Bailey
Guidance on coffee shop ownership?
I've dreamed of opening a coffee shop for quite some time now, but I'm unsure of what my first steps should be. I've helped open coffee shops as a manager and have worked in different coffee shops for four years now. I know I have a lot to learn, but have felt I shoudn't go to college for a degree yet until I know it will for sure benefit me. What college degree would I go for? Would a business degree be beneficial? Or would it be a waste of money?
Barista question: should I get my barista certification or is it a waste of money?
How can I best achieve the knowledge needed to open a coffee shop? #business #college #entrepreneur #college-major #career
2 answers
Nicholas Nobile
Nicholas’s Answer
Agree with many of the points that Kim has outlined. While I have not owned a coffee shop, I have helped startup a liquor business and have worked on behalf of small businesses. I've answered your questions as well as outlined some things you may want to consider.
What college degree would I go for? Would a business degree be beneficial? Or would it be a waste of money?
While certainly not required, a business degree can't hurt. It depends on your business acumen already and understanding of business. While some coffee shop owners might say it is a waste of money, there may be others who would tell you that their success is directly correlated to what they learned in school from professors and peers. I would suggest taking a few core courses in accounting and entrepreneurship to give you the basics of business. Supply chain management can also be one to further delve into as you look to further understand your COGS (cost of goods sold).
Barista question: should I get my barista certification or is it a waste of money?
Again, I don't think education is a waste of money. In this case, you are learning the tools of the trade you are looking to get into. It also depends on your level of investment in the coffee shop. While some owners simply own the shop and take profits, others are very hands on and in the weeds of the operation. Personally I would suggest learning as much as you can about all there is to know about coffee including how to be a barista. By starting at the bottom, you build a sense of appreciation that cannot be instilled otherwise. When things go awry in your business (not if), you will know exactly what to do and can take matters into your own hands (rather than having to pay an expert). These costs add up and as a small business owner you want to mitigate as many extraneous costs as possible.
How can I best achieve the knowledge needed to open a coffee shop?
While I don't know for certain the knowledge needed, I would suggest first working in a coffee shop, and potentially multiple types of coffee shops in different locations. How do the owners operate? What equipment do they use? Where do you see bottlenecks in the process? Where do you see efficiencies? What makes for a good cup of coffee and at what price? What kinds of margins does the business generally generate, and what are the highest margin products? Answers to these questions will help you formulate what works and what doesn't so when you are ready to open your own coffee shop, you will have learned from the successes and failures of the places you worked at (but not on your own dime).
Other things to think about:
1. Location
This is going to be a key component to your business and overall cash flow. It will be extremely important to be at a location where there is a good amount of foot traffic, or you are near businesses, apartment complexes, etc. Since you will not have the brand power of a Starbucks to begin with, it is crucial to thoroughly vet the location as well as the property owners, nearby businesses, etc. All of these things can play a factor in your success.
2. People
The people you choose to work with and hire are going to be vital to your overall success. Trust is the foundation of a strong partnership. You need to be able to trust your employees and they need to be able to trust you. Show them that you are invested in their success and that the coffee shop's success is because of them. Become someone they want to emulate and are proud to work with as a leader. Once you gain the respect of your employees, you can be confident that your business and it's operations are in good hands. Ensure that you train them well and give them the tools they need to succeed.
3. Unique identity and Supply Chain
Ask yourself what makes your coffee shop unique and why would a customer come to your store? This funnels into location- convenience is likely to be a major reason why people come to your place to get a cup of coffee. But, there are other things to consider as well. Price for example is going to be key. The atmosphere (relationship with baristas) is another. I would advise you to stack rank all of the things which can make or break your coffee shop and ideally reference the experience that you have gained from working at other stores (for at least 1.5 years).
Where are you going to get the beans? Your supplier is going be a crucial selection. This is someone who you want to build a strong relationship with as there may be instances in which you may not be able to pay in full for your beans or perhaps buy more inventory in advance without paying for the full cost upfront. Again, trust is going to be key here and the supplier is going to want to know that they can trust you to ensure that you hold up your end of the deal. It's also crucial from a quality perspective. If you are able to make great coffee from high quality beans, customers will get that. But it depends on the value you provide -- is the cost of the coffee worth it to the customer. And, are you able to make a decent margin on each cup of coffee sold in order to: pay for employees, pay rent, pay for equipment, pay tax, etc.
Hope this helps and good luck!
- Nick
Kim Igleheart
Kim’s Answer
Bailey,
Thank you for wanting to open a coffee shop! I can't answer your question, but, just wanted to say thank you! I think initially marketing is important - picking the right site and pitching your business to the right people in the right way. As an older person (senior?), I envision a diner when you say "coffee shop," but I think you are thinking more along the upscale line of "coffee" shops? You will need to be able to develop a "business plan" to secure financing.
Learn all you can from your job. There are so many aspects to ownership/management. Selecting the right managers and employees, keeping them around, regulatory compliance, profits, the "customer experience", product selection, negotiating contracts/sales prices, etc. And, once you have a successful business, dealing with the inevitable competitor trying to squeeze in on your market .
I don't know that you necessarily need a degree. I would recommend researching what is available to you from the city, colleges, chamber of commerce, etc. Search for "small business owner" information, "minority business," etc. I know a college locally that has their marketing dept undertake projects for aspiring business owners. Also look into MOOCs - there are a LOT of free on-line classes!!!! If you are going to be the owner, you don't need the credential - just the knowledge!
Good luck to you!