Starting a Coffee Shop: Things to think about

By Sirena Van Schaik

If you were to look at the increase in certain businesses over the last decade, you would probably see the coffee house inching up on the chart. It has become a very popular business to start and more and more people are diving into the world of small business ownership with their very own coffee house.

Opening up your own coffee shop is a popular thing to do and it can be very successful if you approach it in a very business-like manner. Yes, you will want the atmosphere but like good wine, part of the atmosphere comes with age and with the clientele that you bring in.

If you are serious about opening your own coffee shop, there are a few things that you should consider before you start finding investors for your business.

Is it viable?
It may be surprising to learn, but going into the food industry can be a very risky endeavour. There are a lot of factors and even if your restaurant is a huge success, there are things that can occur which cause you to shut your coffee shop down.

When you are determining if you coffee shop would be viable, you really need to look at the supply and demand of the neighborhood you are planning to open up shop in. Ask yourself questions like; do people seem interested in having a coffee shop? Are there stores that would promote a coffee shop? This means are there places where people can shop before stopping at your store for a light snack or espresso.

Is the neighborhood near anything that would draw clientele in such as museums, a theatre or a university? What competition is in the neighborhood? If there are five coffee houses already set up on one street, chances are you won’t have a great chance for success on that street.

Once you have determined how viable opening up a coffee shop in that neighborhood is, you can start your game plan.

What is your estimated cost?
Sadly, like many things in life, opening your own coffee shop is going to require quite a bit of money and you will need to be aware of all the costs before you ask for any type of loan or investment. This means you are going to have to figure out the cost of your lease, the cost of the equipment and all the hidden costs such as set up, permits, paint and emergencies. Every budget will be different but one thing should remain the same and that is adding another 25% to your final total. Trust me; it is good to have a safety net there if you have an unexpected expense.

What is the size?
Okay, now that you have looked at the neighborhood and the costs, what exactly is the size you are looking for? Do you want a small shop that seats up to 10 people or a large shop that has several levels and will need several employees just to make it through the day? Are you going to be the only employee or will you need to hire staff? Knowing the size of your endeavour will help keep it under control.

What is your business plan?
You will have part of this figured out while you are looking at the size of your coffee shop, the budget needed and the neighborhood you are looking at but you will also need to refine it. Set down a timeline when everything should be done but make sure you allow yourself some leg room if there are problems with zoning or permits or anything else for that matter. Also write up your plans for advertising, promotion and your plans on where you want to take the business over the first year. It is also good to have a set of five year plans but remember that those don’t have to be set in stone since a lot can happen in five years.

Who are your backers?
Unless you saved the funds on your own, chances are you will need to look into backers for your budget. Unfortunately, obtaining a loan for a food business can be difficult because there are high failure rates. This means that you need to do more than walk into your regular bank and ask for a loan. You will need to do a bit of research figuring out where you can obtain investors and which option is best for you and your small business. Remember that when you go for funding that you add that 25% to your loan request. It looks awful when you have to go back and ask for more money before your shop has even opened its doors.

Now that you have asked yourself all these questions, it’s time to really start getting into the finer aspects of owning your own coffee shop.

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