Setting up a coffee shop & market research... some free advice
Can you offer me any advice on setting up a coffee shop?
We understand how hard it can be to find good advice when running or starting a coffee shop. There are many things to think about. We will try to write the things here that we think make a good coffee shop and we keep updating this all the time. Happy reading!
You are always welcome to meet up with us for a coffee. Please feel free to contact us with your enquiry. And of course remember that we teach courses about coffee and starting a coffee shop on a daily basis.
If you have a passion for serving delicious speciality coffee and if you enjoy socialising then you will most likely do very well. You have to really enjoy the job and the life.
When a customer walks in to your coffee shop and feels that you and your staff are happy and that you guys are enjoying your work then that has a massive impact. It creates a great atmosphere and your coffee shop will be a wonderful relaxing place to visit.
When you introduce your customers to coffee and you show them what you do then you are a bit more special than your competitors. Why not show them how your coffee grows and how it is roasted. Have a wall or display with information about your coffee and demonstrate to your customers what you are all about.
When your customers asks about the coffee - and believe us they will when you serve them something really special - explain what makes it so good. Explain that it is freshly roasted and freshly ground. Tell them that you use fresh milk for each coffee and that the coffee is handpicked and not mass produced.
Show your passion, pass it on to anybody and just believe in what you do. Do not preach and do not talk bad about competition. Do your own thing, do what you love doing and before you know it you will be so busy that you struggle coping with the amount of customers that come through your door. That is what we call a luxury problem!
How about speed?
Speed comes with experience and with an effective layout. The layout behind the bar is extremely important. Try to make it all compact and minimise the distance from espresso machine to serving counter.
Make sure that your customers are close to the espresso machine and have it angled in a way so that your customers can see everything. Have the milk fridge and the serving counter close to the barista so drinks can be poured in front of the customers. A good layout will increase work flow significantly and in the end make you more successful. A good working area means that you can take your time to make a superb coffee and you won't need to rush. Come and see us and we will help you out a little more regarding the layout of your counter. It is extremely important.
How to build your business and get new customers for your coffee shop?
Many businesses have a marketing budget each month and so do many coffee shops. It is very important however to decide where to spend this money. Should you pay for a great website or maybe for flyers around town?
One of the hardest things is to brake the patterns of people. Many of your potential customers will already have their regular. If they are quite happy there then why would they visit you? Why would they take the risk to come into your shop instead of their usual? After all, they don't know it can be better until they have tried it.
There could be a couple of reasons why someone would try your coffee shop:
How much does it cost to run an espresso coffee machine?
We have added an electricity meter to our La Spaziale S5 espresso machine and for four days we have measured the electricity cost working at 13 pence per unit.
When we are not running a course (which hardly ever happens :) it only cost about £0.80 per day.
When we are running a course and use around 2kg of coffee and make lots of drinks it was no more than £1.60.
Starting up the machine in the morning was about £0.10.
There you go. We hope this helps a lot of people!
How to start a website for my coffee shop?
You can of course design it yourself or get it designed by a webdesign company. A good free option is to start a site with Facebook and/or Twitter and to use social networking to promote your business right from the start. Talk to us, we can help with designing a website.
How to market my new coffee shop to get new customers in?
The hardest thing is to break someone's daily routine. Most people already have their regular and are probably happy going there day in day out. They want to try some other coffee shops sometimes but it can be a risk for them so they like to stick with what they know.
You have to find a way to break in and give them a reason to give you a try. This might be a wonderful review or recommendation from someone they know. But word of mouth can take some time and you need to promote and take advantage of the fact that you have just opened.
Imagine you shop at your favourite supermarket all the time. What would make you try another new supermarket down the road?
How much do you have to spend on marketing? What is your marketing budget? Do you think you have a couple of hundred pounds available?
If you have a few hundred pounds for marketing then why not give away a 1000 coffees. It won't really cost you much. Simply go out on the street with some free vouchers that entitle people to any free coffee. Call it a celebration of the fact that you have just opened up and you would like to invite anyone for a free coffee.
Now that person has no excuse really not to give you a try. Why wouldn't they try it? And once they're in you capture them with the best coffee and best service in town!
Make sure you get people in because an empty shop is not very good advertisement.
Is cleanliness really that important?
We can not say it enough: clean up.
Is staff training important?
Of course we feel barista training is very important however general staff training such as customer service and h&s training is also needed.
A barista training program could be three or four days of training, two days of training with a trainer and two days practical training where staff practice serving customers.
Making a cup of coffee in a training course is different then actually working behind a bar and this should be practiced.
Customer service training is also extremely important. Teach your staff how customers should be served. Do you like them to say Sir and Madam or is 'mate' good enough? Should they only serve one customer at a time? How about eye contact and body language? When should tables be cleared and how many baristas should work on the queue at a time? Do your baristas know how to handle a complaint? All these things are extremely important. Of course we can help if you need some help. Please do think about your training program. A great coffee shop really comes together when the staff are properly trained.
Latest coffee shop market research 2012
The coffee shop market is booming. This is very much a growing industry with more and more independents popping up and chains rapidly expanding. Going out for a coffee is becoming more and more part of the UK culture which is fantastic to hear. We feel this is due to the hard work that baristas, coffee shop owners and suppliers have done. The continuing promoting of quality coffee and a wonderful experience has led to growing industry.
These figures have been collected by Allegra Strategies.
In 2012 in the UK there were 15,723 outlets with a combined turnover of £5.8 billion. The market grew by 7.5% turnover and with 3.8% more outlets compared to 2011.
The branded coffee chains were responsible for £2.3 billion turnover with 5,225 outlets, having sales growth of 10% and outlet growth of 5.2%. They added 261 outlets in 2012.
Costa added 183 outlets with 22% growth and an estimated turnover of £648 million with 1,552 outlets. Starbucks had sales growth of 6% with an estimated turnover of £420 million, now with 757 outlets. Caffe Nero has 530 outlets and had a growth of 8%, adding 40 outlets in 2012, to reach £215 million turnover.
Research done with over 25,000 consumers told us that one in five customers visit a coffee shop daily. In 2009 that used to be one in nine.
Coffee shop people drink on average three cups of coffee per week in coffee shops. At home they drink 10 cups per week and 6 cups at work.
The best selling beverage is the caffe latte. The average price of a cappuccino in 2012 was £2.21 and £2.17 in 2011.
The main reason for visiting a coffee shop is the location (33%) and the quality of the coffee a close second (32%). Coffee quality was only 21% five years ago so people are definitely caring more about the coffee quality then ever before.
The average spend in a coffee shop is £3.77 per person. 70% of coffee shop customers purchased food.
Coffee is definitely becoming more an everyday beverage. Wonderful!
Location, location, location???
No matter how good the coffee and the products are, people who visit coffee shops buy on impulse a lot of the time (but not always). A high footfall location should make you busier but it will also give you more overheads. A smaller shop might make it harder for you to build up a regular base to start off with but once you are popular the low overheads will be great.
The more specialised you become the less important the location as people will be willing to travel once they know about you. Location is not everything, but it is extremely important.
What makes you special? Why should people visit your shop? Do you know the answers to these questions? We hope so and if not then it might be a good idea to think about them.
How to make a rota for a coffee shop?
You can use software online to develop staff rotas quite easily and relatively cheap.
If you have a morning and afternoon shift then try to give people as useful shifts as possible. For example, put a barista on a Monday morning shift, Tuesday off, Wednesday off and Thursday afternoon back to work. That way your staff gets a really long and nice time off.
What are the right size cups?
The espresso goes really nice in a small 3 oz cup that has thick walls to keep the heat.
We think that a great cappuccino cup is 6 to 7 oz, round and thick.
The caffe latte, caffe mocha and hot chocolate go nicely in a slightly taller cup and maybe a little bigger than the cappuccino cup.
Should I offer regular, large and/or extra large coffee sizes?
That is totally your choice. The emphasis should really be on traditional sizes that make the coffee taste best. 6 to 8 oz cups deliver the best flavour. You can always offer a larger size, yet we would recommend not to make such a big deal out of the large sizes. Speciality coffee is about the flavour, not the quantity.
What could also be a great idea is to have a large range of cups varying in sizes. Then your customer simply picks a cup they like and order the drink. No matter what the size, all drinks are charged at the same price. This will certainly makes you stand out from the crowd.
But when it comes to sizes, try to keep it small as it will produce better tasting coffees and your customer will not feel too full when they finish the drink. Big cups are not always good. Give people value for their money, not quantity.
Better to serve two regular coffees than one large one.
Quality products, speaks for itself really doesn't it?
Although, how do you know that you have good products? Do you count the number of complaints or do you look at the compliments? Let's face it, many people will not say anything, whether it's good or bad.
Hand your customer a feedback card when you give them their coffee and mention that you would appreciate some feedback.
Our customers often get positive feedback about the coffee all day long. They don't have to ask, their customers go up to the staff and compliment about the coffee and question why the coffee is so good.
What do most people do wrong?
Many people who start a coffee shop do not treat it enough like a business.
Running a coffee shop is fun, hard work and rewarding. But it becomes a lot less fun when it is not making any money. And when you are not on top of your finances it becomes even less fun. If you then get a tax bill that you haven't prepared for it is really not fun at all!
The important thing is to see this as a business. It might be a lifelong dream and once you have the shop it could be the best thing that has ever happened to you. But don't forget that it is a business and with that you get the things that are not so much fun such as paying the tax, hiring and firing of staff, cash flow, insurances, licenses, quality controls and many more.
Be on top of this and things get a lot better and you can focus on the things that you really want.
Other things that are important are things like training, motivation, people skills, service, experience, attitude, systems, accounting skills etc etc.
What is the difficulty about running a coffee shop?
Many coffee shop owners struggle to motivate staff and to develop a successful team of people.
Coffee shop owners often control most aspect of the business and are afraid to let go of things. The reality is that staff usually like responsibility and will happily take on a bit of extra work.
It is very important to work as a team and to make sure that the coffee shop is run by the staff as well as the owner and not just by the owner.
Other difficult things are time management. The ability to find the time to work on the business and not just in it.
Increasing average spend and making sure that the customer is not just having one coffee is another one that some coffee shop owners talk about.
Make sure that you do not loose sight of your dream and stick to your initial reasons why you wanted to start this coffee business. Do however listen to your customers needs and try to please your customers as much as you possibly can.
Keep yourself motivated. Once you start a business you will have to motivate yourself and your staff. Find ways to keep it exciting and remember to enjoy the work.
Some coffee shop owners struggle with hitting targets. It is important that you understand the figures right from the start. This is something we can help you with. Our courses are here to teach you about the financial model of a coffee shop.
You can visit our course here.
How about market research?
Once you have decided that a coffee shop is just the thing for you then you need to go out there and find a location. Location is key as you are probably well aware of. We think that the footfall is very important and you need to know how many people go past and whether the location you are going for is any good.
Go by a couple of mornings and lunch times and see what the footfall is like. You might even bring a click-counter. Also ask the surrounding offices and retail shops what they would think of you opening a coffee shop. They know their area well and can often give you great insight in whether it could work or not.
Make sure that you perform some market research and find out if the market is there before you open up!
Quality at a good price
Passion sells. Quality sells. Products at a good price sell.
If you run your coffee shop based on quality service and quality products at a great price then you are very likely to be successful.
Serve delicious speciality coffees. Work closely with us, learn all about coffee and how to prepare the best drinks and present them with style and you will have a great business. Care about what you do and how you serve your coffees.
Buying the cheapest coffee and working with inferior equipment is false economy. By investing in good equipment and high quality beans you will achieve a higher number of regular customers. And regular customers build your business.
How do you think I should manage my staff?
Lead by example.
It's rare to find a place where the staff are enthusiastic about their work when the owner is not. You are the one that will make the difference whether the staff are enjoying their job or not. Any job out there can be enjoyable, no matter what the work is.
Enjoyment out of work usually comes from the people around you. Try to make the job as much fun as possible. Whether you work in the shop yourself or not, you should show a good leadership. Should you know how to make a good sandwich or a good coffee when you work in a coffee shop? Yes, you probably should.
There is no need to be the best in everything but you need to come across as if you actually know what you are talking about. Be a good example to your staff.
Give your staff incentives and give them different tasks once in a while. Nobody wants to be behind a till for 8 hours. Move your staff around and give them the chance to develop themselves.
How do you suggest we layout the bar area?
The layout of your bar is extremely important. You want to design with the following things to think about:
On the design above people will queue along the grab items and the cake display. The cake display is close to the till so the staff member at the till can grab the cakes. The espresso machine is open and on display. The machine is also close to the till ensuring good communication. The machine is at a 90 degrees angle and the coffees can be poured right in front of the customer. Having the espresso machine extremely close to the customer will create a show and will speed things up big time!
The dishwasher is out of sight and has a clean and dirty section for the dishes. The clean section is positioned next to the machine making it easy to load up the machine with clean cups.
Counter or table service?
Many coffee shops will go automatically for a counter service in their coffee shop. It is often seen as the standard, especially for the high street where it is expected to be busy. Counter service is seen as quicker and easier and often people think that it requires less staff compared to table service.
The truth is however that it has a lot of downsides compared to table service. There is often a lot of pressure in the queue for the customer and the barista example. Many times a customer will order just a coffee because he or she is holding up the queue. The menu and offerings can be a little overwhelming in a short space of time and because of the pressure of the queue the customer orders a lot less than originally planned. Counter service usually gives you less takings compared to table service. You probably won’t agree but lets have a look at the practical side of things.
With counter service the pressure on the barista can be hard when there is a queue. We believe strongly that the espresso machine and the barista should be easily visible by the customer in any kind of coffee shop. This does mean however that many people in the queue will watch the barista make coffee. Sometimes this can stress the barista so much that the quality of the drinks drop. Drinks are being rushed and the customer who has been waiting extra long now get’s a less tasty drink than when its quiet. There is nothing worse then waiting extra long and receiving something of inferior quality.
The layout of the coffee shop has to be designed around the counter service as well. Your customers should queue along all your products which means that pretty much all your sandwiches, cakes and confectionery should be on display. People will spend more when they can see the products in front of them so you have to design the counter around this thought.
A counter with a long queue might make people decide to not enter your coffee shop; sure it is great to look busy and successful although you can also look too busy and lose sales. If everybody that was in the queue was sitting down then your shop would still look busy yet there wouldn’t be any long queues and as long as there is space people would probably come in to the shop more likely.
When people are sitting down for a minute waiting to be served they can have the time to acclimatise to the shop and have a good look at your menu. This will make them feel relaxed and when people are relaxed and have the time to look at your menu they will spend a lot more money; and more importantly they will order what they planned on having in the first place. Of course it is important to acknowledge the customer once they sit down and to let them know you will be with them shortly to take their order.
Many of our customers have table service for their coffee shop. When I speak to them and ask about the average spend of the customer I pretty much always hear of a higher spend compared to a counter service. With table service people often have a coffee and something else. Most counter service coffee shops have customers just drinking coffee. A customer who just drinks one coffee in a busy coffee shop and sits for a full hour could cost your dearly.
Table service allows you to turn tables over quicker as well. If you are busy and need some tables free then table service is fantastic. It is much easier to talk with a customer to see if they would like anything else. If not, then the bill comes a minute later. This is usually enough for people to realise that a table is needed. In the end, table service simply turns over tables so much quicker and turning tables over quickly is extremely important when the shop is full.
Table service will give the customer the chance to order something else. Once a customer has paid for an order they are very unlikely to order and pay again for something else. With table service however the tab is still open and it is easy for the customer to order another coffee. The great thing with table service is that it increases the average spend.
Some might argue that take-out doesn’t work very well with table service and I would agree. Although there are ways around it. You could have a little take out counter area where customers could be served for take out only. You could even have a hatch which is designed for take outs only. Take out service is a little harder with table service but then again, most people think they offer a lot more take out then they actually do.
Another downside of table service could be that the customer is not seeing the coffee being made. We believe that making coffee is an art and can be a great show (think of latte art for example). With table service you might lose this a little. A great way around this is to have the espresso machine inside the serving area, not behind the counter. This is a little controversial but it could be fantastic if designed correctly. All you need is to place the espresso machine on the end of the counter/kitchen with the machine facing the inside of the shop. Place it so that anybody in the coffee shop can watch the barista make coffee. Of course you have to consider safety options here.
Some people will argue that table service needs more staff. I would disagree. You will find that this isn’t the case if you have a good layout. If you design the counter so that even the host (the person waiting the tables) can make coffee, reach for cakes, muffins etc. then you can really speed things up. You could have a till that spins around so the host can always reach it from inside the serving area. The cakes are all on display for the host to reach. In the end, you would need someone at the till anyway which can now be the host. With a bit of planning you could run the shop with 3 people.
And if you are really clever and design the shop carefully then you might even be able to have both counter service and table service available. You could have the espresso machine on a rotating disc so it can turn around for table or counter service. The same goes for the till. It may sound crazy but I am sure you can do it with a little planning and thinking ahead.
It is all about making it work for you. The goal is to make your customer feel at ease, spend as much money as possible and optimise customer flow as much as possible. And of course, to serve delicious coffee!