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RandomGirl's avatar

What's involved in running a coffee shop?

Asked by RandomGirl (3352 points ) December 7th, 2012

OK, so. I’m 16. I have life ahead of me. My state has it set up so that the government pays for you to get as much college as you want under your belt during 11th and 12th grades. I’ll be doing that soon. While it isn’t necessary, it’s generally a good idea to have an idea of where you’re going so you know how to get there. In other words, I’m trying to figure out what to do with my life. The idea that’s really clicking for me right now is to open a coffee shop a small town. I love small towns, coffee shops, cooking, and, especially, forming relationships with people. What I don’t like about this idea is the business side of it. I’ve heard it said in the past that if you find a job you love, you’ll never work a day in your life. If I was going to have to handle the business side of this venture, I’d find something else, because this would not be that “job I love”. But I’m not even sure I have the right impression of what running a coffee shop includes. So I have some questions. I will appreciate any answers I get here. Thanks!
So my questions are:
-What would this venture involve? I’m thinking both start-up and day-to-day.
-Is my impression of the business side exaggerated? Underestimated?
-Would the management of such a business include enough work with money for me to think about a business partner? It just dawned on me today that I could have a business partner to handle money, while I handle the food, advertising, decorations, and day-to-day work.
-If I did have a business partner, would I still need business training? This is one of the things that makes me not like the whole idea. I don’t want to have to take business classes in college, if possible. Would a AS (or is it AA?) be enough? That’s a two year degree, btw. Or would I need a BS/BA? I could have an AS in business by the time I graduate from high school. That’d be alright, I guess, if I needed to.
-Thinking about start-up in particular, what kind of certifications and inspections are involved?
-Thinking about the day-to-day workings of the shop, what kind of liabilities would be involved? Specifically, would there be any problems if I were mainly catering to teens/kids? My mom thinks I would come up against a lot of liabilities if I were to have minors in the shop without their families. I’m hoping to set up this shop in a (very) small town – not the inner city or anything like that.

Well, now that I’ve written pages and pages…. There you go! I have a lot of questions and am hoping to get a bit of answers, or at least some more things to think about! Thanks for any input! :)

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20 Answers

jerv's avatar

I know people who manage to start/run a business without a degree. One of the perks of being your own boss is that you decide the educational requirements ;)

Know that most businesses have a rough start. It often takes a while for them to recoup their startup costs, so it will likely be at least a couple of years before you see any profit.

Odds are that Health and Fire inspections will be all you really need to worry about, though there may be more inspections if you do any real remodeling. So long as your shop is structurally sound, electrically safe, has the proper ventilation and extinguishing equipment, and is clean enough to eat from, you should be okay. And if you lease a space, much of that is the owner’s responsibility and not the business’.

Liabilities…. well, you will need some hefty insurance in case someone suffers a slip-and-fall or similar on your premises. But I don’t see any special concerns about catering to a younger crowd; even if you were adult-only, odds are that you wouldn’t have the public getting access to anything dangerous (cleaning chemicals, hot kitchen equipment….) so I don’t think there are any worries there.

RandomGirl's avatar

@jerv: Thanks for the feedback! I’m very glad to know that leasing a space would make the safety thing the owner’s responsibility. That helps a ton.
Something in response to Jerv’s statement about not making a profit for a couple of years:
I’m actually not in it for the money. My passion, which I touched on very briefly in my initial question, is forming relationships with people. My motivation in life is to make a difference in people’s lives. This is the most fulfilling thing in life for me. I don’t care about the money. The only goal I have money-wise here is to stay afloat. I intend to be connected to a local church, and they can support me as a ministry. I’ll run the place as a business, and be smart with the money in order to use the church’s contributions in the best way possible, but they will help me. This is how I’ll break even and stay open. I know I couldn’t do it on my own.
Does anyone have any advice for me in relation to this new piece of information? I just thought of a new question: How would technically being a non-profit change things? I know it would make things easier on the tax side of things, but how would it change other aspects of the shop? As a Christian, I do have certain beliefs that will change how I run my shop. (No, I don’t intend to be pushy or obnoxious or anything like that.) But I would like to know whether being a non-profit or a for-profit business would change the legal side of things. For example, what about this whole providing the morning-after pill to your employees thing? I’ve only ever heard about this affecting big companies – would it affect little guys like myself? Would non-profit or for-profit be better for me in this aspect? Either way, I’ll be in a very small town (like 4000 people tops, I’m hoping), so I’m hoping I’ll be able to put down enough roots before I have to face a problem like this, so people will understand if I choose not to give health insurance at all (or if I have to make that sort of decision).

lifeflame's avatar

Have you worked before in a coffee shop, even as a barista? I think it would give you a much better idea if what’s involved in the day to day running of it. My advice is that you intern or work in one for a while- find a mentor who can talk you through everything. I did that when I started my own theatre company- there’s so much nitty gritty that it’s going to be hard for us to brainstorm everything for you here.

RandomGirl's avatar

@lifeflame: You just brought me back to the present and reminded what a young, clueless teenager I am. I hadn’t even thought of working in a coffee shop! I had thought of interviewing shop owners (one in particular – I loved their atmosphere! Unfortunately, they’re not open any more.), but not getting a job. Now I know the next step I need to take. For sure.
Now… Do I really want to quit my current job yet? Hmm.

Seek's avatar

You certainly shouldn’t quit your job until you land the next one.

RareDenver's avatar

Buy Coffee. Make Coffee. Serve Coffee.

Response moderated (Spam)
ragingloli's avatar

I guess you will also need a license to grow weed.

CWOTUS's avatar

The best way for you to visualize the requirements would be – seriously – to do it yourself. Imagine the processes involved, the hardware and people that would be required to operate / govern / supervise / maintain those processes, and the various inputs and outputs.

So, obviously, to start: A place, whether that’s a building or a room in an existing building, a coffee maker, water, coffee, ground or unground (and a grinder, if so – you might even consider your own roaster), etc. The more you flesh out the list, the more you will know – without having to read others’ ideas – what will be involved. And then you can start pricing the elements and building a business plan: how many cups of coffee at what price will I need to sell to cover these costs and produce a profit (because the profit will be required to provide incentive to continue, to expand, and to improve).

glacial's avatar

Do not even consider this until you have worked in a coffee shop. If you have the time, volunteer. Who would turn you down?

Also, don’t forget that someone has to clean the bathrooms. Not all of the smells and sounds are glamourous.

dabbler's avatar

@glacial makes some insightful points. Try working in a coffee shop first, before trying to open one up.

If you main goal is the people interaction, why run the place? As you mention you would not so much like the ‘business’ part of it anyway. Working at a coffee shop will get you all the people interaction, and none of the hassle of keeping the place running.

RandomGirl's avatar

@glacial: I’ve cleaned lots of bathrooms, lol. I think I’ve got that one under control. :)
@dabbler: A “coffee shop” will be just the beginning. I’m hoping to grow this shop into a bigger idea eventually. This is my dream.

gailcalled's avatar

Here’s a 2005 sample coffee shop business plan. Actual costs will be much higher and the tax laws may be different, but this will give you a realistic idea

Intro:

If you are planning to open a coffee shop, the very first thing you need to do is write a business plan. This is useful in many ways: it will allow you time to consider all your options before committing as well as put down on paper your goals and ideas. But, most importantly it will provide an analysis of your idea and give you a clue as to whether it will be a viable business venture.

Below is a sample business plan for a fictional coffee shop. You may use this plan to formulate your own. Use your own objectives and revenue figures to work out your business plan.”
************
Here’s an article from 2011 Blookberg Businessweek entitled “Waking up to the Reality of Running a Coffee Shop.”

Intro:

“If your underlying business model is not financially sound, there’s little you can do to improve it. Dressing up a business plan—or even finding a great location—cannot save a business that simply won’t bring in enough revenue to cover expenses and turn a profit.”

Highbrow's avatar

Here’s my tips to be followed carefully :

First you should ABSOLUTELY be aware that location is crucial, but this is a mere detail that can tell the difference.
Running a successful coffee shop is also all about venue atmosphere, customer service, employee management and transparent accounting. The most successful coffee shops target a specific set of customers and deliver a consistent experience. Finally, as with every small business, without exceptions, you must be in a personal capacity involved with the hands-on, day-to-day activities of the coffee shop’s operations.
You’d better open your coffee shop the right spot. Try to target local customer base. It would be useful also for you to get to know the neighbourhood and what types of people live there.
In the majority of cases, you will be able to choose the atmosphere of your coffee shop, because every locale contains many subsets of demographics. Then ensure there are enough people in the area to patronise your business.
You’d be well-advised to scope out the competition. Make your coffee shop as comfortable as possible. One needs to feel comfortable in your coffee. It remains a sure sign that your customers will come back. Put some good music in the coffee shop. Keep everything clean, neat, orderly and self-apparent. Set employee schedules clearly, and hold employees to their commitments. Offer good food even if it costs money.

ragingloli's avatar

Also the most obvious thing: Serve good coffee. The best location will not save you if your coffee tastes like piss.
As Gordon Ramsay once said: “Good food sells itself”. That applies to coffee, too.
Hire someone who knows how to make great coffee and what beans to buy.

Bellatrix's avatar

My daughter went to school with a young man who chose to open a coffee shop after he finished his final year. It was his idea, he organised finance and he opened it our local, large shopping centre. I think he may have sold it now but it was there and appeared to be running successfully for a long time. My reason for telling you this is – you can do it and it isn’t a silly idea. I would suggest you do need to make sure you have either the knowledge yourself or a mentor who can help you.

Why don’t you think about doing a hospitality or/and catering course or look for an apprenticeship with a chef? If you study, look for a part time job in a coffee shop. The more you can learn about the pros and cons of these businesses, the more likely you are to be successful. You are young. There is no rush.

When you go away – go to coffee shops. Check out lots. What do you like about the ones you visit? What do you not like? If there are very successful coffee shops – talk to people who frequent it about what they like. In other words, do your research.

Good luck. I hope your dream becomes a reality.

jerv's avatar

@Highbrow There is a rather successful little coffee shop around here that caters to the sci-fi crowd, especially Browncoats and (due to the overlap between Browncoats and Steam Rats) Steampunk. In most places, it would be hard to find enough Firefly fans and neo-Victorians to run a business, but this is Seattle

Every place has their own niches. The original question mentions catering more to the youth, and those are everywhere.

Highbrow's avatar

If you have the desire to undertake, if you are dynamic and treasurer of your sleep, then you possess the qualities of the perfect cafe owner and this is your future. The fashion for themed bar boost initiatives.

The job in itself

Drinking establishments still arouse vocations but their number decreases. Besides the difficult working conditions, the café have to compete very aggressively fast food, vending machines for beverages and retail. But with theme bars (representing 15% of establishments), they apparently found their salvation. The procedure is simple : choose a concept and develop the place by a suitable furniture and trendy to target more customers. One can still play the card of good bistro temple sandwich bread and pressure correctly drawn. The cheap option fast food remains a major card resistance to competition.

Regulations

Any opening shall be subject to an administrative declaration mayor of the town and a tax receipt from the local customs. Third requirement: you must pay a license (the license I for consumption without license IV alcohol for all legal beverages allowed). The license I, is granted freely to the contrary Administration licensing II, III and IV, which are derived solely upon redemption of an existing fund. Opening a bar is also conditioned on the basis of nationality and location. The establishment must be located well clear of protected premises such as hospitals, schools and cemeteries.
Once these requirements have been met, the Way of the Cross did not end there and then : the protection of minors, repression of public drunkenness, compliance with health standards and hygiene, pricing, reporting to the SACEM for the musical entertainment, remuneration of amateur musicians, noise compliance, I could continue the list !

Starting your own café

Early stage investments are cumbersome: 182 000 for opening a café-brasserie and 140,000 euros for a bar tobacconist. To these we must add the license (from 1 500 to 30 000). No bar without furniture, there must be tens of thousands of dollars to create a friendly environment. A coffee costs 2 000 to 6 000.

Before you get started you must firstly refine your project. Which location (attention to protected areas)? What a concept? What products will be on sale? What will be your customers? Does your project is financially feasible?

The 1st stage for opening a coffee : The project

Will you create or resume your coffee?

Second course to open a coffee : Regulations

So as to be manager of a coffee it is necessary to undergo training of debtor of drink to get your license. It is necessary to report your activity to the city hall as well as to Customs

The 3rd course to open a coffee : Investing

The latter is often substancial. To be reckoned the redemption of the client, the purchase of the license, the investment in the decoration and furniture if you want to change the style bar. To assist you in this investment banks can lend you some funds.

Fourth course to open a coffee : Creating your company

Once the local has been found, you need to create your company. This is the legal entity that will allow you to run your business legally. Different shapes are possible depending on your location. For this you can refer to our online legal forms.

Count an average of one investment of € 250,000.
The average delay to create your company is about 3 weeks if you want to have a wider and deeper field of vision.

The 5th Cape to open up your coffee: Working!

Now you have the local license, the company is created, the work and the decoration are finished, you’ll be able to start.
After the traditional opening night, you’ll finally welcome the first customers. Be aware that everything is not as simple as it might seem at first, you must know how to take up your position, lapping processes concerning commands, organizing schedules, service, inventory management, staff…

Remember that the hours will not be counted during the first months of activity. To help you overcome these caps it is important to be monitored and advised. Interlocutors to favor to complete the opening of your coffee will be the ICC and accounting firm specializing in the field.

So do you have the courage to open a coffee shop? Are you on?

RandomGirl's avatar

@Highbrow: I’ll definitely need help. But I’m not scared off yet!

jazmina88's avatar

Also, work on some cooking skills…....

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