Things to consider when opening a coffee shop
The number of coffee shops in the UK appears to be increasing every year and it doesn't look like this trend is slowing down. According to Statista, in 2019, there were 7,066 independent coffee shops compared to 6,034 just five years earlier in 2014.
As the coffee culture in the UK grows, so does competition and so it's important to do your research and be prepared before starting your own coffee business.
There are lot's of things to consider when starting a coffee shop business. Below are just some of the categories that is important to consider:
What location are you considering? Is there high footfall to increase your chances of success from passing trade? Or are you looking at a destination coffee shop where people will have to go out of their way to find you?
You might want to consider town centres, business estates, public parks, residential areas, children's play centres as just some of the types of options.
Alternatively, you might want to consider a mobile coffee shop where your location will change regularly.
Any setting can lead to a successful business but they will require a very different offering and strategic planning.
What demographics would your market fall into? Could it be an area surrounded by a business park with lot's of labourers that are in need of coffee and food? Could it be an affluent area with a lot of high income earners? Perhaps this market is more likely to have partners who enjoy a daily, leisurely coffee and social greet with friends. Maybe its close to schools and nurseries with a large footfall of young parents?
Your market should have a huge influence on the type of products and prices you offer as well as the decor.
Take a close look around the area and visit the local coffee shops. It's important to know the competition well and find out what they offer including the type of food and pricing they charge. This will give you a good indication of what is popular and what type of market they appeal to. Look for a gap in the market and find your own niche so you stand out. It might be that there are a few coffee shops offering a selection of food made to order but there isn't anybody serving ready prepared snacks and food to grab and go. This is important for those in a rush or on a quick lunch break if they work nearby.
It might be that there aren't any local coffee shops serving home-cooked, healthy food options and instead locals can only buy packaged and pre-made sandwiches and cakes. You might have a niche by selling wholesome, home-cooked, fresh food using ingredients from local suppliers.
Decor and furnishings
Based on the findings from the research in the above categories, this will play a large part on how you decide to furnish your coffee shop and what style to choose. Choosing to have expensive and stylish decor with comfortable lounge sofa's might not necessarily be a good option for a coffee shop location in a business district where customers don't stay for long or if they do, they need tables and chairs suitable for use with client meetings whilst they lunch.
Have a think about how long your target market might stay for and what furniture would suit them best. Space is obviously another key consideration here and how many tables and chairs you can comfortably fit in. It's important to consider space for push chairs and wheelchairs.
Suppliers, products and pricing
This should be chosen carefully based on your market research. You wouldn't want to source pre-packaged slices from the local cash and carry if you are in an affluent area where your customers want home baked goods and ingredients from local suppliers. On the other hand, you wouldn't want a luxury loose leaf tea for your regular builder/contractor customers that work next door and want to grab a takeaway builders tea.
Once you have a better idea of your market, you should be able to get a clear idea of the products and ingredients you want to source.
If you want to work out the costs of your products then it's a good idea to write down the exact cost price of your ingredients to ensure you are charging a reasonable price and making a good profit.
Hot drinks profit calculator
We have a great template which you can use to work out the cost of an average cup of coffee so you can work out your margins and profit. You can download this free of charge here.
Taking all of the above into consideration, it is also hugely important to work out your budget. How much money you have to invest might make you think differently about any of the above categories. For example, you might have your heart set on a prime, city centre location with a huge footfall in a desirable city. However, the rent on these locations tend to the highest. In Brighton city centre for example, a medium sized premises close to Churchill Square can cost over £50,000 in annual rent. Whereas, a similar sized coffee shop in a busy residential area slightly out of the city centre might charge up to £10,000 annual rent.
Do your research and make a business plan
By doing your research, you should be able to create a business plan for your market. Consider all the costs involved such as rent, electricity, water, staffing, equipment, supplies, marketing etc. Once you have an estimate of costs, you will be able to work out how much revenue you need to bring in on an annual/monthly/weekly/daily basis to cover your overheads and start making a profit.
Here at Maverick Coffee, we have years of experience helping startups come up with ideas for their new coffee shop venture. We love to listen to ideas, ask questions and share our wealth of knowledge to get you excited about opening your very own coffee shop. All advice is free of charge too! We also can help with branding ideas, logo design, website building and create marketing materials so we can turn your ideas into a reality.
You can find out more here: https://wholesale.maverickcoffee.co.uk/brand-building/
If you are thinking of starting your own coffee business then get in touch today for a chat about how we can help you (even if it's early days).
Email us: email@example.com or give us a call on 07788293003.