13 Steps to Open a Cafe Business Successfully
Opening a café is often a life-long dream for many people who love coffee and wish to offer a special place in their community to socialize. Whatever your reasons are for opening a café, you’ll be happy to know that the market trends point to a growing demand for coffee.
There is no doubt that today’s coffee-consuming solid trends make it among the best times to start a café business. A growing coffee-drinking market in communities everywhere and high-profit margins make the probability of success much more likely.
However, you want to make sure that you’ve done your research and planning regarding your own coffee business before you begin. After all, positive trends on the macro level are one thing; the success of your café is another. I’m interested in the success of your cafe business, not just the entire market!
What do you need to open a café?
When opening a café, you need to start where you are. For some of you, you may already have a location in mind. Others may already have coffee equipment ready. At the same time, others of you are starting from ground zero and simply looking into what it takes to open a café. Wherever you are, that’s okay!
Indeed, it’s easy to point out the “big things” when opening a café. Those items include a great location, coffee equipment, winning coffee shop concept, and barista training. All these things play an essential role in your ultimate success. We’ve written some detailed posts about them in our coffee business blog that are worth a read.
Start a Café with No Money?
Starting any business requires cash and capital. There is no way around it. Likewise, opening a café often requires a significant cash investment that goes directly towards your café lease, café equipment, café buildout, inventory, training, café staff, branding, and marketing.
Money plays a big part in launching your coffee business. To determine how much your café will cost, you should work out your café budget that details all potential spending.
An excellent way to determine your total spending will be to write a coffee shop business plan. Your coffee shop business plan will help you articulate all of your thoughts on paper in a succinct and organized manner. The more planning you do for your coffee business upfront, the less money you’re going to spend on the initial startup.
Knowing how much everything costs, you will then be in an excellent position to best finance everything. Will you bring in investors? Will you borrow the money to start your café? Do you think some crowdfunding effort is in order?
Not spending any of your money is possible (especially if you don’t have any significant money). However, convincing others to invest their cash in your café will be challenging to do without a well-thought café business plan.
Opening a Café With No Experience?
Nobody starts a café knowing everything. None of us are born with the inherent knowledge of what it takes to open a café. The trust is that every first-time coffee shop owner starts a coffee shop with no experience.
The good news is that this knowledge is obtainable for you and others. The best way to get the knowledge and experience in opening a café is by learning from existing or former café owners and coffee business experts. Also, taking the time to learn the fundamentals of coffee, customer service, inventory management, and pricing will help serve you as you start and run your own coffee business.
While taking the time to write your café business plan, you will be able to go through each area of know-how. If you lack some knowledge in certain areas, you’ll know where to find it.
You can always start small. Fortunately, there are plenty of ways to create a coffee shop on a budget. For example, you can set up your own mobile coffee business, which often has considerably fewer operational costs. Or you can buy an existing drive-thru coffee stand business. You might also think about going smaller and sell coffee at farmers’ markets.
Easy Steps to Open a Café
Develop Your Overall Café Concept
One of the first steps you’ll take in opening a café is to determine your overall concept. What kind of café do you want? What experience do you want your customers to have?
Take a moment to visualize your café concept. If you need a little inspiration, consider visiting or exploring some top cafes in your area. What kind of elements does it want to offer? Write down your ideas in a journal, notebook, or document on your computer!
For more information, read a recent post, Developing a Sound Coffee Business Concept.
Determine Who Your Customer Will Be
Your customers will be instrumental to your success. What customers are you looking to attract? For example, will your café be filled with students from the local university?
Knowing your customers means understanding the area you plan to do business in. Keep your customer experience as the highest priority as you continue to plan your café.
Develop Your Cafe Menu
What are you planning to serve at your café? Will you offer wine and beer in addition to vanilla lattes, cappuccinos, and desserts? Your menu will play a big part in everything you do – from the design and layout, café equipment, café furniture and fixtures, vendors, and customers you plan to focus on.
Honor your menu by taking time to think about it, develop it, and formulate the next essential steps that all revolve around it. Working on your coffee shop menu will be important, but it can be a lot of fun too! Explore new and signature coffee shop items. Or you may decide to add on other items such as ice cream and gelato. Popular items, such as selling ice cream, can boost revenue and generate great interest.
Your Coffee Equipment
Your concept, your menu, and your location will determine your coffee equipment needs. Essential coffee equipment like your espresso machine and grinders are a given. But what about your display cases and your coffee shop POS system? All these things need to budget for before opening your cafe.
Look for a Cafe Location That Fits Your Concept
Finding the right location for any business is essential for its ultimate success and profitability. This is especially true for cafes and coffee shop businesses where walk-in customers are the key to your success.
Finding the right location for your café can be an art and a science. There are so many factors to consider. Items to consider are the physical space, the existing layout, current zoning laws, available parking, pedestrian accessibility, vehicular and foot traffic, your leasing terms, and the condition of the existing space. If you’re having trouble deciding on a coffee shop concept, consider visiting cafes and coffee shops in your area. Additionally, read a variety of local coffee blogs that highlight coffee shops.
Understanding the Costs of Starting a Café
After you develop your café concept, café menu, and café location, you will be able to understand the costs of your café. The best way to determine your expenses is to develop your café budget. Having a well-thought-out budget will help you assess your financial situation as you move forward.
For more reading on developing your café budget, read the in-depth post, Planning Your Sample Budget.
Develop Cafe Your Branding
Launching a café business can be very competitive. Being able to stand out with a memorable café business brand will help you distinguish yourself from your competitors, increase customer identification, loyalty, and goodwill.
Without a doubt, developing a solid brand will help build a connection between you and your customers that will last.
Put It All in Your Café Business Plan
Writing a café business plan is one of the best things you can do to save money, time, and heartache. A well-written café business plan will help you develop all of your thoughts methodically.
Additionally, a coffee shop business plan allows you to articulate your plan to your property manager, potential partners, and investors. As you set out to open a cafe, you’ll want to have a detailed coffee shop business plan. If you are hesitant about how to get started, don’t worry, we got you covered.
Shop Around For Your Café Equipment
Once you have a solid concept and menu developed, you will want to shop around for coffee equipment that you’ll need.
Your café equipment – and its installation – will be a significant investment in your business. Shopping around for the best deal can take time and diligence.
For more information on coffee equipment, read our in-depth post, What Coffee Equipment Do You Need to Open a Coffee Shop.
Secure Your Café Funding
You can’t start a business without money. Indeed, there are low-cost ways to create a coffee shop business. But even so, you will need startup capital to get your café business off the ground. These costs are not insignificant.
The best way to secure funding is to understand the costs of your café, develop your café budget, and have a café business plan written.
From there, you can develop ways on how to meet your financial needs. This may include a funding mix of savings, loans, credit, and investors.
For more information, read, Seven Ways to Open a Coffee Shop with No Money.
Start Looking at Vendors, Suppliers, and a Coffee Roaster
Your café business will often depend on other companies to run and operate smoothly.
These businesses can often include vendors and suppliers, such as coffee roasters, bread suppliers, alcohol beverage suppliers, baked goods, etc. As you work on developing your café business plan, determine whom you will work with. Start visiting coffee roasters in your area and sampling their various roasts. If you plan to offer baked goods (and you are not baking them directly), consider reaching out to other local bakeries that have offer wholesale services and sample what they offer.
This is the fun part! Enjoy going out and talking to potential business partners. Try out their products, learn about their services, and see if you feel comfortable working with your staff.
Start Your Café and Barista Training
Your barista training matters a whole lot to the quality of your service, your customer satisfaction, and your smooth operation.
As a café owner, you should strive to offer the very best coffee in quality and service. Customers will notice.
General training your staff and baristas will go a long way to developing a solid band of high-quality service.
Excellent service begins with hiring the best baristas. Investing in barista training will go a long way in terms of long-term growth and profits. Hire a coffee educator and trainer or invest in an excellent online barista training program.
Generate Your Café Buzz
Promoting your café business should always be a big priority for you. Generating buzz for your café can be fun and a worthwhile investment.
Getting the “word out” to your neighbors, local businesses, and other potential customers will help you increase your brand awareness, generate interest, and increase sales.
Promoting and marketing your coffee business can generate actual sales, life-long customers, and goodwill.
From printing out loyalty cards, having a grand opening, and launching your social media accounts, developing a buzz is crucial to your business promotion.
Further Reading: How Long Does It Take to Open a Coffee Shop?
Start Your Café Shop Website
Your café should have a detailed website. Unlike just a few years ago, today, launching a coffee shop website can be easy and affordable.
A website, along with your other social media accounts, will allow your customers and potential customers to find important basic information about you:
- Where you are located
- What your hours are
- What your menu is
- News and other announcements
- Employment information
- Community Engagement
All of these are important to share and develop as you grow your business.
Further reading: Why a Coffee Shop is a Good Business to Start
Other Coffee Shop Concepts
Mobile Coffee Businesses
Starting a mobile coffee business, such as a coffee truck or coffee trailer, also provides an opportunity to enter into the retail coffee business. Starting a coffee trailer can have a lower cost but also provide a higher margin of profitability because your startup and operational costs might be lower.
Drive-Thru Coffee Businesses
Opening a drive-thru coffee business is an excellent alternative to opening a brick-and-mortar stop. It can also be considerably cheaper too. If you are thinking about starting a coffee business but don’t like the idea of paying rent to a property manager for thousands of dollars every month, then a drive-thru coffee shop may be your ticket to success.
Starting a coffee trailer can be expensive, however, because size and scope can vary. A well-constructed drive-thru can be just as profitable as a large coffee shop. However, many small drive-thru coffee businesses can have a lower upfront cost.