To be successful, you need the right location for your coffee shop. You probably want something centrally located, a place where people already gather, and a space that’s conducive to your vision. Jack Wilson, the owner of Radio Coffee and Beer, warns that finding this dream spot won’t happen overnight.
His team scoured city after city, scouting each location, even going so far as to count pedestrian traffic. He was looking for for a former restaurant space, so he didn’t have to remodel everything from scratch. Finally, one day when he dropped his keys on the sidewalk he noticed a tiny “for sale” sign in a former tavern window. After months of searching, he’d found his spot.
A solid floor plan is vital for a coffee shop. You want customers to have space to form a line, employees to have the materials they need within reach to quickly make coffee, and a seating area that’s comfortable. It will take some time to produce a good floor plan, Wilson says.
“Walk yourself through every scenario you can think of,” he says. “If you’re making coffee, what needs to be near you? If you’re a customer, what do you want in a seating area? Visualize everything you can and start putting those ideas down on paper.”
One of the best pieces of advice Wilson says he can offer a new coffee shop owner is to turn your books over to an accountant. Aside from taking valuable time away from the business, having a numbers expert works in your favor.
“You won’t be as hard on yourself as you sometimes might need to be,” Wilson says. “Plus, you will make assumptions that an accountant wouldn’t make.”
Finding the startup funds for a coffee shop can be difficult. Renson suggests talking with friends and family about investing in your coffee shop first. Present a solid business plan to them and ask them to invest in your business.
If funding via your family isn’t an option, or if you need more cash than your family can provide, Renson suggests looking into local loan options. In some cases, cities offer business assistance programs to offset costs. Consider an SBA-backed loan and also see if a local bank or credit union is an option.
Aside from startup costs, don’t forget that all of your time and energy will be devoted to your new business, a business that potentially won’t be profitable for around six months, even if you start bringing in revenue immediately.
So, plan ahead. Renson suggests making sure you set aside enough money to cover your personal expenses for at least six months. Decide whether it’s possible to run your coffee shop while working another job or side gig.
You will also want to understand the concept of cash flow, especially considering well over half of the businesses that fail were profitable when they went down, they just weren’t cash flow positive.