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Coffee Shops have become a very common sight in our country and a part of our culture over the last decade. Take any street in the neighborhood and chances are there will be at least one coffee shop serving coffee and more to the many patrons that are enjoying their coffee with conversations or busy completing their work on their laptops. With the ever increasing influence of the west and the growth in the tourism industry, there have been a surge of many international coffee shop brands in our country and also has led to many successful local players like our very own Café Coffee Day.
The key to a successful coffee shop are a few things,
About Coffee Shop Business Plan
There are three basic ways to start a coffee shop,
Purchase a franchise
A person can purchase a franchise of a popular coffee shop like Starbucks in which case, all the major decisions like the menu, location, ambience, etc will be made by the brand owners. The entire set up whether in a mall or in a standalone place will be taken care by the brand heads and the franchise owner will be in charge of managing the place.
Purchase an existing business
Purchasing an existing and profitable business is another way to start a coffee shop. The owner will not have to make many efforts in this case if the place is already profitable and can just enjoy the benefits of an already created brand. If the business is not as profitable already, the new owner will have to make some suitable changes like in the ambience, food served, manner in which the beverages prepared and served, additional services like free wifi, etc to be provided.
Start a completely new business
The final and the most difficult way to start a coffee shop business is to start it from scratch. The efforts required in this case are the maximum and requires a round the clock involvement of the owner. The initial efforts may seem a lot but when they result in the success of the business, the results are that much more satisfying.
The business plan for any business is a road map for success and efficiency in business operations. The contents for a coffee shop business plan are like that of any other basic business where the key to a successful business is chalking out the objectives of the business, finding a good location, laying down the operations pattern, looking after the competition, meeting the customer demands and customer needs.
The details of the coffee shop business plan are provided below.
The key to a successful coffee shop business is the location of the business. It is beneficial to have a location that has a lot of foot traffic as well as a good parking space. Also, if the place is easily accessible like not having any steep turns or not easily visible to the potential customers, it will defeat the purpose of the business. In case of franchises, the location is preselected however it is better for the franchise owner to do his/her own analysis if the location is favourable or not.
Serving quality products
With the increase in the number of coffee shops in any area, the dominant factor for the success of one such business is the quality of the coffee and other beverages that are provided to the customers. Also, the demand for gourmet coffees and teas is also increasing as the customer is on the constant lookout for something new. Therefore, it is better for the business to have its own unique blend of the coffee or tea or special accompaniments that give it an edge over its competition. The state of the art machinery and adequate training of the personnel to operate the machinery will also play a crucial role in the final product.
Customer is the king is the motto for any successful business. This is further the truth in the food and hospitality industry. Customer service therefore plays a crucial role in the success or failure of a coffee shop. If the customer does not feel welcome or comfortable in the coffee shop then no matter the perfect location or good quality product, the customers will give it a pass and this will in turn give a bad reputation to the business threatening its long term survival. Hence, the owners or managers have to ensure that the customers are provided with the best possible customer service to ensure customer loyalty and a steady increase in its reputation.
Another point of contention with regards to customer service is the decision to be made with regards to offering counter service or table service. While counter service is very effective for quick turnaround and helps avoiding issues like overstaffing, table service ensures the customers get more attention and may spend more on snacks or desserts by waiting more.
Ambiance of the coffee shop is as important as the location of the business. Coffee shops are known to be places where the customers can meet their friends or acquaintances and a place to have informal meetings or discussions. Hence, the ambience of the coffee shop has to be such that puts the customers at ease and has a lot of natural lights as well as bright lighting for evenings and greenery. The place has to be very trendy and upbeat with modern furniture and fixtures that appeal to the younger generation as well as others and thus attract more customers. Nowadays the latest trend is to let the patrons play board games along with satisfying their coffee needs. This provides a fun and cozy place for the customers to hang out with their friends as well family and in turn builds customer loyalty.
Coffee shops don’t just rely on their coffee sales but also on the sales from the food provided as accompaniments. On an average, the sales from accompaniments constitute up to 30%-40% of the total sales of the coffee shop. Having an assortment of accompaniments on display that are ready to go also increases the chances of sales. The usual accompaniments to the coffee are some of the following food items,
The business can also come up with many loyalty programmes like a free beverage of choice after a set number of paid drinks, discount offers on frequent purchases, loyalty cards, etc. that ensure customer retention and is a good marketing and promotional technique for attracting more customers.
The above pointers are a few key points to be remembered in drafting a good business plan for a successful coffee shop. Entrepreneurs can customize their business plan suitable to their unique ventures and also seek professional help in drafting the same.
1. Why do coffee shops fail?
The main reason for failure of coffee shops is bad pricing policy as well as the decrease in sales or no sales although the patrons occupy the tables and this leads to non-availability of space for the potential customers.
2. Is opening of a coffee shop an eligible business to get a loan?
Yes. Entrepreneurs can get loans from banks or NBFCs or micro lending institutions (MFIs) to open a new coffee shop venture.
3. Does a person need to register the coffee shop under any Act or law?
Yes. The entrepreneur has to register the coffee shop as a new business under the Shops and Establishment Act and any other prevalent Act in force.
4. What are the most common ways to attract customers to the coffee shop?
Some of the most common ways to attract customers to the coffee shop is a great ambiance, quality beverages and accompaniments, good marketing and promotional strategy, branded takeaway cups, social media presence, etc.
5. Is customer loyalty important in coffee shop business?
Yes. Customer loyalty is one of the major factors for sustenance and growth of any coffee shop due to steep competition and ever changing scenario of the business.
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