.
Startup Period for a New Coffee Shop
Most entrepreneurs want to launch their businesses as soon as possible. But except for rare instances, an expedited coffee shop launch usually isn't a good idea. Whether you like it or not, it takes time to lay the right foundation for your new business and a hurried startup cycle can sabotage your new coffee shop right from the start.
In the coffee trade, startup time is tied directly to the size and scope of the operation. A coffee cart can typically be launched in a period of a few months while a full-blown, sit down shop in a fixed lease location can take a year or more to get off the ground. As a rule of thumb, entrepreneurs should avoid launching a coffee shops business until they have allowed adequate time to prepare and execute a sound business plan -- even if it means substantially delaying the launch beyond your initial target date.
Choosing the Right Coffee Shops Business Concept
Coffee shop entrepreneurs are fortunate in that there are many ways to launch new business ventures in the industry and to leverage scalable business concepts that can be easily expanded into larger venues. For startup entrepreneurs, the key is to select the concept that is the right fit for your startup budget and business goals.
The most basic coffee shops business concept is a coffee cart with a startup price tag of around $25k. Budget-minded entrepreneurs interested in a more fixed location can upgrade the cart concept to a kiosk, which can be launched for $40k (or more, depending on the venue).
If market forces and personal business goals preclude the idea of a cart or kiosk, you will need to upgrade both your business concept and your budget. Drive-thru coffee shops businesses typically cost $75k-$100k and sit-down shops (specialty or diner model) can run as much as $350k or more.
Barista Training for Startup Coffee Shops
Employee training can be a tricky startup task, especially for specialty coffee shops that serve a broad range of unusual coffee creations. Eventually, your operation should be capable of providing in-house training for all new baristas. But how will your train your initial staff to prepare and serve a perfect cup of java?
Many coffee vendors are willing to provide training for baristas to ensure that their coffee is fairly represented to consumers. Unfortunately, vendor training may not be thorough enough to ensure that your employees are equipped with the skills they need to perform at expected levels. As a safeguard, we advise new coffee shops entrepreneurs to acquire comprehensive training themselves and to take a personal interest in training their team members, incorporating time for training into their startup plan and launch schedule.
Best Practices: Business Plans for Coffee Shops Businesses
In a startup coffee shops business, there is no substitute for a high quality business plan. The effort you invest in the creation of your plan now will pay off later in lender responsiveness, investor attention and strategic confidence.
Business plans address a wide range of issues, including startup financials. Not surprisingly, lenders immediately turn to the financial section and use the accuracy of your forecasts to gauge the value of other parts of the plan.
Subsequently, a thorough understanding of business plan financial basics is a prerequisite to effective business plan writing for coffee shops businesses.
Take a Look at the Competition
Long before you open a coffee shops business in your area, it's a smart move to see how you will fit in the competitive landscape. We've provided the link below to help you generate a list of competitors near you. After clicking on the link, type in your city, state and zip code to get a list of coffee shops businesses near you.
How are you going to successfully complete with existing firms? It's important that you never underestimate the competition.
Find Good Remote Business Advice
If you are seriously contemplating launching a coffee shops business, it's a smart move to talk to somebody who is already in the business. Local competitors are not going to give you the time of day, mind you. Why would they want to educate a future competitor?
Fortunately, somebody who runs a coffee shops business in another town may be more than happy to give you a few tips, given that you don't compete with them in their area. In fact, they are often very willing to share startup advice with you. If you are persistent, you can find a business mentor who is willing to help you out.
What's the process for finding a coffee shops business manager outside of your area who is willing to talk?
It's not that hard. Just use the handy link below and enter in a random city/state or zipcode.
Coffee Shops Business Acquisitions: Financial Considerations
You've invested a lot of time and effort in planning your startup. But here's something you probably don't know: Startup coffee shops businesses consistently fail to achieve the financial performance of acquired coffee shops businesses.
Although there are many benefits to buying an existing coffee shops business, the financial advantages rank near the top of the list. Many entrepreneurs buy an existing business for the sole purpose of tapping into the financial benefits of an established customer base.
Based on the acquisition target's financial records, you should be able to piece together a realistic forecast of your new company's financial picture for the first year and beyond. If you need assistance, we suggest talking to an accountant or professional business planning consultant.
Don't Forget About Franchising As an Option
Franchising is a smart move for entrepreneurs just getting started in small business ownership. The benefit of joining a franchise network is that you gain access to a proven business model and the resources you need to survive beyond your critical first year of business ownership. Today's franchises offer a range of opportunities for ambitious startups.
Just click the link below to learn more about coffee franchise options.
More Startup Articles
These additional resources regarding starting a business may be of interest to you.
Buying vs. Starting a Business
Share this article
Additional Resources for Entrepreneurs