Thinking of starting my own Coffee Shop

[sarah1ou]

Hi,

I am going to be made redundant in a few months and would love to set up my own business and have my own Coffee Shop - I have worked in fast food outlets before but was years ago and have been looking online to find some help and just wondering if anyone has experience of doing this, how long I will be looking at the planning stage, getting grants/loans approved etc as I will probably have to get another job in the mean time I am guessing.

I already have many ideas on what I want to do and sell, where I want to be located and how I would like the shop to be layed out

Any replies will be greatfully received,

Sarah x

 

[urban33ltd]

First off, you need to plan, plan and plan again!

So many people think it is easy to run their own business, open a shop and make millions, it is really hard work!

You need to plan for premises and all costs involved in opening the shop, do this first before you think of what colour walls you want, you need to see if it is going to make money.

Research the area you want to open in and see who is there and what they are doing, what's going to make you different?

Maybe look for trade shows where you can go to get ideas and meet suppliers so you can find out prices.

I hope that is a few ideas for you, but don't rush into anything!

Stu

 

[oldeagleeye]

Sarah. Before you start wasting your time let me tell you that there ain't no grants to open a coffee shop. There ain't no loans. You would then need to raise at least £10,000 - £20,000 from your own resources to set up a small coffee shop - and the prospects.

Your be lucky to earn the minimum wage. You would be far better off then working your way up to managing a high street coffee shop. Take it from me.

Rob

 

[Consistency]

There are a lot of people wanting to start coffee shops. I would love to see a coffee shop that serves simple coffee.

 

[Drpepper]

Mike Davies - is that you???

 

[Richie N]

We opened an Eatery/ Cafe last year and its very hard work, you need a lot of finance behind you, not to mention experience.
It's the hardest thing i've ever been involved with, even more of a headache than running my own agency.
Starting up from scratch is hard as well, if you have the finance, the best option might be to purchase an existing business and develop it further.

 

[baroba]

im sorry to impose on this persons thread but i posted somewhere else ... the welsh area...and it seems i cant post until i have 15 posts...
please can any one tell me if its illegal to stop another company buying supplies or stop them from trading?

the reason i ask is that my friends son wants to open his own carpet shop..he is a carpet fitter and has been buying on a need to use bases ie if someone wants a carpet he orders it from a supplier and then fits it. But it seems someone has complained that he should not be buying from a supplier because he doesnt have a shop. He is trying to get known and to save a bit for a shop. I dont know the legalities of this but can anyone help pls?

 

[Consistency]

im sorry to impose on this persons thread but i posted somewhere else ... the welsh area...and it seems i cant post until i have 15 posts...
please can any one tell me if its illegal to stop another company buying supplies or stop them from trading?

the reason i ask is that my friends son wants to open his own carpet shop..he is a carpet fitter and has been buying on a need to use bases ie if someone wants a carpet he orders it from a supplier and then fits it. But it seems someone has complained that he should not be buying from a supplier because he doesnt have a shop. He is trying to get known and to save a bit for a shop. I dont know the legalities of this but can anyone help pls?

Hello,

I think you should seek legal advice and explain all.

 

[strikingedge]

Hi,
I second the planning aspect. You need to get every single detail about what makes your shop special sorted before you open.

Because once you do, you won't have another opportunity to step back as you'll be buried under the minutiae of operating the business, dealing with staff, cash flow, marketing etc.

I'd only ever attempt this if you have a real passion for what you're going to do.

And even then, wouldn't attempt without a realistic idea of how you will make money from this.

I don't know much about the coffee business....but I do buy 1-2 cups of coffee a day.

I tend to spend far more on food than coffee - getting takeaway sandwiches.

If I want to sit down, I don't use my little local shop, but go to Nero's which has big sofas - the cost is about double.

When we've got meetings we go to the really nice coffee shop that has tables and fabulous food - breakfast for two is around £25 in there. But it is a bit noisy - echoey accoustics - so sometimes we go to the pizzeria which does really good coffee but no-one knows, so it's always empty in the morning.

I'm not trying to bore you with the details of my working life - but pointing out that I have 4 coffee shops within 2 minutes walk, and use all 4 depending on what I need it for.

I like the little local one because they're the cheapest (big loyalty discount) and I live on their toasted sandwiches, soup - and now toasted croissants. The coffee is superb - but they regularly trial new coffees. During the summer last year they did full fruit smoothies...which were terrible, really bad....but this year they've promised to do a tasting with lots of recipes for people to try.

So it isn't just about the coffee, it is about the food, the location, the acoustics, the seating, the deals/ discounts/ loyalty schemes, the branding & marketing, the newspapers, the internet connection and many many more factors!

Good luck

 

[oldeagleeye]

Forget the coffee shop. A friend of mines brother gave her the freehold of a nice shop a year ago and it is still making a loss. Last year Starbucks had to sell off over 50 loss making locations and only just managed to survive.

Now they have dropped prices to a £1 a cup and offering a wide range of freebe's too just to turnover volume. What they are actually doing is asking for customers to pre-pay for coffee.

I can't see them surviving the 15% unemployment in the USA or our own austerity measures.

BAROBA. there is nothing whatsoever anyone can do to stop a carpet fitter or anyone else for that matter from selling carpets from home or the back of a van for that matter. My uncle was doing it for over 45 years until he retired some time ago.

All anyone needs then are a few samples and they are in business.

Rob

 

[stender]

As with any business idea, do a business plan. I've had many ideas (well a few) which i've thought are good, up until the time i actually start number crunching and realise it's a no goer.
You may find that once you add up the running costs you'll owrk out youd need to sell 500 cups a day to break even.
Added to that dependant on location you may only have limited windows of sales. e.g rush hour to make your targets.

You could consider a coffee van?

 

[Rhodes100]

Businesses fail on the whole due to the lack of the owners business acumen.

They think for example that running a coffee shop is all about making coffee which is easy isnt it. If you want to run a successful coffee shop you have to go was beyond being a waitress.

My advice would be go on a few courses on how to market a business, learn about financial issues, social media, everything you can pick up. You will then realise why so many small businesses are failing,

Its not the economy because there are loads of great businesses growing quickly evern now its the business owner who hasnt got a clue.

 

[IndiCafe]

Last year Starbucks had to sell off over 50 loss making locations and only just managed to survive. Now they have dropped prices to a £1 a cup

To be fair, they haven't dropped their primary products to £1, just their filter coffee, which has alwas been just a secondary cheap product for those who don't want to pay for premium coffee. Your point is still valid - some customers are looking for less expensive alternatives during these difficult times - but there are also plenty of stories of the coffee shop subsector beating the recession over the past few years.
Research and planning - you can't do enough, OP. I'm going to be spending the rest of this year researching for a new cafe to be opened in time for the 2012 summer season in Scotland, so that my decisions (location, sales forecasts etc) are based on fact rather than guesswork as much as possible.

 

[Simply Business]

Hello Sarah1ou,

Just to back up some aspects of previous post's that planning is vital when it comes to setting up any kind of business. It is important to know your potential ins and outs so that you can clearly see whether it is something that you can afford to do.

From a start up point of view - I work for a business insurer - and you will need to consider protecting and covering your business. Aspects for you to consider is public liability, stock, contents and employers liability insurance.

If you have any questions regarding business insurance please feel free to contact me.

Kind Regards

Tim

 

[papverpoppies]

Why does everyone post about wanting to run a coffee shop?
There have been so many these past months.

Is, it because it looks easy to run.
Perhaps people think its easy to set up.
No catering skills required.
Sounds good, I own and run a coffee shop.
Inexpensive to set up and run.

When the market place is saturated with the big names - what makes someone lean towards thinking they can compete, in this very cut throat market.

What research do you all do, before you have the idea and then post for help.
Genuine questions by the way - I am not knocking anyone, I am thinking about writing how and why people choose the business they do.

Poppy xx

 

[baroba]

apparently its a shop that has got wind of what he is doing and they are the ones trying to stop him

 

[IndiCafe]

Why does everyone post about wanting to run a coffee shop?
There have been so many these past months.

Is, it because it looks easy to run.
Perhaps people think its easy to set up.
No catering skills required.
Sounds good, I own and run a coffee shop.
Inexpensive to set up and run.

When the market place is saturated with the big names - what makes someone lean towards thinking they can compete, in this very cut throat market.

What research do you all do, before you have the idea and then post for help.
Genuine questions by the way - I am not knocking anyone, I am thinking about writing how and why people choose the business they do.

Poppy xx

Well I can tell you the following from my research:
- It's definitely not inexpensive to set up a coffee shop if it's a good one. I'm looking at £100k setup, which includes equipment and fitting out, stock, rent (and rent in advance), and 3 months working capital in the bank.
- Competing with the big chains isn't part of the equation for me, at least not at first. The location has to be devoid of costabucks (there are some good spots left in the UK!), at least until my business is established and I can refine the cost structure, so that if the chains do turn up, we would already be in strong position to adapt.
- Catering skills - if you chose your menu/products/suppliers carefully so there is not much cooking to do, you can minimise your risk of bad food, speed up service, and keep kitchen equipment costs lower. Menu design is also critical, and drives so many elements of a cafe/coffee business. Also, employing skilled staff helps overcome any gaps in the owners knowledge.
- Coffee - it is not difficult to offer better espresso coffee than most competitors if you are a stickler for good barista skills.

Personally I wouldn't open if the numbers didn't stack up, so my decision to open a coffee shop isn't all rose-tinted spectacles, but there is certainly a wish to do a job that I would enjoy. I spent 2 years in a poorly-paid full time catering job many years ago and it was much more enjoyable that the well-paid jobs I've had since, despite it being physically demanding. For me it is part of "Project Great Escape" where we are doing a Tom And Barbara, moving from London to the Scotland countryside, quitting our £100k plus jobs, doing a self-build, buying some chickens/bees, and starting up a few small businesses. They only need to be profitable enough to provide a reasonable lliving. My new hobby is laughing at our friends who just can't comprehend someone who's life isn't all about making money.

 

[IndiCafe]

apparently its a shop that has got wind of what he is doing and they are the ones trying to stop him

Makes no difference - there's nothing they can do to stop a legitimate competitor, whether he has premises or not. It's called competition. But your friend needs to make sure he registers his business with HMRC, pays tax, and does things by the book, as if not the shop owners could try to put him out of business by whistleblowing.

 

[papverpoppies]

apparently its a shop that has got wind of what he is doing and they are the ones trying to stop him

So long as what he is doing is legitimate, in so much as he is paying taxes etc then there is nothing that they can do.

Once upon a time we used to get all manner of travelling sales men doing the rounds in small rural villages, (have to say not so any more) but so long as he does his homework) then maybe he can carve out a market.

Good Luck

Poppy xx

 

As a funder, we are bombarded with enquiries from people looking to start coffee shop / cafe type businesses, most of them on the pretext that it's 'easy' or a 'lifesyle business'. Sadly, about 80% of them fail (our underwriting stance is now 'its going to fail, so what's the fallback position?')

The main causes of early failure are:

- Long delays in obtaining relevant planning / licences (never under estimate the capacity of Local Government to be awakward and inept!)
- Over spend on fit-out costs.
- Use of the wrong types of finance
- Over-optimistic projections.

In a nutshell, they mostly open the doors with bad cashflow and never quite catch up.

It's not what you want to hear, but if you can address these issues you will be ahead of the rest...

 

[Consistency]

I want to run a coffee shop.

 

[Kooky1976]

Hi Sarah,

All I'll say is it's hard hard work. I've been 10 weeks in the planning and I'm due to complete on an existing Coffee shop / sandwich bar on 4th March. I liken it to buying a house with contents and lodgers all rolled into one. It's killing me and I haven't even got in the shop yet!

Planning is key. I'm taking on a business that currently has no processes or systems in place. It really was owned by someone who saw it as a lifestyle, not a means of making money.

I'm using redundancy to fund my business (goodwill, assets and the first 12 months rent up front has set me back about £40k). I think that's pretty low compared to some of the stories I've heard.

Look to grow your business outside the template of your shop. Local business buffets, parties, wedding catering etc... but above all, as above, plan plan plan - oh - and get the basics right, know your stuff, learn to be a CEO, accountant, buyer, HR manager, repair person, caterer, barista, counsellor, pighead all rolled into one!

 

[papverpoppies]

I want to run a coffee shop.

Well, have you started it yet?

Poppy xx

 

[Consistency]

Well, have you started it yet?

Poppy xx

No, there were 46 others that beat me to it

 

[Archie844]

Hi Sarah1ou

My family have been in the Coffee Business for about 30 years. Initially we were roasters, we have tended to stick to Wholesale, Import of Beans, Pods and such like. More recently my attempt at bringing the business into the 21st Century we have started selling online. One thing we have never done is open a shop, i cant think why as it seems a natural progression, it has been mentioned but we've just never done it.

Like with every business we have noticed changes in purchasing habits over the last few years but this is not the case across the board. As an example one particular customer i am thinking of has been consistent in their purchases over the last year and a half. This customer has for want of a better word a converted van with an espresso machine in it, an all he does is one particular pitch (six or so hours a day, six days a week). Now having listened to what you've said about it not being all about the money. This customer is actually managing to make a living for themselves off just that. I know it's not as easy as it seems and you would have to really look into it and find a pitch that didn't cost the earth etc. It's just to highlight that there are other options out there, for the right person it is achievable.

I have to agree with Kooky, learn to do as many things as you can yourself. One of the things i did before working for myself was accounts, i have saved everyone a fortune in bookkeepers/accountants!!!

I know your not at this stage yet but from a practical point of view, machinery and what not, don't be afraid to buy second hand/reconditioned machines. I personally have purchased machines off auction sites for a fraction of the price of what they were worth, pick your sellers carefully and always pay with paypal.

As with anything in life you will only get out what you put in. Like any business it will be hard graft but people are doing it and as long as you don't go in with rose tinted specs on (which it doesn't sound as though you will) i wish you every luck.

Archie

 

[Senington]

As soon as you are made redundant, get yourself a part time job to cover your living expenses. Then develop an extensive plan of what you want to do. How you will cope with all of the competitors etc.

Most of the things you should do have been covered by previous posters

Good luck.

 

[casa espresso]

Hi if there is anything I can do in terms of advice on espresso machine or coffee supplies just ask

 

[Cobby]

Hi,

I am going to be made redundant in a few months and would love to set up my own business and have my own Coffee Shop - I have worked in fast food outlets before but was years ago and have been looking online to find some help and just wondering if anyone has experience of doing this, how long I will be looking at the planning stage, getting grants/loans approved etc as I will probably have to get another job in the mean time I am guessing.

I already have many ideas on what I want to do and sell, where I want to be located and how I would like the shop to be layed out

Any replies will be greatfully received,

Sarah x

If you really want to do it, go and get jobs in a couple of different cafés. Visit them all. Speak to people that have gone before you and have experience on how to avoid the pitfalls. Understand the difference between the independent businesses and the big boys. If you're still interested in doing it after a few months then you'll be better prepared and less likely to balk if things get difficult. Then put together your business plan. You'll need plenty of cash up front, moreso if you start out large.

Plan properly and there's plenty of money in it. Plan poorly and you'll be regretting it for a long time.

 

[chipchik]

Hi,
I bought an existing cafe 7 months ago and love it! But....... it is really, really hard work, takes over your life and costs far more than you would ever imagine!!!!
I would encourage anyone to give it a go if they are prepared to give it a go. Like I said I personally really enjoy it and am pinning a lot of hope on our summer trade to pay back some of the debts we have accumulated over the winter.

Lots of luck and feel free to message me if you want any advice!!!

Rachel

 

[denny206]

First off, you need to plan, plan and plan again!

So many people think it is easy to run their own business, open a shop and make millions, it is really hard work!

You need to plan for premises and all costs involved in opening the shop, do this first before you think of what colour walls you want, you need to see if it is going to make money.

Research the area you want to open in and see who is there and what they are doing, what's going to make you different?

Maybe look for trade shows where you can go to get ideas and meet suppliers so you can find out prices.

I hope that is a few ideas for you, but don't rush into anything!

Stu

Amen. Don't want to sound discouraging or anything at all, but a lot of businesses fall through because they're not planned well. Just know it's a LOT LOT LOT of work and sacrifice, but if you're heart is in 150%, it'll eventually pay off--everything has to start somewhere.

 

[Young And Dumb]

The problem I've always thought about coffee shops is people may come in and drink a coffee, read a paper or talk with each other for say 30-45 mins. In this time they are likely to only buy a coffee and maybe a cake. As coffee is an appetite suppresent people aren't likely to want to eat a lot when having a coffee and also if people are in the frame of mind 'I fancy a coffee' or 'lets go for coffee' they more than likely aren't wanting food with it either.

I guess my point is lets say you have 20 people in your coffee shop during rush hour or two how much money are they actually going to be spending? I mean sure some people will get a takeway and such but I just don't see it as being a great opportunity to fill up the till on a daily basis. Just my 2 cents..

 

[Cobby]

The problem I've always thought about coffee shops is people may come in and drink a coffee, read a paper or talk with each other for say 30-45 mins. In this time they are likely to only buy a coffee and maybe a cake. As coffee is an appetite suppresent people aren't likely to want to eat a lot when having a coffee and also if people are in the frame of mind 'I fancy a coffee' or 'lets go for coffee' they more than likely aren't wanting food with it either.

I guess my point is lets say you have 20 people in your coffee shop during rush hour or two how much money are they actually going to be spending? I mean sure some people will get a takeway and such but I just don't see it as being a great opportunity to fill up the till on a daily basis. Just my 2 cents..

"Two pence" not "2 cents"!

Anyway.

Your post is pure speculation and granted, a lot of business planning involves just that but reality plays out a little differently. How your customers behave or more precisely which demographic you attract, is determined by how you set up your business. Some thorough research will highlight that some places are exactly like you say, while many aren't. Learning how to influence your demographic and change their purchasing habits is part and parcel of the trade. Bear in mind though that some aspects will be entirely out of your control once the business is up and running (e.g. location), so planning is vitally important.

 

[IndiCafe]

20 people in your coffee shop during rush hour or two

Well yeah that obviously wouldn't work, but in reality its about making sure the factors that influence your business (customers, location, marketing, basically the business plan contents) are working for you, not against... before you even start. I hate to use the dreaded Mermaid as an example but the one in wimbledon seats about 50-60 and is completely full from 7am til 9pm, not to mention take aways. They got their plan right.

 

[Paul Brooke]

What a load of tosh. Your boy does not need shop premises at all. People work and sell out of vans etc in many lines of business. Whoever is telling you he needs to stop is obviuosly jealous of your son's get up and go. Tell him to ignore it. You do not need legal advice. There is nothing they can do about it

 

[twintulips]

Hi,

First do a bit of understanding the market around you, especially ur area...and scale it with the concepts of "your special coffee" and how that would make a difference...and then see whether that concept can hold up to your finances...then make the first move..
I have recently started tea exports all alone and have been able to set it up with a very minimum amount. It is still in the making and from my experience conceptualizing has helped me to attach each bead onto my thread to make that value chain of business.

any B2C is difficult...but, there is a lot of fun, excitement, enjoyment in it..be it fashion, food, services..

All the Best

 

[Young And Dumb]

Well yeah that obviously wouldn't work, but in reality its about making sure the factors that influence your business (customers, location, marketing, basically the business plan contents) are working for you, not against... before you even start. I hate to use the dreaded Mermaid as an example but the one in wimbledon seats about 50-60 and is completely full from 7am til 9pm, not to mention take aways. They got their plan right.

Oh yeah location is extremely important as well as the size/capacity of your coffee shop I agree. To get a coffee shop of a decent size in a great location where there aren't any big Franchises isn't easy though I would have thought. Having said that If you can come up with coffee shop that does do great food and people will choose it over the big food/drink outlets then I think you could be on to a profitable business. For me it means being an up-market, swanky, sleek kinda place with modern designs and a good chef/menu.

 

[arcon5]

Don't think anybody has mentioned staff yet...

You need reliable, competent, hard/fast working staff who have decent interpersonal skills! Without that your doomed to fail.

I went in to a locally run place in a small village a few months back and the (what I presume to be) owner had her two daughters there who clearly didn't feel comfortable or didn't know what they are doing. I waited 15 minutes for 2 bloody lattes which was burnt!
Then theres the Costa near me.. if you stood at the till and the manager is having a conversation with a member of staff she won't bother to acknowledge you (even if she is stood on the serving till) until they have finished!

Get this wrong and your screwed.

To the guy struggling to buy carpets..
The competition can't stop you buying from the manufacturer... but the manufacturer can pick and choose who they do business with! So if this other store spends enough money with them they may have enough power to get the manufacturer to refuse small one man bands that are going to undercut him.
What can you do about it? Bugger all I suspect.

Just my two "pence"

 

[Lee Jones Jnr]

Oh yeah location is extremely important as well as the size/capacity of your coffee shop I agree. To get a coffee shop of a decent size in a great location where there aren't any big Franchises isn't easy though I would have thought. Having said that If you can come up with coffee shop that does do great food and people will choose it over the big food/drink outlets then I think you could be on to a profitable business. For me it means being an up-market, swanky, sleek kinda place with modern designs and a good chef/menu.

Why would you want to avoid being near a big franchise? If I were opening a coffee shop I'd want to be close to Starbucks or Costa if possible.

 

[arcon5]

Why would you want to avoid being near a big franchise? If I were opening a coffee shop I'd want to be close to Starbucks or Costa if possible.

Couldn't agree more.

'Learn from others mistakes, not your own'

I think the mentality behind the comment though was who would the customer choose ? You have a) a large coffee company with whom your familiar with, they ehat to expect and enjoy or b) the local cafe where you have never been, don't know what to expect and not very familiar with.

I think if you could pull off a professional look and get other key factors right suchas staffing ect then you could easily pull in starbucks/costa customers with lower prices and creative drinks. Although if you get your branding wrong the old mentality of "you get what you pay for" kicks in.

Where i'm based the best cafe around is a place called 'angels'. Its a very small local cafe. But the coffee is fantastic, the mugs are quite funky, and best of all the cakes are beautiful and they are always interchanging certain selections so you don't get stuck with the same stuff each visit

Also.. some may think this to be a small issue, but for me it can be a decising factory... FREE NEWSPAPERS/MAGAZINES! So you can nip in during a quiet time, have a quick coffee & read the paper. Otherwise you will only see me when i'm with my partner.

Some nice music.

ALSO quite important (IMO)... some beautiful local pictures!! When your stood in a queue its nice to be able glance round and keep your mind occupied whilst waiting for that group of people in front of you who think its acceptable to have a conversation about cr*p whilst you patiently wait for them to finish with a deceptively friendly smile on your face

Oh.. don't cram tables too close. People don't like squeezing between other customers.
Have deals suchas latter +panini £5. A chicken/bacon sandwich in Costa is about £4. So if there is two of you a quick drink and sandwich can cost nearly £15

Loyalty cards an absolute must!! Theres nothing nicer than getting to your free drink so when you next go in you go in and present your voucher you can buy something to eat also without paying out too much money


Sorry -- ramble over.

**off to Costa I go**

 

[IndiCafe]

One of the risks of competing with a chain is that with the weight of the group behind them they could potentially decide to run you into the ground with a price war and then re-rise their prices once you're gone. May not be a big risk, particularly with franchises that might not get fully head-office support, but worth considering when choosing location.