Start-up ideas – How to set up a coffee shop

The UK has seen a boom in coffee culture in the past decade which shows no sign of slowing down. There’s a lot of competition to meet this demand, especially from the big high street chains, but small independents which serve great coffee in a friendly setting are definitely in a good place.

So what exactly does it take to start a coffee shop? Our step-by-step guide will help you get up and running.

What do you have to offer?

Start by researching what other coffee shops in your area are offering, including the franchise outlets. This shows you what you’re up against and lets you look for a way to differentiate yourself from what everyone else is doing.

Coffee drinkers are becoming more discerning, so how will you tempt them through the door?

Do you have a speciality grade or roast your own beans on-site? Do you want to be known for the ethically-sourced coffee you serve? Is anyone else selling nitro cold brew coffee locally?

Your unique customer offering can include other elements, such as the warm, welcoming service you provide or the type of pastries or freshly baked cakes you offer. Perhaps the ambience, as well as the coffee, is what will keep people coming back for more.

Reliable supply chain

Another area to research thoroughly is your suppliers. If you’re planning on providing speciality grade coffee, make sure you have suppliers you can rely on to deliver. That goes for everything else, including supplies of milk alternatives which customers now expect to be offered.

Enquire about payment and lines of credit. Forging a good relationship with your main supplier is important, so find out as much as you can before deciding to go ahead.

The right location

Finding the right site at a price you can afford can be pretty time-consuming unless you’re lucky and a suitable premises becomes vacant, or you know of one already.

Ideally, you want a prime location where you won’t go unnoticed and where there are other amenities to attract people.

Check if you are eligible for any small business awards, grants or incentives by researching online and contacting your local authority.

Business structure and insurance

Before you open for business, you’ll have to sort out the legal side. This includes choosing a business structure (limited company or sole trader), and registering the business with HMRC for tax purposes as well as VAT (depending on turnover).

If you employ staff, you’ll need to take out employer’s liability and public liability insurance to cover you against injury to customers. Most of this can be arranged online, plus there’s a lot of free advice available for small businesses. The government helpline  is a good place to start.

Knowledgeable staff and a great atmosphere

You can recruit trained baristas through a recruitment agency or advertise yourself for staff. Either way, you need to employ someone who knows their stuff – customers will expect it. That said, small independents want to distinguish themselves from the big chains by offering a superior product that is expertly prepared and served in a great setting but try not to take yourself too seriously. Think of that McDonald’s ad where baristas patronise customers who ask what a flat white is – don’t be like them! You definitely need to know how to serve a flat white and love what you do, but focus on producing great coffee first and foremost, rather than signalling your expertise.

Spread the word

You’ve got your team and supplies sorted and the coffee shop set up the way you want it. Now all you need are some customers! Hopefully, you’re in a good location and customers will start to pop in to see what you have to offer. The coffee is good, the service great. Word will start to get around.

However, to build and sustain a viable business you require more than that – you need to come up with a marketing strategy. This can be something as simple as a sandwich board or A-board on the pavement to let people in the immediate area know you’re there.

Use Twitter and Facebook to reach a wider audience and also to promote your brand, special deals and introductory offers. Include quality photographs with all your posts.

Remember to contact any local media outlets (newspaper, radio station) and let them know about your new venture, as this can be a great way to get some free publicity. Make it easy for them by preparing a well-written press release in advance and say what it is that makes your coffee shop special!

Building customer loyalty

Once you’ve got some new customers, you want to encourage them to become regulars and bring their friends along! Providing excellent service and consistently great coffee is crucial, but consider also operating a loyalty scheme that is easy to deliver and rewards customers in a tangible way.

Profit and loss

Start as you mean to go on by keeping an up-to-date profit and loss account from day one. This will help you to stay realistic about how you are doing and inform how you manage the business going forward.

Last updated: 12th September, 2021

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