smallbusiness.co.uk: Helping your business think big

Ever since hit TV sitcom Friends reached our shores, lounging in coffee shops has become a national pastime – as seen by Costa’s plans to double its stores over the next five years. So here are some things to consider if the idea of starting a coffee shop is brewing in your mind.

Danny Kinny started his Norwich-based coffee shop because he wanted to be his own boss. ‘We managed to get a £5,000 unsecured loan to put down. I think if you have the money you can set up wherever you want. If you have a good idea and a solid business plan it is possible to get someone to back you still,’ he says.

Mr Barista

‘It’s really important to have a sexy coffee machine, but it’s worth thinking about whether you want to buy or lease one. We initially leased ours for a couple of hundred pounds a month, but then later bought it when we made some more money. I did a deal with the company and we bought it for around £4,000,’ adds Kinny.

Peter Brown, founder of Scottish coffee shop and deli Berits, agrees. ‘The most important thing we did was buy a good coffee machine. If you invest in quality, people will come back to you,’ he says.

Location is everything

Brown says it’s crucial to conduct thorough research into your area. ‘You should literally count the number of people walking by your spot as you want the footfall to be as high as possible. There are even websites you can look at on the internet to find out what the footfall is in shopping centres, if you want to locate there.

‘If you don’t take that into consideration it means you are having to bring people to you,’ he adds.

For Kinny starting out on the fringes of Norwich was really important as a way of testing the waters before expanding into the city centre. He has since sold the first shop and moved to a more central location.

‘When we chose our premises they were near an office block with hundreds of people, so we knew there would always be customers who needed a coffee,’ he says.

Antony Petrou founded his fair trade coffee shop Fair Grounds over a year ago and he too believes there can be an advantage to setting up out of the centre while you are finding your feet with the business.

He says: ‘You can afford to make mistakes because the rent is cheaper. If you mess up, or its quiet for a couple of months in the centre, you could go bust.’

‘I was lucky because I already owned a couple of bars and could take the money out of those businesses to locate just off Carnaby Street in London, which is perfect for us now.’

Create an atmosphere

Brown says the key to the success of his coffee shop, which he has now turned into a franchise, has been in creating a place that people want to revisit. ‘To be successful you need to ensure that people enjoy the experience and will talk about it, and that will attract more customers. That’s vital to something like a coffee shop. We’ve now got a lot of regular customers who treat it like a second home,’ he says.

‘It’s really important to make sure you talk to customers and take an interest in them and don’t have staff wandering around like they’re not interested in people.

‘If there are big coffee chains like Starbucks or Costa around the corner and their customer service isn’t as good as it could be, when you open up nearby you will attract interest just for being new, and people will come back to you instead as you’ll have the edge over them,’ adds Brown.