# Researching The Opening a Coffee Shop - Location and Premises - Tips?



## rollincolin

Hello everybody,

I am currently researching and developing a business plan for opening a coffee shop in Glasgow. I have stumbled upon several questions in my research so far, the answers to which I am sure will be useful to all of us:

Location:

Footfall versus rent: Most central locations where there is a lot of footfall also have rents exceeding 40,000 p.a. for 1000 sq. ft - 1500 sq. ft. I know that you should choose the location based on value but how would you go about determining the value of the location. For any existing business owners what made you choose your current location - close proximity to universities, business centres, hospitals? I have noticed that coffee shops tend go in clusters: is it a bad idea to position yourself to other popular coffee shops or it is actually good assuming you can gain more exposure by creating a scene or at least sharing a customer base. What about positioning yourself and partnering with business serving other interests of your customer base e.g. organic produce shops, bicycle shops, yoga studios and anything related to quality and health focused way of life.

Premises:

What are the most important qualities for good premises for a coffee shop. So far I have found that the class licence of the premises is something to be handled after choosing the premises (e.g. in most cases the property would have Class 1 but that doesn't mean that you can't talk to the Council if they have any plans to switching to Class 3). What about the layout of the coffee shop, many retail properties have big basements but as a coffee shop owner, do you really need that ancillary space or is it just waste of rent. To all existing owners: was there something you didn't realize that was immensely important about the premises until later when you started renting and operating on the premises.

Thank you all for taking the time to discuss and answer my questions.

Best Regards,

Colin


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## garydyke1

Watching with interest


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## The Systemic Kid

Good luck with your venture - £40k rent is an awful lot of coffees. Have a look at Caffe & Co's website. Neil, the owner ditched a marketing job to open this not so long ago. Rainhill has a population of 12k so I was curious to find out why he opened an artisan coffee shop in such a small place. He said the rent on the unit was very low - big plus. It's in a 1970's characterless small shopping mall - all aluminium and glass and looking very tired. Neil has given his shop a really nice feel - rustic. The big plus for the location, he told me, was having two primary schools round the corner. Groups of mums come in after dropping off their kids and have two or three lattes. So, the shop gets a very steady footfall. As can be seen by the website, Neil has diversified by offering training both professional and to the home enthusiast. I think he's doing OK.


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## radish

Making money on your first venture with a rent of £40K (particularly in Glasgow) will be super tough - I'd leave those locations to the tax dodgers ;-) Also, getting a change of use isn't just about the application (the success of which I wouldn't take for granted) but also ventilation, planning regs, etc., None of that stuff is straightforward.

Personally, I wouldn't open a cafe in Glasgow that didn't have (or have access to) kitchen facilities - food is the main driver with nice coffee a bonus.

I'd have a look at places like Where the Monkey Sleeps (West Regent St) as a possible model. I'd avoid the idea of doing a coffee-centric place with minimal food in - particularly near the city centre.


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## rollincolin

Hi The Systemic Kid,

Thanks for replying!

The research I am doing is for an organization and therefore the type of coffee shop I am looking into is not the model owner + 2-3 part-time employees where the net profit is highly sensitive to how much the owner would like to give himself as salary. What I need is a business generating net profit of at least £25,000 p.a. and this should be money ready to be reinvested in the business or invested somewhere else. For this reason I assume I need a bigger operation, thus the higher rent for larger space (1000-2000 sq ft). This also brings me to another question:

Is there a significant difference in net profit margins between smaller coffee shops 500-1000 sq ft (owner + 2-3 part timers) and medium-sized 1000-2000 sq ft (manager + 4-5 employees either part-time or full-time) due to efficiency or scale? This is assuming they are located in the same area so the amount of footfall is similar.

I hope others will join in the discussion and provide insights into the relationship between the size and financials of the coffee shop


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## garydyke1

''the type of coffee shop I am looking into is not the model owner + 2-3 part-time employees where the net profit is highly sensitive to how much the owner would like to give himself as salary''

Sadly this is most likely to be me. Salary? hmmmmm Probably zero for the first 12 months


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## cam coffee shop

Hi All, I have a passion for coffee and looking for a business partner myself to open up a quality independent coffee shop in Yorkshire or Cheshire, (open for other locations if you have something great going). Looking for people who are SERIOUS about the idea, it would be nice if you work/worked in a good independent store before like (Prufrock or Kaffeine...don`t want to mention stores up here). If you want to invest on a 50-50 basis I only need seriousness and fairness from you. If you don`t have money to invest but want to be involved I would be also interested working with you if you have at least 2 years strong experience. Thanks all for reading! Please write to [email protected] Regards, Antonio


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