Back in 2014, when the local village shop and Post Office came up for sale, I thought it would be a great idea (despite never having set up a business of this kind), to become the post mistress and set up a coffee shop and bistro in the local community. My mission was to create a beautiful destination that people near and far would talk about, visit and enjoy. I also wanted to create a hotspot, that estate agents would mention in their marketing material when selling property (hopefully making it more desirable), and a business that would employ local people, both young and old, giving them an opportunity to be part of something exciting locally.
When I received the call telling me my offer was accepted I couldn’t quite believe it. The couple selling the premises were big fans of A Place in the Sun. They had been following my journey and knew that I had a real passion for property. The thing is, this project wasn’t just a commercial premises. When I looked at it I saw the potential to create a flat and a semi detached house, as well as a commercial space.
Having renovated a fair few properties since I was 19 years old I wasn’t worried about the renovation as such, however I had never done a ‘split development’ project before.
I always say that no matter how experienced you are at property development, every project is different and you will learn something new each time as you will be faced with unexpected challenges.
So in a nutshell, instead of buying one property renovation, I had in fact bought three, one of which was to become a shop!
The project was HUGE and whilst I could talk you through how I divided the property in to three separate units, here I am going to explain a bit about how to set up a coffee shop business if you are thinking of doing it yourself…
Starting a coffee shop is a dream for many aspiring entrepreneurs and I guess I had always romanticised over the idea. The ‘Coffee Culture’ continues to thrive globally, and creating a coffee shop can make for a profitable business opportunity. It is also a great way of connecting with the community. It does require careful planning, research, and dedication. I set my business up whilst I was juggling being a mum to two young children, as well as continuing my job as a TV presenter travelling abroad.
Some people might suggest starting out with a well-thought-out business plan but there can be a bit of a mixed opinion on this…as others will say just go for it! I was very much of the ‘just go for it attitude’ but if you want to put a business plan together then I’ve laid out some pointers below…
- Decide on the type of coffee shop you want to open. Will it be a trendy espresso bar, a cosy neighbourhood café, or a specialty coffee shop focused on single-origin beans?
- Study your local market to understand the competition and identify opportunities. Visit other coffee shops in the area to observe their strengths and weaknesses, and gather insights into your potential customer base. I had little competition in my vicinity so I knew there was a gap in the market where I wanted to start my business.
- Outline your budget, startup costs, and projected revenue. Consider expenses, things like rent, equipment, inventory, staff, and marketing. The building I was going to create the coffee shop in was going to be purchased but I knew there were going to be some costly renovation bills. Even if you aren’t completely renovating a space you will most likely need to budget for a shop fit out.
- Develop a menu that aligns with your concept and target audience. Will you provide artisan coffee, specialty drinks, or offer food like pastries, sandwiches, or brunch? I knew I wanted to offer a small menu alongside my coffee offering and I knew that I had a space for a small kitchen and store room, so I had to take that in to consideration when planning the menu. The prices you charge will also need reflect your costs as well as the spending habits of your customers.
- When you are choosing a location, look for somewhere that fits your target demographic and offers foot traffic, visibility, and accessibility.
Once you have worked out the above you most likely need to secure funding. I decided to set my business up with a silent partner and investor. I worked out how much it was going to be to buy the building and renovate and then I researched what I would need for set up costs. Between us we came up with a loan agreement so all parties were happy.
To legally operate a coffee shop, you’ll need to obtain several permits and licenses. These may vary based on your location, so it’s important to check with the local council.
If the premises doesn’t already hold a license to trade as a commercial premises you will need to apply for a possible change of use. You will also need to make sure that when you get this license you have the ability to serve food/drinks. If you want to serve alcohol from the premises (I wanted my customers to enjoy a glass of Prosecco with afternoon tea), you might need to apply for an alcohol license. If you are going to do this, you will be required to get the premises license as well as becoming a personal alcohol license holder yourself.
There are also various health and safety permits that are necessary. You’ll need to pass health inspections and meet safety standards, especially if you’re serving food. I decided to employ a Health and Safety consultant to advise me on this. We made sure all our staff had taken a food safety course, where they learnt about food storage, food prep and cleaning. Different knives and chopping boards are required for different ingredients, temperatures of fridges need to be monitored and recorded twice a day and you should have three wash basins in your kitchen; 1 for food prep, 1 for washing hands and 1 for washing utensils.
You will be required by law to have a ‘Fire Risk Assessment’ carried out by an approved assessor. The fire risk assessment will likely identify a list of recommendations which will need to be addressed. These items could include things like doors which are not fire rated or which have had the intumescent strips painted over, locks which need to be changed to allow them to be opened easily during an emergency or doors which need to be self closing in order to prevent fire from spreading. The report will also identify the locations where you will need extinguishers in the building, as well as an easily accessible fire blanket in the kitchen.
You will need to have a ‘water risk assessment’ carried out which will identify any risks of Legionella, general bacteria, E-coli and coliforms. The water risk assessment will identify high risk areas and will provide an ongoing treatment plan which will include semi-regular testing of the water and monthly temperature checks which you can do yourself.
You will be required to carry out a 5 yearly electrical fixed wiring test on the building's electrics and annual PAT testing of the portable appliances.
A waste management contract will need to be implemented and you have options to use the council or a private company. We had 3x weekly collections and opted for a private contractor. What shocked me was that they charge you more to recycle. If you are using coffee pods there are actually some great companies out there that take your waste away and recycle them to make fuel!
Another required contract is for ‘Pests’. Unfortunately mice seem to be able to get in to the smallest of places and by implementing a pest control contract, the company will come and make regular inspections and assist in helping keep unwanted pests away!
Finally, if you want to play music you will require a license to do so! PRS helped me with mine!
So, as you can see, there are a few licenses and permits to think about but hopefully the above is useful and gives you a good starting point for what you need to put in place. KEEP A FILE WITH EVERYTHING and KEEP IT ORGANISED & UP TO DATE. Make sure your file is accessible as you will get regular unannounced visits from the council.
The next thing you need to think about carefully is the equipment you use. We invested in a quick glass wash and dishwasher, commercial ovens, a commercial coffee machine and a good till/ordering system. You have to remember that the equipment is going to be used A LOT so it needs to be robust and good quality. It might be worth considering taking out guarantees, because when equipment does go wrong it can be costly.
It’s possible to lease a coffee machine and if your figures stack up, it’s a good option to consider when starting out, as you often get coffee training and servicing of the equipment in with the lease.
One of my favourite things to design is interiors, and I LOVED designing the interior of ‘Lord Roberts on The Green’.
We benefited from a great space, both inside and out and in total had around 60 covers.
The interior of my coffee shop was rustic, cosy, warm and welcoming, in keeping with the traditional building and its surroundings.
It’s fair to say that my coffee shop wouldn’t have been what it was without the incredible team I had. It was so important to me to learn every role within the business so if I needed to step in and do anything at any point I could. I was very much one of the team too and I loved it.
I think it’s so important to create a team who share your vision and passion and are on the same page as you. All of our cakes were made by the staff and the customers were aware of who made them… I felt this was a really nice touch for everyone.
We held regular training sessions, and staff parties and events so the team felt very much like a family. At certain times of the year we held special events for example for Valentines, Easter, Halloween and Christmas. I was constantly planning ahead.
I found a system called ‘Rota Cloud’ very useful for managing staff rotas (I had 24 members of the team in total). It was also great for keeping on top of the hours they worked for payroll. Make sure you get a good accountant who understands what is vatable and what isn’t. I very much owe the success of my coffee shop to my accountant who went above and beyond when it came to helping and advising me.
I established some great relationships with our key suppliers and I kept on top of all of my payments to them to ensure we always got deliveries on time!
You should think carefully about whether you want to offer table service or get customers to order at the till. We tried and tested both and ultimately you will have to decide what works best for you and your business.
Whilst social media can have its negatives, it is an incredible marketing tool to advertise. We took and posted images of our produce daily, as well as creating stories and reels. It really helped create a buzz.
Opening a coffee shop is both an exciting and challenging venture. There is a a lot to think about and consider…I thoroughly enjoyed creating mine and who knows I might do it again… I’m still in contact with lots of my team and they are always asking… ‘Laura, when are you going to do another one?…’
If you are thinking of opening up a coffee shop and want any tips or advice, do reach out and I’ll give some pointers as and where I can.
Laura x
