Choose the Best Coffee Shop Location

As you search for a coffee shop location, consider the value rather than the price.

Pop Quiz:

Which of the following coffee shop locations is a better value?

A) The $1250 per month location attracts 150 customers daily.

B) $2500 per month location of identical size that attracts 300 customers daily.

C) Both make the same amount.

If you said “B,” you’re right. In this scenario, that extra $1,250 you commit to pay monthly will generate approximately $5,000 extra gross income. This calculation is made at reasonable coffee prices and conservative profit margins — ordinary 2012 wages in a small town. Rent in first-tier cities can easily be ten times as much. Be aware that expensive commitments can be more profitable, so don’t shortchange your business prospects. Go where the people are when you choose your coffee shop location.

Even considering extra staff hours and demands such as electricity and water, most of that money will end up in your pocket at the end of the month. That’sThat’s a good value for your investment dollar.

So, how exactly does one estimate the number of customers visiting your coffee shop location?

Texts recommend visiting an average retail coffee shop by .2% to 1% of proximate vehicle traffic. This figure is higher for pedestrian traffic and areas with better visibility or access. As the law of averages goes, this is reliable.

For better accuracy, you must make adjustments for the following:

  • local area demographics
  • visibility of the location
  • traffic patterns
  • accessibility, and
  • competition.

If a coffee shop location has nearby competitors, take a seat and count the volume of customers they serve at high and low times of the day. Check out different days of the week, too.

Create projections for low, moderate, and high-volume scenarios. Develop a response to each of these situations and be prepared to act. The stress and uncertainty often associated with the financial planning of a new business will be reduced when you have a response readied.

Check out some of these additional recommendations from credit card processor Square.