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Start Your Own Coffeehouse

Coffee is still a viable business idea. Here's how to start your own coffeehouse paradise.


Whether it's a drip, a latte or a cappuccino, Americans are addicted to their coffee. According to the Specialty Coffee Association of America, specialty coffee was an $11 billion industry in 2005, up from $9.6 billion in 2004. But some historians theorize that what Americans are really looking for in their cup of joe is a sense of belonging. "We spent so much of the post [World War II] period in this country retreating inside suburban houses [with] fenced-in back-yards," says Bryant Simon, a professor at Temple University in Philadelphia who spent a year studying Starbucks. "Coffeehouses play to [the] desire [to be] out, even if you don't talk to anyone."

For Beth Livedoti, 29, Jeff Furton, 29, and Stephanie Lemmo, 28, entering the industry in 2004 meant opening a window--or two. At The Daily Rise Expresso, a double-sided coffee and smoothie drive-thru in Ogden, Utah, customers come for more than a drink. "[Some customers] come in two to three times a day just to talk," says Livedoti. "We are their little piece of sanity." Year-end sales will reach $300,000, a second location opened earlier this year, and franchising is in its future.

If a coffeehouse isn't for you, think products like Java Juice, a liquid extract straight from the bean. Other niches include aftermarket products like Coca-Cola Blak and products that incorporate coffee for its health benefits--caffeine's been linked to decreasing the risk of diabetes, liver cirrhosis, Parkinson's disease and even gallstones.

Getting Started

To brew up success in your own coffeehouse:

  • Use your size to your advantage. Being small has its benefits--especially when it means you can accomplish what the big players aim to do but sometimes fall short. Study the coffeehouses in your community and examine what they fail at, advises Simon. By doing so, you'll have a better chance of finding your niche.
  • Aim for excellence. "People clearly want the milieu of a coffeehouse," says Simon. "They want the intellectualism, the music, the art. So do it. Really play music that you haven't heard a million times before, really put up local art on the walls, really emphasize your relationship with the community. If you really want to have a coffeehouse, go out and educate people. People want to know about coffee. It's like wine. Really go and educate your baristas."
  • Establish a presence in the community. The co-founders of The Daily Rise Expresso make it a point to stay involved in the community--whether it's providing refreshments at the farmer's market, concerts and fourth of July celebrations or donating to local schools and fund-raisers. Says Livedoti, "People start to see us around town, and I think that sets us apart because we support them, so, in turn, they come back to support us."
  • Don't underestimate your customer. Make sure you do your homework and find quality products in order to truly satisfy your customers. The founders of The Daily Rise Expresso considered 25 to 30 different roasters before making the final selection. "People really know their coffee," says Livedoti. "So it's very important that you're starting out with a good quality bean."
  • Prioritize customer service. "It's about attention to detail and figuring out what that person wants and what that person is really going to enjoy and what's going to get that person coming back time after time," says Lemmo. "People appreciate that you make an effort to figure out what's going to be the best for them."