A coffee franchise is a fun business that can be run in a number of ways. For coffee fans, it’s a business that allows them to indulge that love of java. For other business owners, it’s a way to sell a product that is always in demand and that is relatively inexpensive to make. Before opening a coffee franchise, there are a number of things that any entrepreneur should keep in mind.
Know the kinds of opportunities that exist. There are more ways to open a coffee business than simply opening a restaurant-style franchise. While an eat-in coffee place is a well-known sight among coffee fans, there are many other ways that a coffee franchise can operate. Consider the other ways that coffee can be sold before deciding on one. There are coffee stands and mobile coffee operations that make perfect business opportunities for some entrepreneurs.
Some coffee varieties are highly popular, but only for a short time. High-priced coffee, for instance, fell out of favor quickly when the economy made it difficult for many people to afford that luxury. While coffee is considered a necessity to coffee drinkers, consider whether one specific type of coffee franchise is a fad or whether it may have real staying power. Decide whether you want to serve a specific type of coffee or a broader spectrum of coffee types and blends.
Know the general demographic of your area before opening a coffee franchise. A rural area that doesn’t have a lot of commuters may not be a suitable place to open a coffee stand or restaurant. A larger metropolitan area or one that gets a lot of commuter traffic moving through it may be better suited because of the larger customer base. Take a look at how many coffee restaurants and stands already exist in the area and how much traffic they get each day before making a decision.
Understand the high profitability of a good cup of coffee. The expense of creating a cup of coffee is low while the potential retail price can be quite high. A good cup of coffee is one that your demographic will be willing to pay a premium to get- and they will likely do it with great regularity. A coffee drinker who finds a type they like may buy a cup every weekday or even seven days a week. If you can get a good number of regular customers, your overall expenses will remain relatively low while your profits will skyrocket.
Virtually any coffee business includes has a number of add-on items that add to the overall profitability of the business. A coffee restaurant or stand doesn’t just sell coffee- there may be muffins, pastries, coffee beans, coffee mugs, bottled water and a host of other items that bring in a higher average amount per sale. Depending on the franchise, these may be a few smaller items, or the business may have so many items for sale that coffee is only a complementary item to encourage the sale of other items.