COFFEE SHOP BUSINESS GUIDE FOR THE "ESPRESSO BUSINESS CHALLENGED"


With all the popularity of "How to.... For Dummies" books, here is my short guide to "Coffee Shop Business Simplified so that Even You Would Understand" written for people that don't have a clue.

People call and e-mail me everyday asking "what machine or coffee" to use. Espresso equipment and coffee alone do not make a "business" and will have very little to do with your success or lack of it. You will understand this better by the time you finish reading this material. In very simple terms, for people that have never been in any kind of a retail business, especially a business dealing with food, you will need three basic  things:

  1. Enough money to start your business (remodel, supply, equip)
  2. A location where you will put your business
  3. Knowledge on how to start and operate it successfully without going broke.

I cannot help you with the financing, but my book, Espresso Business Success Program", has a business plan that may help you with the bank or an investor. If you read this material, you will know how much money you will need, and what kind of a location you should get. I will be happy to advise you about any location you may have in mind. This initial advise and consultation is free, without any obligation. Call me. But please, DON'T CALL before you read my whole site! Most of your questions will be answered here.

While business savvy companies and individuals, when venturing into a new line of business may admit their limitations and engage a consultant to advise them on matters beyond their primary areas of expertise, individuals with limited financial resources and no business experience often fail to recognize that need. Unfortunately, the people that need help the most can afford to risk their money the least! If a wealthy individual or company loses money in a new business, they may shrug it off. On the other hand, an individual with very few resources cannot afford to lose all they have because of bad advise, poor planning and deficient training.

They must do everything within their means to assure that every invested dollar generates maximum results in designing the shop, purchasing equipment and products, training all employees in all phases of the operation, and implementing marketing strategies that will bring customers in when they first open, and making sure that they come back.

Let us assume that you want to open a coffee shop/bar/house for whatever the reason. Here are some of the challenges that you will have to solve before you can sell your first cup of "cappuccino". If you are not prepared to meet those challenges, either you won't open your business in the first place, or if you do, you won't stay in business for long, no matter what machine, coffee or how much money you have invested in opening it.

Here are the challenges:

  1. Get enough financing for your venture.
  2. Find a proper location.
  3. Design the shop not only for looks, but for speed of service and customer's convenience.
  4. Choose your equipment and coffee supplier.
    Know what other things you will need, where to get them and how much to pay.
  5. Design a menu that will make sense not only to you, but to your "espresso challenged customers".
  6. Implement a marketing strategy with the goal of selling mostly espresso based drinks. Why? Because that's where the real money is!!!
  7. Train yourself and your employees in all phases of shop operations, including correct and speedy drink preparation techniques for better taste and faster service.
  8. Train yourself and your employees in how to market espresso based drinks, so as to sell more of them and create a large, loyal, and "addicted" to YOUR espresso, daily customer base. That is the "secret" of any successful coffee operation.
  9. All of the above, with little variations, will apply to any coffee concept, whether you open a single cart, a drive-thru or a 1000 store franchise.

The question is then, HOW do you meet all these challenges? Of course, you could get a franchise. A franchise is a proven way to do business. They already "ironed" out most of the mistakes for you, therefore eliminating many factors that would contribute to the failure of a start-up coffee business. Unfortunately, you will have to pay dearly for them to do all the thinking for you, anywhere  from $10,000-15,000 for franchise/training fees, and around 6%-11% of your gross sales as royalties. You still will have to find your own location, and spend around $250,000 to open it. Many franchisees end up paying more to the franchise company in royalty/advertising fees than they retain for themselves. Of course, they still cannot guaranty your success. No one can.

So, if you want to be in this business but don't have $250,000 or more to invest in a franchise, WHAT do you do? You may have two options left:

  • Do it on your own, with some very limited "free" training by your coffee or equipment supplier. Though one hour or so of training may be useful, it will never cover the above nine points, and it cannot substitute training that you may receive in your own shop just before and after you open. It would be equivalent to showing your son or daughter how to drive by going with them around the block a couple of times and then sending them alone on a busy freeway! And if you believe that some "experienced" kid that is working at some coffee shop (whom you consider in stealing away) will teach you all the planning and the "business", I may have an excellent espresso machine that I may sell you for two dollars!