Coffee Shop | Lucrative Retail Business Idea

Over the past decade coffee shop industry is increasing rapidly. An entrepreneur passionate and talented about coffee can initiate coffee shop business with substantial capital investment. Coffee shop actually treated as a third place outside of work and home to relax. Coffee shop business is one of the best way to turn your love for coffee into a profit making business.

You can start the business independently or you may consider to buy a franchise. In independent starting you will need to establish the coffee shop entirely on your expertise and you will enjoy the margin in full. On other hand as franchise of a reputed brand you will get guidance in starting the business and in day-to day activity, but you will need to consider the royalty commission and franchise fees.

Plan For Coffee Shop Business

The first most serious step that you will need to take is crafting a business plan. Coffee shop is a high-volume and low-transaction business. Crafting a right plan can only move your business towards success. Developing a detailed business plan will also help you in arranging seed capital. Figure out your establishment cost with interior and equipment. Calculate working capital cost with raw material, man power and miscellaneous expenses. Plan about the other food apart from coffee you will be keeping. Define your marketing strategy and how you will going to compete with other coffee shops in the locality. Determine your business objective and calculate an expected revenue return. Getting traction in a competitive business like coffee shop is vital. You will also need to have a clear understanding of how to get customers initially and a plan for keeping them returning and referring you to their friends.

Compliance For Coffee Shop Business

In starting coffee shop business

  • You will need to register your firm first. Licensing formality differs as per location. In India, You will need to apply for Health / Trade license from the local authority.
  • You will need to obtain food safety license from FSSAI (Food Safety and Standards Authority of India).You can find the link here to apply.
  • You will need to obtain Eating House Licence from Police Commissioner of the city.
  • You are required to register your coffee shop under the Shops and Establishment Act.
  • You will need to obtain Signage Licence from local civil authority.
  • You will need to maintain the fire protection policy of the Government.

You should also learn the Hazard Analysis Critical Control Point, or HACCP, which is an internationally-recognized method for identifying the most common food safety hazards in a preparation process.

It is advisable to have insurance for your coffee shop business. Talk to an insurance company to cover Public Liability, Product Liability, Fire Policy, Building & Asset.

Location For Coffee Shop Business

The location for your coffee shop should be in an easy accessible place. Area demographic plays an important role in selecting space for coffee shop. According to your plan consider the Square feet area. You will need to understand that coffee shop is a business of impulse buying and also it’s treated as a destination. Check your business rent agreement for the space carefully.

Establishment Of Coffee Shop 

It is important to create a floor plan prior. Ask an experienced interior for this. You will need to consider places for sitting arrangements, work space, cash counter, washing sink and storage. Ensure that your coffee shop work station layout is such that the barista hardly moves their feet in performing all their coffee making duties, and they are not competing for the space with other staff members. Place the cash counter on front counter. Stand out of crowd. Try to give an comfortable atmosphere with unique theme. Concentrate on the inside ambiance and take extreme care on it. A good comfortable sitting arrangement with trendy decoration, cool music and WiFi connection definitely matters in coffee shop business.Concentrate on operating procedure and maintenance of books of accounts. Pay attention on exterior also.

Products For Coffee Shop Business

It is important to select right products apart from coffee that you will going to offer. You will need to promote multiple products from your coffee shop.Normally you can keep cakes, cookies, muffins, burgers, energy drinks, ice cream etc. It is advisable to  cover the necessary categories, but with limited and strategic offers. Concentrate on pre-make food and leave the custom making to the coffee. A successful coffee shop gets 40% weekly sale from only coffee. Another 60% comes from products other than coffee . Determine the flavours, size and types of food that you will be selling from your coffee shop. Remember, every item you add to menu list, creates many multiples of management effort.  Fix pricing. Always be careful about the quality of the food that you are offering.

Resources For Coffee Shop Business

While you are opening an independent coffee shop concentrate on fixing vendors. Getting the quality product in reasonable price is important. Fix reliable vendor or supplier for getting smooth delivery.

As any retail service industry manpower plays a crucial role in coffee shop business. Hire experience, skilled manpower with a pleasant character. Keep an accountant who is familiar with the point of sale software.

Takeaway Customers For Coffee Shop

Concentrate on takeaway customers. Remember that takeaway customers pay the same price as the sit-down customer, but without raising any of the occupancy costs.

Promote Your Coffee Shop Business

  • Understanding the needs you are really catering to your customers will help you to craft Your offer that keeps your customers returning.
  • Offer loyalty card to your coffee shop customers. Such as buying five and get six one free.
  • Be consistent on serving good quality food to your customers.
  • It is advisable to craft a media kit before.
  • Pay attention to in-shop branding activity.
  • Concentrate on the brand building of your coffee shop.
  • Go for some co-branding activity with another reputed brand like sports channel etc.
  • Concentrate on media coverage
  • Use social media platform carefully.

Opening a coffee shop is a hard work. Running a profitable coffee shop is much harder than that. Only true passion for coffee can make this business really successful one.