Cup of coffee cost price
Profit in a cup of Coffee
December 8, 2017
Evaluating coffee shop locations
March 29, 2018

The dream of owning a coffee shop or cafe is a strong one for lots of people but are you cut out for the realities of this type of business? Let’s find out.

This chapter is not meant to put you off but rather allow you to consider the challenges of owning and operating a coffee shop.

1. The Failure rate is high: Cafe’s, coffee shops are right up there with restaurants, pubs & nightclubs for the highest failure rates for businesses. Over 50% of businesses in any sector don’t last more than 5 years, it’s an even higher % for coffee shops.

I would speculate the reason is related to the dream, it’s easy to dream of opening a shop, it’s relatively easy to open a shop without a huge pot of money. It’s really, really hard to run a profitable sustainable coffee shop. So lots of people get opened but most don’t last more than a few years.

2. Long working hours. The hours are the longest of just about any business type. You are probably opening up 6 or 7 am in the morning and quite probably trying to stay open late to maximise your revenue opportunities. Therefore you can easily be open for 12hrs a day, 6 or 7 days a week. On top of the opening hours you have the administration time to make sure ordering is done, bills are paid and accounts are kept up to date.

When you add this up you can see how an 80hr week becomes normal.

3. It’s not all chatting with customers. The dream may look like spending hours making the perfect cup of coffee and talking to customers about the origins of the coffee. The reality is that you will spend a lot of time unblocking toilets, chasing suppliers and dealing with paperwork.

4. Get rich quick. This is NOT going to make you rich. It’s very hard to make serious money out of owning and running a coffee shop. A manager of a coffee shop earns around £20k per year, if you are running the shop you can take that managers salary plus any profit. Getting to profit is a major challenge.

5. The customer is always right. If you are not a natural people person that lives to serve then you may find the role of coffee shop owner and manager difficult. Every day involves a situation where you know the customer is wrong, they order extra hot coffee, this cake is too dry etc etc. But they are always right and you have to deliver excellent customer service every day because every customer matters and word of mouth is your best advertising channel.

If the list above hasn’t scared you off then you are in for the ride of your life.

Many people hold their local coffee shop dear to their hearts, it’s a safe warm place where they go to relax, escape life for a bit, meet with friends, laugh, cry and meet new people. It’s for those reasons it’s a unique opportunity and privilege to run a coffee shop in your local community.