Start your own: Café or coffee shop

Finding premises

The biggest decision you’ll have to make when setting up a café or coffee shop is regarding your premises. Location and size and the two main factors you need to consider when looking at sites. 

Two-thirds of consumers, and three in four 16-24-year-olds, buy coffee and other hot drinks when out and about and so it may be worth looking for a busy urban area with a lot of foot traffic. However, properties such as this are expensive and the amount of square feet you will be able to get will be less than if you choose a more suburban or rural location. Equally, you may have envisioned a spacious, airy coffee and tea shop with room for large sofas and coffee tables covered in newspapers, which means you might be more restricted on the kind of location you can afford.

As two thirds of consumers considering the quality of the coffee to be the most important factor when choosing a coffee shop, it could also be profitable to consider investing in better beans and saving a little on the location. The important thing is to be a bit flexible, visit a range of properties, big and small, in busy and quiet locations.

With 1,400 stores already across the UK and plans to open 350 more, Costa is by far the market leader. Researching your market is essential: look into the locations that are popular among branded coffee shops as these are the areas that have been identified for drawing in a good trade. If these are busy during peak times, there could be room for an independent alternative.

It is also important to know your competition. Consider what the most popular brands are offering and how you could improve upon that. Here’s a list of the UK’s most popular coffee brands to give you a start:

Many of these companies are listed. Checking their accounts and annual reports may reveal the most profitable areas, plus you will be expected to supply this kind of in depth information if you are looking to secure a bank loan.

While the size of the property you will buy is intrinsically linked to its location, you should know roughly what sort of size and square footage you need, or how many covers (people seated) it can accommodate, as this will help you when going through property advertisements. You need to be clear about whether you need a large seating area, a kitchen, space for internet access, a performance area or a small retail section for instance. A rough guide to coffee or tea shop size is as follows. For a small café (15-45 covers) you’ll need between 500-1000sq ft. For 45-100 covers you’ll want at least 1000sq ft and for 100+ covers you’ll need to consider spaces bigger than 2000sq ft.

Think about what you need from your coffee or tea shop, what is already provided and what you would need to add yourself. When viewing properties, take the layout into careful consideration and try to imagine your service area fully staffed and a bustling sitting space decked out with tables, chairs and a lot of customers in need of a caffeine injection.

Before you negotiate the lease or purchase of a property you must also check what commercial classification it currently falls under. If the property does not already have the correct classification for a coffee or tea shop you will need to get planning permission from your local authority.