Recently on BusinessWings, I wrote an article on how to start a coffee shop, based on my own experiences as a café owner, a roaster and coffee consultant.
As part of the BusinessWings blog, I will be expanding on the points I raised in the first article, pointing you in the direction of where to start your research in a world full of advice.
First up, know your market.
Once you have decided you want to open a coffee business, your very first point of call should be to understand your market, and make sure that your idea fits into the marketplace.
For example, opening a predominately takeaway coffee and sandwich shop aimed at the commuter market is unlikely to be desired in a suburban town populated by families, away from any train or bus links. However, it may be popular in a city suburb close to a well known commuter train station.
Not fitting your business to your area is a classic mistake first time business owners can make
Not fitting your business to your area is a classic mistake first time business owners can make – which is frustrating as it may be that it is not their idea which is bad, more the execution of the idea.
So how do you know whether your idea will fit into the market place? That’s when the first stage of research comes in.
1. Identify which is the most important to you first
For example, do you want to be situated in a certain geographical area? If so, focus your research on that area – what businesses are already there, what is the socio-economic class of the inhabitants, what kind of coffee shop would be required? Then focus your research on creating the right café for that area.
If however, it is the concept which is more important to you (say, for example, you want to open an ice cream parlour and café), you will need to widen your geographical search so you open your business within an area that it will suit. In the ice cream parlour analogy, this may be an area which sees a lot of tourists, or an area within walkable distance of schools, offices and a high street.
2. Analyse existing businesses
Once you have an idea of where you want to open, do some research into other businesses in the nearby area. Will your business fit in? Opening a chic, high end café bar in an area inhabited by charity shops and service businesses (such as laundrettes and chemists) may be problematic as the local residents may not go to that area for entertainment.
However, opening in an area which is populated by independent boutiques and restaurants will be more successful, as you already have a solvent clientele used to visiting that locale.
3. Don’t fear competition
Often in the food and drink market, businesses can feed off each other. Bear this in mind when looking for locations. Just because an area already has several types of café, don’t automatically discount a suitable spot.
Social venues attract people, and people like choice. Instead, ensure you are dong something which makes your business stand out, which maybe is not offered by the neighbouring cafes.
Don’t copy an existing business like for like however, especially in smaller areas such as suburbs or small towns. Make sure your food menu is different, or your coffee menu is unique, and prove to your customers and the existing businesses that you can all work together. This will help create a more neighbourly feel, which will in turn benefit you all.
4. Its good to talk
The best way to find out what people want is to go talk to them! Your best research will be that which involves you going into the marketplace and talking to your potential customers.
Find out what they want from a café, what they’d like to see on the menu, what opening hours they’d like. Don’t try to implement all the ideas, but use them as the framework for your business plan, and as a guide for your decision making.
