Professional Documents
Culture Documents
Tom Matzen
Marybeth Harrison
Self-Counsel Press
(a division of)
International Self-Counsel Press Ltd.
USA Canada
Copyright1997, 2007, 2011 by Entrepreneur Coach Inc.
All rights reserved.
No part of this book may be reproduced or transmitted in any form by any means graphic, electronic, or
mechanical without permission in writing from the publisher, except by a reviewer who may quote brief
passages in a review.
Self-Counsel Press acknowledges the financial support of the Government of Canada through the Canada Book
Fund (CBF) for our publishing activities.
Printed in Canada.
First edition: 1997; Rerpinted: 1998; 1999
Second edition: 2001; Reprinted: 2002; 2003; 2004; 2006
Third edition: 2007; Reprinted 2008
Fourth edition: 2011
Cover Image
CopyrightiStockphoto/Coffee/ fotohunter
Inside Image
CopyrightiStockphoto/coffee with fresh branch/joannawuk
Self-Counsel Press
(a division of)
International Self-Counsel Press Ltd.
1704 North State Street 1481 Charlotte Road
Bellingham, WA 98225 North Vancouver, BC V7J 1H1
USA Canada
This book is dedicated to the hardworking men, women, and
children who harvest coffee by hand, bean by bean, so that
we may enjoy this tasteful brew.
Muchas gracias, amigos.
contents
PREFACE x 7. How to Negotiate Your Lease 53
8. The Key Consideration in Making Your
iNTRODUCTION xi Final Site Decision 54
PART 1 GETTING STARTED 1 5 DESIGNING YOUR OWN STORE 55
1 Preparing A Business Plan 3 1. Creating Your Businesss Identity 55
1. Why Prepare a Business Plan? 3 2. Your Coffee Bars Look 55
2. Your Vision for You 4 3. Your Staffs Look 72
3. How Should I Start Out? 6
6 GETTING TO YOUR OPENING 78
4. Customer Profiles: Finding Your 1. How to Do Cost-Effective Plans 78
Target Market 7
2. How to Get Permits and Licenses 79
5. What Type of Coffee Bar Is Best? 9
3. Putting the Job out to Tender 79
6. Choosing Your Products and Services 11
4. Things to Do and Buy 83
7. Risk Assessment 14
5. Supplier Considerations 86
8. The Business Plan 15
6. Storing Your Order 91
2 SETTING UP YOUR BUSINESS 18 7. How and When to Open Your Doors 93
1. Choosing a Name 18
7 BUILDING A WINNING TEAM 97
2. Your Business Structure 20
1. How to Find Great Staff 97
3. Start-up Costs 26
2. Employment Standards 98
4. Licensing 30
3. How to Interview 101
3 INSURANCE 31 4. How to Make Hiring Decisions You
1. Obtaining Insurance 31 Wont Regret 104
2. Planning Your Insurance Program 32 5. Deciding How Many People to Hire 105
3. Types of Business and Personal Insurance 33 6. How to Train Your Staff 106
7. Station Designation 112
4 SECURING A SITE FOR YOUR COFFEE BAR 36
8. How to Find a Great Manager 113
1. Where Are the Best Locations? 36
2. Mapping It Out 40 8 HOW TO KEEP YOUR COFFEE BAR CLEAN 116
3. The Site Selection Criteria Checklist 40 1. Keeping Your Coffee Bar Clean 116
4. Evaluating the Competition 45 2. Cleaning Tips 117
5. Evaluating the Financial Viability 3. The Importance of Dishwashing 118
of the Site: The Pro Forma 46 4. Specific Dishwashing Instructions 119
6. Making an Offer 52 5. Keeping Your Coffee Bar Well Stocked 120
v
PART II THE PRODUCT 121 4. Types of Teas 163
5. Market Potential 163
9 ROASTING COFFEE 123
6. Tea Brands 164
1. Coffee 123
7. Five Keys to Great Tea 164
2. Decaffeinating 125
8. Cupping Tea 167
3. Roasting 126
9. Serving Tea 168
4. The Different Roasts 129
10. Selling Tea to Your Customers 169
5. Roast Samples 130
11. Teahouses To Build or Not to Build 169
6. Coffee Flavoring 131
7. Storing Beans 132 PART III OPERATIONS 171
8. Cupping 132 14 THE MONEY EXCHANGE STATION 173
9. Selling Roasted Beans to Your Customers 134 1. The Money Exchange Station
Where It All Happens 173
10 MAKING AND SERVING COFFEE 139
1. Which Coffee Should You Serve? 139 2. The Till: Policies and Procedures 173
Contents vii
notice to readers
Laws are constantly changing. Every effort is book is put and are not assuming any liability
made to keep this publication as current as for any claims, losses, or damages arising out
possible. However, the author, the publisher, of the use of this book. The reader should not
and the vendor of this book make no represen- rely on the author or the publisher of this book
tations or warranties regarding the outcome for any professional advice. Please be sure that
or the use to which the information in this you have the most recent edition.
ix
preface
Its a funny thing about life; if you refuse to accept anything
but the best, you very often get it.
somerset maugham
Hello, fellow coffee lover, and congratulations including coffee bars. The hands-on techniques
on taking a major step toward success in the you will learn have been designed and tested
coffee industry! If you are like us, you are prob- to produce real-world results. You will get a
ably drawn to the coffee business for many rea- comprehensive overview of what you can ex-
sons ... your love of exotic coffees from far-off pect in owning and operating your own coffee
regions of the planet, the idea of the hustle and business; or, if you are already in the industry,
bustle of a busy coffee bar, or seeing the looks this book will help you build your existing sales
of appreciation on the faces of your happy cus- and increase your profit.
tomers. Yes, owning your own coffee bar can be We also hope that, as a business owner, you
fun, challenging, and very rewarding! will take a leadership role in being a positive
But like any business there are many risks in- force for good in the world. We encourage you
volved: economic conditions can change, global to do what you can to recycle, support local
coffee prices can fluctuate, and pressure from growers, and buy fair trade, organic coffees.
competition can increase. In fact, more than 50 We hope you will encourage your employees
percent of new businesses fail within the first to walk or cycle to work, and educate your
five years so before you start your new coffee bar customers on environmental issues facing us
venture (or buy an existing one), we hope that today. We hope you will be a leader, do what
you will evaluate the risks carefully. Take your you can and help make the world a better place
time, do your research, and try to stay objective. for our children.
We hope that this book will be a valuable Good luck, have fun, and maybe we will
resource to you in your journey. The informa- stop by for a cup of java one day!
tion we present is based on our many years of - Tom & Marybeth
owning and franchising our own businesses
x
INTRODUCTION
the coffee bar business whats in it for you?
Coffee is the worlds most popular beverage with only water
being consumed in larger quantities!
McCoy and Walker
xi
2. The North American percent in annual growth from 2004 to 2009.
By 2010 the organic coffee industry was grow-
Coffee Market ing at approximately four times that of the
conventional coffee industry.
In North America, coffee was a $41 billion USD
industry in 2009 and, despite the global reces- By positioning your business to take ad-
sion, the market is expected to grow 14 percent vantage of the current trends in coffee, you
in volume over the next ten years to $47 bil- help ensure that it will not only survive but
lion USD. The increase in volume reflects the flourish in the years to come.
growing preference for specialty or premium
coffee including not only higher quality beans 3.1 Gourmet coffee
but also organic, Fair Trade and unique origin Gourmet coffee is made up of the arabicas, or
coffees. high-grade coffee beans. Arabicas are much
In the United States, over half the popu- more flavorful and typically have less than half
lation above the age of 18 are daily coffee the caffeine of the robustas.
drinkers with an additional 30 percent who The term gourmet coffee refers to both
drink coffee on an occasional basis. On aver- the high-grade beans themselves (arabica
age, Americans consume 3.2 cups of coffee per beans) and the liquid coffee made from those
day with approximately 30 million Americans beans. The low-grade robustas are used for
drinking specialty beverages on a regular basis. blending (to help offset the higher cost of ara-
In Canada, approximately 63 percent of bicas) and for instant coffees and mass-market
Canadians drink coffee on a daily basis with drip coffees.
Quebec having the highest percentage (70 per- Part of the growth in gourmet coffee sales
cent) and the Atlantic region having the low- can be attributed to a general trend toward
est (53 percent). The average number of cups quality. Futurist Faith Popcorn has indicated
consumed by Canadians per day is 2.6. that consumers are increasingly demanding
higher quality products. She also notes ad-
3. Coffee Trends ditional trends in her best-selling book The
Popcorn Report that help explain the move to
While coffee consumption worldwide is actu- gourmet coffee:
ally declining slightly, the market for two types
of coffee specialty or gourmet and organic (a) Cocooning. People are spending more
continues to rise. Specialty coffee represents time entertaining at home and serving
approximately $14 billion USD in sales with gourmet coffees.
organic coffee representing almost $1.5 billion (b) Small indulgences. This trend describes
USD in sales. The specialty market continues the movement away from spending
to grow due to a number of factors including large sums of money on expensive new
an increase in home coffee consumption, new cars and toward spending on smaller
coffee venues and new coffee products aimed quality items such as gourmet coffees.
towards young people. This also helps explain why coffee is
Organic coffee has seen the largest growth somewhat recession-proof.
in recent years with an impressive rate of 21
3.2 Organic coffee The first targets are the on-the-go, hurry-
up morning coffee crowd; people hurrying
Organic coffee is coffee that has been produced to work, rushing to drop their children off
without the use of synthetic fertilizers, pesti- at school. These coffee bars recognize the in-
cides, insecticides, or other harmful chemicals crease in value we put on our time and focus
that threaten the long range sustainability of on fast, efficient service. They are generally lo-
soils, ecosystems, and groundwater supplies. cated in convenient, on-the-way-to-work areas
Not only is the planet demanding that we with many offering drive-thru service. Keep in
clean up our act but todays consumers are mind that with 65 percent of all coffee being
demanding that companies be environmen- consumed in the morning, large fast-food
tally responsible and offer consumers envi- restaurant chains are now competing for that
ronmentally friendly products. Recent studies morning gourmet coffee dollar with companies
have shown that approximately 65 percent of like McDonalds serving quality premium cof-
customers are willing to pay more for a com- fee at all their drive-thrus.
panys products and services if they believe The second type of coffee bar takes advan-
the company is environmentally and socially tage of the trend toward local cocooning. These
responsible. Yes, that is 65 percent! community coffeehouses place importance on
This means that if you are not committed relaxation and conversation with the emphasis
to environmentally friendly practices in your on warm, inviting, comfortable spaces; places
coffee business, you will lose customers. Ap- where long conversations can be enjoyed over
pendix 1 discusses in more detail organic cof- the perfect hot latte.
fee and environmentally friendly alternatives
and programs you can implement in your cof-
fee bar to help capture this market.
Introduction xiii
PART I
getting started
1
Preparing A Business Plan
A business plan is a road map of where you want to go in
your business, the various routes you will take to get there,
the stages along the way, and most importantly, where you
will be when you have arrived at your destination.
DOUGLAS GRAY & DIANA GRAY
3
which color to paint the walls of your percent of businesses fail in the first
coffee bar to what kind of biscotti to five years. This is usually because of
serve with a cup of coffee. lack of planning and preparation, lack
(c) Preparing a business plan will help of capitalization, and a lack of man-
crystallize your vision of the opportu- agement and marketing skills.
nities and the limitations of the market (i) Preparing a business plan will help
you are in. Where is the most potential you outline the exact steps required
in the coffee industry? Who will your to get your business up and running
competitors be? How will you compete smoothly and profitably.
against them? (j) Finally, preparing a business plan will
(d) Preparing a business plan will help hopefully inspire and motivate you to
crystallize your vision of exactly who take action! Knowing what you want
you will be serving. If you are not clear to do isnt very useful unless you actu-
on who your customers are, you will ally do it.
not be able to meet their needs and
your business will not succeed. The
knowledge you acquire about your 2. Your Vision for You
target market will be invaluable to you Take out a pen and a piece of paper, or sit
in your concept and marketing efforts. yourself down in front of your computer as
(e) Preparing a business plan will help de- you read through the rest of Part I. Write down
termine what products you will offer your thoughts and answers to the questions
your customers. Once you know the we raise. Taking action now will give you a
demographic and psychographic char- good head start on your business plan and will
acteristics of your target market, you help you formulate what exactly it is that you
are in an excellent position to decide want to do and how you are going to do it. Take
what products will appeal to it. action now.
(f) Preparing a business plan will help Your vision of your business lays the foun-
determine what services you will offer dation for your business. Your vision is what will
to your customers: Home delivery ser- give you a sense of direction and give your life
vice? 24-hour ordering service? Whole- a sense of purpose as you build your business.
sale service? Drive-thru? What is your vision for
(g) Preparing a business plan will force (a) Your day-to-day activities? What
you to look at the dollars involved, will you do on a daily basis? Do
from initial setup through your first you see yourself serving customers?
few years in business. Budgeting and Do you see yourself networking with
financial planning will be vital to your other business owners in your local
success. area? Do you see yourself being a posi-
(h) Preparing a business plan will force tive force in your community?
you to look at the risks involved in (b) Your lifestyle? Are you early to bed,
owning your own business. Eighty early to rise? Do you see yourself
5. What Type of Coffee Bar and giftware sales. They may or may not offer
liquid coffee sales and are often found in mall
Is Best? locations or gift districts.
call one of its variations the Vancouver Hotel from the coffee bar in early morning or evening.
Breakfast Blend and promote the coffee in its Five stops a day, five days a week can translate
hotel rooms and on its restaurant menus. With into an additional $15,000 in revenue per year
a small batch roaster you will be able to provide (based on a $12 per pound purchase price).
this marketing opportunity to wholesale accounts.
A custom roasting service will be a key sell- 6.2c Email or voicemail bean
ing feature for all the bean business you do. ordering service
This is a service that only requires a bit of
6.2b Free home delivery service promoting. With this service, you can encour-
A free home delivery service can be a great way to age your customers to call or email ahead to
launch your whole bean coffee business. You can place their bean order, making your roasting
easily plan drop-off routes along your way to and efforts that much more efficient.
COMMITMENT BOX
I, _________________________________ , commit to completing
a business plan for my coffee business.
________________________ ________________________
(your signature) (today's date)
MARKETING PLAN
Sales objectives
Marketing objectives
Marketing strategies