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Master of Business Administration 2010-12 Batch (Semester – II) Business Research Course Code: MS 108
“OPENING A COFFEE SHOP IN
THE BEST LOCALITY”
Submitted To Mr. AJAI PAL SHARMA
Submitted By NIKHIL AGGARWAL Enrollment No.:-09517003910
with a population of 60 million. Even in the mature coffee markets of Portland.on their way to work in the morning.000 coffee bars.000 coffee bars with a population of 290 million. around the corner from where they work. Do the math! How do I determine the right location for my coffee shop? Finding a good location generally requires effort. the U. The demand for specialty coffee is growing every day.Assignment Jan-Apr 2011 Class – MBA II Subject: Business Research Faculty: Dr. even if it takes six months to a year. depend upon your concept. . One factor common to all desirable locations. of course. opportunity still exists for new coffee businesses. Given all the competition. Ajai Pal Sharma 5) You are planning to open a coffee shop in one of two areas in your locality. is the proximity of a large population of potential coffee drinkers.S. Italy. Your business needs to be in a convenient location for customers . Seattle and San Francisco. In comparison. In other parts of the country. know your market. is opening a specialty coffee business still viable? Yes. has over 200. Conduct a secondary data search on key variables that would allow you to make a logical decision on which area is best suited for your proposed coffee shop. there is vast opportunity. has approximately 15. persistence and patience. sit-down coffee bar than you would for a cart or drive-thru operation. You will need a different type of location for an upscale. Probably one of the hardest things for people to realize is that the right location is worth waiting for. Take time to find the right location. Your location considerations will. Following points should be kept in mind while opening a coffee shop:Firstly. or in the mall where they shop. however.
or an area within walkable distance of schools. it may be popular in a city suburb close to a well known commuter train station. this may be an area which sees a lot of tourists. opening a predominately takeaway coffee shop aimed at the commuter market is unlikely to be desired in a suburban town populated by families. do you want to be situated in a certain geographical area? If so. offices and a high street. what kind of coffee shop would be required? Then focus your research on creating the right café for that area. high end café bar in an area inhabited by charity shops and service businesses (such as laundrettes and chemists) may be problematic as the local residents may not go to that area for entertainment. do some research into other businesses in the nearby area. Will your business fit in? Opening a chic. Identify which is the most important to you first For example. If however. Analyze existing businesses Once you have an idea of where you want to open. your very first point of call should be to understand your market. you want to open an ice cream parlour and café). . for example. 1. In the ice cream parlour analogy. For example. what is the socio-economic class of the inhabitants.Once you have decided you want to open a coffee business.” So how do you know whether your idea will fit into the market place? That’s when the first stage of research comes in. and make sure that your idea fits into the marketplace. However. 2. “Not fitting your business to your area is a classic mistake first time business owners can make. away from any train or bus links. you will need to widen your geographical search so you open your business within an area that it will suit. focus your research on that area – what businesses are already there. it is the concept which is more important to you (say.
Broad differentiation strategy which seeks to provide product or service that offer benefits different from competitors and that are widely valued by buyers. A failure strategy is one which does not provide perceived value-for-money in terms of product features. Don’t fear competition Often in the food and drink market. This will help create a more neighborly feel. as you already have a solvent clientele used to visiting that locality. opening in an area which is populated by independent boutiques and restaurants will be more successful. Its good to talk The best way to find out what people want is to go and talk to them! Your best research will be that which involves you going into the marketplace and talking to your potential customers. what they’d like to see on the menu. don’t automatically discount a suitable spot. but use them as the framework for your business plan. 5. usually to selected market segment. Make sure your coffee menu is unique and different. In many markets there are described as premium products and are usually heavily branded. roaster and brand of specialty coffee and owns thousands of coffee shops all over the world) is between a broad differentiation strategy and a focused differentiation strategy. Don’t copy an existing business like for like however. and people like choice. ensure you are doing something which makes your business stand out. the position of Starbucks (it is a leading retailer. Focused differentiation strategy It seeks to provide high perceived product/service benefits justifying a substantial price premium. Social venues attract people. which maybe is not offered by the neighboring cafes. In my opinion. 4. and as a guide for your decision making. Find out what they want from a café. what opening hours they’d like. Bear this in mind when looking for locations. especially in smaller areas such as suburbs or small towns. Don’t try to implement all the ideas. which will in turn benefit you all. Instead. businesses can feed off each other. 3. price or both.However. The aim is to achieve advantage by offering better products or services at same or higher price. . Just because an area already has several types of café. and prove to your customers and the existing businesses that you can all work together.
Keeping your set up and running costs as low as possible gives you a better chance of making a profit. good quality equipment. Spend the money in the right places. Premises and premises use – The right premises can make or break the venture. 9. and there are a wealth of books. 7. befriend the local planners on the council and invite them to look round any potential unit you want a change of use on – a friendly chat can often save you time and expense. how many tables you can fit in and how many “covers” you can fit in. consultancies and barista trainers who can help you stand out in the marketplace. documentaries. Understand your product – If you are new to the industry. . If not. always ensure you have a “perfect triangle” between coffee machine. sink and fridge. General shop units are A1.6. so try to look for property which already has A3 if possible. Coffee is the world’s second biggest traded commodity. Budget – Don’t be tempted to overspend. If you have no previous experience. research your products. Consider your business plan when looking for premises. Attend training courses – There are dozens of training courses. This will help you work out how many staff you need and what kind of income is realistic (as mentioned earlier). Where does it come from? How is it grown and traded? What is ethical trading? Have an understanding of coffee beyond serving it. get some from the experts! 8. There are also no guarantees it will be permitted. sturdy furniture – spend only what you have to on rent deposits. Plan your kitchen area with military precision – every inch of space must be utilized well. Like your kitchen at home. websites and even competitions in the world based around the bean. 9. business rates and legal bills. Café layout – In every premises you look round do a rough sketch of where your serving area will go. and if you wish to open a café in what has previously been a shop you may have to apply for “change of use”. on the décor. Pay attention to space for your customers to queue and move around. Cafes selling basic food usually require A3 premises usage. Also consider the “use” which has been applied to the premises by the council. make sure your location matches it.
Then.How do I compete with the large chain operation that might be opened across the street from my café? Quality products and service are where the small operator can really compete against the chains. What big chain executives can't do is interact with customers each day to gain a feeling for the pulse of the community. you can take more care in hiring your employees than the chains. That will assure they know how to prepare the best drinks. you can put your staff through a careful training program instead of the quick cookie-cutter course that many chains use. so take advantage of it. First. There is no way they can offer the personal touch that you can as a local owner. Thanks . This is your biggest competitive edge.
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