Coffee shops are a good investment just like any other food product is. Undoubtedly the most important aspect of setting up a coffee shop (like any normal business) is deciding on a location. It really depends on your preference but if you ask me, you would want your coffee shop to be around people who take the same path on an everyday basis or around college campuses. Why there? People on the go usually don’t have time to brew coffee anymore, if you’re there, they turn to you for their everyday fix. Coffee shops around schools seem is a good idea because students need that little quiet place to study. Libraries don’t allow drinks and food and most of these students would need pick-me-uppers to get through their studies. It’s simple. It’s logical.

Get your business plan straight. It does not cost much to actually start a coffee business if you would stick to basics and drop gourmet coffee. Leave the fancy coffee to the big players, work on your niche. Offer something unique and make names for your coffee. Know how much goes to production, to services and to lease if you’re renting out the place. It is important to see where your money goes and how it comes back to you (and to make sure it comes back).

Do not hold back on equipment. It is of great importance that you have good, functioning equipment if you’re going to run a coffee shop.

Here’s a neat trick – hire one professional barista and then make him train the other less-experienced ones. You’d be saving a lot in cost.

Starting a coffee shop business is not as hard as it looks. Like in any other business ventures, you need to cover the basics first. Get a credible supplier for coffee beans and other ingredients, get good equipment, get efficient manpower and make sure you have a good location. To further entice customers you can join in the campaign that promotes coffee as an excellent source of antioxidants. Bank on the fact that coffee does not only keep you up in the morning, it has also been linked to a lot of health benefits, including protection against liver and colon cancer, type 2 diabetes, and Parkinson’s disease, according to some recently published studies.

Health buffs would be all over that but of course they know that already so aside from the health benefits, another angle to consider is the kind of warm environment that your place offers. It’s the secret of coffee shops. The ambiance it offers makes people go back.

Kristel Nicole Eniego is part of VONCORE’s creative writing team. If you want to learn more about call centers in the Philippines or want to find out about outsourcing companies in Asia you can check her profile and give her a message.

• demographic, such as the “graying” of America (creating opportunities in health services, for example);

• sociological developments, like the “green” movement, with its emphasis on recycling and environmental sensitivity, and;

• cultural changes caused by changing economic conditions and technological developments.

Opportunities can also frequently be found in current and developing business trends such as:

• the globalization of business,

• the need for outsourcing created by downsizing, and

• the burgeoning service economy.

The Internet and rapid growth of e-commerce have certainly created changes in the process of buying books and CD’s, trading stock, delivering information, and bidding on collectibles. Where do you see the next process to be transformed in a major way by the Internet?

Let’s do a brief case study in opportunity:

Neighborhood Coffee Shop

I live in the eastern section of town, which is growing rapidly, and food and business services are not quite keeping up. The “East” is fairly isolated from the rest of the city by water, an interstate highway, and an industrial park, forming a separate and distinct market. “People” are saying that the East desperately needs a good coffee shop. (Who are these people? Are they just in our immediate circle? Are they representative enough of the area to extrapolate from?)

Let us analyze some factors which indicate the opportunity potential of an idea:

* The “window of opportunity” is opening, and will remain open long enough.

We cannot be the only entrepreneurs that perceive these opportunities. How long before the need becomes compelling enough for others to jump in?

* Entry is feasible, and achievable with the committed principals.

Two friends want to be partners with me in a venture; one is managing a coffee shop across town, and willing to manage a startup. Between us, we could muster the capital for a coffee shop.

* The proposed venture has some competitive advantage.

We were among the first to locate in the new area, and are very active in the local business community. We know of an ideal site, and the building manager is a friend. She is willing to sub-contract the beverage and light-meal/dessert services the building provides tenants.

* The economics of the venture are “rewarding and forgiving.”

Materials costs are a small percentage of revenues; site preparation and equipment costs are minimal.

* We can break even at what seems to be an easily achievable volume.

We may even want to consider a more upscale atmosphere based on what some say is the difference between a “coffeehouse” and a “coffee shop:” About two bucks a cup… A coffee shop is a place to grab a quick bite and a cheap cup of coffee.

Eric Gerber of the MSN Network’s Sidewalk suggests that “A coffeehouse is a place to wax philosophical — Mozart or Bach, Faulkner or Fitzgerald, Xena or Hercules? — while seeing just how complicated you can make a simple drink like coffee: double latte espresso-chino with half decaf Jamaican Blue Mountain dark roast, extra low-fat foam and a Frangelica drizzle, please.”

The conditions for starting a neighborhood coffee shop seem favorable, but there must be more that we can do to critically evaluate the venture while improving our chances of success. That “more” is market research, and do not leave the business launch pad without it!

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

A market analysis is a study of the market area and of probable future patterns. It should include the current state of the market, and the nature and extent of competition. The purpose of the analysis is to make it possible to develop more accurate, that is, more fact-based sales forecasts. The method is to identify the pattern or trend of sales over the past and to use this information to project or estimate sales for the period ahead.

Another important issue is how much it costs in selling effort to produce a given volume of sales. It involves two types of costs: advertising costs, and salaries and wages paid for selling. If the business requires sales-people in the field, as a manufacturer might, information on reimbursable travel expenses should be included.

A study of the competition should be included in any market analysis. The competition may be local and well defined, or quite generalized, depending on the nature of the business and of the market. Trade associations and other data-gathering agencies, both governmental and non-governmental, are sometimes helpful in this area. A good deal of the information about competition, such as estimated sales, pricing policies, advertising and promotional costs , services offered, performance of sales personnel, must come from direct investigation, business by business.

Of interest also are whether there are businesses entering and leaving the competition recently, and changes in the competitive structure through product mix or services offered. If there is a lot of flux in the market, we need to look into the causes, and whether they are favorable to our entry.

When evaluating a location, be sure to investigate whether there any plans for proposed changes that may have an adverse effect on the future of the business. Urban revitalization programs, changes in highways and streets, flood-control programs, changes in zoning ordinances, could all severely impact what looks today like a favorable location.

The number of people within the market area and the amount of disposable income they have are important market factors. For many kinds of businesses, the total population is less important than certain segments of the population. A business selling hearing aids, for example, will be interested only in persons who have hearing difficulties, which would generally imply an older demographic.

General population figures are obtained from Federal, State, and local government sources. The Federal census gives not only total population figures but also breakdowns that are useful in many business situations. For most of the larger cities, census figures are further classified by sections within the city, called census tracts, on the basis of certain population and economic characteristics.

Business population figures may be available from numerous sources. The Yellow Pages of the telephone directory and the city directory are local sources that are immediately available. Chambers of commerce, trade associations, and State and Federal government agencies can often be helpful.

Many trade associations report the results of research on consumer expenditures. Other sources of data on income include planning commission offices, employment offices, and utility companies. Many newspapers research and report on building permits and demographic trends, especially in newly developed areas.

A much broader yet vital part of the market analysis has to do with what might be called the general state of the market, that is, overall economic conditions of the market area and of the country. These may be widespread movements such as national cycles of prosperity and less favorable times, or they may be purely local conditions.

Perhaps the prospective entrepreneur favors a particular area, near home for example, and is merely looking for a specific location. It can still be very useful to investigate a couple of other areas, in case the opportunity in the favored area is particularly less than in other neighborhoods. The possibility must always be recognized that the nature and /or direction of the industry, or the competitive situation may prove unfavorable in all the areas investigated.

Options then are to wait for conditions to become more favorable, or to “cast a wider net” geographically or in terms of business niche chosen. In any case, finding out at the analysis stage makes it much easier to optimize the opportunity chosen.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.