Opening a Coffee Shop (in 2020)

Jamie White
Feb 10 · 6 min read
How to open a coffee shop
How to open a coffee shop

If you do it right, opening a coffee shop can be very lucrative. Think about it. Whenever you pass a good coffee shop, it always full of people paying good money to have their favorite coffee, tea and pastries!

The winning formula is pretty basic. You serve quality coffees and snacks, in a relaxing, yet trendy atmosphere. Starbucks did it and became one of the most successful business in America!

If you’ve ever wondered how to opening a coffee shop works, this is the article you’ve been waiting for!

There are three tried and true methods for staring a coffee shop:

Purchasing a franchise
Buying an existing business
Or go it alone and start from scratch

No matter which route you go, the same key principals apply if you want to make bank in the coffee world.

Now, I hate to say the “b” word. Especially so soon, but you have to have a business plan and it has to address some key things.

Location, Location, Location…. within reason.

Before you even think about opening a coffee shop, you need to understand why they are always so busy. For starters, they are a great place to get together with friends. Okay, so say you are like me and don’t have any friends. Coffee shops are also a great place to go to read a great book or just surfing the internet while sipping on a coffee.

Coffee shops are also a popular choice for students or even for a casual business meeting. Don’t believe me? Just walk into your favorite local shop and there is bound to be a realtor going over their latest listings with a client or a get together of students studying for the next big test.

With that in mind, you can see why finding the right location is so critical to attract customers when you are thinking about opening a coffee shop. Now, when you buy a franchise or an existing business, the location is either already picked for you, or they should have someone that helps you pick the right spot. That said, you should still do your own research to make sure that it’s a good location.

It’s important to acknowledge that the best locations for opening a coffee shop might be too expensive. Malls as well as other locations with a lot of traffic typically cost the most and have the fiercest competition. Storefronts are usually great locations to open a coffee shop. They tend to have the highest visibility with more manageable rents than malls. As an added bonus, you get to set your own hours instead of having the hours of the mall dictate when you open your doors.

Vehicle Traffic and Parking

Another key component to picking a site for your coffee shop is accessibility and parking. I know there are some great places by me that I just don’t go to because it’s too much of a hassle. Watch out for difficult turns off of a busy street and parking should be easy, visible and plentiful. In a perfect world, you want a centrally located shop that’s highly visible on a busy street that also has enough parking so that your regulars can just pop in and grab their favorite coffee on their way to or from school or work.

Your coffee shop can become very successful if you pick the right location. The formula is simple in theory, but takes some legwork to get it done: A spot by a high traffic crossroads, great access for cars (with plenty of parking) with plenty of foot and vehicle traffic all for as little as you can negotiate the lease for.

Consistently Serve a High-Quality Product

When planning on how to start a coffee shop, you’ve got to know that your core customers want more than just a cup of coffee or a tea bag. Over 60% of coffee beverages sold in the US last year were specialty drinks, and that number keeps going up.

In order to best serve your customers (and make the most money), you HAVE to serve the BEST regular as well as specialty coffees with CONSISTENCY. Do this one thing well, and you will have customers choosing to come in your doors instead of your competition. This means you must:

Provide Great Customer Service

Exceptional service is something you will find an any successful business in the food service industry. Combine that with a great location and great drinks and you will be very successful.
Did you know that 80% of customers rank customer service as one of their top reasons for frequenting their favorite coffee shop? That’s what got Starbucks to the top place in the industry. They combined great service with a consistent product delivered quickly.

Create a Trendy, Relaxing Atmosphere

A close second to customer service, most people list atmosphere as a key reason they go to their favorite coffee shop.

When designing your coffee shop, developing the right atmosphere is critical to becoming the go to spot for people to have business meetings as well as having friends hang out.

The ideal ambiance is generally bright with plenty of sunlight, as well as clean and not cluttered. Have different types of seating, like bench tables and bigger chairs, so both people there by themselves as well as larger groups both have places they feel comfortable. Make sure you have plenty of lighting since the sun isn’t always out. Another great feature for when the weather permits is a comfortable patio section.

This is all a lot to take into consideration, I know. Unless you do this type of design work for a living, consider hiring someone that does! It’s a great way to make sure you are both using your space well, along with providing the right atmosphere for your customers.

Offer a Variety of Snacks

An often overlooked aspect to a having a successful coffee shop is understanding that while the margin on coffee and tea are amazing, you can’t survive on coffee sales alone. You need quality snacks on display at the counter as a nice add on to your customers order.

Make sure your employees recommend a food choice to customers at checkout time if they are only ordering coffee or tea.

Behind the coffee bar, speed is the name of the game. Make sure that the snacks you sell are either purchased ready made from vendors or pre-made before the rush. Making food as it’s ordered will only slow you down and eat into your profits. Talk to your local food vendors. Bakeries are a great place to start.

Offer Loyalty Cards

If you pick the right location, and are serving a great product, think about implementing a loyalty card program. Not only does getting a free espresso after 10 purchases make your customers happy, it gives them reason to keep coming in day after day.

When planning your loyalty program, you have a few options. The simplest is a card that the customer’s present and get stamped. Get so many stamps and you get a free drink. Make sure that the card stock you use is quality enough not to fall apart in someones purse or wallet.

A great alternative might be in your point of sale system. Many now have loyalty programs built in. This makes it easier for your customers and you can get some pretty good data in the process.

The best option, in my opinion though is an app. They can be a little pricey upfront to have made, but they give you not only in depth data on your customers, but a great way to advertise to them as well.

Serve on the Front Line

When you think of any great customer service focused company, a common thread is that the owner is visible to the customers and active in the day to day activities . For many customers, seeing the owner behind the bar making drinks reassures them that they are in a place that cares about the quality of service and product their customers are getting.

Not only is being hands-on great for customer service, but it also helps to motivate the staff to perform well. This is so crucial when you first start your shop. If for some reason you aren’t able to be there, find a good manager that takes pride in their work as your proxy.

To wrap it all up

The basic formula for how to open a coffee shop is pretty basic: good location, good product, good service. Follow those three rules and you should find success comes rather easy. If you want to learn more, there are plenty of great resources online for all the specifics.

Jamie White

Written by

Coffee enthusiast. Entrepreneur. Father. Photographer.

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