How to start a coffee shop

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Jacob Jaber is co-founder of Philz and a consumer investor and would be happy to help you get started. Book a 1v1 consultation with Jacob today! Browse other experts in other fields here.

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Jacob Jaber started Philz Coffee with his father, Phil Jaber, at their winery in the heart of San Francisco’s Mission District. Now, it’s a coffee empire, with stores in 52 communities and more than 1,000 employees. They are famous for their ridiculously appetizing classics like the the silky Mission Cold Brew or the addictive Iced Mint Mojito coffee.

We sat down with Jacob for a real coffee chat and learned his “how to” process of launching a local shop.

1. Do you love coffee?

“Don’t open a coffee shop if you don’t want to spend time in it,” Jacob Jaber told us.

It is incredibly challenging to succeed in the food business without passion. You need to start this business from a place of love. The owner sets the standard for cafeteria culture. At Philz you feel like you are at your grandmother’s house: the employees are always attentive to your needs, treating you with kindness and respect.

This is not a good hustle, you have to live it.

2. Solidify a unique concept

“To have a successful coffee shop,” says Jacob, “you need 5 things that people love.”

While coffee is a product with seemingly endless demand, it’s essential to stand out with a handful of spectacular menu items. What makes Philz so special is the heart and soul that goes into each craft coffee drink. Jacob originally defined himself through artisan creations like Tesora, a blend of coffee with cream and honey, which was perfect for latte drinkers (check out his menu for inspiration).

Be passionate because the cup of coffee (or food) you have to offer is different from everyone else’s. As Jacob says, “Find something you don’t think is already available and boldly offer it up? This takes courage.”

Don’t worry too much about your company name or brand, but obsess over the quality of your product offering.

3. Order your business documents

Jacob told us his secret: “I don’t know if I’ve ever written a business plan. When you start something with passion and love, it’s going to give you the fuel. Don’t worry too much about the business plan. Make it a page like maximum”.

Take care of your legal documentation (ie, entity formation) with the help of a lawyer. You can ask for a good local lawyer, but some good options online are Legal Zoom or Zen Business.

4. Hire a real estate agent and choose a location

“Great marketing can’t fix a bad location,” says Jacob.

Jacob breaks this down into three things to consider: density, visibility, and accessibility. You want to be in a space that people will be walking or driving through frequently. Things should be convenient for the client (for example, you need a parking lot for areas with heavy traffic and busy roads).

Don’t rush this part of the process. If you find a neighborhood you like, spend time studying the area. If there’s a competitor in your area, which there probably is, it’s an opportunity to learn. Get insight from the baristas and customers. Ask competitors how they are doing.

Think about customer habits on weekdays and weekends. You need to determine the culture of your store. A business park isn’t bad, but it will cater to office workers and be dead on the weekend. Close to hospitals can be great.

Location is EVERYTHING. It’s easily the most important step to get it right. If your location requires an update, it can be expensive. You sign a lease, get a general contractor, and the costs start piling up.

Before you dive in, try these inexpensive tactics to test your product and your market:

  1. Think of your coffee business as a product, not a store.
  2. Research all the events in the next 6 months where you can open a kiosk
  3. Open a pop-up and introduce yourself at events, farmers markets, etc.
  4. Use these income and earnings as proof for banks, angel investors, friends and family, etc.

This rudimentary mindset can go a long way. Blue Bottle started via pop-ups and is a huge success story.

5. Execution is key

You’ve got the perfect space in the up-and-coming part of town and maybe you’ve even found your favorite formula of cold brew.

Now what?

If you’re stressed about furniture, cakes, machinery, or other logistical parts to make your store stand out and shine, consider these tips first. “Iterate. Don’t go through all the design options at once. It’s not only cost-effective, it’s also a waste of time,” Jacob shared.

Instead, open with the bare bones.

From there, you can build the store around the customer experience on something they really love. If you notice people coming in with laptops, make it a comfortable space to work in. If there are families, include children’s drinks on the menu. If there are students, consider a discount! Either way, when the store first opens, you should plan to be there to make sure the execution and training is just the way you like it.

All ready? Get out there and get ready!

Do you want to go deeper? Book a 1v1 consultation with Jacob today! Jacob Jaber is the co-founder of Philz and a Consumer Investor and would be happy to help you get started. Browse all the experts here.

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