Most of you reading this are planning to start a coffee shop or are already in operation. You have one thing in common – you are seeking information to help you succeed. Congratulations to you both.

Unfortunately, many start a coffee shop on a whim. They have a great coffee experience somewhere and get the bright idea, “Wouldn’t it be great to have a little coffee shop. I sure love coffee, so I know I could be successful.”

One of the first things these people do is seek to sample coffee from different roasters. No business plan, no financing, no building, no equipment - no clue.

While we are happy to get these inquiries, experienced industry professionals see the red flags immediately. The person on the other end of the line is inexperienced in starting and running a successful coffee shop.

This example highlights the fact that many begin down the path to business ownership without really understanding what it takes, and in what order, to succeed.

There are many factors that contribute to success. However, the number one reason for coffee shop failure is poor planning. The fact that you are reading this puts you in the group that has a much higher chance to succeed.

If you try to look like a Starbucks and act like a Starbucks, unless you have an exclusive monopoly on a high demand location, you will have a hard time succeeding. The solution is to differentiate your cafe in a variety of ways described below.

Our goal is to help you succeed in business – not simply to be your roaster. If we can help you succeed, then maybe we succeed too. While the ideas below are not everything required, they are tactics that will help set you apart from the rest, and improve your odds of bucking the bronco!

Best wishes,

Kevin Kapaun
Founder & President
SpecialtyJava.com

WRITE A BUSINESS PLAN:

This is the most important and the first step in starting a successful business. It is many times given only cursory attention. Some will start a coffee shop and proceed with only enough information to lose their life savings. Some don’t know what a business plan is or where to start. Some proceed on a wing and prayer.

There is no absolute correct format for a business plan. The secret of developing a business plan is to ask yourself (and answer!) the right questions. The magic occurs when you go through the writing process. Your vision, and the path to reach it, becomes clear. We have prepared a list of some questions you can use to prepare your own business plan. Make sure to review our Business Planning Questions.

DEVELOP A BRAND STRATEGY:

One of the results of a good business plan will be a clear understanding of what you want to become. With that picture etched clearly in your mind (and on paper) you have the vision to create your branding strategy. Your brand strategy is part of your business plan.

Effective branding uses all sensory means available to create a lasting impression of your identity in your customer’s minds. Everything they see, touch, hear, smell and taste has the potential to contribute to your brand identity. Your brand strategy will drive the development of your culture and the ambiance of your café. Most importantly, a successful brand will create customer loyalty.

I highly recommend using a professional designer to create your brand imagery. It is easy to recognize the difference between amateur and professional. Professionals are experts at selecting appropriate colors and designing images to support your brand identity.

You should also adopt the mindset to brand everything – not just mugs, cups, and uniforms, but also counters, walls, windows and chairs. This doesn’t necessarily mean your logo is on everything. For example: If your theme is organic coffee and food, could you use recycled paper products, hand-made pottery mugs, or hand-made wood furnishings? If your theme is 1950’s Retro – can you picture the red & white decor, the vinyl booths, or the chrome counter? If your theme is a coffee & gaming environment, can you picture a Monopoly Board painted on the floor? Even a signature hello and goodbye greeting to your customers could support your brand.

I recommend reading everything you can about branding. A must-read online resource to learn more about branding and other methods to grow a business is MarketingProfs.

PRODUCT VARIETY:

Remember the days when you simply ordered a "cup of coffee" and the server didn't ask 5 follow-up questions to understand what you really wanted? Today, consumers want more variety than ever. This actually creates opportunity to be creative on your coffee and food offerings. Will you be a coffee and wine bar? Will you offer more exotic products such as gelato? Will you offer Organic or Fair Trade Certified products? Will you go for a little class and serve French Press-Pots? You may also develop a variety of profit centers such as office catering, hosting in-house meetings, selling gift cards and merchandise, etc.

ORGANIC & FAIR TRADE STRATEGY:

Organic coffee has grown dramatically within the specialty coffee industry in the last couple years. In addition, offering Fair Trade Certified coffees continues to gain awareness in the consumer community. Some successful cafes have organic offerings as their dominant theme. This strategy attracts a huge following among the 30, 40, and 50 something female population. It also strikes a vibrant chord among both genders in mid to upscale urban areas. The opportunity for an organic strategy extends to food, smoothies, deserts, ice creams, chocolates and teas.

EXCEPTIONAL QUALITY:

I am amazed, as I travel around the country and visit independent coffee shops, how bad some coffee and espresso can be. This is due to poor quality beans and poor preparation. While Starbucks may not be the best coffee around, they are consistent.  

Excellence in coffee will come from a variety of components. Following are some key elements to help you differentiate yourself from either the Starbucks of the world or the poorly run independents.

• Fresh Roasted Beans: Here you have an advantage. By the time most coffee beans make it to the end consumer, they can be months old. Coffee equipment companies are notorious for offering stale, pre-roasted coffee as part of their equipment program. Investigate whether a coffee supplier is truly a roastery or simply an equipment company that sells someone else's warehoused coffee on the side. It make not be immediately apparent. Their focus will provide the answer. Insist on knowing exactly when your coffee was roasted rather than deceptive "Use by" dates. With that method, it is common to see a "Use by" dates of sometime next year!!! Just take a gander down the isle of a Costco or a grocery store and you will see what I mean. Even Starbucks can be months old.

• Properly Roasted Beans: Artisan roasters cringe at the cookie-cutter, burnt coffee, they see served by Starbucks. They jokingly call it “Starburnt” because of their tendency to roast very dark. Artisan roasters pride themselves in finding the perfect roast profile for every coffee they offer.

• Specialty Grade Beans: It is true Starbucks buys acceptable quality beans. They are the big bronco in the room so they have buying power. However, they overlook the exceptionally high quality specialty beans from small Fair Trade Certified farmers. These farmers are too small for them to take their time to even deal with. Also, it is also rare to find the highest quality beans from coffee equipment companies that supply coffee to independents.
   

• Espresso Drink Preparation: This is also a huge opportunity. You may have noticed that Starbucks (and others) have switched to the super-automatic espresso machines. The employee simply pushes the button and waits for the drink. They are turning their approach to coffee into McDonald’s approach to food. Even Howard Schultz, the CEO of Starbucks has expressed concern about the long-term effect of this trend. Notice what he said in a memo dated February 14, 2007: "when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre..."

With a little training and practice, you can easily differentiate yourself. You will need to learn true Barista skills in drink preparation, but the opportunity for creativity is endless. Watching hands-on creation of signature drinks becomes part of the memorable experience of your customers. You can hire an experienced Barista, attend seminars, watch videos, or hire a short-term Barista trainer. Whatever method your budget allows, it is easy to rise above Starbucks.

Proper espresso grinding and hand-packing the portafilter is the foundation of an exceptional espresso program. I see many independents fail miserably in this regard, even using the right equipment. The most common error is improper grinding and packing. Their espresso shot has virtually zero crema and is basically just strong coffee. They wonder why they are struggling to stay open!   When you pull a properly ground and packed espresso shot, the result is overwhelmingly superior to the, at-best average, super-automatics shots at your local Starbucks.

• Espresso Bean Blends: It goes without saying you need great espresso beans. The most common myth is that espresso is dark roasted. While it can be true in some cases, the highest rated espresso blends in the world are not dark roasted.

CAFÉ DESIGN:

Face it. Some people have it. Some people don’t. If you have to ask yourself if you do – you probably don’t. Your café design and layout is one of the most important elements to communicate your brand identity. It starts before they even enter your shop.

The ability of professionals to think “outside the box” is priceless in this regard. While hiring a professional designer is not cheap, it is also one of the most costly mistakes. Creating an ambiance to match your theme will help make your café stand out in the mind of your customers.

In the world of cloned Starbucks coffee shops, you need to differentiate your cafe.  In fact, Starbuck's move to homogenize their stores, creates opportunity for the independent. Note again a quote from Starbuck's CEO about this transition: "...one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter..." Coffee shops that are successful today, especially those situated next to a Starbucks, usually have a unique, memorable and compelling environment.