Every American starts his/her mornings with a cup of coffee.
I had a friend who made a kettle of black coffee in the morning and went on drinking it till she felt like she had woken up.
She would offer me cups after cups like she was drinking telling me she was still feeling sleepy.
Not everyone makes it at home. Even if he/she does, the first thing he wants when he goes to work is a coffee break to visit a cafe nearby.
Huge opportunity exists in coffee shop business looking at 200+ million coffee drinkers in America.
Would you start a cafe looking at the easy task of making them happy?
Then you could start a kiosk under $5000. Go solo if you think you can’t afford a help in the beginning but soon you would be putting up a sign saying ‘Help wanted!’ when you see money coming in.
When I offered a cup of coffee to my American tenant in Denver city on a Sunday morning, he exclaimed, now I can go to run around the block!’
He used to be as lazy as a mule.
I laughed at him and really thought about starting a coffee shop.
I would call it Cafe Au Lait to sound French. What would you name it to sound catchy and local..
Here are some of the actionable tips on how you can start your own coffee shop business
1. Select Your Business Location
Look for a busy place close to offices or courts in downtown.
You could never fail by opening a cafe near a park if you see many people going in and coming out like the Central Park in NY.
Two prime locations flashed on my mind.
Starbucks coffee in the Railway station.
When I had to go out of town, I would get ready in a hurry and go to the Railway station to buy my ticket.
Train will arrive in half an hour. Time to relax and sit down for a while chatting with my son about our visit.
First thing that comes to my mind is Starbucks coffee shop where millions of Americans go to have a sip of the wonderful coffee they make. The aroma is inviting.
We go there and order for two cups with cinnamon sprinkled on top. Rightly priced. Not too heavy for my pocket.
Sipping the coffee made with the right proportion of coffee and cream, we forget our worries for a minute.
The other location is the cute kiosk at the downtown Denver. It had been there for many years and yet was kept neatly painted. A great footfall.
I could just take my food truck too and park it somewhere there.
2. Set Your Budget
If I had a million dollars, I would start a chain of Cafe Coffee Day like Siddharth did and burn my fingers not knowing how to price my coffee.
Agreed you have the topmost quality of coffee seeds from your own plantation, but no common man would come into your coffee shop to pay $5 for a cup.
Failure can come from underestimating how much would one pay for a nice cup of coffee.
Luckily I don’t have a million dollars to invest and open a posh cafe so I could open a kiosk in downtown with $10000 or go for Starbucks type set up with a medium $50000 if I could get a partner.
Anything in between would do too. But I must get at least a big share of 210 million coffee drinkers of America.
That being my goal I cannot cut down on interior decoration or exterior.
Americans love those who speak good English. So the staff must be polite and well spoken wearing a black and white uniform like they wear in Italy.
Keeping that in mind, I could open my shop anywhere people pass by and I would definitely place some chairs and tables on the outside like they do in Paris.
We were students there and used to walk a long way to drink mint tea at a roadside cafe. More people would sit outside basking in the sun than inside.
It wouldn’t cost much for such a coffee shop honestly.
Get a partner who could invest if you don’t have enough money.
Banks and Governments help small businesses to get started.
What kind of roaster would you buy? There are many roasters around offering a free cup of coffee. So, don’t feel shy to go round and taste the coffee to find the right kind of roaster.
You could import your beans from the coffee estates to maintain high quality. Coffee beans are cheaper in India and the import duty is just 1% in the USA.
Did the Trump government change it?
Just check in case you are importing Or just go for what you can buy in the supermarket.
Organic stores let you choose your own beans from different countries and roast and grind in the machine yourself. It doesn’t take long once you make up your mind. It’s worth it as you can add chicory in the proportion you like or not add it.
You could add cafe de nonno or coffee in grains of ice like an Italian speciality if you want a cosmopolitan taste.
4. Complete Legal Formalities
Begin with a visit to the local health department, which is a must.
Listen carefully as a deviation will not be tolerated and you can risk shutting down.
Passing a hygiene test is compulsory.
They want you to start your business to support the economy and create jobs. So they will be helpful and pleasant.
Follow through the procedures of registering a business name etc with the city. They will help you to get the licenses you need.
You will have to go with your personal identification documents along with lease records if you have already leased some premises.
Better to check the location before you rent it unless it was a cafe before you leased it and was already licensed by the city.
Make sure there are no cockroaches or pests by leaving some food somewhere for a day or two.
You will be fined later by the Health Inspector even if they existed before you took over.
Asking a lawyer about insurance etc will help you to get the right kind of liability insurance and employee insurance etc
Insure against thefts too.
That done, let us go to buy your furniture and equipment.
You must get a business account at your bank even if you intend to go cashless buying online.
It will show your profits and losses and it is the first thing a lender would like to see if you need finance.
5. Get Coffee Shop Equipment
Make a checklist to buy the right kind of coffee machine or an espresso bar.
- Cutlery and cups and saucers
- Coffee counters with sinks
- Chairs and tables
- Biscuits and cupcakes
- Cinnamon powder to sprinkle
- Flower vases with plastic or real flowers
- Cleaning mops and scrubs
- Detergent to wash hand towels
- Dish washing liquids
Go on adding until you think you have exhausted all your needs.
You could order your stuff online or go in person to make the right selection of you have time in the old fashioned way.
Shopping is a continuous process anyway when you have a business.
6. Hire Staff
You cannot begin a coffee shop however small without two people other than yourself.
One should be specialized in making coffee and the other hand to serve and deliver to nearby offices and shops.
Once you have the business running, you can increase the number of staff depending on the income.
Make provision for bills and salaries in your budget.
Expenditure for purchases and rents etc cannot exceed your income or you will be running under loss.
So maintain your accounts to keep a check and don’t go overboard in spending too much in your enthusiasm.
7. Manage Accounts and Finance
The most important part of a business is bookkeeping.
If you are not sure how to do it, hire an accountant who could come in for a few hours in the week to help you set up your books and maintain them.
Don’t let the taxman get you.
Pay your taxes regularly to avoid fines.
You can discuss the basic things you will need to maintain with a tax officer for free. They have free courses for you if you can digest them.
If it’s too hard,a preliminary discussion with the Income tax officers can guide you to begin your books in the right way.
Commercial tax will be different even if you decide to go as a sole proprietor. You can read about all legal business entities here.
Better to be aware of your options than repent later.
8. Marketing your Coffee Shop Business
A website is a must to get online orders from nearby places.
Make sure it comes up in a search when people around you are looking for a cafe nearby to order their coffee once or twice a day.
Once you set up the daily orders, the delivery staff can take it in time.
But if they forget it, make sure you remind them or you can end up losing those orders.
Make some brochures and leave them in businesses around you to get orders.
Staff you have will stay outside more than necessary making personal phone calls etc. So you must keep an eye on them and get sincere staff.
They are hard to find though.
Advertise in local newspapers and also in the social media.
Facebook is offering pay to click advertising and you pay for number of clicks only.
Inauguration of your cafe should include invitations to nearby offices offering them free coffee or tokens for future use. It’s a good idea to welcome a new guest with a voucher for a free coffee at his next visit to encourage him or her to come back.
Some cafes offer a happy hour for ladies to get 50% off to encourage them to visit. Ladies are usually free in the afternoons when they go for shopping.
So happy hour should be 4pm to 5pm when the cafe is usually empty.
Offer a free sample of cupcakes if you make them. Cut them into pieces and offer to passersby so they will notice your existence in a shopping mall for example.
Bad quality and customer service can cause a failure in any business. Make sure your staff behave well with your customers and always greet them with a smile or small talk.
Drink the coffee sometimes to check the quality.
Coffee machines should be washed daily and thoroughly to avoid bad smell and diseases.
High quality maintenance is a must to keep out cockroaches and pests.
Window Glasses should shine just like the floor to be mopped daily.
Make sure your staff washes their hands after they come out of toilets.
Hepatitis B can spread contamination and once you get a bad name, no amount of money can restore it.
Just don’t drink too much of coffee or you will be addicted says the argument contra-coffee.
But a cup in the morning and evening can keep heart attacks away.
It will certainly keep people active but can make them nervous if they drink too much.
So offer cafe without caffeine sometimes. Tea should be also offered as an option.
Lemon tea and cool drinks too are offered in a cafe. Cup cakes or a toast with marmalade consumed with coffee reduces the risk of bad effects of coffee on an empty stomach.
Offer fresh fruit juices alongside. Fresh orange juice is easy to make.Offer ice cream on sale too.
Hot chocolates are also offered on the menu in cafe bars. Pizza or sandwiches can be added to the menu if you can get them.
Grilled sandwiches with green spinch or brinjal fried are offered in Italy in a cafe bar which is fantastic around lunch time.