Complete Guide to Opening Your First Coffee Shop

For many people around the world, opening their own coffee shop would be a dream come true! If you are one of those people, the potential for a great business is huge. Whether you are looking to create an ultra scientific coffee lab with the latest gadgets and barista techniques, or a cozy hangout for customers to kick back with their favorite book, the possibilities are endless. The coffee shop industry in the US alone is worth over $50 billion, and with the country just beginning to open up again after the Covid-19 Pandemic, this is a great time to give it a go. 

To tell you everything you need to know, here is the complete guide to opening your first coffee shop.

1. Know Your Stuff

There are over 60,000 coffee shop businesses in the US and so competition is fierce. With so many competitors, your new business will not succeed unless you are able to deliver a quality product at a competitive price, or you have a unique selling point which enables you to stand out. It is so important that you understand the business inside out, from what local people expect from a coffee shop, to how much you are able to charge for your different drinks. Market research is vital when starting any new business, but it is particularly crucial when opening a business as competitive as a new coffee shop. Identify your USP and push it hard. Perhaps the coffee itself is the freshest with a unique blend not offered anywhere else in the local area, or perhaps you have the most instagrammable decor anywhere around. Whatever makes your coffee shop special, make sure that it is front and center of your marketing campaigns.

2. Buy the Right Equipment

Buying the right equipment is going to make a major difference in whether you succeed or fail. There are various different types of coffee machines for home users such as pod coffee machines and bean to cup machines, but for a coffee shop you will need a professional espresso machine. The coffee fanatics at MajestyCoffee.com explain that you will need a machine with at least two or three group heads. This will enable you to make multiple drinks at once so that you can serve more than one customer at a time and increase your profits. As well as a great coffee machine you will also need a professional level grinder. Look for a model which can produce varying grind sizes because different drinks require different sizes. 

3. Find the Best Beans

Great coffee is all about great beans and so you need to make it a priority to find the best beans available. For a coffee shop, you need to make connections with a coffee wholesaler as you will be able to buy the beans in bulk and save a lot of money. When choosing your beans, you should speak to the retailer about where they come from and how they were picked. There are many unethical coffee producers around the world where people work in extremely inhumane conditions. Always choose fair-trade beans to ensure that you are not contributing to slavery or inhumane labor conditions. It is very important that you don’t grind the beans until just before you are going to make the coffee as this is when they are at their absolute freshest. If you pre-grind the beans, your coffee will not be as aromatic or tasty as your customers will expect. 

4. Learn How to Make Coffee

This may sound obvious but there are a surprising number of people who attempt to get into the industry without having worked in it before or without doing any training at all. Making different types of coffee takes knowledge and practice so before you start selling coffee it is crucial that you first learn how to do it. There are barista training courses available both online and offline which can walk you through each stage of creating the perfect latte and cappuccino, as well as how to look after your coffee machine. If your coffee shop isn’t up to scratch, customers will never come back and give you a second try. For many coffees, the most important factor is getting the temperature and texture of the milk right, so spend some time every day practicing until it becomes second nature to you.

5. Write a Business Plan

Whether you are opening a new coffee shop or a new Wall Street bank, every new company needs a detailed business plan. This will include everything from your business’s name, budget, marketing strategy, and profit forecasts. Your business plan will be necessary if you are seeking outside funding to your company. You will need to show it to potential investors so they know the direction you intend for your business and can make a judgment on whether they think there is money to be made. 

6. Decide on a Business Structure

When writing your business plan you will also need to decide what business structure you want to set your coffee shop up as. Most small businesses are run as sole proprietorship. This business structure is useful for startups as it doesn’t require you to register the business. One negative with a sole proprietorship, however, is that you will be personally liable for any business debts or losses. Setting up as a limited liability company (LLC) provides you with the operational autonomy which is so important for a small business while reducing your liability for financial problems.

Decide on a Business Structure

Opening your own coffee shop can be a lifetime dream come true but unfortunately, it is also many other people’s dream. This means that the industry is incredibly competitive and if you don’t have every aspect of your business well planned, you can lose a lot of money quickly. Every detail of the business needs to be addressed systematically, from sourcing the right beans to budgeting enough money for marketing. Follow this guide and it will be a good start to creating a successful coffee shop.