Opening your own coffee shop is an exciting and also challenging adventure that isn’t for everyone. The challenging part is even more true with the current world situation. Though it’s not impossible to have your dream coffee shop if you have a solid plan and the right tools to navigate the bumps in the road, prepare yourself for some dedicated work to even make a plan. Let’s take a look at a few of the crucial steps before opening a coffee shop.
Choose a Location
If you have not already chosen a location for the business, this is a good time to do so. Remember, potential investors including banks will want to know exactly where your shop will be as represented in your business plan. Choose wisely based on your design concept, budget, and availability of a vacant property. Do a thorough investigation of the area so you know what kind of traffic you can expect. Furthermore, do some recon of the local coffee shops and cafes to give you an idea of what is already represented.
Create a Business Plan
It is vital to create a solid business plan before you invest money and make commitments that you can’t get out of. A business plan for a coffee shop will help you decide to go forward with the venture or not. My husband and I did this very thing some years ago and decided to NOT open a coffee business based on what we discovered from creating the plan. And, I highly recommend that you gather as much information on setting up a coffee shop and writing business plans before you even start. Just do your homework. Anyway, here are a few things that your plan will need.
Business Plan Contents
The business plan for a coffee shop needs to include everything about the business including financial predictions (expenses/receivables), menu, characterization of the service (serving, delivery, etc.), key suppliers, design concept, and any other pertinent information that can show and prove your worthiness to open this type of business. This plan can evolve over time while you are in the planning stage and even after you open if changes are appropriate.
Also include an analysis of operational parameters (location, structure, concept, products), and definition of the operating system. This also includes planning, licensing, and analysis of the company’s business environment. Look at the market analysis and competitors in the area. You could use a SWOT model that examines the following parameters: strengths, weaknesses, threats, and opportunities of a company or potential company.
Base your analysis for the potential business and against the competing businesses in the area. This helps you to create a profit and loss statement, balance sheet, and cash flow prediction to examine the business results of a coffee shop. Your dream can become more concrete when you look at the potential positives and negatives.
Set a Budget
The budget is determined by your financial strength (assets), as well as your ability to pay your bills and debt. Much of the actual numbers can be derived from the business plan if it’s done thoroughly enough. Do keep in mind, however, this plan is like an educated guess. It doesn’t guarantee your success or hitting any numbers you predict. It’s a good idea to have a contingency plan just in case things don’t go as expected. This may mean that you put more of your own money in the mix to give stability to the fledgling company at the beginning.
The equipment required to start a coffee business depends on what you intend to sell. Will you have coffee only or food and other drinks? This might change in the future, so don’t limit yourself. Perhaps you can only start with coffee and baked goods for now but intend to add breakfast and lunch items at a later time. In this case, get a good handle of what you will need for both and plan accordingly. Keep your eyes open for used equipment that will help you stick to a budget.
Consider the Details
The process of opening a coffee shop is as complex as any other food business. It needs concise planning of details that make up your vision. After all, this is your baby. The details like what type of coffee to serve or roast on the premises, coffee bag design, branding, staff, and interior design are the elements to set you apart from other coffee businesses in the area. Customers will have a pleasant experience when they feel comfortable, served, and as though you get them. Pull in details that they won’t find anywhere else.