A barista hands a credit card back to a customer. A chrome brewing machine and various bottles of syrup stand behind the barista and a white mug on a saucer is placed on the countertop in front of her.
Many coffee shops take their offerings well beyond coffee and sell homemade pastries, teas, sandwiches and their own unique house blends. — Getty Images/shapecharge

Running a coffee shop can be a rewarding experience and a profitable long-term business model. Here are six steps to opening a coffee shop.

[Read more: How Woman-Owned Copper Cow Coffee is Disrupting the Coffee Industry]

Consider your options

When you’re starting a coffee shop, you can either open your own store, buy an existing coffee shop or purchase a franchise. There are pros and cons with each option, and the right choice for you will depend on your goals and aspirations as a business owner.

Starting your own coffee shop will give you the most creative freedom, and you’ll get to keep most of the profits. However, this is the hardest route to take, and your coffee shop could fail.

When you buy an existing coffee shop, you’ll receive a business that already has customers and brand recognition. On a similar note, when you buy into a franchise, you’ll receive a built-in business model and processes. But both of those options will require significant upfront investments, and it could be hard to find the right opportunity.

Choose a location

The location of your coffee shop can make or break your success as a business owner. Successful coffee shops are built on repeat customers, so if your store is in an inconvenient location, it could hurt your profits over time.

When you’re scouring your community for the right location, pay attention to any neighborhoods and businesses nearby. It's also a good idea to consider the parking and the foot traffic in that area.

And finally, be sure to check out any nearby competitors. Doing competitor research will help you identify ways that you can set your coffee shop apart.

Identify your target market

Now it’s time to identify your target market and decide how you’ll make your business stand out. If you want to build a successful business, you can’t try to offer everything to everyone. It’s better to narrow in on one specialty and strive to do it better than anyone else.

There’s probably some bigger vision that motivated you to open your own coffee shop. Use this as a jumping-off point as you think about the atmosphere of your store and how you want customers to feel when they walk in, as well as what type of coffee, pastries and food you want to serve. This will help you come up with your unique value proposition and create a compelling business plan.

[Read more: How to Write a Business Plan]

The location of your coffee shop can make or break your success as a business owner.

Come up with your menu

If there’s one thing most successful coffee shops have in common, it’s serving a high-quality product. And this no longer just means serving drip coffee—most stores also offer specialty coffee drinks, teas and pastries, and some even serve alcohol.

Come up with a few signature drinks that your coffee shop will be known for. If you plan to serve food and pastries, it’s a good idea to offer gluten-free and vegan options as well. From there, you can calculate the cost for the ingredients and determine your profit margin.

Find the equipment you’ll need

It takes a lot of equipment to run a coffee shop, and buying this equipment can be pretty overwhelming at first. Here is some of the equipment you can expect to purchase:

  • Grinders.
  • Espresso maker.
  • Drip coffee station.
  • Water filtration system.
  • Refrigerator.
  • Sinks and a sanitizer.

You can either buy this equipment outright or lease it through a third-party provider. Just make sure the equipment is in good condition, so you don’t create problems for yourself down the road.

Hire employees with customer service skills

Finally, a successful coffee shop needs knowledgeable employees that can help customers understand their options. Focus on finding employees that have good attitudes and excel at customer service.

Anyone can learn more about the coffee industry, but you want employees who will build relationships with your customers.

[Read more: How Companies Are Implementing Virtual Product Sampling Experience]

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published May 11, 2021