Opening a Coffee Business: What You Should Know

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Coffee perhaps runs through your veins. You have enjoyed this hot beverage since you were a tween. You spent three years in Bogota, Colombia. You’ve been enamored with the country, the people, the music, and the coffee. It’s now time to go home. You’ve asked your company to find you a replacement.

Though temperatures in Bogota are almost constant at 14°C (57°F) on average, you miss the chillier weather of Park City, especially toward the end of the year. Your cup of coffee and water heater keep you warm during cold winters.

Your interactions with locals, including coffee farmers and business owners, have inspired you to become an entrepreneur. With your love for coffee and the contacts that you’ve established, you thought, “Why not open a coffee shop?” Here are a few things that you should know:

A Look at the Industry

Do you know that coffee ranks second as the most sought commodity in the world?  The coffee industry has a net value of $100 billion.

Ann Arbor, Berkeley, Vancouver, and San Francisco are some of the cities in the USA with the most coffee shops per capita. The ratio in Ann Arbor is one coffee-related business for every 2,825 people.

These are all good indicators that coffee shop businesses are thriving. It doesn’t mean, however, that it’s not without challenges. Industry experts give the following pointers to would-be coffee shop owners:

  1. The industry is highly competitive. Competition comes from independent owners and coffee chains.
  2. Market saturation. Many stores have closed as well. You need to find something that will set your shop apart from the others.
  3. Picky customer base. One wrong move and you’re all over social media.
  4. Economic climate. If the economy slows down, chances are, your business will suffer, too.
  5. It’s a lot of work. You will have problems with hiring, training people, and sourcing coffee.

Where to Start

coffee shop

Narrow down your approach into these three possibilities:

  1. Get a franchise. This model is a turnkey solution. You just follow a template, and you’re up and running.
  2. Buy an existing shop. You deal with independent coffee operations.
  3. Start from scratch. You build from the bottom up based on your vision. This requires the most effort.

Sourcing and Other Steps

There’s a long list of items that your business plan should address, from finding the best location to creating your product line to knowing your competitors.

Make your entire experience in Colombia count. Learn if you can source produce directly from farmers or cooperatives. Remember that in a competitive market and demanding audience, you need to find your great differentiator. This could be in the product that you provide or the service given by your staff.

Coffee shop owners also emphasize that consistency in your product is the key to success. Invest in training and professionalizing your staff. This positively impacts your efforts to achieve consistency.

Lastly, consider integrating the concept of fair trade into your business. This is designed to help coffee producers in developing countries and promote sustainability.

Your passion for coffee, your clear vision, and thorough research will guide you to a successful beginning of your new coffee shop enterprise.

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