February 14

Start-up Strategies

Start up Strategies Monthly Column

Thinking of opening a coffee shop? As in any business, careful planning is vital to success. Here are some strategies to ensure that your coffee shop gets off to a sensational and profitable start.

Lead with location. As in most retail ventures, location can make or break your coffee shop. Search for a highly visible spot on the way to, or near, an area where prospective customers work, go to school, shop, or travel. This is because at least 60 percent of specialty coffee purchases occur in the morning. The best locations are on the side of the road because of morning traffic and the high traffic volume during morning rush hour. A large volume of pedestrian traffic is another positive location factor.

Good locations often can be found in or near:
•    Downtown office buildings
•    Colleges and Universities
•    Tourist areas with a high volume of pedestrian traffic
•    Strip malls with high-volume traffic
•    Airports

Location is so important that you may need to wait for the right spot to open up. The rent of your location should take up no more than 15 percent of your operating expenses in the first year.

Think efficiency when arranging your shop. By speeding up the drink preparation and customer service, the ideal coffee bar layout can boost profits by 20 percent or more. People hate to wait, especially when they haven’t had their morning jolt of java yet. Set up equipment and ingredients within easy reach of the barista. Locate the cash register within two steps of the espresso machine. Your customers will marvel at how speedily and gracefully your baristas and cashiers fill their orders.

Buy the best. Specialty coffee customers are passionate about the quality and origin of their coffee. One strategy to attract and keep customers is to gain a reputation for serving the best drinks in town. So don’t skimp on products or equipment. Any money saved by buying lower-grade beans or used equipment in the beginning will be lost several times over as customers leave your shop and don’t come back.

The espresso machine is the heart of any coffee shop. Buy the best machine and learn how to maintain it properly. Remember, if the espresso machine goes down, so does your business!

Top-quality coffee beans, syrups, milk, and other ingredients are essential to your success. Rigorously taste-test the coffee you plan to serve and only order from roasters that guarantee quality and freshness. To keep inventory costs low, find suppliers who can deliver top-notch ingredients as you need them.

Make marketing a priority. Too many coffee-shop owners think customers will appear as if by magic once they open their doors. In reality, marketing must be an ongoing priority. Marketing begins with prominent outdoor signage, your in-store menu, and point-of-purchase displays. You also need an online presence, such as a website or Facebook page that is updated regularly. You need to reach out to potential customers who will be driving or walking past your store. I discussed marketing techniques in the March and April 2013 issues of CoffeeTalk.

Get hands-on training. Thorough training for both owners and baristas is one of the most critical factors in starting and running a successful coffee house. You’ll need in-depth instruction from experts covering everything from operating your equipment, to preparing drinks, and more. I reviewed training essentials in the June 2013 issue of CoffeeTalk.

Wow customers with incredible service. Happy customers become loyal customers. These individuals make word-of-mouth recommendations that bring in new customers. Set the stage for outstanding service by hiring friendly and outgoing baristas and cashiers. Make sure you greet everyone who comes into your shop with a smile and a friendly wave or “hello.” One key to repeat business is to know what your customers want as they walk in the door. This makes customers feel special and increases the speed with which you can serve them. Of course, great customer service doesn’t occur in a vacuum. It’s integrally tied to all other facets of your coffee house, from store layout to equipment to staff training.

Turn cleanliness into a competitive edge. You only get one chance to make a first impression, so make sure your coffee shop remains first-date-ready throughout the day. Set up cleaning routines so that the parking lot remains litter-free, your glass windows sparkle, tables are quickly cleared and cleaned, and the restrooms are spotless. In many areas, your business may be subject to unannounced health inspections. Make sure you’re always prepared!

Greg Ubert, founder and president of Crimson Cup Coffee & Tea, has been roasting coffee in small batches since 1991 and has taught hundreds of business owners how to run successful independent coffee houses. Greg can be reached at greg@crimsoncup.com.

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