How to Open a Coffee Shop & Book Store

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Think carefully before you launch a coffee shop/book store.
Think carefully before you launch a coffee shop/book store. (Image: Jupiterimages/Photos.com/Getty Images)

Many people dream of leaving their corporate jobs and setting up their own business. Building a coffee shop with a book store is a common idea. Each retail concept has tough competition and faces oversaturation in some markets. The beverage category is filled with established chain, franchise and local providers. Independent book stores are closing because of chain competition and a move to ebooks. Combined, coffee and books may be a good formula with a lot of hard work involved.

Start with a business plan

Make a business plan. SCORE offers 13,000 mentors free of charge in 364 chapters nationwide. There are free templates to build your plan, which will help you in getting funding, finding partners and guiding you when the going gets tough. You need to put everything down in the plan. Include financing. How much you have, how much money you need to borrow (if any). The concept and market: what you envision for your coffee shop/book store. Resources: how many staff, payroll. Product line: what you will sell and how, as well as pricing plans. Use the SWOT analysis to develop Strengths, Weaknesses, Opportunities and Threats.

Decide how you blend your coffee shop/book store. Seek advice from other business operators and industry associations like the American Booksellers Association. Conduct a market study to identify product demand, competition, pricing strategy, opportunities. Talk to your Chamber of Commerce and local Small Business Development Council, often located near a university or community college.

Shop around and check out your competition. See if there are any coffee shop/book stores in your area, within a 15-mile radius. Sample their menu, see what books they sell and what makes them unique as a retailer.

Decide if this venture is definitely for you. It is a big commitment and could result in you losing money. Ask yourself if you can afford to do this, whether you have the entrepreneurial spirit and whether your family will support you.

Look for a building or an existing shop to house your coffee shop/book store. You will need to rent the building, get licenses and find suppliers and vendors. Once you have done this you will need to sign a lease, set up utilities and create all interior furnishings according to a theme you've established. Establish credit and terms with your vendors. Share parts of your business plan with lenders, the landlord and vendors as needed.

Contact your regulatory agencies: state, federal tax ID, county and city licenses. They will register your business and help you apply for a business license, an employer's identification number and tax identification number.

You'll need insurance and likely workers compensation coverage. Check that the insurance covers the building, its contents, general liability. Some lenders require "key man" insurance for the business owner or operator.

Register your coffee shop/book store with your local health authority. The health authorities will check you know how to prepare food safely, how to store it and how to handle different types of foods. You must have a County Health Permit. Do not schedule your opening until you are sure you have the permit.

Furnish your coffee shop/book store and decorate the building according to your theme. Establish your signage. Decide on an opening day. (Leave around 30 days prior to the opening day so that you can advertise.) Check that suppliers and vendors can supply you the items you need before you open. Review your inventory with book distributors and wholesalers. Seek Point Of Purchase signage and premiums form book vendors.

Hire staff. Your business plan should cover how many staff you need so follow this. You will need wait staff and a book store clerk. Advertise in the local newspaper for staff. Put a notice in your shop window.

Advertise your opening as part of a marketing plan to establish awareness. Work with your Chamber of Commerce to host a networking event. Host a grand opening with special offers, authors, book distributors and community leaders. Seek newspaper and media coverage by sending invitations with your press release. Register your new business with the Chamber as well as business directories like Yellow Pages, Google and Manta. Make sure you and your staff conduct a dry run on practices and techniques. When your checklist is complete, make your "soft opening" to work out problems.

Tips & Warnings

  • Retail coffee shops operate in oversaturated markets. Coffee is a commodity available in many retail locations. A new coffee shop faces competition from local establishments, chains and franchises.
  • The independent book store is declining because of competition from chain retailers, online retailers and more readers who choose ebooks.

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