Hard to believe, but achieving gold status at Starbucks does not an independent café owner make. A lot goes into a great cup of coffee, and it's the same for a great coffee shop, says Matt Milletto, vice president of Portland, Ore.'s Bellissimo Coffee InfoGroup, a company that's trained thousands on the art of opening and running a successful retail coffee business.
"The coffee bar is often that third place outside of work and home to relax, and creating the right ambiance is critical to success," Milletto says.
Aside from the patience to learn as much as you can before getting started, here's what else Milletto says you'll need:
Business plan. Yes, you must differentiate yourself from the competition with a cool concept, but base it around what you can afford. Coffee retail is a high-volume, low-transaction business, and big coffeehouses can require a quarter of a million dollars in startup costs. Figure out if it's feasible--or hire someone who will.
Location. The location needs to be easily accessible to customers, especially in the morning. Then, think about the area's demographics. "It's easy to get emotionally attached to your concept or space," Milletto says, but if your customer base wants food and iced drinks, include them in the menu, even if it changes your square-footage needs. And finally, negotiate the hell out of the lease.
Design. Take "extreme care" in building out the concept. Apply it to the layout, music, décor, furniture, customer flow and even the equipment behind the bar. Everything matters.
People. Since you're not opening a franchise, partner with vendors and roasters who have similar missions and are willing to provide support. Then train (and retain) the right employees, who can make or break your operation.
Coffee. There's money to be made in specialty coffee, but in order to make a living, you have to invest serious time and energy into getting it and serving it. "It's very important," Milletto declares, "to have true passion for coffee."
Should You Buy a Franchise?
There are plenty of ways to find caffeinated success via the franchise route. Here's a breakdown of some of the leading coffee franchisors from Entrepreneur's Franchise 500 and their associated startup costs. --Tracy Stapp
The Coffee Beanery
Total U.S. franchises: 90
Cost range to launch: $62.4K to $545K
Gloria Jean's Coffees
Total U.S. franchises: 81
Cost range to launch: $278.6K to $673.7K
Bad Ass Coffee
Total U.S. franchises: 41
Cost range to launch: $227K to $326K
Total U.S. franchises: 108
Cost range to launch: $220.5K to $390.1K
Dunn Bros Coffee
Total U.S. franchises: 86
Cost range to launch: $128.2K to $466.1K
Total U.S. franchises: 75
Cost range to launch: $50.5K to $457K