How to Open a Coffee Shop? What Preparation and Costs Are Needed to Start a Café?

I knew it! You still want to open your own coffee shop, don't you!

Alright then! Since you still want to open your own coffee shop, let's talk today about everything you need to do to prepare for opening a coffee shop. Of course, every shop has its own style, and some decisions need to be made on your own. What's mentioned below might not be suitable for everyone, but you can use it as a reference to create a plan that suits your own coffee shop.

Research Before Opening

Before opening a shop, we need to think about what exactly a coffee shop is and what kind of work skills are needed. You should know that running a coffee shop requires hands-on practice. It's not enough to just see others running successful coffee shops or think that making coffee looks simple—you can't actually do it just by watching with your eyes.

Therefore, before opening a coffee shop, you need to collect extensive information and build up knowledge reserves to lay a solid foundation for your shop. The knowledge reserves mentioned here are not just about learning coffee brewing skills and coffee knowledge, but also about understanding how to use funds, personnel arrangements, and specific operations for opening a coffee shop.

Working in a coffee shop is actually a great learning process, but it must be at a reliable coffee shop. Although working in a coffee shop may not meet everyone's expectations, as long as you calm down and observe things beyond the counter, learn to communicate with customers in advance, and gain service experience, it will be more important than just focusing on coffee brewing techniques. Some things that cannot be expressed in words can only be understood through personal experience. During this process, you will meet many like-minded friends, and these connections might bring great help when your coffee shop opens and operates.

About Coffee Shop Positioning

Regarding positioning, we need to think about what your motivation for opening a coffee shop is. How do you make your ideas concrete? Although there are some commonalities in opening coffee shops, if you're the owner, you definitely want your coffee shop to have its own characteristics. It's very risky to open a shop impulsively without thinking about positioning.

Here we can use the 6 Ws and 2 Hs to think about these questions: Why open a coffee shop? What do you want to primarily sell to customers? When will you open the shop? Who do you want as customers? Whom will operate this coffee shop? Where will you open the shop? How to - what style will you adopt? How much - how much startup capital do you have?

Determining the Coffee Shop Menu

The most indispensable thing for a coffee shop is the menu, which is comparable to the shop's signature. Remember! The menu should be determined when you decide to open the shop, not when the shop is already ready to operate. When thinking about the menu, you need to consider region, customer demographics, characteristics of surrounding shops, and the needs/requirements of nearby customers. After fully grasping regional needs, create a menu that everyone can accept.

Once you have a menu, you need to consider pricing. What price range is appropriate? If judging from raw material prices, you need to refer to the food cost percentage formula: Food Cost % = Raw Material Cost ÷ Selling Price × 100%. Generally, the food cost should not exceed 30% of the selling price. But this is just thinking from material costs; we also need to add rent, labor, utilities, and other costs, which you need to calculate based on your specific situation.

Coffee Shop Location Selection

Location selection is particularly important, as it's a factor that determines whether your coffee shop will thrive. Therefore, when selecting a location, first consider the region and do more field research. After finding a shop you like, you need to determine whether the shop is suitable/can be used as a food and beverage establishment, whether water, electricity, and gas are normal, what restrictions exist on interior and exterior decoration, and whether the shop's rent and deposit are reasonable.

Essential Funds for Opening a Coffee Shop

The money for opening a coffee shop doesn't come from nowhere, so before opening, the most important thing to consider is funding. It's recommended to create a detailed plan, which includes several items that every coffee shop must use funds for: rent, interior and exterior decoration costs, equipment and tableware purchase costs, advertising and promotion costs, material inventory costs, and shop operating funds.

Fund Management After Coffee Shop Opening

Opening a shop is easy, but operating it is difficult. After a coffee shop opens, the indispensable monthly expenses are rent and labor (even if you operate alone, you must factor in your own time cost). At this point, without corresponding revenue, it's easy to fall into the downward spiral of losing money... So before opening, learn more about how to adjust the ratio of expenses to income, and learn to adjust the coffee shop's positioning in a timely manner when necessary.

First, you need to clarify the monthly fixed expenses, which include rent, labor, and depreciation costs of fixed assets—that is, the monthly depreciation costs allocated over a certain period for decoration and equipment put into use. Then there's revenue forecasting, where revenue equals "average customer spending × daily customer traffic." Daily customer traffic can be calculated through "number of seats × table turnover rate × seat utilization rate" or "pedestrian traffic in front of the store × attraction rate." This daily traffic needs to be calculated in detail based on weekdays, weekends, and holidays. Finally, there's setting the break-even point. Before this setting, see how much working capital you can provide, then use fixed expenses ÷ (1 - working capital ÷ revenue).

When calculating these, don't be too idealistic; you must determine the fund management after the coffee shop opens based on actual situations.

Obtaining Coffee Shop Business Qualifications

The most time-consuming and effort-intensive part of opening a coffee shop is obtaining business qualifications. Different places have different regulations, and different coffee shop positioning may have different requirements, but there are two certificates that are essential: one is the food business permit, and the other is the shop's business license. These need to be applied for from relevant departments and undergo a round of verification and inspection. Therefore, when you determine the coffee shop's opening date, it's recommended to apply in advance to give yourself sufficient time.

Equipment Investment

Act within your means—expensive isn't always better. High cost-performance and staying within your affordable price range are the most important things! It's not recommended that everyone blindly invest in expensive equipment when opening a shop. You really don't need to throw all your funds into equipment when opening! It's not too late to gradually upgrade equipment after your operation stabilizes. A coffee shop should try to save costs in its early stages, and don't be too optimistic about the future—this isn't discouragement, it's reality~

Coffee Shop Design and Decoration

Before doing this, you must clarify and solidify the shop's style, then make a design plan based on the actual situation of the shop space. Besides considering the shop's style and decoration, we also need to fully consider the space allocation between customer areas and the counter/kitchen, as well as workflow design.

Staff workflow design needs to fully consider that staff can operate efficiently after receiving orders. Therefore, starting from the placement of equipment, you need to consider how to make the process from operation to food serving more seamless. Customer workflow needs to consider whether the placement of tables, chairs, and decorations will obstruct customers' movement, and whether the indoor lighting positions can guide customer routes.

Selection of Material Supply Channels

Whether it's coffee beans or other materials, you must choose suppliers, manufacturers, and brands with legal production qualifications! This is very important!!!

Final Inspection Before Opening

Check that all equipment in the kitchen, counter, customer area, and restroom are functioning properly, that ingredients and materials are fully prepared, that ingredients are within their expiration dates, that cleaning supplies are complete, that the cash register system is working, and that staff are ready to enter operational status.

About Service

Regardless of your personality, the basic principle of serving customers is enthusiasm and generosity, truly making customers feel satisfied and convinced. I believe that in any industry, service determines whether a shop, company, or brand can survive long-term. With good service, congratulations, you're 99 years away from becoming a century-old establishment!!!

Although this article is a bit long and wordy, the fact that everyone can read to the end proves that you really have perseverance and want to open your own coffee shop. So here, I wish you all prosperous business in advance! May wealth roll in! I hope everyone can stick to their dreams and do something they won't regret~

If anyone has any shop-opening or management experiences to share, please leave a message in the comments section~ I! Will! Immediately! Select!!!

Image source: Internet

For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat public account: cafe_style)

For more specialty coffee beans, please add FrontStreet Coffee on private WeChat, ID: kaixinguoguo0925

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473