Starting a coffee shop is both thrilling and intimidating — there is a lot to consider before even beginning to write your business strategy.
This guide will walk you through the major processes necessary to open your coffee shop, including comments from industry professionals and access to other resources.
What should my coffee shop business plan include?
Your start-initial up’s component is always the same: your business plan.
Your coffee shop business plan will resemble that of other businesses. It should contain the following:
- Your commercial proposal
- Distinctive selling point (USP)
- Clientele à destination
- Marketing plan
- Funding sources
- Overheads
- Financial projections
What makes a coffee shop unique is that you’ll need to discuss the kind of coffee you will use and the items on your menu. Is food or beverage your primary source of revenue?
Along with your pitch, you should describe the goal of your firm. Numerous enterprises today begin with an ethical foundation. Not only can incorporating your purpose into your company strategy help you stay on track to meet your objectives, but it will also help you recruit ethical investors.
Before approaching potential partners, you must have these things hammered down. “The first thing we inquire about is the meal you want to offer. What kind of sound are you after??’ Occasionally, they haven’t exactly captured it on paper,” said Lloyd, proprietor of Catering24, a takeaway packaging company. “They must convert meal portions to costings and then determine the daily volume required to cover their premises, van rental, or pitch area and rental.
“It’s the nitty-gritty aspects that we want to get down because sometimes we may give them a container that costs 30p per part or a container that costs 10p per portion. This begins to determine if the takeout or coffee shop will be lucrative from the outset.
They need to know the cost per unit of everything involved – from the materials to the stirrer used to serve the coffee. Everything must be factored in. “I can go to a truck on the side of the road and get a £1 cup of coffee from a plastic cup,” Lloyds said. “The inexpensive cup costs ten pence and is not particularly ergonomic. The cup is fairly insulating. If I purchase the same quality coffee in a 15p cup, I may sell it for £1.70 from the same brand, but the client receives an impression of value. Now since it’s made of paper, it has a more secure cover, and you can drink from it without it spilling over your clothing.”
Your business concept and unique selling proposition
Coffee shops are a competitive industry, and standing out will need creativity. This is where your company concept and unique selling proposition come into play.
People watching, a frequent hobby at cafés, may be instructive in this instance. “If you discover a coffee shop you enjoy, take a cup of coffee, sit outside for a few hours, and watch how many people pass,” said Stuart Wilson, creator of Lost Sheep Coffee. Yes, it is a little strange. However, you may get an understanding of them and your target consumer.”
Additionally, it is vital to be aware of current and forthcoming trends in coffee and beyond. “For me, the next big thing will be your iced coffees and speciality coffees. If I were a coffee shop owner right now, I’d be preparing for a strong iced coffee option next year,” Wilson said. “All of those things, as well as your alcoholic coffees, such as espresso martinis. We spoke with a couple of brewers about creating coffee-infused beverages, beers, and other items.”
Lloyd has noted another trend emerging from the growth of takeaways: “Afternoon tea boxes are huge at the moment.” I imagine that someone just starting would not consider that first point. They may consider takeout coffee since it is usual for a coffee store.”
Décor may help draw customers into your coffee shop and reinforce your unique selling proposition. Consider palm palms, arcade games, and neon signs. For the essentials, you may save money by purchasing used furniture — this also has the additional benefit of being environmentally friendly and giving your coffee shop a unique appeal.
Where should I locate my coffee house?
This will rely on several factors, including your location, the units accessible to you, and the business’s objectives.
The majority of people will opt for a typical coffee house setup. This is an interior café with bricks and mortar. The location of your company is determined by what you want it to be and where your consumers are. Rightmove can help you identify prospective locations for your coffee shop, while services like Floorplanner may assist you in visualising where everything will go.
The alternative is a little more mobile. A cart, kiosk, or van allows you to be in a high-traffic location such as a railway station or bus terminal for a considerably cheaper cost. Additionally, you may pick a set location each day or, in the case of the cart or van, you can choose new locations and visit popular events such as festivals. Lost Sheep Coffee began in 2012 as a microvan. Wilson elaborates: “For us, the most cost-effective way to pursue our [then] interest was tiny, which is why we began with a three-wheeled coffee van. I built up the whole operation for less than £10,000. We were fortunate to get a site in the heart of Canterbury’s main street, where people still remember the cart to this day. It was wonderful from a marketing standpoint.”
Why do consumers gravitate toward brick-and-mortar coffee houses? “To be honest, I believe that is tradition,” Wilson said. “Many individuals do not consider kiosks to be legitimate businesses. It’s akin to a gilded market. Certain individuals want validation for bricks and mortar if you will.
“A kiosk is not always able to provide that for someone. They’re gaining popularity now that Costas and Greggs are available at service stations. It has grown in popularity during the end several years. four or five years.”
What amount of money will I require?
According to Start-Up Loans, opening a coffee shop might cost between £20,000 and £100,000, depending on its size, offerings, and location.
Though it does not have to be as costly. “A lot of folks are taking on inexpensive flats these days. As a result, they may begin to become more accessible,” Wilson said. “A large number of individuals starting as a coffee shop these days are taken on premises that are potentially rated exempt, according to the present government’s stance.”
These may include benefits such as three months’ rent-free. They are also equipped with running water and power. “I have a client who is about to open one in Folkstone, and she is doing it for less than £15,000. “This is a full-size business,” he said.
There are similar houses throughout the southeast of England, but you should prioritise regions that you are familiar with and like. If you do discover a cheap apartment, just inquire what your landlord can do to assist you.
However, if you decide on a kiosk, more affordably may be accomplished. “That pandemonium in Canterbury, to be honest, is a lot of work that I’m still doing, but it’s still less – more like a £30,000 project,” Wilson said. “The business we had in Ashford was 750 square feet, and it cost between £15,000 and 60,000 to equip it up from a shell with everything.”
He stated that they are considering opening bricks and mortar locations, costing £100,000 per year in rent alone. The kiosk around the block is a fraction of the price. It may be worthwhile to purchase the whole store since they make more money. “You’ve got the kiosk, which you’d take X amount of money every year, and then you’ve got your store, which should take more like 700,000x,” Stu said. “You pay more, but you get a larger income stream.” Again, assess the prices and choose the best choice for you.
In terms of total cash flow, if rent is 15% more than predicted rates and sales, profit margins will be tough to achieve. According to Start Up Loans, staff should not exceed 50% of overheads.
Selecting the proper coffee
Now, possibly the most critical aspect of your coffee shop’s operation.
Which will you choose: a single origin or a blend? Is the coffee chosen by the target client or vice versa? Are you aiming for repeat customers or passing trade?
“The product itself must be meaningful not just to the company owner, but also to the person consuming it,” said James Sweeting, founder of Lincoln & York coffee roasters. “These are not typically one-time purchases. They have a high rate of repeat business. I think that 90% of visits are likely repeats.”
He continued by stating that you should understand your consumer. “I believe that nowadays, you think of an artisanal coffee shop with hand-roasted coffee and nutritious cake,” Sweeting said. “Of course, it may be a coffee shop in a shopping mall, or it could be something else entirely. That is why the coffee must be meaningful.”
He emphasises the need to have a ‘high-quality aspiration,’ regardless of whether the coffee is espresso-based, filter-based, or cold-brewed. “It should probably be a mix of 100% Arabica beans, or a singularity, or a combination of Arabica and Robusta beans that produces an excellent espresso coffee. Quite frequently, you will want some reverse engineering to do this. Anyone who asserts differently does not have a complete understanding of the coffee industry.”
Coffee should not just represent you as a company owner; it should also reflect the firm’s beliefs and mission, as described before. If you claim to be ethical, you must audit your supply chains to ensure they adhere to the same standards as you.
“You must have an understanding of the standards — how it was developed, some narrative aspect. Have you paid your supplier a reasonable price? Has the supplier, in turn, given the farmer a reasonable price?” Sweeting inquired. “If you purchase anything inexpensively, it is possible that someone has been victimised. Can you defend your company if someone came in and questioned a coffee shop, ‘Where do you get your coffee?’ If you are unable to respond, you have not completed your assignment.”
A simple approach to determine a supplier’s or roaster’s standards is to seek certificates, which they would almost certainly post on their website. Fairtrade implies that the group of farmers has been compensated at a set price level while also paying costs associated with training and origin. Rainforest Alliance is more concerned with environmental stewardship in the expanding industry.
You should inquire about how the coffee will be roasted and how it reacts to various roasts. “You should ask similar queries, such as, ‘How much difference does it make whether you roast it slowly or darkly?’ What effect does this have on the flavour? And what would my customer think when I provide coffee with such themes?’” Sweeting said.
Bear in mind the freshness of the coffee. “There are a few fallacies about whether or not coffee should be freshly roasted,” he said. “Of course, if a pack states ‘freshly roasted,’ that was undoubtedly accurate when the remainder of the pack was freshly roasted. When the customer receives it, this may not be the case.
“Now, the best gestation time for a coffee shop is roughly two to six weeks. The rationale for it is, as you would say, ten days to thirty or thirty-five. If coffee is eaten extremely quickly, i.e. roasted one day and consumed the next, the blend has not had time to settle. When you put it in a grinder, you know that the grinding properties will be different whether you roast it today versus if you roasted it ten days ago.” By ensuring that it is settled for about the same amount of time each time, you may increase the consistency of your coffee, providing a constant taste experience for your regulars.
Finally, there are concerns concerning the capabilities of certain roasters. Certain artisan roasters can produce extremely tiny volumes, up to six kilogrammes. On the other hand, other enterprises would want to be able to drop off around 20 kg plus additional items to make the trip worthwhile. “There has to be a balance between pure coffee freshness and practical logistics,” Sweeting said. “I believe that a coffee establishment should be able to receive deliveries every two weeks.”
If you’re having difficulty committing to a single source, you may sample a few to get a sense of their offers. “Another excellent approach to discover roasters with whom you may like to collaborate is via subscription services,” Wilson said. “There are now a plethora of firms that will ship three bags each month from various speciality coffee roasters around the nation. Consider opening a speciality coffee store. Sign up for one of these programmes for a few months or go old school and call and request samples.”
What kind of coffee shop equipment should I purchase?
Now you want to consider the kind of equipment you’re going to purchase and whether it will be new or used. Additionally, it is important to consider the lifetime or warranty.
This might include the following, depending on what you’re offering:
- Purchase an espresso machine for between £1,500 and £10,000. Additionally, you may lease for roughly £5 per day.
- Appliances de cuisine
- Brewer of tea
- Point of sale system
- Depending on the geography, a water softener
- Dishwasher
- Grind coffee beans
- Fridge/freezer
- Blender
- Microwave
- Panini press/toaster
- Router WiFi
It is not simply the product that you are considering. It’s also what you’ll need to clean your equipment and how time-consuming it will be. “There are plenty of excellent coffee machine options available. It may be completely automated, semi-automatic, or completely manual, but it must maintain them very effectively. It has to be impeccably clean,” Sweeting said.
Certain businesses specialise in hospitality and coffee shop point of sale (POS) systems. More information is available at The fundamental guide to point-of-sale (POS) systems.
Finding the correct sources for non-coffee related things is sometimes ignored. Spend time investigating several suppliers, paying close attention to their narrative and values as well as their goods.
“Attempt to ascertain their background, the length of time they’ve been dealing. You want them to be large enough to sustain you as you begin,” Lloyd said. “Long-term supply is an abundance of information. They often have decades of experience in customer service and sales. Frequently, they have excellent ideas.”
Look for favourable comments and third-party certificates that can inform you about the quality of your provider. “These are little indicators that a consumer is dealing with a trustworthy organisation, something they can trust,” Lloyd said. “They are ethically doing business with regards to supply chain management. Because these items originate from all over the globe, it might be difficult for a café or coffee shop to determine the true origin of their products.”
Recruitment and training of personnel
The size and objectives of your coffee business will assist you in choosing which employees to recruit and who to prioritise.
Naturally, you’ll have baristas and chefs/cooks, but your workforce might also include managers, marketing, and accountancy, to mention a few. Rebecca Siciliano, managing director of hospitality recruitment agency Tiger Recruitment, recommends hiring your manager and marketing expert first if you’re employing them. They’ll assist you in setting up the bottom floor of your café before it even opens.
Even if you’re not the one brewing the coffee, it’s a good idea to undergo barista training. However, your baristas are quite vital to your company – coffee shop owners often seek individuals who have previously been taught. However, since training varies, it is up to you to ask the appropriate questions. “If it’s a coffee shop [where they previously worked], great,” Wilson said. He would next inquire about the coffee shop’s name and do a Google and/or TripAdvisor search to read reviews and examine images of the coffee. “You know, if it’s a greasy spoon or anything like that, and they’ve produced a couple of foamy coffees, that is not barista training,” he said. “If they work for a reputable coffee shop and you’re certain they take their training seriously, that’s fantastic.
“I then ask, ‘Do you have any photographs of your work?’ I promise that anybody pleased to be a barista has images on their phone. ‘Could you perhaps send it to me?’ I then ask.”
He said, “The last step in the interview is to get them on the machine to brew a cup of coffee in front of you — the one they’re most comfortable producing.” “You can see immediately what degree of training they’re going to have,” he said.
If you are unable to locate trained workers, contact your coffee roaster. They may provide instruction themselves or be able to recommend some reliable individuals.
Attracting and maintaining personnel may be a significant challenge in the hospitality sector, so make every effort to give advantages. “You have to provide a little bit more to entice such applicants, such as a greater starting salary,” Siciliano said. “Then there are some additional perks. Indeed, we know of one coffee shop where all staff members have been informed they may take the day off to honour how hard they’ve been working.” Flexible working hours are also important, with employees desiring to take days off for significant occasions or to work during the day and take nights off.
Additionally, she advocates advertising job openings on social media to reach out to those already interested in your company.
Having said all of this, you should avoid overstaffing. “I stepped into a new café, and they had a 15-seat café with five employees,” Wilson said. “The quickest and most efficient method of destruction any new firm is to spend all of your money on employee expenditures. To be sure, you want to recruit people, but you’re useless to everyone if you go bankrupt.”
One approach to address this is to recruit temporary personnel at peak times of the year. “Temporary employees may be ‘dialled up’ or ‘dialled down’ in response to demand,” according to Novo Constable, co-founder of Indeed Flex. “This makes them important at peak seasons when finding enough permanent employees is difficult. Due to their adaptability, they do not need to be used during calmer moments.
“Having fast access to qualified temporary employees also protects a coffee shop against personnel absences. A large pool of trained, vetted – and, most importantly, accessible – employees may step in and rescue the day if the shop’s normal staff is absent.”
Legal ramifications
This part will be dry, but it may save you a great deal of time and aggravation later.
To begin, incorporate your firm. This may be accomplished by forming a limited company, a single trader, or a formal partnership.
At least 28 days before opening, you must register your coffee shop on the government website. Registration is completely free, and you cannot be denied.
Following that, licences for coffee shops. Planning clearance will be required if the building is not currently classified as a coffee or tea store. Coffee shops are often classified as A3 establishments that accept food and non-alcoholic drinks on the premises. Determine what kind of licence you need with gov—UK’s licence finder.
There is a great deal of health and safety documentation to complete. Contact the Food Standards Agency (FSA) for further information about your business’s requirements, contact the Food Standards Agency (FSA).
Insurance of the proper sort is critical, and there are many varieties.
Public liability insurance protects you against claims brought against you by workers or clients if an employee or customer is injured or their property is destroyed as a consequence of your operation. It might have occurred on your premises or off-site.
Employers’ liability insurance protects you against claims resulting from incidents involving employees and customers, as well as damage to appliances and other property.
Insurance against stock deterioration: Covers damage to items housed in designated cold storage areas due to a change in temperature caused by a breakdown or unintentional damage to refrigeration equipment.
Insurance for the contents of your coffee shop if they are lost, damaged, or stolen, including fixtures, fittings, and personal belongings of your staff.
Insurance against business interruption: Could include both Covid-like incidents and weather-related disasters such as floods.
Different insurers will provide a variety of basic products and add-ons. Bear in mind that, if relevant, your company insurance policy must cover both takeout and delivery drivers. This also applies to alcoholic beverages sold on the premises and the supply of late-night snacks.
A couple of extras in case you need them. If you want to play music in your café, you must get
an entertainment licence. Additional information is available at PRS.
Finally, be aware of your employees’ employment rights, which include working hours, vacation, and other paid time off.
Promotion of your coffee house
Let’s begin with your branding — ensure that it is consistent across all platforms. Having an immediately recognisable emblem that you can include in all of your marketing materials will assist buyers in remembering you.
These might be well-placed signs such as bus stop advertising near your location for your offline marketing. You’ve probably seen something similar at fast-food restaurants, which advertise with signs with their logo and an arrow pointing to the next location.
Attract locals and pass trade into your business by offering free cake samples (Covid restrictions apply at writing). Participate in a culinary event or arrange a coffee-making/bakery workshop to increase brand loyalty. This may be efficent in person or through the internet. Provide participants with a special discount on their next coffee and cake or in-store purchase.
Naturally, it’s critical to establish regulars; they’re also an excellent source of word-of-mouth advertising. Take care of them by being acquainted with them and becoming familiar with their normal routine. Consider contacting local groups such as parent and toddler clubs or a nearby sports team – you can find these on meetup websites – and offering them a regular space during quieter times to grow your customer base and establish yourself as the go-to spot for the locals. Offering discounts and specials at slower periods of the year, as well as a loyalty programme for regulars, will increase traffic
Regarding your internet presence, you definitely should consider developing a website and establishing a presence on at least one social networking platform. This is notably true if you reside in. a city with a high level of competitiveness. A simple place to start is Google My Business. This widget appears when you enter a search term such as ‘coffee shops near me in the search engine. It contains your café’s hours of operation, photographs of the establishment, and client evaluations.
Ascertain that your website is both user-friendly and comprehensive. They can learn more about you and your business, as well as your menu and upcoming events, by visiting your website. We have several tips on constructing a website, but here’s one piece of advice: remember your keywords. This is what consumers will search for when looking for companies similar to yours. Include ‘afternoon tea’ and ‘high tea’, for example, if it is one of your primary attractions.
Take stunning photographs of your food and beverages for your website and social media platforms. Customers will better understand what you’re presenting, and the images may entice them to visit your café. Loyalty building is critical online as well – you can do this via your newsletter. When they join up, give them a special discount on their first booking or purchase.
Prepare for larger events that will draw a crowd to your coffee business. “They should be planning for Christmas. “Large style,” Lloyd said. “This Christmas, we anticipate the largest hospitality boom in years. You need to start thinking about Christmas and what will set you apart.” He recommends speciality coffees such as gingerbread lattes or other syrups.
“We create our own Christmas cups for independent retailers. They may then play a significant role in the café’s marketing efforts.”
He forewarns of a massive decline in January’. “You have to make it work in October, November, and December. Then pay out and enjoy your Christmas. February and March will see a resurgence.”
So, is it the correct time for me to launch a new coffee shop?
As you can see, opening a café is a lengthy procedure, but do not let this deter you if you believe in your concept.
You are reading industry publications like Caffeine, and attending coffee events with other baristas and roasters can familiarise you with the community. If you’re still undecided, work for a few days at another person’s coffee shop to see if this is something you could do long-term.
Instead of opening a coffee business, you might start a franchise such as Costa.