How to Set Up a Coffee Shop the Right Way

• Why Are You Doing This?
• Financial and Personal Goals
• The Concept Plan
• Research
• Update the Concept

Why Are You Doing This?

Most people dive into searching for shops for rent or businesses for sale, brainstorm witty names, and design cool logos. But before long, they've made critical decisions that can impact their business and life for years. I recently spoke to a couple about to open a coffee shop; they'd already secured a location and started the fit-out. While we discussed equipment and menu, the big decisions had already been made. So, let's take a step back and start with the big question: why are you doing this?

Financial and Personal Goals

People often aren't completely honest with themselves or their partners about why they're starting a business. Many are running away from something like a job they're sick of. To get started on the right foot, be specific about your financial and personal goals. Think years ahead in three specific areas:

• Money: What’s the minimum income you need to replace your current job, and what return are you expecting?
• Lifestyle: What hours or days do you want to work once your business is in rhythm?
• Time Frame: How long do you plan to own the business? What’s your exit strategy?

It’s critical to have these discussions with your family and partners. Aligning on these points can prevent future breakdowns and set you up for success.

The Concept Plan

Planning can take many forms. While detailed business plans are important, we’re going to start with a one-page concept plan, like an elevator pitch. Include details like:

• A description of your menu and service model
• The type of location you're looking for
• A description of your target customers
• Where you're planning to get the money from

Having a rough concept allows you to see how your ideas stack up to reality.

Research

Research is about gathering information and identifying strengths and weaknesses in your plan. Ask yourself questions like:

• What locations are available for rent or businesses for sale?
• What do they cost?
• What is the competition like in the area?

Visit competitors, buy their coffee, and analyze their customers. Compare this with the customers you want to target. Census data can also be helpful in understanding the age groups and income levels of people in the area. When I researched a location for my business, I sat at a bus stop at 6 a.m., observing foot traffic and taking notes. This helped me learn the mix of people and their daily routines.

Update the Concept

Now that you’ve gathered information, tweak your concept or even find a bigger opportunity than you originally thought. This updated concept will be the foundation of your business plan, setting you up with a clear goal before you start negotiating on a site.