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Opening a Coffee Shop

With coffee drinkers an ever-growing market, opening a coffee shop can be a quick and relatively inexpensive business to start. Compared to say, a clothing store, where start up costs can easily run a half million dollars or more, you can start a coffee business for $50,000 – $200,000, depending on whether it’s a small kiosk in the mall, a drive-thru, or a full service coffee shop.

Although it’s a food service business, coffee shops have a higher profit margin without the high attrition of the restaurant business. Coffee is sexy. People get attached to their coffee shop as an appendage of their social life, their hang out, or their retreat to get some serious computer screen time.

Don’t be intimidated by the big chain shops. Their store designer in corporate headquarters is busily designing the same store for Alaska as he or she is for Florida. You have an advantage in that you are keenly attuned to your community. You know the habits and customs of the people, you know the demographic you’re aiming for. The uniqueness and character of your coffee shop will draw a loyal and appreciative clientele…if you do it right.

You’ll need to consider some of the major expenses of your initial investment based on the type of coffee business you want to have. Every case and scenario is different. You’ll probably be signing a lease. You’ll need cabinetry (build-out). Equipment will be another large expense to consider, which will be dependent on your menu.

There are some important factors to consider when choosing a location for opening a coffee shop. Coffee is usually an impulse buy. People will seldom go out of their way to get it, especially if there’s a quick drive up kiosk on their normal driving route. Location is the most important factor to consider. It will define your success or decide the failure of your business. Take your time. Shoot for an A+ location, and don’t settle for anything less than a B+.

If you’ve never worked in the coffee shop business before, plan on setting aside some funds for taking classes. Rosettas, hearts, steam, and foamy milk don’t just happen, and mastering them isn’t necessarily intuitive. This is particularly important if you’re planning to open a coffee shop in an upscale area. Once your customers taste a great coffee drink that’s been properly prepared, it’s going to be very difficult for them to ever go back a large chain for an auto-steamed cappuccino.

There are few good reasons for opening a coffee franchise unless you’re accustomed to someone telling you what to do and how to dress. Franchises make all the decisions for you and you pay a significant price for that privilege. So, unless you don’t have a creative bone in your body and no entrepreneurial spirit running through your veins, you’ll have spent a lot of money to be held back and frustrated.

Of course, since the focus of your business is coffee, you’ll want to make sure you work with a reputable company. The best way to find one is through an independent consultant. Your choices may be vast or restricted depending on your geographical location. If you’re in North Dakota, you may only have the choice of two or three companies that will be reliable to work with.

It’s equally important to make sure that the manufacturer of your equipment has quick reliable service. You can’t afford to have your espresso machine down for an extended period of time. You’ll need that repair done in a matter of hours, not days.

There are 330 million cups of coffee consumed every day. That makes the specialty coffee business particularly attractive as a start up. With careful planning, opening a coffee shop may be the best move you ever made.