The 11 Factors for a Successful Coffee Shop Start-Up
Get these wrong and there will be trouble ahead...
The success factor
There are 11 key factors to a successful coffee shop or cafe start-up
It may seem obvious, but the foundations of a successful coffee shop business need to be rock solid. The clear vision for the venture that stirred you into action, your deep-rooted passion for service, an excellent understanding of the market, knowing the numbers, all these things will be crucial to support your business during its development stages...
Probably the number one factor leading to success is getting the balance of overheads to the turnover right. Get it wrong? Disaster. Getting it right means you have enough profit to grow and develop. The total cost of rent and rates should be less than 10% of your sales.
Location Location Location
Match what you do to the local community’s needs and your business will flourish. Increasingly people are looking for a ‘third place’ to spend time that’s neither home nor work. Create different zones in your coffee shop as customers drop in for many reasons: whether it’s for work, meetings or just chilling, you need to have a zone that matches.
All successful companies need consistency. Too many ‘barista centric’ coffee shops make their drinks in different ways depending on who is on shift, so the customer doesn’t always get their preferred style of drink. No matter how loyal they are, we reckon that it only takes three problems for them to go somewhere else.
Building a strong relationship with the local community gives you the advantage over bland big brand neighbours. This is easy to achieve: a good notice board, offering your space for meetings, making friends with clubs and societies, donating to schools and charities all build a relationship with people very quickly.
Customers get tired of the same thing; the successful coffee shop will stay relevant in their minds by continual innovation and development of service while remaining true to their inherent values
Keep up to date with food, health and nutrition developments but being selective is the key to success. Bringing in too many new initiatives often causes confusion. By following your values and filtering out the fads that are not relevant, you will have a clear proposition that your customers will understand and increase loyalty.
Today’s coffee drinkers are fussy. Through the expansion of the 4th and now 5th wave coffee shops consumers are more open to trying new brew methods and roasting styles. Successful independents are becoming the local experts and adding to the collective knowledge of their consumers, thus steering them away from commodity suppliers.
There is an unfortunate three-year cycle in the independent coffee shop business: Year 1 honeymoon period; Year 2 reality hits home if the bar is not as profitable as forecast; Year 3 decline and closure. The successful independent will have a very different first three years: Year 1 high growth phase; Year 2 consolidation and solid profit; Year 3 refurb and expansion. A well-executed refit will increase sales and pay for itself in a few months
The long-term success of any business is down to the people who work there. Aim to become the best place in town to work as this will make sure you attract and retain the best people. Through a combination of good selection and recruitment, ongoing training and above average reward package, your coffee house will flourish
Good marketing (and not just on social media) should be planned and focused on the local community. Getting the names and email addresses of your customers allows you to talk to them regularly and share your story. It’s your duty to shout about what makes your business so special.
Know Your Numbers
Finally, being on top of the numbers by knowing weekly your costs and what profit you have made is non-negotiable. The variance in sales day to day, week to week can be volatile and unpredictable and affected by many things outside your control. Remember: never be caught napping by the espresso machine.
This article was first published in Boughton’s Coffee House Magazine