If you’ve spent years as a barista and are finally looking to branch out on your own, look no further – we’ve got the main points you’ll need to know to open your coffee shop. If you aren’t a barista, never fear, this guide will be plenty useful even if you don’t have prior coffee shop experience.
Why open a coffee shop?
According to the British Coffee Association (BCA) in 2021, the UK was drinking 98 million cups of coffee per day. In fact, the BCA says that 80% of people who visit coffee shops do so at least once a week, whilst 16% visit on a daily basis.
With stats like that, it’s fair to say that the coffee culture in the UK is booming and that it could be a lucrative venture to open up your own coffee shop. However, you won’t be the only person getting in on the action. In 2021, 17,494 restaurants and cafes opened – that’s an average of about 48 per day.
So, if you’re planning to do this, you’ll really need to think about what sets your coffee shop apart from the other ones in your area. Whether it’s selling single-origin coffee, doing crazy coffee art, having exciting flavours or another gimmick, finding a unique selling point will help you tap into that huge market of coffee drinkers in the UK.
Let’s take a closer look at some of the costs you might have when starting up:
Inventory costs
One of your first expenses will be fronting the money for any food and drink that you need to have in stock. You’ll want to think not just about the coffee but also any food items you might want to add such as pastries, sandwiches, or crisps. It’ll be important to really do your research on what sells well in your area so that you know how much to buy. Food wastage means money wastage, so you’ll need to be on top of tracking what sells well and what doesn’t so that you can adjust your stock purchasing habits.
Point of sale (PoS) systems
The right point of sale system will not only take payments from your customers but may also help with some of the inventory tracking mentioned above. You may want to look into a variety of payment systems – from your standard chip and pin machine to iPads that can take payment as long as there’s a Wi-Fi connection.
Depending on what kind of package your PoS system comes with, you may be able to get detailed reports on what’s selling well, what your peak times are and other data that can help you maximise sales.
Kitchen equipment
The main reason people are in your coffee shop is for what comes out of the kitchen, so it is important that you have top of the line equipment for making your food and drinks. Here’s a list of some of the equipment you may want in your café kitchen:
- Coffee grinders for fresh ground coffee
- Coffee making equipment such as espresso machines and milk frothers
- Dishwasher
- Water boiler
- Ovens/Toasters
- Refrigerators/Freezer
- Microwave
- Blenders
- Minor equipment such as timers, scales, thermometers
- Chopping boards
- Utensils
- Storage and food containers
This list is not exhaustive, but it is already long. For some of the major equipment, you may want to consider renting it before purchasing. This allows you to test and see if the products you’re making with it are popular enough to warrant buying it outright.
It’s also important to ensure that all of your equipment is suitable for commercial use and can stand up to the frequent wear and tear that it will face as part of a coffee shop. You’ll likely want to insure the equipment that you purchase in case anything breaks down so that you’re not left in a tough spot.
Health, safety and security equipment
As the café owner, you’re responsible for the welfare of every customer, visitor or employee. As you’re working with food and drink, you’ll also need to ensure that you meet all the required health and safety standards.
Here’s a few things you might need to purchase:
- Trash cans and trash bags
- Fire extinguishers
- Mops and buckets
- Brushes and dusters
- Cleaning cloths
- Industrial cleaning products
- Soaps and hand sanitizer
- Security equipment such as alarms and CCTV
- Employer’s Liability Insurance
- Public Liability Insurance
Waste management
As a coffee shop or café, you’ll be generating a lot of waste each day and getting it disposed of promptly will be important. You may want to hire a private company to collect it or see if the waste collection services from your council are robust enough for your needs. No matter what you choose, ensuring you have an efficient way to get rid of any waste will keep your café looking clean and tidy.
Furniture & Fixings
The design of your coffee shop can be as simple or as creative as you’d like. Creating an atmosphere can help bring people in but may require more furniture and decoration. Here’s just a few things you may want to consider:
- Wifi
- Seating & tables
- Kitchen shelving and counters
- Food display shelves or baskets
- Pictures, posters or paintings and frames
However, if you have a coffee stand or kiosk which only allows for takeaways, you won’t have nearly as much cost in this category. So, if you’re concerned about the funds needed for starting up, it may be a way to lower your initial capital needed.
Step by step guide
There are a lot of steps to starting a business, but this step by step process will start you thinking about what needs to be done in order to open your coffee shop. While this guide may not include every single step, it’ll give you a top level overview of how to get started:
- Find your niche: Figure out what’s going to set your coffee shop apart from the rest. If you have an ideal location in mind for your shop, walk around the area and stop into other nearby cafes. Make note of their décor, their menu, and anything else that make them distinct. You won’t want to copy them as the competition would be quite fierce, so knowing what is already being done will help you find the gap. Some niches to consider may be a retro vibe or an organic/health focus.
- Write a business plan: A business plan will help set out your company's strategy and objectives, the process of writing a detailed plan can also help you stay focused and develop ideas.
- Confirm your location: You might have had one in mind already but now’s the time to really confirm that this is the best place for your concept. You’ll want to make sure there’s good foot traffic, see what the general demographic is like, what the competition is in this area, and how much parking is available – just to name a few considerations.
- Register your business: You'll need to register your business for corporation tax and pay yourself from the profits. For the Government’s full advice on starting a business, head to GOV.UK for more.
- Choose your suppliers: Finding great suppliers that you can rely on is paramount to success. You’ll need to look for supplier for your food, coffee, crockery, paperware for takeaway, and more. In order to ensure that your suppliers are reliable, consider taking out business credit checks on them to understand their financial stability.
- Hire some staff: Whether it’s baristas, accountants, shift managers or cleaners, there are a lot of roles you might want help with. Prioritise what roles you absolutely need in order to open the shop, and then build up your staff as time goes on. Be aware that employer’s liability insurance is required for anyone who has employees.
- Get the word out: Begin to promote your business. Whether that’s through a grand opening, flyers or social media accounts to get people in the door the first time or loyalty programmes to keep people coming back. Consider writing a detailed marketing plan to help guide your thinking.
The legal stuff
As a business that serves food and drink to the public, there will be quite a few added regulations on top of the average business ones. Here’s a few different things you might need to be on top of:
Food business registration
You’ll need to take several steps to get your business properly registered. First of all, if you’re using a commercial property, you need to make sure the commercial premises is allowed to be used as a café. If it wasn’t previously listed under this usage classification, they you many need to consult your local council to get it registered under the correct class of use. You’ll also need to register as a limited company and register as a food business with your local council. There’s quite a few steps in here so be sure you understand the timings for all of them and that they are done in the right order.
Pavement licence
If you want to have any signage outside of your shop or outdoor seating places, you’ll need to get a pavement licence from your local council. Usually these cost up to £100 and lasts for a year, so it can be a very cost-effective way to expand your space or add some extra on-street marketing.
Food and catering VAT
Food and catering have their own specific Value added tax (VAT) rues that need to be followed. If food is consumed on your premises, you’ll probably need to charge VAT but if customers are enjoying your coffee as a takeaway then it may not be necessary. Find out when you need to charge VAT and at what rate on the UK Government website.
Food safety standards
The Food Standards Agency (FSA) is the government body that oversees all food safety standards. They’ll have full guidance on how to ensure any food you serve is up to the right hygiene standards. They have all sorts of resources available including an information pack called ‘Safer food, better business’ which will guide you on complying with the law and making your premises safe for the public.
Insurance
If you’re registered as a limited company, you’ll need to have employer’s liability insurance at a minimum but there are other types of insurance you should look into as well. For example, any business that regularly interacts with the public should have public liability cover. For example, if someone slips on spilled coffee and gets injured in your shop, public liability insurance could help. You can take a look at the types of insurance cover that we suggest for cafes and coffee shops to get a better idea of what you might need.
Build your network
Hopefully this guide has given you some guidance on how to get started on opening your own coffee shop, but if you want to network more within the coffee industry there are some organisations and events in the coffee industry that might interest you:
- British Coffee Association
- Specialty Coffee Association (UK Chapter)
- Caffe Culture Show
- Coffee Shop Expo
- European Coffee, Tea & Soft Drinks Expo
All links are checked and valid at time of publishing, 17 June 2022.
