Many business minded entrepreneurs get into the coffee shop business without being prepared to face problems that almost every business person will encounter in the coffee business. It is not unusual to see new coffee-houses close up after only a year in business. Many people try to get in the coffee industry but only a few will succeed and make real profit.
Don’t be discouraged to start your own coffee business because of probabilities, but must be aware of some common pitfalls so you can avoid costly mistakes. By knowing these pitfalls that can cause the demise of your new coffee-house, you will be able to avoid making mistakes, and prepare a back-up plan in case you are confronted with common problem in the coffee shop business.
Not knowing enough – Not knowing enough about a certain industry you plan to get into may cause you to fumble around in the process of discovering how to run a business. This uncertain type of management and guesswork can lead to lost earnings, more operational costs, and mistakes than can be detrimental to your coffee shop business. Study the coffee industry by attending seminars or courses, read informative material about the industry before jumping into a business blindly.
No direction – A business plan will force you to learn more about the coffee business and provide guidance and direction. Not making one risks that you will miss something important. You will cover all areas when you create a business plan like management, budgeting, marketing, training, where to get equipment, construction, your menu, etc. You become educated about the business you plan to invest in. A business plan is also needed in case you have to borrow capital from a bank.
Wrong location – Deciding on the wrong location can really set you back and may cause you to close up thin 2 years or less. Location is important because being out-of-the-way or hidden in an obscure corner of your town won’t get you any customers. You need a location with high foot traffic, visibility from the road and a huge market of coffee junkies. Don’t make the mistake of scrimping on rent if it means being located wisely.
Money problems – Be sure to have enough money saved up aside from the money you will use to open a coffee shop business. You will need extra money for supplies, marketing, wage, and unforeseen expenses for the next 6 months at least. Don’t make the mistake of assuming you will make a lot of money right away. Save some cash for the rainy days until you get more regular customers.
Serving bad coffee – Serving bad food can happen to many restaurants but for a coffee shop to serve bad coffee is like a death sentence. There are a number of factors that can contribute to this problem. One is buying cheap coffee beans from an unreliable supplier. Another is using cheap coffee machines that can’t brew coffee like it should. Another is getting bad quality grinders. Don’t scrimp on buying good coffee beans and heavy-duty and reputable coffee machines that can produce good tasting coffee.
No marketing – It is a big mistake to scrimp on marketing your coffee shop business. Aggressive marketing can be costly but it will also help you earn a lot of money. Without marketing you will only get a handful of customers and very little earnings. Don’t make the mistake of relying on word of mouth only because talk won’t get you the mileage you need to make real profit.