How to Start a Coffee Shop
Many new coffee shop owners open their doors thinking that the specialty coffee's recent popularity guarantees success. More often than not, they quickly lease their space, buy value priced equipment, and start serving drinks with very little training or education. Another mediocre coffee shop is born.
In this situation, short term survival is possible, but genuine long term success is rarely realized. Most markets are saturated with places to buy coffee, and many consumers are perfectly happy with their current options. The big chains have a long history of making specialty coffee accessible and convenient for the average customer. Unless a new store can offer something new, or something better, what purpose does it serve?
This paints a somewhat gloomy picture, but also presents a large opportunity. There is a definite need for quality oriented coffee in this country; Not just another company with the seemingly mandated "dedication to quality" statement, but a shop that is genuinely passionate about serving the best product possible. A well trained barista, working with top of the line equipment and high quality ingredients, can create an espresso drink that truly puts their competition to shame. Once a customer experiences coffee at its best, Starbucks will never taste the same.
Networking and Education
Networking
No one person has all of the skills, knowledge, and experience necessary for starting and operating a successful business. Even with a well rounded management team, relationships with vendors, accountants, real estate agents, and business counselors can be quite helpful. The S.B.A. (Small Business Administration) offers free counseling services for every stage in the process, and most vendors will offer help with items pertaining to the product they sell. Coffee roasters not only supply coffee and equipment; they will often train new clients on drink preparation and can offer insight into what steps must be taken to serve the best coffee possible.
When establishing any business relationship, it is important to research the available options. Individuals and organizations should be chosen based on their credentials, experience, and industry reputation. Asking local business owners for their recommendations can help narrow the field.
Education
Education is the foundation for a successful coffee shop. Knowledge of business and coffee share equal importance. Working for a company in the industry can sometimes satisfy both requirements, and the experience will be endlessly beneficial. When this isn't possible, business classes at a local college or university are a good place to start. A basic knowledge of accounting, book keeping, and marketing should be considered a requirement. For someone new to business, the S.B.A. (Small Business Administration) also offers a number of free online courses covering very basic material.
Acquiring coffee knowledge is somewhat easier. Again, the value of working in the industry cannot be overemphasized, but many other resources are available. Several good books have been written on coffee preparation. Espresso Coffee: Professional Techniques by David Schomer is one of the best. Industry publications, like Barista Magazine and Specialty Coffee Retailer, sometimes offer the most relevant and current information. There is a lot of good and bad information available on the internet, and it can be a useful tool as long as this is kept in mind.
Knowledge learned through reading must be implemented through practice. Learning to make good espresso takes substantial time, and the learning process will continue long after the doors are open. Coffee suppliers can be a great resource for initial hands on training. As long as the trainee has sufficient background knowledge, a knowledgeable roaster should be able to get them off to a good start in one or two sessions. Many times training will be free with a contract, but if not, time spent with an industry expert is worth every penny.
Timeline
1 Year or more prior to Start Up
- Take any necessary business classes
- Work part-time or full-time in the industry to gain experience
- Begin writing business plan
- Meet with SBA counselor
10 Months
- Finish preliminary business plan
- Choose and register business name
- Secure Financing
- Determine time required to obtain business permits
- Visit potential locations
- Interview and establish relationship with banker, real estate agent, accountant, and attorney
8 Months
- Sign Lease
- Hire contractor
- Hire graphic designer for logo, menu, etc...
- Apply for licenses and permits with state, county, city, etc..
6 Months
- Determine form of business organization and file necessary paper work
- Purchase computer and business software
- Prepare advertisements
- Prepare financial budget and review with banker
3 Months
- Interview potential staff/management
- Verify license and permit applications are complete
- Choose a roaster and open account
- Choose and purchase equipment
- Open business bank accounts
- Secure Insurance
- Set up merchant accounts for credit card processing
- Purchase telephone and internet service
- Prepare job descriptions for employees
- Research workers compensation
- Write policy and operational manual for staff
- Finalize menu and promotional materials
- Plan event for opening day
1 Month
- Talk with accountant about tax requirements
- Open accounts with other vendors
- Build-out complete
- Train management on drink preparation
- Order printed office supplies
- Establish utility accounts
- Begin training some employees
Opening Week
- Finish training all staff
- Write a press release
- Begin advertising
Throughout the Process
- Read anything available about coffee
- Revise business plan when necessary
- Visit competition for ideas