Business Overview

Many people drink coffee on a daily basis, often having multiple cups per day. A coffee shop offers both convenience, as people can quickly get a cup of coffee rather than making it themselves, and a place to enjoy coffee. Although coffee is usually the main product sold, most shops have offerings for people who don’t drink coffee.

Who is this business right for?

People who love coffee, food and other people are well-suited for working in or owning a coffee shop. The business involves plenty of hands-on work making beverages, and business owners regularly interact with both employees and customers. Most people drink coffee in the morning, so most coffee shops are open during morning hours. Shops can also be open the afternoon or evening, but owners should at least expect to be working almost all mornings. Some owners close their shop one day a week so they can have a day off, and many either close their shops or have limited hours on holidays.

What happens during a typical day at a coffee shop?

In a coffee shop, day-to-day activities center around making and serving customers coffee. When not brewing coffee and ringing up customers, downtime is filled by restocking supplies and ordering more inventory (e.g. milk, coffee and cups), scheduling employees (if a shop has multiple employees), washing dishes, cleaning, and prepping more coffee and food for sale.

What is the target market?

An ideal customer is someone who has discretionary income and enjoys food and beverages. Customers with little discretionary income are less likely to purchase higher-priced beverages and food items.

How does a coffee shop make money?

Coffee shops charge their customers based on what beverages and food items a customer orders. Some coffee shops have problems with people “camping out.” These customers may purchase one beverage, but then remain at the shop (typically on a computer) for several hours without spending any additional money. To combat this, a few coffee shops in higher-traffic areas ask customers to make a purchase every hour or two. Other coffee shops don’t offer Wi-Fi, but this can also deter customers from coming at all.

What is the growth potential for a coffee shop?

A coffee shop business can be as small as a single drive-thru or as large as a national, or even international, chain. Starbucks, for example, has more than 24,000 stores around the world. Many successful coffee shops are local or regional, having a few locations in a relatively small area.