10 tips for starting a coffee shop

So, you’re thinking of opening a cafe, and everyone is asking:

Are you sure?

You’re starting to wonder if you’re really making the right decision.  You already know that cafes are rarely get-rich-quick schemes. They’re a lot of hard work with (we're sorry to say) a high rate of failure, so why do it?

Ask successful owners and they’ll tell you: passion. The life of a cafe owner is like no other, and when you do well — you do really well.

But you don’t enter the game to fail. So how can you ensure success?

Plan to succeed:

Based on our 20 years' experience helping coffee businesses thrive, we know that success is the result of many factors, some within and some beyond an owner’s control, so these 10 tips are designed to help guide you through those all-important first few months.

1. Market research

You shouldn’t launch your business without knowing what your competition is doing and how they’re doing it. Think about the following points as you’re conducting your market research:

Who are your competitors? Look at all cafes in your target location as well as those offering a similar product in a different area.
What are they doing right?
Where are they failing?
Read reviews online for added insight.

2. Choose your location carefully

Narrow your choices down to a few streets in a few areas with places available for purchase or lease. Does your concept match? For example, high traffic commerce areas tend to favour counters over sit-down cafes. Research the areas you are considering, will the higher volume of foot and car traffic on a main street make up for the extra rent you pay?

Doing some informal on-street surveys in your potential location is also a great idea. Ask passers-by what they would like in the neighbourhood? What’s missing? Document everything you hear to ensure that you make the best of the information you gather.

3. Space and layout

Make sure the coffee workstation and layout is such that the barista hardly moves their feet in performing all their coffee making duties, and they are not competing for the space with other staff members. High volume coffee sales are the foundation stone of every coffee shop, so make sure this workstation is perfectly laid out with easy access to underneath. Have your machine face your customers as they approach the buying position as this helps sell coffee as well as promote the high standard of everything else you offer. There are commercial espresso machines on the market which are ergonomically designed to fit into tight work spaces, so this could be a good option if you are short on space.

4. Keep it simple

One of the most common mistakes that new cafe owners make is trying to anticipate and meet the every whim of every potential customer. This not only tends to lead to confusing menus, but also a spread-thin staff, and a dozen items that hardly anybody orders. Open with a limited menu of high-quality basic offerings, and add any extras as realistic demand presents itself. For instance, if you're not sure you'll sell many decaf cappuccinos, start your first two or three weeks without it on the menu and see how many customers ask for it.

5. Promote multiple sales

Coffee may be the main motivator for customers coming to the coffee bar, but they must leave with multiple sales to be a successful coffee business. As a target, coffee should be no more than 40% of your weekly sales and two item sales per customer transaction means you are getting it about right. So make sure the traditional coffee accompaniments (muffins, cookies, cakes) are close by at the point of sale, and the coffee shop offers cold food, cold drinks, and hot food to ensure the best chance of multiple sales.

6. Pre-make as much as possible

Custom-made assortments assume that the customers know precisely what they want. They don’t. Customers see you as the expert and are hoping that you will suggest to them what combination of food/drinks they should be trying. Pre-make the food and leave the custom making to the coffee. Custom food is also a high cost option because you can’t get the economies of scale making-to-order, and it limits your turnover in those peak periods where you should be busy pumping out the sales as quickly as possible, not spending the time making custom orders.

7. Staff training

Will you be training staff to produce barista quality coffee or would you prefer something more automated? This is an important consideration and there are options available for both choices. You can buy the best espresso machine on the market but if it's not used and maintained correctly you will have the worst coffee.

If you would like to train your staff to create barista standard coffee then a traditional espresso machine is best for you. It's important your staff are properly trained to use it and know how to get the best espresso from it. Make sure you choose a supplier that provides barista training as well as installation.

If you would prefer something more automated then a bean to cup machine is the best choice. This is where the grinding, brewing and milk preparation all takes place within the machine, so all your staff have to do is press a button and you are guaranteed consistency. There are some excellent models of bean to cup machine on the market and many can make a wide selection of different drinks, using fresh milk and coffee beans.

8. Serve on the front line

Coffee shops are much more a people/service business than they are a goods/transactional one. While a goods/transactional business can still succeed with a non-present owner, a coffee shop needs the owner’s care, attention, and engagement. Customers expect it, and staff are far more enlivened when the owner in on hand taking orders or making coffee or is generally hovering in active care of the business.

9. Supplier support

Your coffee machine is the lifeblood of your coffee business, so it's vitally important that it's not out of action for long periods of time. This means making sure it is regularly serviced (this is also a legal requirement) and ensuring your machine comes with a comprehensive support package. Find a supplier that has their own service team and specialise in your brand of machine; some companies use external service teams which may mean waiting longer for your machine to be repaired or serviced as they do not stock and carry all the spare parts required.

(And last but definitely not least) 10. Consistently serve the finest espresso

It’s rare in business to discover a product where consistently offering 100% quality is the best commercial decision you can make. But espresso coffee is one of those rare products where consistent 100% quality matters. Customers will walk past ten other competitors to get the best espresso, which is why this factor alone means you don’t need the highly visible, most expensive location. So buy the best espresso coffee machine you can afford, install it with a water softener and use a professional grinder, and only buy top quality, freshly roasted beans.