How To Start A Coffee Shop?

Jul 7, 2020

Coffee is the elixir of life for many around the world and as rightly said “ As long as there was coffee in the world, how bad could things be”. Coffee is a way of life for many and it provides the much needed energy boost that people often seek in a cup of coffee. But apart from that, coffee has several health benefits too- coffee contains a number of useful nutrients, including riboflavin (vitamin B-2), niacin (vitamin B-3), magnesium, potassium, and various phenolic compounds, or antioxidants. Some experts suggest that these and other ingredients in coffee can benefit the human body in various ways.

Coffee is akin to a culture in itself and it is best enjoyed in a coffee shop with the company of friends. A coffee shop is more than a place that provides the most loved beverage, it is an experience altogether. The recent lockdown has made people crave for the time spent at a coffee shop- meeting others, sipping the brewed beverage, even more.

Even in the times of social distancing, the appeal of a coffee shop business is not going to fade. People still crave for a cup of freshly brewed coffee and the business can modify itself in adherence to the new norms, ensuring safety and hygiene.

How To Start A Coffee Shop

Once an entrepreneur decides to start a coffee shop business, the next step is to know details about how to start a coffee shop, the vital factors to consider and the essentials to arrange for in order to start the business.

Decide The Type of Shop

A coffee shop business plan can be one of the following types-

- - A coffee shop that only serves coffee
  - A cafe which serves different types of coffee along with food such as sandwiches, croissant, pastries, etc. These types of coffee shops have seating arrangements too for the customers to sit and enjoy their coffee and snack.
  - A Takeaway coffee shop where the coffee and snacks are available only for takeaway. This is the ideal coffee solution in the times of practicing social distancing.
  - A Brewing coffee shop can be where the customers can brew their own coffee, including various flavours and concoctions. This can be a unique experience for the customers too.
  - A Franchise is also another option to start a coffee shop. There are several coffee shop chains from which the entrepreneur can choose when planning to start a coffee shop.

Choose Good Location

- - Location is tantamount to the success of a coffee shop, just as any other factor. The location of the coffee shop is vital and the factors to consider when choosing a suitable location include-
  - Reasonable Rent- purchasing a coffee shop space can be expensive unless the entrepreneur already has a vacant commercial space at a suitable location or has the budget to invest in a shop on their own. Otherwise leasing a shop space is the most suitable option. The rent of the coffee shop must be reasonable and affordable.
  - Easily Accessible- the coffee shop must be easily accessible by customers of all age groups. A shop located in a bylane or on the second/third floor of a building is not easy to locate and access. It should ideally be facing the road and on the ground floor.
  - Ambience- the ambience of a coffee shop is equally important to the success of the business. A dark, dingy coffee shop will not invite many customers compared to a brightly lit and cheerful space. The ventilation and natural lighting in the coffee shop need to be kept in mind.
  - Parking Availability- the availability of ample parking space will ensure greater footfall at the coffee shop as customers will not have to worry about finding parking space.

Prepare Estimate Of Requirements

- - The next step to consider while looking how to open a coffee shop is to make an estimation of all the material and other requirements for the business.
  - Equipment- listing the equipment needed in a coffee shop is a good practice to make a smooth start. Normally, a coffee shop requires a coffee grinder, an espresso machine, coffee maker, blenders for making cold beverages, ovens, toasters, refrigerators for the cooking and storage needs. Additionally, the shop must maintain an inventory of all the ingredients such as milk, water, sugar, coffee beans, bread, and materials needed for the food items to be served at the cafe. A refrigerator display unit will also be needed to display the menu available for the day.
  - Furniture – if the coffee shop will be seating customers it will need chairs, and tables, along with storage units and cabinets. A counter to brew and serve the coffee is also needed.
  - Shop Space- the space required for the coffee shop depends on the type of shop the entrepreneur has in mind. If only a takeaway or if only serving coffee on the go, a small space is sufficient. But if the coffee shop is serving eatables and looking to seat customers, it will require a space of minimum 1000 to 1500 square feet.
  - Registrations- starting a new shop will require certain registrations, including a business entity incorporation, Shop Act registration (if the proprietary or partnership business is within the Municipal Corporation premises) and GST Registration if the annual turnover of the business is greater than 40lakhs.

Obtain Funding For The Shop

- - When looking to start a coffee shop, the funding is of utmost importance.
  - First, a list of all the expenses to be incurred in order to start the shop must be made. This can include the lease or shop purchase amount, the equipment and material cost, the furniture and lighting cost, the daily wages and maintenance cost, recurring costs and the registration and application fees. Any other expenses to be incurred while starting the business must also be factored in.
  - Next, ways of funding and fulfilling these expenses must be considered. The entrepreneur’s savings alone might not be able to fund all the expenses of starting a coffee shop. This is especially evident when making purchases for the shop, since most of the purchases (such as equipment, material and furniture) need to be up-front. The best option to meet the capital requirements is by applying for loans.
  - Loans can be obtained either via banks or through non banking financial companies (NBFCs). For either of the loan applications, the entrepreneur needs to prepare and submit a funding proposal. This can either be prepared by the business owners themselves, or they can Get funding proposal service (New Business) from deAsra.

Prepare Funding Proposals

- - - A funding proposal has certain essentials that need to be kept in mind while preparing it. Some of these include writing the business plan, mentioning the mission and vision of the business, along with other details, etc. The essentials of a funding proposal can be known by Downloading Funding Proposal Checklist to ensure that all the points are covered. This checklist can speeden the process of creating a proposal and increase the chances of loan approval in order to start the coffee shop.

Make The Coffee Shop Stand Out

- - Another aspect to consider when getting familiar with how to start a coffee shop is to concentrate on the quality and marketing to make the coffee shop stand out against the competition. This can be achieved via-
  - Quality Products- consistent products made with utmost care, taking safety and hygiene into consideration will definitely win over the customers. Additionally unique coffee and food offerings like Vietnamese coffee, or an affogato, or espresso shots or unique coffee flavours can help the business create a niche for itself.
  - Customer Service- timely, prompt and efficient service offered at the coffee shop can also win the approval of the customers. Entrepreneurs can train the staff to be friendly and efficient and maintain good service consistently.
  - Offer Delivery Services- the coffee shop can even offer delivery services to customers which will be appreciated by customers, especially in socially distancing times.
  - Online Presence- in addition to the above, a new coffee shop must have an online presence via a website along with being listed on various food delivery services. An Instagram and Facebook presence is also highly recommended. This is a must in today’s digital times for the business to be noticed and to connect with the customers.
  - Additionally, the coffee shop can also offer combo deals or special discounts for orders placed by groups or for ordering exotic flavours, thus piquing the interest of the customers for the coffee shop and its offerings.

These factors will help entrepreneurs learn how to open a coffee shop keeping all the essential details in mind. Entrepreneurs can fulfill their coffee shop business dreams by planning the business in detail, considering all the needs and requirements to start the business. To ensure that they consider all the essentials while planning to start the business, they can refer to the checklists from deAsra’s website or visit them in person to ensure a full-proof beginning to a successful venture.

RELATED

Set Up Google My Business To Help Your Small Business Grow!

A study conducted by Google revealed that an impressive 46% of all the searches made on the search engine have local intent. This gives a peek into the immense opportunities that Google provides for s...