Saturday, October 15, 2016

Why Choosing the Best Location for Coffee Shop Business Is Important for Its Success

Finding the Best Location for Coffee Shop


Choosing the best location for coffee shop business is one of the most crucial decision to be made. Because it is one of the significant factors in its growth and success. If you pick the wrong location, it will be expensive and difficult to undo. Does it sound scary?

best location for coffee shop


If you need help, this post offers six checklists you can use. Then decide on the best option.

1. Visibility - Physical & Online


Visibility is important for the foot traffic but premise rental is higher. You will be competing with A1 tenants that are willing to pay more. Tenants such as banks, designer brands, big franchise chains etc. Can your small independent shop afford this?

Even if you can, do the followings before you sign the lease agreement: Observe foot traffic volume at different times of the day and on different days of the week. Once you are convinced that it meets your earlier assumption, you can negotiate the lease. Start with one or two year lease. Once established and your coffee shop is running well, negotiate a longer lease.

What if you cannot afford a prime and a good visible location? Use the power of online marketing to overcome this challenge. With the increasing usage of internet, your location can be visible to potential customers. How?

a. By having your own website. If you don't have the time, get a professional to help you with the content writing and call to action buttons. 

b. Get listed on your local F&B review website. HungryGoWhere is an example of such site. It has a presence in Singapore, Malaysia, Australia, Hong Kong, Vietnam, and Cambodia. The site has reviews of restaurants and dishes, food and culinary guides. It does food search based on price range, type of food and location. In some countries, it has restaurant reservation system.

Other examples of mobile apps for location sharing are Foursquare, Swarm, and Glymps. You can take advantage of these apps by offering deals and promotions to the users.  Or try Google My Business and get your coffee shop location on Google Maps.

c. Email and SMS. Tell people in your network of your impending shop opening date. As an incentive, offer either discount or free drinks. And ask them to share with their friends as well. Once the business is in operation, update your customers with your latest offers and menus. This is to entice them back to your coffee shop.

d. Customer Loyalty: Studies had shown that customers will continue to patronize a coffee shop for its product promotion, good staff attitude, and professionalism. Even if has an awkward location. If your location 'sucks', work on the aforesaid factors. This will establish a strong customer loyalty base. This should be part of your business plan.

You just have to pay attention to what people need and what has not been done - Russell Simmons

To learn how to succeed in retaining your customers and attract new customers, read 'Seven Power Strategies for Building Customer Loyalty'. You will learn much more about building customer loyalty and how it is important for your success.

In addition, you can use this indicative premise size guide to help you decide on the best location for coffee shop lot:

i. For a small café for 15 to 45 pax seated, you need around 500 to 1000sq ft. floor space.

ii. Medium café for 45 to 100 pax, floor space should be around 1000 to 2000sq ft

iii. Large café, i.e for 100pax and more, you need at least 2000sq ft

2. Shopping Mall Location - Best Location for Coffee Shop?


There are advantages of having your shop in a mall. To start with, there are lots of parking bays and rates are reasonable. You can ride on or share customers of established brand outlets in the same mall. You also take advantage of customers who prefer the convenience of shopping 'under one roof'. In most cases, these people will do their shopping and patronize the F&B outlets as well.

But is it the best location for a coffee shop? As in any controversial questions, there are all either right and wrong. You need to study the micro attributes of the mall's location in relation to its visibility and shopper congestion. Some shoppers are irritated if the mall is congested but for many shoppers, congestion has, surprisingly, some perceived benefits! Hence, choose the mall that will give you your target shopper segment.

3. Accessibility


Office workers are always in a hurry and will drop in for their morning coffee. Is your location easy for them to rush in and out at this hour of the day? This constant stream of foot traffic is an asset that is vital to your success. So improve your layout to take advantage of this good traffic.

Is the location close to public transport - bus stop and subway station? These can bring another flow of potential customers to your shop.

best location for coffee shop

4. Your Competitor


Your competitor's presence near your proposed location can either be good or bad for your business. Can the demographic support more than one coffee shop in the area? Do you offer something that your competitor doesn't?

Assess the situation before you decide on the best location for the coffee shop.

5. What's in Your Neighborhood?


Are you in the financial district or near office area that brings morning, afternoon and evening foot traffic? Or near to colleges, sports center, hospital etc. that generally have a large number of people in the building?

Can you complement or collaborate with other businesses in your neighborhood? By offering things that are related to your business and may be of use to their customers. An example is a 20% discount on all coffees with cinema ticket stub.

6. Convenient for Employees?


Hiring good employees for your startup coffee shop is not as easy as you'd think. Is your shop location convenient for them to come to work? If it is, then it will be easier to entice good staff to join you.


Finding a good location is tough, so take the time to assess each site.  Once you decide on the right location, don't forget your legal, environmental and community obligations.

As a small business owner, getting involved in your community’s activities have several advantages. It gives reasons for customers to visit you again (provided you consistently served the best espresso). It builds loyalty within the community and increases your shop's visibility. Hence, it is good to give back and be involved. And serve the best coffee.

Lastly, Supplement Your Income Stream


Have you thought of bringing in extra cash with a complimentary online business?

There's a good discussion here on the cost of starting a conventional business and online business. If you do this properly, it can increase sales and lower your costs.

Give it a thought.

If you have any comments or suggestions, please feel free to let me know.

16 comments:

  1. Hello there
    Coffee especially now when it`s getting cold outside is something we need so often.
    Sometimes it`s hard finding any coffee shop at all and one wonders why they do not open coffee shops in the right places.
    I'm surprised that tourists do not trust independent coffee shops,in any country l have ever been, l drink coffee where i see it, l don't mind or care about name brands,didn't know not all people do the same,learned something.
    Repeating myself again on location, there are times one would want a coffee but the coffee bar is upstairs in some shop,this is where l always draw the line,there is no way im going up into some building just for a cup of coffee.
    You put some serios thinking into your post,simple things like customer loyalty points is not something most businesses think about but it can make a difference in return customers or not.
    Thanks so much for sharing,some really useful tips not only for a coffee shop but this apply to different businesses.

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  2. Hi, roamy. Like they always say, it is location, location and location. And as you rightly said, it is not going to attract many customers if it is located in the 'wrong places' such as on the upper floor of a building. Good accessibility is one of the factors to a coffee shop's success.My recommendation on non-tourist area is mainly due to high rental in places where tourist frequent. My blog is targeted to the small coffee shop owners and budget could be a factor. But if you look around & get a good rent, why not. But I believe in repeat customers and you wouldn't get that much in tourist area. roamy, thanks for sharing your thoughts and experience. Good of you to drop by and comment. Cheers.

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  3. My coworker loves coffee. You are right about tourist spots. They are where brand names exist. I mean brand names like Starbucks and Dunkin Donuts. However, that also means that any places that's not tourist attractions are perfect spots for coffee shops to open. The reason is because it's not profitable for them to localize in areas with low traffic. This also saves you up on store rent. Promoting online is also good as the internet can spread information really fast.

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  4. Hi, Blame. Thanks for sharing your thoughts. The tourist spots are great traffic area but rent can be high for a small start-up independent coffee shop outlet. But I guess, if the business plan, markjeting and startegy are done well, why not?

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  5. Interesting information you provided here on finding a good location for a coffee shop. You're correct that physical location and a website are both very important. Nowadays, people are using the internet in their cars looking for a good coffee shop along the way. Definitely right about staying away from tourist areas.

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  6. Kevin, thanks for dropping by and commenting. I too, will use my handphone and check out for a restaurant, cafe or coffee shops that are highly rated, when i am on the move.

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  7. Hello here. You have an interesting article regarding coffee shop location. As for now, I think that I would prefer coffee shop where you can work with your computer, which could accommodate all people who need Internet access.
    Usually, coffee shops rent places . If it is an upscale neighborhood, it can be expensive. However, clients would have more money to spent for coffee.
    Anyway, if coffee and service are great, coffee shops will prosper with the right attitude towards customers.
    All the best, Nemira.

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  8. Hi, Nemira. having free WiFi in coffee shop is great but some customers tend to stay longer. During peak hours this is bad for business. So now some establishment imposed time limit and you have to buy another cup for an extended time limit. I think this is a better idea. What do you think?I agree with you that consistent good service AND good espresso are important for coffee shop business to succeed. Thanks for dropping by.

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  9. Tourist area do have its advantages. Even if rental is higher. I think I will give it my first choice.

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  10. nacyJK, thanks for sharing your thoughts. I guess it's a matter of striking the rght balance and to understand the commitment that we are making. For most cafes in tourist area
    the target customers are mostly economy minded tourists for a decent meal and coffee at a good price, and service MUST be relatively fast.

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  11. Hello there,
    Perhaps I can give some info from a customer side. I am a student myself and we usually go to a bar for a coffee almost every day. So if you have a chance, try to build it next to universities or student complexes - Guaranteed traffic. Over the summer you can then try to get some traffic from tourists but that then depends on where you live. Obviously next to tourist attractions isn't that bad either, or next to a business complex. Just my take on the subject. And like pointed out above, make yourself available online - That's the future.

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  12. Hi, Dejan. Thanks for sharing this. The next thing is how to attract traffic during summer or during other University breaks - maybe by offer incentives to the local residents or Uni staffs. Tourist area is good but make sure your income is more than sufficient to cover the potential increase in rental cost.

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  13. Hi Mazlan,
    I must have a cup of freshly brewed coffee before starting work and another after lunch. It will be great to have a coffee outlet at an office block where office workers can grab a cup just before clocking in.
    Serve some light food as well such as sandwiches or healthy salads for people who just wanna have a quick lunch or on-the-go between their busy schedule.
    My dream cafe at the ground floor of an office block! The aroma of the coffee will surely pull in the customers.
    A good cup of coffee to start a great day! Who doesn't need one.
    Cheers!
    Sharon

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  14. Sharon, coffee shop at the ground floor of an office block is a good idea. Just check whether there are enough customers after office hours, weekends and public holidays.

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  15. Location is important, yes. But if your drink sucks no one will go back. So I do agree you must not ignore other aspects of running a good cafe or coffee shop.

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  16. Harry, you are right so a coffee shop owner has to address many issues to ensure success.

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