100 Things You Should Know Before You Open A Coffeeshop

This is another one of those tips that sounds obvious until you start to think about it. More important than what coffee you serve is where you serve it. Coffee is a convenience, so don't expect people to inconvenience themselves to get it.

When choosing a location, think first and foremost about places where large groups of people naturally congregate.  The best spots tend to be near shopping, schools, and offices. Our location just off of Haight Street is a great location because it is near one of the top shopping areas in San Francisco, it is within walking distance of two universities (UCSF and USF), it is next to four bus stops, and the neighborhood is a major tourist destination.

Once you find a great location, determine where people in the neighborhood currently get their coffee. Don't automatically rule out an area just because it already has several coffeeshops. Rather, find out whether the market for coffee in that neighborhood is fully saturated. Although it may seem counterintuitive, sometimes the best place to open a new coffeeshop is a place where there are already several other coffeeshops in existence.

When we opened Coffee to the People, there were at least half a dozen other coffeeshops within easy walking distance of our location, but we were not deterred. Why? Two reasons. One, the mere fact that there were so many coffeeshops meant the demand for coffee in the neighborhood was strong. Two, the coffeeshops already in existence were doing a poor job of serving their customers: they had slow service, low-quality coffee, poor hygiene, and few amenities.  It was obvious to us that this was a neighborhood full of people who would appreciate the type of  high quality coffeeshop we were planning to provide.

This point was brought home to me a few weeks after we opened when a customer thanked us for opening the shop. She said that when she heard a coffeeshop would be opening in our location, her first thought was that the last thing the neighborhood needed was another place to get coffee. But after visiting our place, she realized that in reality our neighborhood really needed a community coffeeshop like ours. Now she visits our store every day.

Of course, if you find a location where people congregate, but where there are no coffeeshops already in existence, that could be even better. But be careful. Before you rush to capture the local market, make sure there is one. Maybe there is a reason no one has opened a coffeeshop in that area. Maybe someone already tried to open a shop, but it closed because demand for coffee in the neighborhood was too low to support a business. If there is a market for coffee in the neighborhood, people must be getting their coffee somewhere. Find out where. Then figure out if you can compete. If people in the neighborhood don't seem to be getting their coffee anywhere, then they probably aren't coffee drinkers and you should find another place for your shop.