Thinking about opening a coffee shop? Turn your coffee bean dreams and passion for business into a lively venture to serve your community.
MyCompanyWorks has formed LLCs and Corporations online for small businesses since 2001. Tap into expert advice and tips to open your coffee bar quickly. If you decide that this business model is right for you, you can begin the process with any of our business startup packages.
You don’t have to look too far to see that independent coffee houses are all the craze and have become community hubs for socializing and networking. If you’re interested in owning your own shop, it’s a great small business idea. But where do you begin? What type of startup options are available? Before we dive into the startup process, let’s go over a few different options.
You can build your company from the ground up, which is desirable to many entrepreneurs. It’s exciting to have a say in the build-out and create a space that expresses your creativity. However, starting a brick-and-mortar store from scratch can be more costly and requires a lot more effort than other options.
Buying an existing coffee house could be a viable option if you’re willing to revamp someone else’s creation. Commercial business brokers and websites like BizBuySell can help you locate existing businesses for sale in your area. Buying an existing business may not be as exciting as building from scratch, but you can save a lot of money – and headaches.
Franchises are another option to start your business quickly and with support from a franchisor. NerdWallet has published a great article on the best coffee house franchise opportunities. The initial investment can be quite high, but worth exploring if you’re looking for a turnkey startup.
You may not need all the products or supplies listed, but most coffee houses use the following supplies and equipment:
We can form your company for you, but you’ll want to contact an accountant or lawyer to decide which business type is best for your business. Both Limited Liability Companies (LLCs) and Corporations can apply for Small Business status with the IRS. This allows what is called “pass-through” taxation. This prevents businesses from being taxed at the corporate level. Contact one of our accounting partners for more information.
Most businesses need a business plan to apply for financing and lease space. A business plan is a key requirement for applying for financing as well as a way to track your progress and grow your business. There are plenty of free business plan templates online that you can download and edit to suit your needs. To find out more about business planning services, head to our Business Planning Resources page.
Be sure to include an executive summary, marketing strategy, and financial statements in your business plan. In the executive summary, include your mission statement as well as a description of your company and the benefits you offer. The marketing strategy is where you’ll detail how you will promote your services to potential clients. A financial section should include information such as how much money will go towards salaries. A business plan can be a vital tool for tracking goals, refining methods, and collecting resources the business will use to accomplish its objectives.
Make sure these items are included in your business plan:
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The Federal Tax ID, or Employer Identification Number (EIN) is a nine-digit number assigned to each US business by the IRS. Businesses that employ workers must have EINs.
If you have a social security number, you can apply online for an EIN with the Internal Revenue Service (IRS). If you’re forming your company on your own, you can apply online with the IRS for a Federal Tax ID, also called an Employer Identification Number (EIN). Note that a Social Security Number to apply. International entrepreneurs must satisfy additional requirements if they don’t have a social security number. Add an EIN application to any coffee business startup package.
An EIN becomes part of your company’s legal identity. Most banks require an EIN for business bank accounts. You’ll also need one to hire workers and file your business taxes. DBAs are only required to have an EIN if you want to hire workers, but without one, you’ll have to use your personal Social Security number on all business tax and legal documents. We recommend all businesses with DBAs apply for an EIN so you can keep business and personal tax and legal matters separate.
Many larger banks also offer business banking products, so the best place to start is to contact the bank where you keep your personal funds. If your bank doesn’t have a satisfactory banking solution, interview other banks to find the best one for your business needs. Our banking partners can also help you find the best banking solutions for coffee startups.
A quick internet search will show all the commercial real estate brokers in your area. They can help you locate the right store site and negotiate a lease. Our Vendor Network is a great place to find a commercial real estate agent.
Most coffee shops don’t require federal licensing unless they also sell alcohol. However, the state where you do business will have its own set of business license and permit requirements. Many states have business websites where you can start researching license requirements. Our business license compliance package does all the research for you.
Business insurance costs are determined by factors like risk and equipment value, so they’ll be a little different for each shop. You can expect to pay somewhere around $900 for a business insurance policy. Workers’ Compensation policies can run anywhere from $1000 to $2000 annually. The median cost for General Liability policies is roughly $400. If you need help choosing the right business insurance, contact our partners Hiscox or netQuote for recommendations and a free quote.
It’s critical for every successful business to set up a system to manage your business finances and records. You can work with something as simple as a spreadsheet or use a program like Quickbooks Online. Hiring a bookkeeping or tax professional may be well worth the money if numbers aren’t your strong suit. Accountants and bookkeepers may also be able to manage your payroll and tax returns for an additional cost. Find qualified accounting experts in your area.
Organizing files for all your invoices, receipts, bills, and business records makes finding them much easier if they’re filed when they’re received. Take advantage of free services like Google Drive or other cloud storage to create a paperless filing cabinet, or set up a secure filing cabinet in your office. Do what works best for you, but do it! You’ll be glad you did the first time you have to find a document. Here are some file labels to consider for your filing system:
Whether you need, you can post job ads online for part-time or full-time staff on Indeed.com or ZipRecruiter. Many job seekers also use LinkedIn, which means they’ll have a profile you can check out for work experience. Before you post a job ad, take these steps to prepare for your first new hires.
Having an employee handbook makes communicating policies, procedures, and expectations easily to new hires. It also keeps everyone on the same page, so your company runs smoothly, even while you’re away. A comprehensive employee handbook should include orientation, employee reviews, and policies and procedures for things like employee time off, how to use equipment, and general responsibilities for safe operation. You can download free employee handbook templates to customize for your shop.
You may have a few different roles to fill when you set up shop. If you hire a cashier, a barista, and a supervisor, each one will have different responsibilities. You can include a general conduct description in your employee handbook, but employee roles really should be clearly defined. The job description for each role should include a list of expected tasks and duties. Do your best to list as many details as possible so job seekers know what’s expected and whether or not they would be a good fit for each position.
Posting a detailed job ad will reduce the number of unqualified job seekers who apply. Even if everyone who applies is qualified, you might get hundreds of applications for just one position. Ideally, you don’t want to schedule more than about 10 interviews for each position, so it’s worth taking some time to weed out the applications for less-qualified candidates. Indeed.com has a free recruitment guide to help you hire the right team.
TIP: For every employee you hire, you’ll probably interview somewhere between 6 and 10 job seekers.
Marketing is extremely important for startups. Using the best techniques and tools to attract customers can help you spread the word that you’re opening a coffee shop. Not all businesses use websites to sell online, but many potential customers look for a website before they start calling or driving around for businesses that brew coffee. Think of your website as an updated version of the yellow pages ad. Even if you don’t run your business online, you can still use a website as a communication tool to promote events and new products, and business hours with contact information. You can order a domain, email, and website package with any of our business startup plans.
Email marketing still works, so publishing a regular newsletter or email campaign is another powerful way to market your brand and also give others something to share with friends and on social media. Collecting email addresses doesn’t have to be complicated. You can do something simple like setting up a jar with a sign and pen by the cash register. Customers can jot down their emails while you’re ringing up their orders. The best part of collecting voluntary email addresses is that you earn them honestly, you’re not buying lead lists, and they’re from people who are already customers.
TIP: Collecting email addresses is easy if you want to download a list and spam everyone until you get a hot lead. But a quality email address doesn’t require money and your customers are less likely to hit the ‘unsubscribe’ link on your newsletters if they sign up voluntarily.
These days it’s essential to set up social media accounts with Instagram, Facebook, Twitter, and Google Business if you want to promote your business online. Posting catchy ads, quotes, phrases, and product pics is either free or low-cost and has exponential potential to reach customers that are not already part of your base. People share the things they like with others, and it’s no different with social media.
In addition to your website, email, and social media channels, there are also other ways to market your shop to the local community. Nextdoor offers free profiles for local businesses. Check out local networking and community events where you can showcase your products. Companies like Addy.co can help you create affordable, attractive online ads. Searching the internet for “coffee shop marketing ideas” can help you find free and low-cost ways to spread the word about your new shop.
Ready to open your coffee bar? All startup packages include our FREE Startup Wizard to guide you through the process. Manage all your important documents and filings in one place with My Account Dashboard, also free with every business startup order.
Opening a coffee shop can be both exciting and profitable if you take the time to start properly. Take the time to decide whether you should build from scratch, buy an existing store, or start with a franchise. Searching the internet and estimating costs for each business option will lead you to the right decision. Before you start making money, you’ll have to invest in stocking products, equipment, licensing, insurance, and recruiting. If you develop and stick to your business plan, study your local market, train employees properly, and run an effective marketing plan, your chances for success will increase dramatically.
Starting a coffee business properly may seem tedious, but it’s worth setting up systems and processes before opening your doors, so you can easily navigate potential tax and legal issues throughout your business journey. If you have read our guide and decided a coffee spot is in your future, it’s time to get started!
MyCompanyWorks can form LLCs and Corporations fast! All business startup packages include our exclusive Startup Wizard and loads of forms and tools to manage your business in one place. Our blog is also full of articles, resources, and links to help you run a successful business.
MyCompanyWorks Premium™ puts your coffee business on auto-pilot. We’ll file your annual reports, monitor business compliance, and provide over 200 business forms and other free items to maintain business compliance.
If your question wasn’t answered in our guide, our helpful Frequently Asked Questions page has answers to common business startup questions. Our friendly support team is also standing by, so email or call us for more information to start an LLC or Corporation for your new coffee shop quickly.
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This entry was posted on Thursday, April 21st, 2022 at 8:16 am and is filed under Incorporation, Limited Liability Company, New Business Ideas, Starting A Business. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
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