The American Barista & Coffee School’s Matt Milletto on assessing whether you’re ready to open your own shop
Editor’s note: Working on his article, “Stocking A Startup,” for the current issue, June+July 2015, of Barista Magazine, frequent contributor Jon Shadel dug up much more information than he was able to use. So we asked him to share some of it here on the blog…
BY JON SHADEL
SPECIAL TO BARISTA MAGAZINE
Countless coffee lovers around the world dream of opening a café and serving mind-blowing beverages ” happily ever after. But it often seems that few of these caffeine-fueled visionaries consider what it actually takes to operate a successful coffee shop.
Many new retailers seem to obsess over things like the quality of the coffee they’ll be serving and the interior design of their shop. And while these are clearly important considerations, they are only part of the business equation. In fact, many industry professionals stress that things like drink pricing, menu planning, and proper training can be just as essential.
Make no mistake: Café owners need to have a lot of passion ”even an obsession ”for specialty coffee. But running a successful coffee shop is serious work, and failing to carefully consider the tricky business of operating a retail location can set you up for disaster even before you get to serve your first customer.
Matt Milletto of the American Barista and Coffee School (ABCS) stresses this fact when training new retailers and baristas in the countless workshops and seminars his company conducts each year. Milletto’s love for specialty coffee is immediately apparent, but his passion for helping new retailers understand the day-to-day reality of opening a cafe is just as obvious.
In assessing whether you’re up for the job of running a cafe, he advises new cafe owners to ask themselves a few questions to make sure they understand the investment they’ll be making, hopefully saving a few from blindly proceeding only to see their dreams evaporate like a puffy cloud of steamed milk.
How patient are you?
œPatience is the first thing you’ll need to operate a cafe, Milletto says. And of all the obvious things that can test a new retailer’s patience ” pesky customers, lazy employees and tricky machinery, just to name a few ” sometimes it’s the business concept itself that becomes the greatest source of frustration.
Milletto explains that coffee shops require a major investment of time and money. While the industry can be lucrative for some, many retailers put in long hours with limited returns. œYou have to be prepared to work without getting paid until you start turning a profit, he advises.
Do you have a realistic idea of how much money it takes?
œYou have to be prepared to make a realistic investment and grow from there, Milletto continues, saying that many of his students are struck with sticker shock when it comes to sourcing equipment like espresso machines. œYou need to have a clear understanding of what it will cost to launch a café based on your plans.
The financials of launching a new café can be tricky, but a combination of personal contributions, bank loans and so on are necessary to get off the ground. œBe realistic with your concept and what you can personally contribute, he says, explaining that pairing down your business concept might be helpful. œIf you don’t have a lot of capital, you can still be a cool café on a smaller scale.
Who do you plan on serving?
œUnderstanding your customer is key, Milletto insists. Defining your target customers helps you through every step of the process ” from menu design to selecting a location.
For example, if you aim to cater to busy commuters, a neighborhood café environment serving pour-over coffee wouldn’t be the most logical business decision. Instead, a coffee shop near close to public transit with a quick-service menu would be a better choice. œYou need to think carefully about how your customers are going to be using your space, he says.
Do you have a location in mind with a suitable market?
It might be a real estate cliché, but location is key, Milletto says. œOne of the most important first steps you’ll need to take is finding a location that has a suitable market, he advises. And for many new retailers, this can be a very challenging step. It can take time to find the right location. And working with lawyers and landlords can present different roadblocks.
With all of this said, Milletto suggests new retailers stay focused on the needs of the community they intend to serve. œCater to the people in your neighborhood, he says. œBuilding your business around the satisfying the needs in your community is one of the best ways to set yourself up for success.
Are you prepared to get creative with marketing?
Many new retailers think they can serve coffee and the community will show up to support them, but unfortunately it’s not normally that simple. œIf you don’t market, you can’t expect your business to grow, says Milletto, emphasizing that café owners also need to get savvy with low-cost, high-impact marketing methods to get the word out about their new café.
œYou are the ambassador for your café, he says, œand you need to put the effort in to make your new café a success. There’s no silver bullet, and every market plan must cater to the unique needs of a community and your business concept. However, with the right mix of low-cost, community-building tactics, you can open a successful coffee shop ” just make sure you have a realistic idea of what you’re getting yourself into before taking the leap.
ABOUT THE AUTHOR
Jon Shadel is a Portland, Ore.-based writer and lover of fine coffees. He’s the editor of Discover Portland, and his stories appear in Salon, Oregon Business and Oregon Home magazines. He’s also the founder of Rusty Bike Media, a content marketing agency helping brands better engage their target audiences. With years of experience as a barista, he loves Portland’s coffee culture and is often found furiously typing in a cozy café.