Three Challenges New Coffee Shop Owners Have To Face

The coffee shop business is huge, which makes it both lucrative and extremely competitive. Coffee shop owners have to deal with giants when they get into this industry, but the good news is that there is still a strong demand for non-affiliated local coffee shops. This is your chance to make a niche for yourself, but it is still an uphill battle. You have to be prepared for what it truly means to be a coffee shop owner and the challenges you might be faced with. Here are a few of them.

The Business Side

People often open coffee shops out of passion or because it is something they have always dreamed about. The issue is that many don’t have an understanding of business in general. They may come in with all sorts of misconceptions and make errors as a result. One common error is buying equipment new when they could get the same equipment used or on a lease. Another one is overspending on decor when they haven’t worked on building a quality product or clientele first.

One of the biggest issues that coffee shop owners have to deal with is cash flow. Getting financing is also difficult. This is because many lenders see coffee shops as a risky business, so financing your cafe might require that you look at alternative lenders. Make sure that you have at least a competent manager or sit down with an expert first before you embark on this type of venture, since it’s one with very tight margins and tough competition.

Human Resources

When it comes to coffee shops, the quality of the staff is just as important as the quality of the product. Finding motivated and competent employees can be difficult when considering that they aren’t the most well paid. So, you’ll have to sweeten the deal for them. Make sure that schedules are as open and flexible as possible. Give them benefits and allow them free time when they need it. You cannot overwork them, and you have to do everything you can to retain your top performers. 

Increasing Average Spend

This is another very common challenge coffee shop owners have to face. Margins on coffee are tight, and most successful coffee shops do not rely solely on coffee sales. So, you will have to be prepared to offer other products besides coffee. If you don’t want to make products in-house, know that you can always partner up with a bakery in your area. Selling additional items is what allows big franchises to stay afloat and turn a profit, so you will have to make sure that you offer a wide selection of high-quality products, and teach the art of the upsell to your employees.

These are all challenges you will have to prepare for as a new coffee shop owner. Get as much information as you can about the business before getting started and sit down with someone who knows the industry before making the jump.