So you decided to fulfil your dream and start your own coffee shop business, but now have no idea how to start, or you think starting a coffee shop/business is unrealistic because of COVID-19 pandemic and its restrictions. But let us tell you something, COVID has made starting a coffee shop/business even easier and more affordable than ever!
And that's exactly what we are here for! To help you go through this process easily with maximum savings and benefits, and make sure your coffee shop business is as successful as it can be!
This guide for how to start your own coffee shop business with no money and no experience will address every single detail you should think of when starting a coffee shop business, be it a cafe, coffee store, coffee stand, coffee bar, coffee catering business, drive through coffee shop, take away coffee shop, online coffee shop, coffee cart business, coffee food truck or caravan.
Get ready to make some dreams come true...
If you're trying to understand how easy is it to start and run a successful coffee shop, how to start a drive thru coffee shop business, a coffee stand, bar or any other type of coffee shop business, you have to make sure that you do it right and follow the right steps. Luckily, this 'how to open a coffee shop for dummies' master guide helps newbies with no experience and no money have an easy way to start a coffee shop, or at least easier, and make sure it is a successful one.
While there are many steps involved in the process, the most important things to consider are having a great coffee shop business plan and strategy, a variety of excellent products, hiring the right employees and training them well, choosing a great location, leveraging food delivery apps and having online presence, and setting up ambitious goals for your coffee business.
Read on to learn how to start a coffee shop with no money, little money, low budget or big budget:
Wondering how to open a successful coffee shop and looking for a coffee shop business plan? You're in the right place! There are several key components to your coffee shop business plan as a coffee shop owner that are vital to your coffee shop success, which we discuss in greater detail further down the guide:
Much like in real estate, your coffee shop business location is probably the most important component of your coffee shop success and it will help you attract customers that come to your business to socialize, have meetings, date, work or just chill. Finding an awesome location with rent that fits your budget and without an insane competition will help you achieve that.
However, since COVID-19 pandemic situation started, most states only allow dining out and take aways, which may make rent more affordable as you don't necessarily need a big space and can shift the efforts and focus towards getting found online via google maps & search, food delivery apps, websites, etc. which we will touch in the next point, but you should definitely consider starting a drive thru coffee shop business, as almost 50% of daily coffee drinkers in America who buy their coffee outside consume it from a drive-through coffee shop business.
If you start a drive-thru coffee shop, the first thing you want to do is choose a location that is both noticeable and accessible by cars. Other tips on this guide apply to drive through coffee shops as well.
To find local coffee shops nearby, many people will simply search for take away or delivery coffee shops near them. For them to easily find you, create a free Google My Business Profile and manage your Google Maps and Google Search presence. Create similar business pages on Facebook and Instagram and start engaging with your target audience with your own brand voice, style and tone. Be sure to include excellent hashtags to reach your target audience. Consider using WhatsApp Business, a cheap and instant customer support online solution that allows you to take orders and respond to your customer queries through the popular messaging app instantly, whether automatically through a chatbot, or manually by yourself or an employee. Consider buying a domain name for your coffee shop for as little as a few dollars a year and setting up a simple wix or wordpress site on it.
25% of coffee lovers make their orders through an app and since COVID-19 broke out, this number has only increased. To leverage the growth of orders through food delivery and take away apps and start your own delivery & take away coffee shop, list your coffee shop business with its menu on the most popular food delivery services and apps for take outs, DoorDash, UberEats, GrubHub, PostMates and Cups App and focus on delivering such delightful customer experience all around to encourage your customers to share reviews and give your take away coffee shop maximum rating!
Are you starting your coffee shop business from scratch? buying a coffee shop franchise or an existing coffee shop business? whatever choice you make, your financial resources play a role on how your coffee shop business is set up for success. However, starting your coffee shop with no money, little money or low budget doesn't mean that you are set for failure. If you have less financial resources, you just have to be more resourceful and put on some extra hustle on your coffee shop business. Nothing beats a business with soul.
Make sure your coffee shop has a wide variety of products, coffee types, gourmet coffee and beverage options, teas, sandwiches, fruits, snacks, donuts, great vegan options, sweets, granola yogurts, cold drinks and more.
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When you start your own coffee shop, you want to make sure different customer types can find what they seek. Some fancy coffee drinkers will not settle for a simple coffee with foam on top and look for "gourmet" coffee (or other gourmet beverages) options brewed from 'premium' beans. According to the Coffee National Association 2020 Data Trends Report, gourmet coffee consumption has increased by 25% since 2015. It also found 20% of Americans prefer black coffee, espresso-based coffee consumption is on the rise, with most popular espresso-based beverages being cappuccino, latte, frozen blended, espresso, mocha, macchiato, americano and flat white coffee. Additionally, according to the report, 53% of coffee consumers prefer buying coffee that is good for the environment, for coffee farmers and for communities, so you'll want to have that covered to cater to a larger audience of coffee enthusiasts.
Your customer service and customer experience play a vital role in how people feel about your coffee shop and how they react to it, will they return, tell their friends and family about it, share a positive review online about your business? you need to pay careful attention to every little detail in the customer service and customer experience to wrap it up with lots of love and care, because this is being identified with your brand. Make sure to train your employees to be the most customer centric employees and always serve with a smile to make your customers feel loved and important, family and home, and they will become loyal customers!
With so many coffee businesses out there, what makes yours unique? pay good thought to that when you open your coffee shop. You want to stand out with a unique experience, vibe, brand voice and style, because this is how people will remember you and come back to your coffee shop. Even if your brand colors matter. Be memorable and noticeable and your coffee shop will thrive!
This one is pretty straightforward - create attractive loyalty programs, referral programs and subscriptions that keep your customers engaged. It can be a loyalty program that gives your customers 1 free coffee of their choice for every 5 coffee orders, a referral program that rewards your customers with 1 free coffee of their choice for every friend/family they bring to your business and free coffee for a month for every 10 friends, or a fixed monthly subscription for unlimited coffee.
It can be a unique coffee foam art challenge that rides some trend and go viral, a competition or a creative content strategy for Instagram stories. A good Instagram strategy can make your coffee shop go viral and get flooded with business and orders!
Whether it is outside due to COVID 19 restrictions, or inside post COVID, limit wifi access for 1 or 2 hours of use for every minimum order to prevent free internet riders that sit around without ordering anything for hours.
This one is vital to avoid unnecessary and unexpected financial loss that may be huge. To make sure your coffee business, its employees, equipment, interests and income are all well covered from unexpected events and financial loss many businesses may suffer quite often, with the cheapest possible spend, you can easily achieve that right here and compare cheap coffee business insurance quotes online from the best, cheapest and most reliable business insurance companies, to find a cheap business insurance policy that protects your coffee shop/business interests well on a budget. All you have to do is click 'Get Quotes' at the top of this page and follow the process.
In order to take your coffee shop business to the next level, you should ask yourself the following questions and properly understand their answers:
The answer to this question varies. If you have a significant savings account and business experience, it could be fairly easy. If you have never owned a business before and do not have very much in savings, it could be quite difficult, especially if you don't have a good credit score. However, starting a coffee shop is generally an attainable goal.
You're probably also thinking, “How much does it cost to start a coffee shop?” The costs can be significant, but we cover this in more detail later on. Fortunately, if you're wondering how to open a coffee shop with relatively limited resources, there are ways that it can be done. Our how to start a coffee shop pdf can help you do it right!
If you want to know how to start a nonprofit coffee shop, the first thing to understand is that it's important to have a plan to make contributions to organizations that benefit and give back to the community. In addition, you'll need to meet the tax requirements associated with running a non-profit organization. However, there are some successful non-profit coffee shops in the US that you can look at for guidance.
How much is it to open a coffee shop that's non-profit?
The answer varies significantly by region. New business owners who are asking how much to start a coffee shop that's non-profit in an urban area will find that it's much more expensive than it is in a rural or suburban area.
If you're wondering how to start a small coffee shop, there are several factors that you need to consider when it comes to location, which are the demographics of the region, the neighboring businesses, the amount of traffic, how strong competition is in the area, traffic times, and the region's cost of living. Here's what you need to know about each of these location-based variables:
The demographics of your area will be the first piece of the puzzle. Areas near college campuses or grade schools (due to parents and teachers in the area) and major business centers tend to have the best demographics for a coffee shop owner. If you are asking how to start a coffee business in a rural area, it's typically best to open it in a small town that has art galleries.
It's best to find an area where there are either no major franchise coffee shops or very few of them. If you're asking how to start a coffee shop business, you'll want to avoid regions that offer drive-thru shops if you do not intend to offer this service, and you should also avoid areas that are near gas stations or other locally-owned coffee shops.
While some types of business can compete with yours, others will actually complement your coffee shop. For instance, bakeries (for coffee shops that don't sell baked goods), gyms, sandwich shops, and boutique stores can be beneficial for a locally-owned coffee shop. Bookstores, libraries, and businesses that require customers to wait for a period of time can also be beneficial to a coffee shop in the area.
If you're wondering how to run a successful cafe in an area without neighboring businesses that are beneficial, it is possible, but it may be much more difficult. Also, the answer to “How much money to start a coffee shop?” will be more expensive because there are no neighboring businesses that could attract paying visitors to your shop.
It's best to choose a location that's located along commuter routes, areas frequented by night shift workers (if you're open 24 hours), routes that are traveled by people out for the evening, and areas where people on their lunch break are likely to travel to for a bite to eat. However, each of these factors will influence when you can expect a surge of customers, and this can help you to plan accordingly.
For instance, coffee shops in areas that are likely to be frequented by night-shift workers should ensure that they have enough staff late at night to cover the influx of customers. However, coffee shops in areas that people tend to visit on their lunch break should take extra steps to ensure that they're well-staffed during the middle of the day.
Overall, the cost of living in urban areas tends to be quite high compared to other regions. In fact, the average rent for an apartment in an urban area is $1,848 per month, but it's only $1,269 per month in suburban areas. Therefore, you can expect to pay around 1.5-2 times as much to rent space for a coffee shop in an urban area than you would in a suburban region.
As a coffee shop owner, you will need a small to medium-sized commercial property. On average, commercial real estate costs around $11.50 annually per square foot, but this average is higher in urban areas and potentially lower in suburban or rural regions. An average coffee shop needs a total of around 1,400 to 1,600 square feet, which means that you can expect to spend around $1,700-$1,800 per month to rent the space for your coffee shop in an "average" region.
If you're wondering, “How much money do you need to start a coffee shop in a rural area?”, the answer to that question depends primarily on real estate prices in the region. For example, a coffee shop in a scenic, rural area will have higher real estate prices than a coffee shop in a small rural town.
If you're asking how to start a cafe shop, the answer will be very different than if you're planning to start a coffee shop. Coffee shops focus on serving coffee, but cafes focus primarily on food. If you're wondering how to start a successful cafe, you'll need to place a strong emphasis on the food you offer.
It usually costs somewhere between $80,000 and $250,000 to open a cafe. However, the specific costs will vary based on your location and the type of business that you're starting. In addition, you may wish to know how to start a coffee shop bakery if you're planning to open a cafe.
In order to run any business successfully, you need to create the right plan when it comes to your finances. It's essential to ensure that you budget properly, get the right insurance, have plans in place for the future, and develop ways of lowering your operating costs while increasing your income. Here's what you need to know to properly financially plan your coffee shop:
Accessing start-up funds will be essential to properly set up your coffee shop, but many new coffee shop owners are not familiar with the process of getting financing. While business financing is easy to access in many cases, there are two different types of business loans, which are fixed-rate loans and adjustable-rate loans.
The interest rate of adjustable-rate loans can increase or decrease over time based on the economy, but fixed-rate loans will maintain the same rate. As a result, coffee shop owners who get an adjustable-rate business loan may find their monthly payments are difficult to manage. So, if you're wondering, “How much does it cost to open up a coffee shop?”, the answer to that question in the long-run will partially depend on your business loan's interest rate.
If you face a lawsuit or your shop is damaged, business insurance could save the day. Therefore, getting the right insurance could be essential for your success. Don't just choose insurance that offers the cheapest rate available. Take a look at the coverage that's offered. If you're wondering, “how to start my own coffee shop?”, your insurance policy will be crucial. Here are a few things to look for when you are choosing business insurance:
- Make sure that you choose an insurance provider that reviewers have found to be reliable, affordable, and good value.
- Pick an insurer that offers unemployment coverage, disability coverage, liability coverage, and worker's compensation coverage.
- Choose a provider that offers exceptional customer service and makes it easy to get quotes.
- If you're wondering “How much money does it cost to open a coffee shop?”, your business insurance policy will only be a minor factor in the overall cost.
In most cases, coffee shop owners can expect to pay around $35 per month for general liability coverage and $85 per month for worker's compensation. However, the specific amount that you pay depends on how you run your business.
Our small business insurance is considered one of the best policies on the market for small business owners. We offer comprehensive coverage at a low cost, and we are extremely reliable. We also have gotten great reviews from our customers. If you're wondering “How much does it cost to start up a coffee shop?”, it will be a lot more affordable if you have protection from lawsuits, natural disasters, and other expenses that may be impossible to cover on your own.
The menu that you offer will be essential for your success. In general, it's best to keep your menu relatively simple. A long menu list can overwhelm customers, which can cause them to ultimately walk out the door. In addition, it's best to keep the menu fairly simple when it comes to the dishes on offer. If you have to source a large number of ingredients, it will be more challenging and expensive to acquire all of them.
For instance, your bagel menu could consist of plain bagels, a few different flavours, and cream cheese or butter. Offering meats, salmon lox, and uniquely flavoured bagels is not always necessary. In fact, it may increase your operating costs and lead to waste, which can reduce your profits. Sourcing your coffee beans from the same brand can also lower your operating costs. If you're wondering how to start your own coffee business, it will be essential to find a low-cost supplier.
If you are able to use leftover ingredients, this can greatly reduce the amount of waste that you produce. One great way of doing this is by using bagels and other baked goods that are near expiration as breadcrumbs. Another way to lower your operating expenses is to standardize your portion sizes. Also, offer items that are especially popular while discontinuing ones that are not.
If you're wondering how to start a coffee shop bakery, it's important to become familiar with popular baked goods in your area. This will help to ensure that you offer popular food selections, which will sell quickly rather than being wasted.
The atmosphere of your coffee shop will play an essential role in your success, so you need to create an environment where people will be encouraged to stay for a long time. You'll want to make sure that the environment is pleasant and relaxing. In fact, research has shown that the products a coffee shop offers only accounts for 48% of the emotional connection that customers have with a business. The other 52% has to do with variables such as the atmosphere of the shop.
First off, you need to choose a consistent color scheme for the entire shop. This scheme should primarily focus on soft and relaxing tones. You also will need to pay close attention to the lighting, which should help to create a soft and relaxing atmosphere. The music that you play will also be important, and it's best to use slow, relaxing, and mellow music to set the right tone for your shop.
Convenience and pleasant interactions with customers are other important factors in your coffee shop's success. Here are a few tips to consider:
- Keep the temperature of your coffee shop comfortable. It's best to have several people come into the shop before you open to provide feedback on whether or not the temperature is comfortable for them before you open your doors. As a rule of thumb, set the temperature in the mid-70s during the summer and the upper 60s in the winter.
- If you are able to offer an app to your customers to help them place orders or take advantage of loyalty programs, this could also be a significant advantage.
- When considering how to start a coffee house, you need to make sure that your parking lot has enough spaces for your customers. You don't want your customers to have to walk a significant distance to get to your shop.
- Ensure your employees are friendly and helpful at all times.
You'll also want to make sure that you offer your customers books, newspapers, and magazines to read.
When thinking about “How much does it cost to set up a cafe?” or “How much money do I need to open a coffee shop?”, a large part of the answer will depend on the atmosphere that you create.
Make sure that your business has fast wi-fi and comfortable seating for your customers. Keep in mind that many customers will use your shop as a place to do their work, which means that the reliability of your internet connection will be crucial. Here are a few tips that can help you to pick the right internet service provider for your business:
Each region has multiple options for internet service providers. Make sure that you compare prices, plans, the speed of the service, and any other benefits on offer.
Your internet connection will be an important part of your coffee shop for many people, so check the connection each day before you open up.
It's important to make sure that you pick out comfortable seating for your customers, and ensure that there's a range of seating options for them to choose from. It's always best to offer a combination of chairs and sofas for your customers. When asking, “How much does it cost to set up a coffee shop?”, one important variable to consider is the cost of your furniture.
Luckily, it's often possible to reduce your expenses by getting second-hand furniture. However, if you're asking yourself “How much does it cost to start a coffee stand?”, you may be pleasantly surprised to learn that most coffee stands do not need furniture, reducing your expenses even more.
It's important to make sure that your opening date is far enough away that you'll have time to prepare your shop. However, you don't want to wait too long to announce your opening date. Here are a few tips that can help you set a realistic opening date:
- You should begin planning the opening of your coffee shop 12 months before you actually open your doors. This will allow you to do research on the right business structure and allow you to set up your business to succeed.
- After around three months of planning, you should begin to consider local permits and licenses that you'll need to get your business off the ground.
- After six months, you should start to apply for all the necessary permits and licenses. You should also pay any necessary filing fees. Also, you'll need to get a listing in the phone directory and begin applying for business loans.
- After nine months of planning, you should have all of the legal aspects of starting your business ready to go. You'll also need to make sure that you have purchased the right equipment, set up a merchant account, established your inventory, and ordered the office products that you'll need.
- You should announce a grand opening around two weeks prior to your opening date and put up flyers to promote it. Also, let your business associates, friends, and family members know that your grand opening is coming up!
Hiring the right staff is an essential part of running a successful coffee shop. Even if your coffee shop is small, you'll still need to hire a strong team. Not only will this ensure that your customers remain satisfied with the service on offer, but it will also help with the day-to-day management of your business. Here are a few tips that will help you hire the right employees for your coffee shop:
- You'll need a combination of baristas, managers, and accountants. However, if you have a limited budget at the start, you could do some of these tasks yourself.
- In most cases, you'll need at least two baristas per shift. You can cover all shifts by hiring four full-time baristas along with one or two part-time baristas.
- Your baristas should be knowledgeable about coffee, have exceptional people skills, be honest and reliable, be passionate about customer service, have good coffee pouring and brewing skills, be interested in latte art, and know how to manage inventory in a coffee shop setting.
In most cases, you'll be the manager and accountant for your coffee shop when you are first starting out. The process that you'll need to go through when hiring managers and accountants is much more complex than other employees. However, these are the most important things that you should look for if you'll be hiring accountants and managers:
- Managers should have the skills to keep track of inventory, deal with customer disputes, find a replacement when an employee calls in sick, supervise staff members, and make rotas.
- Accountants should be honest and reliable, so always make sure they have the relevant qualifications and certifications to be managing your money. An accountant with prior experience in the coffee shop industry would be preferable.
In most cases, baristas are paid $8-$11 per hour. On average, assistant managers are paid $12-$14 per hour, general managers are typically paid $14-$16 per hour, and cashiers and bakers are usually paid around $7.25-$10 per hour.
Ultimately, the cost of opening a coffee shop depends on the type of shop that you're opening. Here are the average costs for opening some of the most common types of coffee shops:
- Coffee kiosks/stands: $60,000-$105,000
- Coffee shops with seating and/or a drive-thru: $80,000-$300,000
- Mobile coffee or food trucks: $50,000-$154,000
- Coffee shops that only offer drive-thru services: $80,000-$200,000
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