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How to Open a Coffee Shop

The 2018 Experts' Guide

Date: August 7th 2018        Author: Joshua Phillips

If you’re reading this, then chances are you’ve considered opening a coffee shop
And why not? You get to hang about in a coffee shop all day, slinging lattes to a crew of dedicated regulars — right? Anyone who’s done it, though, will tell you that it’s not that simple. There’s a lot to juggle, and a lot of things you need to get right. We’ve trawled the web and found 70 snippets of expert advice from people who’ve been there, done that.

How to open a coffee shop
bright idea graphic

Chapter 1

The bright idea

How to come up with an idea for your coffee shop

Let’s start with the nuts and bolts. What’s driving your coffee shop?



Even if you’re not big on the whole idea of niche concept coffee shops, there’s always going to be an idea behind it.

That idea can be as broad as “a cozy neighbourhood hangout” or “somewhere for commuters to get a quick caffeine jolt”. Or you can go as detailed as you like. Perhaps you want to run the best owl cafe in downtown Toronto.

coffee cups

No matter how broad or specific your vision for your coffee shop is, you’ll have one.

And whatever you do, says Matthew Algie, make sure you establish a key USP. Once you’ve established this, you’ll be flying, no matter what it is. It doesn’t matter if your USP is as simple as pulling top-notch espresso, or baking great cakes — you need to establish it and put it at the heart of your business.

"OK, it’s an obvious one. In this crowded market place you really do need to find a way to stand out from the competition and attract customers with Unique Selling Propositions (USPs). Maybe you are a coffee connoisseur and want to establish the first real artisanal outlet in your neighbourhood. Maybe your exceptional baking skills mean people will travel for miles to sample your cakes. Perhaps you have bagged the prime retail spot in a busy business hub and possess the business acumen to simply run the fastest, most efficient coffee shop in the area.

In short, know your strengths and apply them effectively." But you can go one step further than that. Diana Stephania Patiño at Perfect Daily Grind says that this is the “core of your business”. So you’d better make sure you’ve given it a lot of thought. Getting your USP down will benefit you further down the road.

"This question is the core of your business, and it’s easy to think you already know the answers. But slowing down and really considering these points in depth will be beneficial later on."

Having a niche that’s a bit, well, niche can make you stand out from the crowd. Over at My Bizdaq, writer Chloe Suret talks about the benefits of going niche. There are over 16,000 cafes and coffee shops in the UK alone. And establishing a clear niche can really help you establish yourself in a crowded marketplace. The Cereal Killer on Brick Lane might seem a bit ridiculous, but they’ve made themselves known, in spite of (or perhaps because of) their £3+ bowls of cereal.



thumb up


"Niche cafes also benefit from the non competitiveness of the market. Despite there being over 16,000 cafes and coffee shops in the country, niche cafes aren’t forced to compete on the same terms as traditional cafes. Their quirkiness is what makes them appealing. After all, there are certain cereal cafes across the UK charging over £3 for a bowl of cereal! The diverse range of concepts and opportunities available for starting a niche cafe makes it an exciting business area to launch into."

Niche coffee shops don’t just have to be a money-spinner, though: they can be a great way of building communities, says Helen Dunsby at Startups.co.uk. A board game cafe isn’t just a coffee shop with board games, but rather the focal point of a community that values board games. It’s the same for cycle cafes and comic book cafes.

"The diverse array of opportunities available also makes launching a quirky cafe an exciting prospect as it’s not just cats, cereal, and crisp-centric venues that appeal to the public. In the last couple of years there’s been a steady influx of cycling cafes. These included Brighton’s Velo Cafe which offers a “community” for cyclists, and other interest-driven cafes such as Newcastle’s Geek Retreat; a cafe for comic book fans, and Notting Hill’s Biscuiteers Boutique. This, as the name suggests, concentrates on biscuits. Consumers increasingly want added extras so if you can draw on the success of these cafe start-ups and find your niche, then a quirky cafe could be a good money spinner."

Basing your cafe around a unique concept, whatever that might be, is a great way of differentiating yourself from the competition. Chances are you’re not going to be the only coffee joint in town. Even the smallest town is likely to have somewhere serving coffee. And even if you’re opening up in an espresso desert, without a cappuccino for miles around, you’ll still have indirect competition from stovepot Moka pots and Nespresso machines and jars of instant. Adela Zugarova at European Coffee Trip says that it’s not enough to just do the basics well. To grab people’s attention, you need to do something really special.

"Let me be a bit sarcastic here. Homemade desserts and lemonades are not enough of a concept. They are delicious, but it is kind of a standard service nowadays. Here are a few thoughts on what you could do to establish a unique concept business. Take into consideration the development of your market! Offer a sort of technological innovation, feature a brand new product, a unique design."

coffe is always a good idea

But how does this pan out in reality? In an interview with Inc. Magazine, Duncan Goodall talks about setting up Koffee in New Haven, Connecticut: he went down the “artsy” route, and turned it into a real selling point for his cafe. While a previous foray into the world of coffee saw him trying to be “all things to all people.” Previously he sold paninis, coffee, crepes, chocolate, and much more. Now, Koffee focuses much more tightly on a far smaller group of customers, and it has flourished as a result.

"Goodall’s first rule is to focus on a group of customers and products rather than trying to be everything to everyone. This is good advice because the only way that customers will buy your start-up’s product is if it is better than anything else on the market.

If you do one thing very well, you can build a following. If you succeed, you can expand by finding similar customers in new parts of the world.” That said, trendiness is fickle, and you can run the risk of being left high and dry by fashion’s ebb and flow. Over at Serious Eats, Nick Cho warns against chasing the latest trend, or the latest tech.

Following fashion isn’t necessarily the way to go. Especially if there’s a lot of money at stake. If times change then you could be stuck with a tonne of pricey kit that makes coffee that nobody’s buying any more.

"There are new $15,000 brewing machines, newfangled grinding techniques, hype around certain roasting profiles, and fashionable taste characteristics that come and go all the time. If you're just starting out, looking over what's going on, chances are your eye will catch what's new, cool, hip and trendy.

Be wary."

Coffee shop sign

Chapter 2

Grand designs

How to design and fit out your coffee shop

 

This chapter goes hand-in-hand with the last one. How you decorate your coffee shop is tied with the broader concept driving the business.



This chapter goes hand-in-hand with the last one. How you decorate your coffee shop is tied with the broader concept driving the business.

Your cafe’s decor will help set its ambiance and its atmosphere, and have a huge influence on how your customers feel about the place, and how they use it. For instance, plush armchairs and a roaring fire won’t suit a busy city-centre cafe that aims to capture lucrative takeaway foot traffic. Meanwhile, a board game cafe that wants groups to linger over coffee and Settlers of Catan will want to invest more in comfy seating and cozy decor. Bare concrete and bar stools won’t suit them at all.


The best coffee in town

Or, as designers John Barnett and Anna Burles put it on the Speciality Coffee Association’s blog:

"Designing a coffee shop isn’t just about getting the right look. Or serving the best coffee. It’s about creating an experience which not only shouts about the amazingness of your coffee, and how that makes people feel good, but also an experience which gives a double-shot boost to your brand.”

And considering there are 16,000 cafes in the UK (and counting), getting the decor right is pretty crucial. There’s a lot riding on your cafe’s decoration and furnishings. It’s the first thing your customers experience, well before they take their first sip of coffee. In an increasingly crowded marketplace, potential punters are likely to set a lot by first impressions. It’s something that can really help you differentiate yourself, as UHS Group say in their blog:

How to open a coffee shop
"When choosing a coffee shop, most high streets present a number of options ranging from well-known chains to quirky independents. Because of this, there’s little room for dull furniture and lackluster design in such a competitive market – with 70 million cups of coffee consumed in the UK every day, it’s never been more important for your café to offer something different (perhaps an avocado latte – don’t do this!) and most definitely, show off a stylish interior."

But as with your coffee shop’s concept, it’s important not to get too caught up in the latest trends. There’s perhaps even more at stake here, as interior design fashion changes faster than trends in coffee. Third Wave coffee isn’t going anywhere fast, while the Edison bulb is already more than a bit out of date. Liteco Projects, who specialise in fitting out coffee shops, say that any decor you go for needs to keep your customer in mind.

"Despite these waxing and waning yearly trends, café interior designs and refurbishments need to keep the customer in mind, whilst still remaining ahead of the game. There is no point in following trends if they don’t have a positive effect on your ROI and increase your bottom line."

Keeping the customer in mind is what’s driving Bill Sleeth, the brains behind Starbucks’ recent push to make their stores unique. Starbucks hasn’t always been associated with great design, but that’s changing, to the point where one of their Amsterdam outlets has made this list of perfectly-designed coffee shops compiled by Wallpaper*, while Architectural Digest has compiled a list of unique Starbucks locations around the world.

Man drinking coffee in a cafe


Starbucks’ aim is to make their stores look and feel unique, and to foster a sense of ownership among Starbucks-goers.

"Today, Sleeth is thinking about Starbucks less in terms of stringent brand standards and more as a kind of intrinsic feeling. He wants to foster more of what people call “my Starbucks” and less what people call “that Starbucks.” That’s not only what Roy’s does, but all of Starbucks’s most successful stores. People personally identify them as theirs, they feel some connection to it, and even ownership over it."

Chances are you don’t have the sheer financial muscle of Starbucks (and who does?) but there’s a lot to take from their approach. Working on creating a space that your customers can feel at home in, and feel like they can take ownership of, is the way to go. When people identify with your shop, they’re more likely to come in, they’re more likely to buy bigger-ticket items, and they’re more likely to bring their friends and family.

Designing a coffee shop that becomes a community hub isn’t necessarily the easiest task. There’s a lot to take into account, from flooring to the type of light bulbs you use. But you don’t have to do it on your own, say Select Interiors. There’s a wealth of pros whose expertise can help lighten your load.

barista
“An experienced fit out contractor can be hired to relieve this headache. Most should be able to develop the scheme, design the space and illustrate it using CAD plans and 3D models, support with planning applications, set a budget and timeline for completion and most importantly oversee the entire project and workforce from start to finish."

When designing and fitting out your space, you don’t have to stop at coffee — your space may well offer you other options. This can help boost your bottom line, as well as getting you known in the community for things other than coffee. It can be a major factor in driving people through the doors, say Melony Spencer and Martin Swinden at Hospitality Interiors.

"Explore other avenues that could help to bring people through your doors. You may be able to diversify your services by reinventing a space that’s always empty – perhaps you could use it as a meeting space or a function room? If it’s food or drink you offer, invest in a take-away or delivery service for busy workers in nearby offices. These avenues could develop into new services altogether, therefore increasing your reputation and commitment to customers’ needs."

Location graphic

Chapter 3

Location, location, location

Where to set up your coffee shop

 

Where you set up your coffee shop is as important as how it looks or the idea behind it. Where you’re located determines how your customers interact with you and your business. Customers will look at a coffee kiosk on a busy station concourse differently to a cafe tucked down a sleepy side street.

Route graphic

 

No matter where your coffee shop is located, the one thing you need is passing trade. Thrillist call it a “non-negotiable” in an article about setting up a coffee shop. They say that being in the centre of town isn’t necessarily the be-all and end-all, but you absolutely, definitely need to be in a location that gets foot traffic, or otherwise you’ll flounder.

"Although most factors about location are give and take, foot traffic is the one thing that's almost non-negotiable. You don't need to be on the busiest street in town -- a more up-and-coming area can be a boon because your business can help define what the area will become. But you do need people to already be walking in front of your place, so that they'll actually walk into it."

Restaurant Report says something similar, but they add one important caveat: the location you choose can’t be too saturated with coffee shops already, or you’ll run the risk of not being able to differentiate yourself from the crowd. They also advise that you’re realistic about what you can afford, or you’ll run the risk of being disappointed.

"The location is not the only key to success, but it is an important one. The location should be researched and chosen carefully. Start looking in areas that you can reasonably afford, the last thing you want to do is fall in love with a location you cannot afford. Target high traffic areas that cater to your customer and that are not already inundated with coffee houses."

Perhaps the easiest thing to do is to try and find a space that has previously been a cafe — if it’s been successful then chances are it’s got a lot of winning features. It’s likely that it’ll be in a high-traffic location, and it’ll be easier to get licenses and to fit it out. The previous tenants might have left you some equipment. Bond Street sum it up this way:

"Choosing a space that was already a café-type business can alleviate much of the initial hassle of preparing for building renovations and obtaining necessary documentation (and in some cases, could even cut down some of those renovation costs). Really, the most essential requirement of your location is the amount of foreseeable foot traffic"

Wherever you choose to open up, make sure that you do your research first, and that you’re sure about why you’re opening up in that location. Deputy’s blog on choosing a location for your business talks about setting up second (or third, or fourth) locations, but their principles are sound regardless. You need to work out why people are visiting (or will visit) your coffee shop, and what motivates your customers — you should open your business where those customers are.

Customers graphic
"When choosing your next location, do the extra research to first understand why people are coming to your current location(s). Once you know what your “why” is, you will build a business and brand that will dictate your growth plan and goals. Even more, you will understand who your best customers are and what motivates them. And those best customers are where you next location needs to be."

When seeking out areas with high foot traffic, you can look for other businesses that rely on passing trade, as well as businesses you can piggyback on. Coffee Shop Startups has a list of ten different businesses you might think about opening up near. Their list ranges from pet grooming salons to laundromats, but they all have one thing in common — they need foot traffic to survive.

"Why these locations? Because all of these business require foot traffic to survive. Chances are that if they have successfully sustained their business throughout the years, then they have found a good location. Often times, your coffee business can piggy back on their food and vehicular traffic – and even draw further traffic to the area."

Mark Mileto, the founder of Portland’s Bellissimo Coffee InfoGroup, a consultancy that’s helped to launch thousands of fledgling coffee businesses, says that morning trade is crucial for cafes and coffee shops, and that you should focus on the people who come through the door, rather than the people you think should be customers. Oh, and you should try to get the best deal

"The location needs to be easily accessible to customers, especially in the morning. Then, think about the area's demographics. "It's easy to get emotionally attached to your concept or space," Milletto says, but if your customer base wants food and iced drinks, include them in the menu, even if it changes your square-footage needs. And finally, negotiate the hell out of the lease."

Legal documents

Chapter 4

Legal must-haves

What paperwork do you need to set up a coffee shop?

 

Whenever you set up a business, paperwork is never far away. There’s a lot to work out.



You need to find the best legal structure for your business, you need to make sure that your location is properly licensed, you need to find commercial insurance that covers your property, your staff, and your customers, and you need to make sure your health and safety paperwork is all present and correct.

One of the first things to do is to make sure you’re registered properly with HMRC and Companies House. There are a few different incorporation structures in the UK: you can register as a sole trader or partnership, or as a limited company. Registering as a limited company is probably the best way to go for a business like a cafe or coffee shop, as it lends you credibility when you come to sign leases and deal with banks.

It also limits your liability should the worst happen, meaning that if you go bankrupt or get sued, it’s your business that gets in trouble rather than you personally — if you’re a sole trader or part of a partnership, you’re exposed to much higher risk. The downside is that limited companies need to do  more admin: they have to register with Companies House and file year-end accounts. The team at Startups.co.uk explain it like this:

"Incorporating means registering a limited company or LLP at Companies House: it’s a move that will lend credibility to the business. It may also make it easier to borrow money when the time comes. But do look carefully at your motives: being the managing director of a limited company may bring status, but you may regret the move when struggling with the year-end accounts.

Once you register at Companies House as a private limited company you are letting yourself in for more administration. But it is not as daunting as it used to be – these days you can be the sole shareholder and director, and act as company secretary too (although appointing a company secretary is no longer a legal requirement)."

Every company, no matter what they do, needs to be incorporated one way or another. But there are a few absolute necessities that are specific to cafes and other food and drinks businesses.

One of these is health and safety. It’s not enough to keep your cafe spick and span. You’ve got to be able to prove it’s safe and hygienic, sometimes at a moment’s notice. NCASS, the Nationwide Catering Association, have written a pretty definitive checklist of the 14 things a new cafe needs to do in order to be fully health and safety compliant. There’s a lot to keep track of, but you just need to be methodical and organised.

How to open a coffee shop checklist
"Your business premises must be well-maintained, minimise air-borne contamination, provide enough work space per person, protect against dirt, allow for good food hygiene practices and provide suitable food-handling conditions. Within your NCASS due diligence folder, you'll find a number of health and safety policies and risk assessments to carry out and maintain to help you make sure your premises are always compliant with the law."

You also need to make sure that you’re correctly insured. Commercial insurance works a little differently to your house and car insurance. As well as getting your property and equipment insured, you need to make sure you have public liability insurance.

You’re not legally required to have public liability insurance in the same way as you’re required to have car insurance, but without it you’re not protected if a member of the public is injured in your cafe.

If someone’s injured on your premises and you don’t have public liability insurance, then they can claim legal expenses and the NHS can claim for the cost of any treatment that they had to provide the person, as well as for the ambulance ride. Public liability insurance isn’t a necessity, but Park Insurance say it’s as important as your selection of coffee and cakes:

"As important as your selection of coffee blends, cakes, and ambience, but easier to put off thinking about, is the essential insurance that goes with running a successful cafe. Without it, your business could go under, so it makes sense to carefully consider what you need and take the time to get the best value deal."

It's also a legal requirement to register your food business with your local council at the very least 28 days before opening day. More information can be found here

Espresso machine

Chapter 5

Kitted out

What equipment do I need?

 

At the heart of every coffee shop is a good espresso machine. No matter whether you’re going for a hardcore Third Wave experience, or you’re serving up hazelnut frapps, you need the dark stuff on tap.



But you shouldn’t just go for any espresso machine — or even necessarily for the most expensive one. Instead, you need to make sure that your espresso machine fits in with your business.

Espresso machines
Size matters, but bigger doesn’t necessarily mean better in the world of espresso — which is apt, considering the most miniature coffee packs the biggest punch. Instead, you need to look for a coffee machine that’s the right size for your space, and is powerful enough to handle your customers. Get a machine that’s too big for your shop and you’ll lose precious counter space; too small and you’ll struggle to handle your customers. Casa Espresso says that your choice of coffee machine relies on three factors:

"The size of the coffee machine really boils down to three things: 1. How busy you are, 2. How much room you have and 3. Your budget. The majority of coffee machines come in either 2, 3 or 4 groupheads which in turn are capable of producing 4, 6 or 8 drinks respectively. Obviously the more groupheads means the more worktop space required and generally speaking the more expensive it will be."

The real key to choosing an espresso machine is working out the number of groupheads you’ll need. The more groupheads you have, the more drinks you can make at once, and the easier it’ll be to cope with crowds. If you anticipate that you won’t have much foot traffic, then you can get away with two, but if you’re likely to see busy rushes then you’ll need three or four, as Lockhart explain on their blog:

"If you have a busy venue or need to be equipped for demanding peak periods, you’ll need more groups on your machine so that you can prepare more drinks at once. These machines also come fitted with one or more steam spout for foaming milk."

Expert Market recommend that you try to quantify this as far as possible before you make a decision on an espresso machine. You should work out how many cups you’ll be relying on your coffee machine to make per day. That way you can be sure you’re looking at the right models.

Coffee cups
"The important equation will be how many cups of coffee per day you would need the machine to dispense. Work that out before you contact any suppliers as this information is crucial. Some machines will not cope with high volumes while others will be temperamental when not being used enough.

The cup/day ratio is based on an 8oz serving. Low volume coffee machines are recommended for just fifty cups per day. Medium volume coffee machines are recommended for 150-200 cups per day. High volume would be 200-500 cups per day."

There’s also a choice to be made as to what type of espresso machine you’ll go for. The convenience of an automatic machine is tempting but there’s a trade-off: you lose the romance of a manual espresso machine. There’s a few other benefits to a manual machine, which this article by Espressotec explains:

"Many a serious Italian barista will insist that no other machine can produce such perfect espresso. This is because the operator has control over the infusion time - the time that the handle is left in the down position before being released - which can coax the perfect flavour out of the coffee grounds. Because of the physical labour involved, it is not the ideal machine to have in a high traffic location where junior staff or one overworked owner have to pull 300 drinks in a day. However, these machines have one great attribute, even today - if equipped with an optional propane kit, they require no electricity to run. This makes them great for fairs, on catering trucks, some cart situations, etc. In addition, their lower cost and extremely low maintenance can be a plus for low-volume locations."

But your coffee machine is just one piece of the puzzle. You’ll also need something to grind those beans. Coffee beans go stale fast, and ground coffee goes stale even faster, so you’ll need to be able to grind beans to order. And if you’re slinging hundreds of cups per day, you need a machine that’ll keep pace. As Know Your Grinder explains:

Coffee beans


"The truth is, you can’t really open up a coffee shop without a high quality coffee grinder. Any café you go to will have one, but some just skimp on them and end up with an inferior model, and, hence, inferior coffee and espresso."

You’re likely to need more than one grinder, though — one for regular coffee and one for decaf. It’s important to get a grinder that’s powerful enough. Get one that isn’t, and you could find that the motor goes at a critical moment or the burrs begin to get blunt. Street Directory talks about what you should look for in a grinder:

"You will need one for decaf and one for regular espresso. There are several manufacturers and models. I will tell you though to be sure it's automatic and has a doser/coffee hopper. They make a doserless model that grinds right into the portafilter and though this is freshly ground espresso, it does not work well in a rush! The units with a hopper allow the hopper to fill with ground espresso and have a lid to keep out the air. The bigger units have a bigger hopper and vice versa. Also, these have a bean hopper that you can get about 2 lbs of espresso beans in."

Seattle Coffee Gear says that when choosing a commercial grinder, you should take into account the size of the burrs that grind your coffee. It’s important for busy shops to invest in a grinder with larger burrs because they will grind faster.

"What is the advantage of having bigger burrs? You won’t have to wait as long to get a shot. With a smaller burr-set like 58mm, it will take you about 8-10 seconds to get a double shot of espresso, while with a 64-65mm burr-set it will take only 6 seconds. Thus, if you have a small volume café, it is ok to go with smaller burrs since you won’t experience as much of a time crunch. However, you cannot use a smaller grinder at shop at that is doing 150 drinks a day, as it will slow you down too much."

You’ll need plenty of other gear to open your coffee shop. While you might not need to invest in much kitchen equipment, depending on how you’re setting things up, you will definitely need to buy a milk fridge. A small shop can get away with a normal home fridge, but, as Bizfluent points out, a larger and busier operation will need commercial kit that can cope with being opened every few minutes. Having your milk spoil is far from ideal. Not only will you have to ditch the offending milk, but it’s a public health risk — so it’s important to get a good milk fridge.

"You will need a refrigerator to hold your milk at a suitable temperature. A small coffee shop can often get by with a refrigerator designed for home use, but if you will be doing a considerable volume of business, you should invest in a commercial refrigeration unit that can hold plenty of inventory and keep your milk cold even when the cooler door is opened every few minutes."

Robot

Chapter 6

Getting technical

How technology can boost your coffee shop

 

Coffee shops have been around in one form or another for centuries, but that doesn’t mean that you have to forego modern technology. Tech can help to ease a lot of pressure points in your business, from automating tedious admin to helping your baristas brew a better coffee. Or, as Jordan Nelson at Merchant Maverick puts it:



"Anyone who’s worked in food service knows there’s more to running a café than good food and great service. You need precision, nuance, and four years of jujitsu training. Wait…I’m thinking of my sister, who’s training to become a ninja chef. But my point still stands. Any ninja-chef-to-be will tell you there’s a lot of work going on behind the scenes of a well-run eatery. Aside from the jujitsu, there are books to be balanced, inventory to be tracked, employees to be managed, customers to be marketed to, and reports to be analyzed. Even small business owners can get overwhelmed if they don’t have the proper tools."

An EPOS system is a must-have piece of tech for any forward-thinking coffee shop. EPOS stands for Electronic Point of Sale. Think of them as smart tills, which can track sales and take the hassle out of cashing up at the end of the day, calculating tax, and much else besides. Using an EPOS system can help to turbocharge your business, but you need to make sure you’re getting one that’s built for cafes, and has the features you need. You wouldn’t buy a restaurant EPOS for a shop, so why would you buy a shop EPOS for a cafe?

Fit Small Business explains what you should look for in a cafe EPOS system — it should help you manage service, providing you with an easy way to track orders and tickets, and make it simple to switch between eat-in and takeaway orders.

"A cafe POS system is designed to help small coffee shops and eateries efficiently manage counter, seated, take-out, and delivery orders, plus oversee general business needs. Customer service tools, quick order-taking, and ticket-tracking top the list of needed features in good cafe POS software."

Capterra say that an EPOS system isn’t just a tool for your business, but can act like another member of staff. It can’t make a coffee, but it can ease the admin burden and make life much easier for you, as well as helping you to serve customers faster.

 Cafe staff
"Features that make a POS work well for a coffee shop might be different than those for a POS that serves a full service restaurant.

Look for speed, automation, mobility, and comprehensive analytics that let you tweak operations as quickly as your customers need their coffee. When you think of your POS as another staff member that will improve customer experience, you’re on your way to choosing one that’s more of a partner than a tool."

You can also find tools that give your baristas a boost, doing everything from frothing milk perfectly to brewing five cups of pour-over at a time. Ellie Bradley, the editor of Fresh Cup Magazine, says that this will make it easier for baristas to offer a consistent product, helping them to offer the perfect cup each and every time.

Fresh coffee

"Good baristas have spent months—often years—honing their skills behind bar. But even a team of highly trained baristas will demonstrate inconsistency during preparation across the group, simply because so many of the steps in drink preparation still rely on manual control. As coffee businesses see continued growth, it will become imperative to find solutions for mitigating variation between baristas.

New tools continue to appear on the market as a solution to this inconsistency: automated tampers, espresso machines with built-in scales and countless options for controlling espresso extraction parameters, and pour-over stands with controlled pulses. These tools perform consistently in high-volume businesses, and allow for repeatable results. Knowledgeable baristas are still very much needed, but automated tools will continue to hit the market, expanding the options for producing a high-quality product."

But with bean-to-cup machines popping up everywhere, bringing decently-crafted espresso drinks to places where good coffee never used to be, might tech run the risk of putting baristas out of business? Ric Rhinehart of the Speciality Coffee Association doesn’t think so. In an interview with Imbibe, he says that baristas do more than just serve coffee — and machines can’t replace that.

"“You have to step back and ask yourself, ‘What is the essential role of the barista?’ If you think the critical role of the barista is the conversion of whole-bean roasted coffee into ground particles and the addition of water across a filter medium, then, yeah, maybe there is some risk there,” says Ric Rhinehart, executive director of the Specialty Coffee Association. “But I don’t believe that’s the critical role. I think the critical role of the barista is to provide the customer with an experience that’s tailored to meet their needs, and the barista can use a wide variety of tools to get that done. I mean, we don’t for a minute say, ‘Wow, automated grinders! That’s the end of the barista! They should be grinding this by hand!’ That’s not true.”"

Cafe staff

Chapter 7

You can't get the staff

or can you? How to staff your coffee shop

 

You can’t run your coffee shop on your own — and you really shouldn’t, either. There’s a lot of balls to juggle, and it’s easier to do it with others. Unless you’ve got the very smallest of locations, you’ll want more than one set of hands manning the espresso machine. Make It Cheaper’s Ultimate Cafe Owner’s Guide discusses why you should hire:



"There are many benefits of recruiting cafe staff, including reducing your own workload so you have more time to focus on other areas of the business. However, there are also certain downfalls that can come with having employees, such as those associated with not hiring the right people, and entrusting the fate of your business to a stranger."

Recruiting staff
Hiring people is a big task, especially when you’re just starting up. You want to find people who can approach things with the same level of dedication that you do, and can serve up coffees with a smile. In short, you don’t want to just hire the first people you see. Barista Magazine tells you why you should take your time, and what you should do:

"The best thing you can do is to approach hiring slowly. You know that saying, measure twice, cut once? You want to practice the same patience and deliberateness in hiring. Interviews are usually the first measurement of a person’s abilities, and they’re almost always the only one, but there are a dozen ways you can measure twice. Check references, schedule a stage shift, or ask someone from your staff to join in a second interview or make a list of things they’d like to ask."

You also need to make sure you know what you want from your new hire. Taking the time to make sure that you’re clear on what you want your hires to do means you’re far more likely to find a barista who fits the bill, as the team at Perfect Daily Grind make clear:

"Make sure you clearly define what you want from your new barista. Do you need someone to work the bar or to be in the kitchen? Or do you someone flexible enough that they can jump in wherever they’re needed? Don’t stop there: how many hours do you need them to work? What level of experience is ideal? What kind of attitude should they have? What personality do they need to click with your team?"

But what to look for? Five Senses makes it clear that a great barista does more than just make coffee — they can build a rapport with your customers, making them feel welcome and encouraging them to return. And you should be able to trust them to man the ship when you’re not about: you can’t be everywhere at once, after all, and having employees you can count on makes life much easier.

"But the best employees can do more than pull top-notch shots. Look for people who maintain a great demeanour and create a welcoming environment. An employee who can build a rapport with customer will promote return business. Employees also should understand how to eliminate waste and control costs. If you have the confidence to allow your workers to figure out most issues on their own, it’ll free up time for you to focus on growing the business as a whole."

All this a lot to handle? Don’t worry. Your interviewees are bound to be more nervous than you are, say How to Start an LLC. Just take things slowly, and get to know your candidates, and make sure they fit the bill: you’ll be spending a lot of time with the successful ones.

Recruting staff
"If you take your time during the planning and recruiting phases of the process, you will likely end up with many qualified candidates.

Nonetheless, it is perfectly natural for a new business owner to be a bit anxious the first time hiring employees. Don’t forget that the interview is just a chance to get to know an applicant and to give them an opportunity to learn more about the role and the business. Also, it might help to remember that they are probably even more nervous than you are!"

Coffee beans

Chapter 8

Full of beans

How to ding the best suppliers for your coffee shop

 

You can’t start a coffee shop without coffee. Fact.



But you can’t just pop down to the local supermarket for beans. That won’t fly when you’re shifting hundreds of cups per day.

Coffee beans
Ensuring that you find the right suppliers for your business is crucial. The connections that you make with your suppliers are among the most important that you’ll make, period.

In fact, QSR Magazine likens the relationship with your suppliers to a marriage, saying that a good relationship requires a lot of face-to-face communication and negotiation:

"It’s very much like a marriage, there’s love, hate, and everything in between. With a good supplier, you can complain or argue and at the end of the day, you’ve corrected any problems and made up. If you can’t maintain a good relationship with them, if problems aren’t corrected, you have to reevaluate the situation and consider a divorce.”

Nailing your supplier relationship means that you can run your business smoothly. It’s as important as getting a customer base down, says Chron. You need to be able to rely on your suppliers, and yours should be accustomed to going the extra mile to help you and your business.

Cafe supplier
"Since suppliers provide the essential goods and services to run a business, owners should focus on what they bring to an operation instead of what they cost. Suppliers provide quality materials and help you acquire what you need in a pinch. To meet your goals, you'll have to ask them to go the extra mile. Establishing a relationship with a supplier is much like growing a client base. It requires a solid track record of professional behavior combined with a personal touch."

When looking for suppliers, you shouldn’t necessarily just settle for the one who can get you the cheapest price — tempting as that may sound. Instead, you should look for suppliers you can view as long-term partners, say Buzztime Business.

"Focus on quality versus quantity. When choosing suppliers look for partnerships that offer your restaurant the most value, not just the lowest price. Think of each supplier that you select as a long-term partner in your restaurant, and they too will deem you to be a valued partner in their business."

Unpalatable as it may sound, you’re pretty much reliant on your suppliers, which is why they need to be a part of your business plans from the very start, says Bob Reiss at Entrepreneur. You need to think strategically about your relationship with your suppliers, and ensure that you’re realistic about what your suppliers can offer you and what you can ask of them.

"Your approach to suppliers needs to be part of your strategic plan since almost every company, whether product- or service-oriented, is dependent on suppliers. Many business owners seem to get this supplier issue backwards. They think that because they write the order, they're in the dominant position and can exploit it with unreasonable demands, including personal perks."

One major perk of partnering with suppliers is that very often they’re the go-to experts in your field. Coffee suppliers don’t just sell beans — very often, they’re an integral part of the supply chain, selecting the beans from growers and mixing and roasting them just right. Keeping a good relationship with your suppliers means you can take advantage of this expertise, says Sadie Hopkins at BusinessesForSale.com.

"It can be that when talking to suppliers, you find new options for your menu which you had not previously thought of. Some smaller, more specialist coffee suppliers now offer specialist single origins alongside their regular blends.

It may be that you can add a USP to your coffee menu by offering a wider coffee selection, such as cafetiere or filter options. Use the experts - ask their advice about current trends in coffee, and utilise this knowledge to make your coffee menu stand out from the crowd."

But where to find wholesalers and suppliers? It can be a difficult task, suggests the team at SmallBusiness.co.uk, who recommend looking at trade shows and exhibitions — they tend not to show up on Google, and trade directories can be out of date. A fringe benefit to meeting suppliers at trade shows is that you can use these events to network and make connections.

"Wholesalers tend to shun flashy advertising and web search optimisation, so Googling manufacturers is not a great method to find wholesalers – although The UK Trader and The Wholesaler websites have large directories dof UK wholesalers.

A better option is to visit a large trade show or exhibition – even if you don’t commit, they can be a valuable networking opportunity and your fledgling business can get a feel for what’s on offer."

And as with any business relationship, you need to keep a firm hand on the tiller to make sure that everything’s going smoothly. You need to be sure that you’re getting the best from your suppliers, say Smarta. You may find that you need to ditch your suppliers, so be sure to get an exit clause in your contract.

Megaphone

Chapter 9

Marketing your coffee shop

How to get your coffee shop known

 

Getting your coffee shop set up and supplied is one thing, but attracting people through the door is another one entirely. You’ll need to devote quite a bit of time and effort to marketing your coffee shop, especially when you’re just starting up and you don’t have a well-defined brand or loyal customer base to draw on.



Coffee shop marketing starts with your physical location — App Institute point out that consumers make choices based on their eyes and noses, and say that you should do as much as possible to make your place look and smell attractive. Think about how attractive trays of baked goods are, and how tantalising the smell of freshly-roasted coffee is.

Cafe marketing
"The visual side of marketing your coffee shop can’t be overlooked. People make assessments about businesses using their primary senses, and the vibe a coffee shop gives off is very important to customers, even at a subconscious level.”

You can use visual cues to encourage customers to spend once they’re in your coffee shop, say the team at Print Print. Understanding where customers’ eyes fall, and how they make decisions, is key to this. Then, you can strategically place posters and fliers hawking the high-margin items you want to sell more of.

"Most coffee shop customers won’t pore through the whole menu to calculate the best deals. They’re not buying a new car – they’re just here for a drink and a bite.

So when they arrive, they’ll often go for the first attractive thing they see. And that means you have a real opportunity to put your highest-profit drinks and special offers right under their noses.

Get some big, bright and colourful posters that push the deals and offers you’d like to sell more of, and put them up in the places where a visitor’s eye falls to first – in the central window of your front door, above and behind where your baristas work, and next to the door to your toilets."

This strategy doesn’t stop at sight, or sound, or even smell. Customer experience is a vital part of building your brand and marketing your coffee shop — word of mouth advertising has been around for as long as there are products to advertise, and the power of recommendations from trusted friends cannot be underestimated. Or, as the team at Handground put it:

"“Creating a really great customer experience is key to everything because they are by far our best marketing tool,” said James Yoder, of Not Just Coffee. “Everyone wants to be the one to tell their friends about a great spot they go to and we have so many customers who were referred by friends.”"

But people don’t just pound the streets looking for their next coffee fix. As important as making sure your coffee shop is attractive to passing trade is, making sure people can find you online is vital. Local SEO is incredibly important for small businesses, especially those looking to grow local followings, say Small Business First:

"Once you’ve set up your cafe, [making sure people can find you] is possibly the first thing to do online. It’s very common for cafe-goers to search for places nearby and it’s important for your cafe to show up in the top results. So how do you make that happen? You’ll need to ensure your cafe is listed in as many online food directories as possible. Start off with Google My Business and Yelp, and submit as many details as possible including your opening hours, phone number and directions on Google Search and Maps. Best part? Listing your business won’t cost you a penny!"

And if you want to splash the cash on internet adverts, you can make sure that they’re laser-targeted towards people in your area. This means that the people who see and click on your adverts are more likely to come in — and because search adverts are pay-per-click, it means you’ll get more bang for your buck. Wordstream puts it this way:

"For most restaurants, local is the name of the game. Most folks are looking for good eats close to home, and you’ll get the most value out of your online marketing efforts by investing primarily in geo-targeted ads. Geo-targeting ads help you save money, ensuring that only users in certain cities or within a specific radius see your ads (eliminating non-relevant clicks, which can cost you big ad bucks).

Many online advertising services, from Google AdWords to Facebook and Twitter, offer geo-targeting ad options (at no extra cost). Be sure to take advantage of these handy targeting features to get your best ads in front of your best customers."

There’s no reason to miss out on the benefits that social media marketing can bring you and your coffee shop. While you can put serious time and money into it, social media marketing doesn’t have to cost you a penny — it costs nothing to set up a Facebook or a Twitter account, and post to it. But you need to put some work into it, say the team at Wishpond.

Social media marketing
"By virtually connecting everybody to a social network, there is an incredible potential for the spread of your product and brand. Engagement with clients outside your store is difficult as a coffee shop because consumers don’t have that many reasons to connect online, unless you use incentives. Just being present online is not sufficient for anyone because everyone can be."

There’s plenty you can do, though — The Social Savior has some ideas that take advantage of your coffee shop’s unique charms. They suggest taking advantage of the visual nature of platforms like Instagram to give your followers a behind-the-scenes peek into your coffee shop, and use that to build up your brand.

"With faster internet speeds and unlimited data allowances, people are happily watching video content these days. Take the visual nature of social media to the next level by posting clips of your coffee shop in action.

Whether it’s a quick pan of the room on a busy Saturday morning, punters enjoying a special event, or a behind-the-scenes of your kitchen at work, it’s a super effective way to give viewers a feel for your café. You can build your brand identity through videos by portraying the vibe, personality, and feel of your café.

Tailor your videos to the platform – short clips on Vine, food montages on Instagram, behind-the-scenes shenanigans on SnapChat, and social videos with patrons on Facebook."

When you do any kind of advertising or marketing, though, whether that’s physical or digital or social, you should always keep your customers in mind. Restaurant Engine recommends creating what are known as “customer personas,” little sketches of your typical customers, and making sure that the marketing you do is targeted towards them.

"First, you want to think like your customer. If you were joining the conversation on your Facebook page, what would you want to know? What would you care about?

Now start imagining what different types of your customers look like. What is their demographic? How old are they? Do they own or rent? What are their interests? Lucky for you, Facebook Insights can help you out with some of this information.

It will be easier for you to market to your customers if you know their personas."

Customer service

Chapter 10

(Customer) service with a smile

How to offer great service

 

Great marketing might get customers through the door, but you need to offer something special to get customers coming back time and time again — you need to offer great coffee and, more importantly, great customer service. In an article for Customers That Stick, Vernessa Taylor says that customer service is something that can create customers for life, and that at its root is the idea of “serving” someone — it’s this idea that should drive every interaction with your customers.

Social engagement

"What is customer service? At the root of customer service is the old-fashioned notion of “serving.” I think that many companies, big and small, fail at delivering remarkable customer service because they have not built a foundation upon serving. The “something” that happens inside you when you are on the receiving end of great customer service is the same “something” that should drive our own efforts.

Some companies have placed such a premium upon customer service that they create lifetime loyalty. That’s the essence of customer service — they keep coming back irrespective of price, venue, or even convenience. For a small business, the level of customer service can be the bottom-line differentiator.”

The first step to happy customers, says The Balance SMB, is making sure your staff are all well-trained and approachable. After all, your customers are always going to interact with them, so it’s important that they’re showing your coffee shop at its best. And bad customer service doesn’t just put out a single customer — it dents your brand.

"The first step in great customer service is your staff. A well-trained front of house staff will keep customers happy and coming back for more. Not just anyone can wait tables or tend bar. Good wait staff are among the most talented people out there. They are friendly, but not annoying. They can multitask, but still give customers their undivided attention. And they are honest, trustworthy and can work as a team."

One of the first steps to ensuring that your staff offer the best service is to make sure that they’re all on the same page — literally. Food Woolf recommends creating a handbook or a manual for your staff, so that they all know what’s expected of them and how to do things. This might seem a bit overkill for a small coffee shop, but having things written down makes everything go smoother. It means that if you’re short-staffed suddenly, other members of staff can pick up where they left off.

"Many restaurants operate without service training guidelines or employee handbooks that include service guidelines. Though having a service manual for a small café or mom and pop restaurant may seem unnecessary, keep this in mine: a restaurant without a service handbook is like a football team without a set of plays.

A thorough manual that states clear service goals, steps of service, and performance expectations is integral in the teaching process of instilling a consistent philosophy of service.

If you don’t write down what you want from your staff, your goals and expectations are unclear. If you have ever thought “they should know what their job is,” you are experiencing proof that the people who work for you probably don’t know what’s expected of them."

Writing a staff handbook might seem like hard work, but you’ll benefit from it. It costs many times more to acquire a new customer than to keep one, and anything you do to offer your customers better service will be vastly beneficial further down the line. An article on Restaurant Engine quantifies just how much you’ll benefit:

"Satisfied customers are integral to your business model. According to a Harvard Business School study on Starbucks, customer satisfaction has a massive impact on your revenue. Regarding Starbucks, they found that the satisfied customer visits 4.3 times per month, spends $4.06 and is a customer for 4.4 years. They went on to find that the highly satisfied customer visits 7.2 times per month, spends $4.42 and is a customer for 8.3 years."

But writing a handbook and making sure your staff are up to speed on process is only one part of the equation. You need to train your staff, yes, but Chef Works suggests that you shouldn’t just train them on process. Training should also help your staff to understand what kind of company culture you want to create, and the kind of service you want to offer your customers.

"One of the most important steps in providing great customer service is a proactive step: train your employees. Training your employees thoroughly and properly helps ensure that they are given the tools to provide the best customer service that they possibly can.

Training involves more than just teaching your employees the technical aspects of how to do their job. It can also be your chance to introduce and reinforce a company culture, teaching employees how to adhere to your own chosen protocols for etiquette and dealing with specific situations. Having systems in place for your employees to provide great customer service help them do just that."

One really simple way to offer better customer service, suggests Perfect Daily Grind, is to greet customers in a way that seems genuine and heartfelt. Small gestures like this go a long way, and customers remember these things.

"Every customer that walks in should receive eye contact and a smile. It’s a subtle way to let them know that you’re glad they’re here and, as of such, will do your best to give them a great coffee. It’s also much better than yelling “hello” at people. Seriously, on behalf of the world’s introverts, please stop doing this. You’re not greeting people, you’re disturbing the entire shop. A smile will suffice until they get to the counter."

Thumbs up

Chapter 11

Running a tight ship

How to run your coffee shop efficiently

 

So now that you’re up and running, you need to graft to make sure you stay that way. It’s certainly no easy task, though. There’s a lot to keep on top of. A huge part of this is making sure that you’re running everything as efficiently and as effectively as possible. When I Work points out that a huge part of this is making sure you maximise your profits, and that one way of doing so is making sure that you sell high-margin items.



"A big part of efficiency is maximizing your café’s profits. Which coffee products you sell has a huge impact on how much profit you make. For instance, you’ll only make a few bucks per pound when you sell a bag of coffee beans, but when you turn that pound of beans into high-end drinks, such as espresso-based beverages, your profit margin expands exponentially."

Meanwhile, coffee consultants Stockton Graham say that keeping stock turning over is a great way of making sure you’re running as efficiently as possible. A high turnover of stock means that everything stays fresh, and that you’re not lumbered with lots of surplus inventory. As a bonus, it also makes your customers more likely to spend with you.

"Keep your inventories lean to ensure your coffee is always fresh and keep your presentations clean to let your products breathe. When it comes to merchandising, whether it’s retail bagged coffee, mugs, muffins or snack bars, less is more. Research shows that more sparsely stocked shelves suggest that items are in high demand, which subconsciously makes them even more desirable."

As well as keeping your inventory turning over quickly, Serious Eats’ coffee columnist Meiste suggests that new coffee shops keep their selection limited when they’re just starting up. That way, they can focus on nailing the basics first — you can always add more items further down the line, when you know there’s demand and you have the space and time to experiment.

"One of the most common missteps that new cafe owners make is trying to anticipate and meet the every whim of every potential customer who might stumble across the threshold. This not only tends to lead to unwieldy and confusing menus, but also a spread-thin staff, and a dozen items that hardly anybody every orders—except when you try to get rid of them, which inevitably invites a hundred complaints about how this or that regular suddenly can't get their favorite drink. Why offer a hundred mediocre items when you can knock everybody's socks off with a cool dozen?

Open with a limited menu of high-quality basic offerings, and add any extras as realistic demand presents itself. For instance, if you're not sure you'll sell many decaf cappuccinos, start your first two or three weeks without decaf espresso and see how many folks ask for it. Are there enough requests to justify the expense and addition? Then go for it. If not, you can feel confident in keeping things tight to preserve quality (and your own sanity)."

At the heart of all this is the advice to focus on what matters — the coffee. All Business suggests that you learn as much as possible about coffee before you cut the ribbon. You should become the go-to expert on coffee, and share your knowledge with the world. Being a geek is no bad thing, especially when you’re a coffee geek.

We love coffee
"Train yourself first on brewing coffee, tea, or whatever beverage you will serve. Be a geek about everything that you are selling. Learn everything you can about the coffees—the altitude of the coffee plants, the coffee varietal, name of the farm, cupping notes, and recommended brewing styles. Read every book, search the web, and ask a plethora of questions about your product. You should be “the expert” about your products. Also share your knowledge and passion about coffee and the cafe with your staff. If they’re not passionate about your product or services, they will not help your bottom line."

Whatever you do, be sure not to forget about the coffee — it’s at the centre of everything you do, and everything else follows that, says high-end coffee suppliers The Roasterie:

"The number one thing any coffee shop should have is great coffee—everything else should follow. You shouldn’t open a coffee shop and tout having an awesome smoothie selection. Producing great coffee means fresh roasting and grinding as well as proper brewing and knowledge of what to look for taste-wise."