- Patrycja Hala Saçan, content writer at Market Inspector presents practical guidance through the whole process
Subscribe to Speciality Food magazine today for just £19.99/year.subscribe now
In the last 20 years, the UK coffee market has been experiencing continuous growth. With around 25,000 coffee shops, and around 200 cups of coffee sold on average in a single coffee shop, opening a coffee business seems like a good idea.
However, starting a coffee shop that will turn into a big success needs planning, including an effective marketing strategy. We have gathered 15 practical tips for you
that will provide guidance through the whole process, starting with these five…
Do Market Research Before Starting a Coffee Business
Having a great idea for a business and executing it without market research might be a recipe for disaster. Studying the specifics of the coffee sector, competitors, needs, and target demographics should be an essential step to starting up a coffee shop. With so many unique interdependent coffee shops out there, finding a gap in the coffee sector is very important to open a profitable coffee business.
There are different ways to conduct market research. One way is to do it yourself. Looking at competitors in the location of your interest and learning their strengths and weaknesses might help to find a gap in the coffee sector and avoid mistakes. This approach does not need to cost you anything. You can visit coffee shops of your interest, talk to the owners, read reports, and articles.
However, those who have the time and the resources, can conduct surveys and focus groups, to learn about customers’ preferences and expectations. Finally, market research might be conducted by a research firm, which provides detailed well-prepared reports of a target group, suitable location, and product in demand.
Find a Unique Coffee Shop Concept
A unique concept is a fundamental element on which business plan, interior design, and financing will be based on. For that reason, finding a concept should be done at
the very beginning of building a coffee business.
Learning about current coffee shop concepts might be helpful to stand out in a highly competitive sector. Yet, the concept should go hand in hand with the location, target
group, and the values you want to represent. The easiest way would be to hire a professional, however, this might be associated with a high cost. Nevertheless, finding a unique concept without investing money is possible, with small efforts from your side.
There are different concepts that you can use as an inspiration. For instance, it becomes more and more common that entrepreneurs, start-ups owners, remote employees, and freelancers work from coffee shops. A place, which might serve as “office space” might be an attractive alternative to noisy coffee shops. On the other hand, veganism becomes a way of life for many people, and opening a completely plant-based coffee shop might be an original and trendy idea as well.
Create a Successful Business Plan
A business plan is an inseparable element of any kind of business. It provides documentation for the whole process, directions for the business owner, manager and the rest of the staff. At the same time, it is a document that is usually decisive for those who seek an investor or a bank loan.
Business plans might slightly vary, however, every business plan should include the following:
1. An executive summary
2. Market analysis
3. Capital or funding requirements
4. Product description
5. Sales plan
6. Financial plan
7. Organization and management
A successful business plan should be well-prepared and adjusted to your audience. Thus, if you would like to get a bank loan , you need to be very specific with all financial and sales aspects, in order to conceive banks that your business will be profitable. Banks do not tend to offer loans to those whose business ideas are unclear and unfeasible.
Choose the Right Location for Your Coffee Shop
What determines the right location for a coffee shop? The immediate area that surrounds your potential coffee shop might impact the number of customers. Location close to busy roads or business centers might attract different customers than a coffee shop in quiet suburbs. Consequently, foot traffic combined with target groups should be a priority in searching for the right location.
It can be a good idea to get creative and focus on less obvious ideas that might be more successful. Obtaining considerable capital might be problematic for many people. Others do not want to risk a huge investment. The alternative solution might be setting up a mobile coffee shop, which is associated with lower opening and running costs.
A mobile coffee shop is basically a vehicle equipped with coffee machine,selling coffee products, which are offered by conventional coffee shops. A car does not need a huge financial investment. Usually, mobile coffee owners use old vans,vintage campers or three-wheelers. Moreover, this kind of business offers a lot of flexibility and additional profit opportunities, such as festivals and other kinds of events. Last but not least, it can be opened only on weekends or during particular hours, which is a perfect solution for those who look for a side job.
Decide on Coffee Shop Financing
Using your own money for starting a business is the lowest-risk strategy, because you do not need to put your business in debt. Those who do not have enough capital
might consider a start-up loan. This kind of loan is usually offered at a fixed interest rate with mentoring and application support.
It is useful to get familiar with different options for start-up loans. There are start-up loans through debt or equity. A debt loan means borrowing money, which is expected to be paid back over a particular time. An equity loan is associated with sharing the ownership either with a family member, a friend, or an investor. Start-up loans can be offered by the government, banks, or an online lender.
Another common solution is angel investment. The investor usually demand a stake, or some level of involvement in the business for the money invested. The investor receives benefits when the business starts to generate profits. However, in case of failure, the investor is not entitled to financial claims.
The best approach is to conduct thorough research on the advantages and disadvantages of each option before making a decision.
more like this
20 November 2019Research commissioned by Ubamarket using a sample of 2,003 British adults found that 82% of UK shoppers believe that the level of plastic packaging used in food and drink products need to be drastically reduced, and 41% believe that the current level of usage is having an adverse affect on their health
21 November 2019"Cheese is fascinating" says Rosie from The Bristol Cheesemonger