Things You Need To Know Before Opening A Coffee Shop
For so many people, opening a coffee shop is the stuff of dreams! Whether it be a high-tech joint with scientifically precise brewing formulas worthy of NASA, a cozy little book cafe with bean bags and old paperbacks, or a peaceful Shangri-La in the middle of a busy city, the opportunities are endless. The US coffee shop industry is valued at $50 Billion Dollars, with 35,000 coffee shops nationwide. This booming industry is showing no signs of slowing down and is an attractive proposition for potential new coffee shop owners. With such huge rewards available however, the market is highly saturated and competition is fierce. It is estimated that 50-75% of independent coffee shops close in the first five years. In order to ensure that you do not become one of them, careful planning and business practice are vital. To help get you started,
Here are four things you need to know before opening a coffee shop:
1. Stand Out From The Crowd!
In such a saturated market the first thing you need to do is identify your unique selling point and make sure that you get the word out there! There are countless niches available to you, so try and choose one that you are genuinely passionate about. If you are a true connoisseur, then the coffee itself is your selling point. If you want to create a hip place for the instagram generation to be seen, it will be all about design. If what you want is a cozy little place for people to snuggle down with a book on a rainy afternoon, think about how to create a peaceful atmosphere that will keep people coming back again and again.2. Do Your Homework On The Competition
There is hardly a place in the known world where you cannot find a dozen coffee shops in close proximity. It is vitally important for you to know everything about your local competition, including their USP, their products and their pricing. If there is a direct competitor who is doing exactly the same thing that you intend to do (and are doing it well), you may have to ask yourself if the market is big enough to accommodate both of you, or whether you need to reevaluate your concept. Likewise, comprehensive research into what is locally available can be invaluable in highlighting any gaps in the market which you might fill. Do not allow yourself to fall out of touch with your neighborhood. Walk around and keep up to date with everything that is going on in your local area if you want to stay competitive.
3. Know Your Customer
When considering your target customer the most important factors to take into account are the location of your coffee shop and your USP. Identifying both of these will enable you to better customize your product and service to satisfy the needs of the market. If you are in an area where there are many students, tailoring your coffee shop to their needs could guarantee you a solid customer base. Students need reliable WiFi, abundant charging points and an affordable price point. Contrastingly, if you are opening your coffee shop in a financial district, take into account the requirements of the local office workers. Would deliveries to local companies be cost-effective? What food products would draw people in at lunchtime? You may have to make compromises between your dream concept and that which fits the local area. Know your customer and it will help you to make the right decisions.
4. Know Your Coffee
Whether you are offering takeaway cups for a few dollars, or unique artisan coffee, customers are getting more and more demanding and you must satisfy their needs if you are to succeed. It is not enough to open a trendy looking spot if your product is no good. Staying up to date with changes in the coffee world is a 24/7 thing. The industry is evolving at a frightening pace and failure to innovate means the likelihood of failure. The correct coffee depends on your customer’s needs. Are they focused on ethical blends from independent fairtrade growers? Do they care more about the difference between light roasts and dark roasts than they care about the price? The right beans, the right roasts, the right baristas are fundamental in building a successful coffee shop business. Learn as much as you can about coffee before you commit to opening your business and never stop learning.
Opening a coffee shop can be a dream come true but it is far from being an easy venture. The fantasy that many of us have of using our savings to buy a little place to while away the hours in aromatic peace is usually just that: a fantasy. Coffee shops can be notoriously expensive to open and if you have not done your homework or planned right, the costs of failure can be enormous. Take these four tips into account however and you have a greater chance of success.