This is the second article in the Successful Coffee Shop 101 series. If you missed the last one, check out Hours of Operation.
Next I’m going to talk about location and demographics. With a physical product that you are selling, you can decouple location of the factory producing your product from the demographics of your customers. With a coffee shop, you are selling an experience that is located at a physical building. Therefore, where that building is located will determine who your demographic will be.
Many coffee shop owners go into the process with a clear image in their mind of what their cafe should look like. This is SO important. That vision is your driving force, it will drive you forward through the tough times. Don’t lose that vision. The important piece that I want to discuss is how to use that vision to grow a profitable business.
Consider your concept. Who would this appeal to? Let’s dream up two hypothetical visions. Vision 1 is “English Tea Party”. Picture floral upscale China patterns, scones, doilies, lace, the whole nine. Vision 2 is “Hipsters in Paradise”. Imagine rustic colors, vegan pastries, pour over organic fair-trade coffee, exposed painted pipes coming out of old brick in an old factory, and the baristas wear fedoras.
Starting Point: Our Heuristics
Our heuristics are a reasonable place to start when trying to figure out who our target market is for each of these concepts. “English Tea Party” is likely to attract a predominantly female crowd, probably older. And “Hipsters in Paradise” is probably going to attract, you guessed it, hipsters.
Before you accept this generalization as 100% truth, have you ever heard of Bronies? These men completely break our heuristics of who would be interested in My Little Pony. While I’m not suggesting you build your business around the edge case, starting a coffee shop is expensive, so I would suggest taking an extra step and doing some research into who would be a viable target market.
Next Step: Research
Now that you have a hypothesis about who is going to come to your coffee shop, it’s time to do some digging. I’d start my research online. Are there other coffee shops with a similar concept in other parts of the country? How do they brand themselves? What information do they have on their website? How did they decorate their space? Where are they located? Look around on Google Maps. Are they near a college? Do they have parking? Are they a convenient lunch spot for offices?
Look at their social media presence. How popular are they? See how many followers they have. How often do they post? What types of comments do they get? Are there pictures of their menu items? What do the reviews say? Try to see who is engaging with them. Do they seem older? College age? Do people talk about their selection for kids in the comments?
If feasible, I’d take a trip out to this coffee shop. See if your research gave you a good picture for their vibe. See if they’re busy. If you can, try to go at different times of the day to see when they’re busy and when they aren’t.
I once scoped out a coffee shop that looked upscale and served fancy paninis with all kinds of special cheeses. When I went to visit at lunchtime, no one was there. The owner indicated that they didn’t have much of a lunch crowd. The cafe was located in the city but not walking distance from any office buildings. They were the only restaurant on the street, next to a pawn shop and across the street from a check cashing place and one of those places that buys gold. I wouldn’t think to go there for lunch either.
A quick note: the intent here is NOT to copy their concept. Focus on what they do well, and what they could improve. Pay special attention to what is drawing in the crowd that they’re getting. Maybe “English Tea Party” is getting a surprising number of young male guests. Is it the only game in town? Do young ladies work there who may be somewhat interesting to them? Bottom line: try to figure out the why behind who supports this business.
Once you have a good understanding of who your demographics are for your concept, it’s time to find a place to get started. I know that this is extremely complicated because you have to figure out what’s available, local zoning regulations, pricing, space constraints, and all of this other stuff. But here’s why you should prioritize this: without a solid customer base, nothing else will matter.
If you’ve put in the work of researching your demographics, where you should place your coffee shop will begin to feel more apparent. Perhaps “Hipsters In Paradise” makes Gen X office workers feel more relevant, so the right place to put it would be near office buildings. Or, maybe your initial heuristic was right that it should be near a college to attract that hipster crowd.
Summary: Focus on their needs
The important thing here is to just consider what your demographic wants out of a coffee shop. Is it speed? You should prioritize buying equipment that allows your customers to order and receive a drink in less than 5 minutes. Is it an escape after work? You should prioritize having a space that is large enough for people to sit down and relax. Think about what your target market needs and create an ideal spot for them to get exactly what they came for.
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