How to Start a Coffee Cafe

Americans drink more coffee than tea, unlike people in many countries.
Americans drink more coffee than tea, unlike people in many countries. (Image: Monkey Business Images Ltd/Valueline/Getty Images)

With millions of cups sold each day, coffee is an important consumer product in the United States. Numerous coffee cafes exist all over the U.S., but properly planned and implemented, you can start a profitable new one. Begin with a thoroughly researched business plan, an effective marketing strategy and sufficient funding.

Write a business and financial plan after through research about the pros and cons of starting a coffee cafe in your geographic area. Your business plan serves several functions, but its primary purpose is to provide a plan for the operation of your business. Businesses that are built around the sale of coffee drinks differ in significant ways from those in which coffee is secondary to another product, such as donuts. A coffee cafe generally needs less initial investment than many other retail businesses.

Research potential locations, customers and your likely competitors. Compare the reasons to open your cafe in a busy mall storefront to leasing space in a supermarket. Examine the probable customers you would have in any location and try to determine in what type of location you can attract more customers. Some people set out to buy a cup of coffee, but others buy it on impulse when they see it for sale. Your location needs to be in a place with substantial foot traffic from all types of customers. Identify the licenses and permits you will need at each location.

Look at cafes in other areas to see where people sit when they drink their coffee, and whether the cafe provides newspapers, magazines and wireless internet service.

Create a marketing strategy. Some of your planning will be influenced by your location. Make use of social networking sites on the Internet where your younger customers spend time. You can offer sale items and coupons online to bring customers to your store. If most of your business is during the day, try having a small group of musicians or a comic perform in the evening to attract customers. You will probably be competing with brand-name franchises so you must find ways to differentiate your cafe from others.

Obtain the financing you need to keep your business operating until your operation is profitable. Among the options to explore are banks, investors, community development agencies, the Small Business Administration and friends and family. Your business plan and experience are important signposts to most sources of funding.

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