Have you ever been walking down the street and smelled a great, fresh coffee? You may have even stepped in to buy it. What if I told you that with a little bit of patience and creativity, you could be the one brewing up those cups of java? In this guide, we’ll discuss how to start a coffee shop with no money – how do all those big chains do it without spending any cash on their businesses?!
Compare Your Shop Options.
Coffee is a massive part of American culture, and more specifically, coffee shops are becoming increasingly popular. With this increase in popularity comes an abundance of coffee shops to choose from.
Purchase a Franchise.
Not only does a coffee franchise give you access to its branding and marketing strategies, but it also gives you the right to use the brand name. This is how Starbucks made its way into so many daily routines! You won’t need any startup money or even have your store – they’ll build one for you! They’ll train staff, provide recipes, and even provide the furniture for your shop.
Buy an Existing Business.
If you want to save yourself the hassle of opening a business from scratch, buying an existing coffee shop is your best bet. This allows you to start up with all their equipment and furniture set up how they like it, so there is no need for renovations!
This route has many benefits, including lower risk and lower overhead costs than starting your own company. The downside is that it can be expensive to buy out an existing business owner. However, there are some things you can do to get them on board with selling their business for less money than they deserve.
Start From Scratch.
The first thing you’ll have to do is find a location. You can either open up your shop or lease out space from an existing business owner, which will save you some time and energy as well as startup costs! If leasing, though, is sure to read the fine print – how much are their monthly rental fees? How many years of a lease do you have to sign? What happens if the business closes before your contract is up?
You’ll also need to get equipment. While this may be more expensive than buying used, everything must work how it’s supposed to, so there are no surprises once you open for business! Look into foodservice warranties and how long they last to ensure your equipment is how you need it.
You may also want to consider hiring a consultant or business coach if you’re not confident in how much money should be towards certain things like marketing, renovations, and payroll expenses. While this will cost extra upfront, they can save you more time and money than what their fees are worth.
Run a Pop-up Shop.
If you’re more into the idea of having your own business but don’t know how long it will last, running a pop-up coffee shop is an even better option than opening one from scratch! These shops usually only run for two to three months at most before moving on somewhere else. They are incredibly low-cost and low commitment, but you will still benefit from owning your own business!
Locating A Good Premise That Offers A Reasonable Rent.
If you consider starting your own coffee company, the first thing to do is find a good location. This will be the foundation for all of your future business decisions. Location selection may seem like an easy decision, but it can have severe implications for how profitable your company will be in the long run. A great location has high traffic and visibility, making it more likely that customers will walk by and spot you.
Location Vs. Rent.
The most critical factor in how much you will pay for rent is the location of your shop. You can choose between a prime spot with high foot traffic and low rental costs or an inferior position with lower rents but fewer customers walking by. The best value may be found somewhere between, such as on a busy street only accessible via public transport.
Vehicle Traffic and Parking.
The second most important factor in how much you pay for rent is how many people drive by each day. If your shop is located on a large road that has very little vehicle traffic, then the rental costs may be cheaper than if it was located somewhere busy where parking spaces are limited. You should also consider how hard it is to find a parking space when determining how valuable the location is.
Elevators And Stairs.
If your business is located on multiple floors, it can drastically affect how much you pay in rent because many people have to use stairs or elevators each day. For example, if your coffee shop has five stories but no elevator, how many people will be willing to climb the stairs each day? This could drastically reduce how much you pay in rent because only a tiny percentage of customers may show up.
In addition, if your shop is located on multiple floors without an elevator or enough room for a staircase, how many potential employees will ask about working there, and how hard will it be to find suitable candidates willing to work on multiple floors?
If your coffee shop location is in a highly-populated area, you may need more than just great drinks and pastries for customers to visit your business. For example, how many people are there already offering free Wi-Fi or comfortable seating? If the location you are considering lacks how many amenities it offers, rent might be higher to compensate for how much more customers will pay.
Serve A High-Quality Product Regularly.
If you are looking to start a coffee shop, the first thing that customers will look for is how high-quality your product is. You can have the best location in town, but if your drinks and pastries are subpar, then no one will come back! The essential value proposition of any business is how well it performs its primary function. This is how you establish yourself as a valuable brand.
This means that your drinks and pastries need to be on par with what competitors offer, if not better! You can attract customers by being the most affordable option or have a fantastic location, but how will people know about it? Having high-quality products on regular rotation is how you ensure that customers will be happy with how much they pay for your product.
Offer A Variety Of Drinks And Pastries That Appeal To Many Different Tastes.
You may have the best coffee in town, but if you only offer one type, then how are people supposed to know? Having more than just great-tasting beverages is how you ensure repeat business from customers who may not be interested in coffee. You also want to have a variety of drinks and pastries so that you can appeal to many different tastes.
Always Serve Fresh Options.
People do not want to buy how much you charge for a cup of coffee that has been sitting out all day. If this is how your business operates, then how many people will come back? You need to serve new options, which means that everything needs to be made in-house or prepped close enough, so there is no delay between when someone orders and how long it takes for the drink to be made.
Offer A Balanced Combination Of Customer Favorites, Current Trends, And Your Creations.
People tend always to want the same thing. It is how they find comfort in something familiar and how you can guarantee how much money your business will make. If you only offer what people already know, then how do you expect to expand? You also need to create new options so that there is a balance of customer favorites, current trends, and your creations. This means that you need to offer something for everyone, no matter how popular or unpopular the option is.
Invest In High-Quality Equipment.
Buying high-quality equipment is an excellent investment because it will last longer and save you money in the long run. High-quality machines are built with higher quality parts that are more durable than lower quality machines for less cost per coffee sold. A few examples of these machines include:
- La Marzocco espresso machine.
- Mahlkonig K30 grinder.
- Jura E8 filterless pump espresso machine.
- Dualit kettle.
- Mazzer Major grinder.
Give Outstanding Customer Service.
Creating an inviting atmosphere is how you give the appearance of excellent customer service. People want to feel welcomed, and they will not be able to if your staff does not know how to interact with customers in a friendly way. If you have a large population of people who visit so often, consider hiring more staff members so that there is always someone available for customers to ask questions.
Offer An Experience Worth Paying For Over Other Options.
If you look at how much they are spending on your drink or pastry versus how much it costs elsewhere, which option will they choose? It is not how much it costs but how much value you provide. That one cup of coffee might cost $0.50 somewhere else, whereas your customers are paying twice as much for something that they cannot make at home! You want every customer to leave feeling like their money was well spent and that the experience itself was worth how long they had to wait in line for it.
Maintain A Competent And Informed Staff.
You may have the best coffee in town, but how will people know if your staff is not trained to sell it properly? As a business owner, you need to prepare your employees to market and sell their products. This means that they should explain every detail of how a product works or why someone might want it instead of another option. They should also answer any questions that customers may have about how much something will cost or how long it takes for them to make each drink.
Create A Hip, Laid-Back Café Atmosphere.
You want your business to feel like a place where everyone wants to go and hang out, as well as somewhere that has exceptional customer service. What kind of atmosphere is this? It should be laid-back! Customers do not want an uptight or formal environment when trying to relax with their friends or spend time alone. You also need to create a current hip atmosphere that reflects how you want your business to be perceived.
Offer A Comfortable Seating Area And Wi-Fi Access For Customers Who Want To Hang Out Or Study.
Providing your customer with a place where they can be both productive and communicative is how you stand out from the rest of the competition in town! Having an inviting atmosphere will make people more likely to frequent your coffee shop. It also allows customers to study or write a book, which is how coffee shops got their name in the first place!
Create An Atmosphere Of Creativity.
Customers love feeling inspired when they are around your business! This means displaying local art on your walls instead of generic decorations that you get from home decor stores. You can also display how-tos and helpful information on your digital signboards so that people who visit see how creative you are.
Establish A High-Quality Brand Image.
A high-quality brand image should include exceptional customer service, well-branded products, an inviting environment, as well as recognizable logos or fonts on all marketing materials, from ads to social media banners. You can also offer unique and custom packaging that makes it easier for customers to remember your business.
Write how you can guarantee how much money your business will make. If you only offer what people already know, then how do you expect to expand? You also need to create new options so that there is a balance of customer favorites, current trends, and how you can guarantee how much money your business will make.
Offer a variety of food and drink options to meet as many needs as possible. You might be able to sell one or two types of coffee, but how do those people who prefer tea feel about it? How does someone who is lactose intolerant enjoy their latte if you only use milk? You cannot please everyone, but you can meet as many needs as possible if you offer food and drink options for every palate.
Establish how much money your business will make in the future. Keep track of how long it takes to pay off expenses, how much profit is left over after those bills are paid, how fast revenue is growing, how much money you are making in comparison to how many customers visit your business each month (or even each day), and how long it takes for customers’ habits to change.
You might not know exactly how much profit or cash flow you will make in the future, but if you do the math on what needs to happen during different phases of growth. What needs to happen for a business like yours to expand? How can you make it grow faster, and how much money will your business need during each step of the process?
It’s worth noting that the more money you invest in your coffee shop, the better chance it has of succeeding. If you have no intention to put much into your business and just want to make a little bit of passive income, then, by all means, start small with an inexpensive cafe. But if you are willing to work for this business day-in-and-day-out without cutting corners, then investing as much as possible is recommended to have higher chances of success.