Want to know how to open a coffee shop? Four things to know first

Opening a coffee shop is a popular aspiration in the UK, fuelled by an ongoing boom in demand in a country where the number of coffee shops is said to have doubled in past 10 years (Source: Alegra) .

Here’s our guide to how to open a coffee shop in the UK, with four key things to investigate before committing to a decision.

Writing a good business plan takes time

You’ll need to write a business plan if you’re planning to fund your new coffee shop with money from the bank or you’re looking for some other outside investment. If you have your own funds, nobody can force you to put a formal plan together. But that doesn’t mean you shouldn’t do it.

Find out more about online resources to help you with your business plan here . But let’s just say here that your business plan should be rich in objective research. It should cover things like:

●      your objectives over a set time period

●      how you will define success

●      your analysis of the market

●      a review of your competitors

●      your product and the niche it will fill

●      management and operational details

●      your pricing model

●      a marketing plan.

Writing a business plan isn’t just a box-ticking exercise. In fact, writing your business plan should be the least of your worries. Put the work in when it comes to concrete matters like understanding your competitors, forecasting your overheads, predicting footfall and working out a pricing model. If you do this, the work of writing up the plan will become straightforward. The result should be a concise document that’s objective, realistic and waffle-free.

Finding funding can be difficult

Funding can be a challenge for potential small business owners. When opening a coffee shop, your options will probably be limited to a loan from the bank, your own funds or investment from personal connections such as friends or family. The more persuasive your business plan, the better chance you have of obtaining credit. Another factor will be your credibility as an individual. If you have qualifications and/or experience in running a coffee shop or similar establishment, you’ll be taken more seriously by the person holding the purse strings.

If, despite your best efforts, you’re still struggling to find credit, you could consider buying into a franchise. Because this involves adhering to a proven business model (as is required of members of the British Franchise Association), you may find banks and other lenders could look on your application more favourably.

How much it costs to open up a coffee shop

The cost of opening a coffee shop depends on its location, size, quality and business model, i.e. whether it’s a franchise (which will involve a fee) or your own unique business.

However, the people behind the wholesaler Limini Coffee , estimate that ‘most people who start a coffee shop, which will be around 50 to 60 sqm and has 40 to 60 covers, will spend around £30k’. They estimate the lowest possible cost at around £20k, and put the expenses involved in opening a big cafe on the high street at around £50k.

Start marketing as soon as you’re ready

Try to build a buzz for your new coffee shop as soon as possible. You can do this before you’re even trading, so that when you do open your doors you can expect some healthy interest. Have coupons and loyalty schemes up and running as soon as you can. Why not send some free samples of the coffee you’ll be using to local workplaces? Try to set aside some budget to have your publicity materials professionally designed. This can make a big difference to the initial impression you make.

Protect your shop with Public Liability Insurance

Hot drinks, sharp knives and (hopefully!) impressive footfall in your coffee shop mean that the risk of accidents is ever-present. Relatively few mishaps result in customers taking legal action against business owners. But if one did decide to sue you, the result could be very damaging to your business. Public Liability Insurance  will cover the cost of legal claims made against you by third parties for injuries or property damage caused in the course of your work.

Public liability is included as standard in our Shop Insurance  along with a range of useful standard and optional covers to help you manage the risks to your business.

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