How to start a café or coffee shop
Thinking of opening a coffee shop? Startups has the ultimate guide to brewing up a perfect business in the café sector
- The cafe industry
- Who is it suited to?
- Finding premises
- Rules and regulations
- Test your business idea (opens in a new tab)
- Register a company (opens in a new tab)
- Apply for a business loan (opens in a new tab)
The cafe industry
Over the past couple of decades the UK has been steadily moving towards the kind of well-established café culture countries such as France and Italy are famous for. An explosion in coffee chains has left few high streets without their branch of Costa or Starbucks. As the pub industry continues to suffer heavy blows, there’s a growing market for boutique and independent cafés offering an alternative place to sit and read the paper. According to research published by The Local Data Company in 2012, there are around 5,000 coffee shop brands and 5,500 independent coffee shops across the UK. Recession or not, us Brits want our coffee and we want it fast, with almost half of consumers valuing convenience of location over brand of coffee. Perhaps that’s why coffee shops are opening up in such large quantities across small distances – Holloway Road, north London, holds the record with 24 along one stretch, closely followed by Gloucester Road, Bristol at 23.
However, quality still overrules convenience and according to Allegra Strategies, people are becoming increasingly aware of factors such as where their coffee is sourced and how it is roasted. Customers are seeking out the best quality caffeine fix, with two thirds of consumers placing quality as the most significant factor in choosing a coffee shop. By far the most successful coffee brand in the UK is Costa, which boasts 1,400 stores across the UK and recently announced plans to open 350 more.
However, while some coffee brands are expanding rapidly, it appears that customers are nonetheless enticed by the intimacy of an independent.
Starbucks have struggled through the recession and have been forced to close a number of stores across the UK. Yet just a week after implementing a radical plan to add a personalised touch to its service, by toning down the logo and writing names on customers’ coffee cups, the US-based company experienced a 9% increase in sales.
If you think that this £2bn industry has reached its peak, think again. Jeffrey Young, managing director of coffee analysis firm Allegra Strategies, forecasts there will be more than 7,000 branded coffee shops within the next few years and nearly 18,000 outlets including independent and non-specialist shops.
There’s no time like the present. Join the coffee shop boom and give Brits those quality beans they so desire!
Ready to get started? Find out everything you need to know about how to start your own business here.