The Best Location for a Coffee Shop May Not Be Main Street
Opening a coffee shop is a classic manifestation of the entrepreneurial spirit. And since more and more people are drinking coffee every year, it’s a business with a bright future. According to the 2016 National Coffee Drinking Trends Report from the National Coffee Association, “Daily consumption of espresso-based beverages has nearly tripled since 2008,” and a significant percentage of that boost is among 18 – 24-year-olds. In Spring 2016, a whopping 36.38 million people had been to a coffee shop in the last 30 days.
That’s why this is the third post in a series about what you need to start a coffee shop. We started in Portland with a general introduction to the coffee business from the Vice President of the American Barista & Coffee School and then hopped over to another great coffee city, Seattle, to learn how to find the right bean roaster. Of course, before opening a cafe there are (at least) two other important decisions: finding a spot on the map and recruiting staff.
In this installment, we talk with four local Bay Area coffee shop owners to learn more about how they approached these two essential steps at their own coffee hotspots.
Coffee shop locations
Main Street or neighborhood coffee shop?
If you’ve opted for floor space instead of a food truck, you need to pick a location before you can stencil your name on the door. Budget may be the determining factor here, but choosing your address involves many other ingredients.
Mazarine Coffee is located next to a transit stop on Market Street, a main artery in the paved heart of San Francisco. It’s an ideal address because of the foot traffic. However, before opening day Mazarine had an extensive construction project on their hands—the owners needed to fill an empty shell.
“We had to build the bar, the kitchen, add bathrooms, plumbing, electrical,” says Jason Miller, operations manager and director of coffee at Mazarine. “If you’re doing the low-key neighborhood place, a little more laid back, you might not need to spend as much on the build-out. The design gets more complicated when you’re looking to put out a couple hundred drinks an hour.”
That capacity speaks to the high rents that come along with a coveted spot on a well-known street.
“You have to be in a place that’s going to give you a volume you need,” Miller says. “The margins in coffee aren’t great. You need to be covering overhead and labor.”
But that doesn’t mean you have to be smack in the middle of the busiest ‘hood in town. On the other end of the spectrum, sits Andytown Coffee Roasters on Lawton Street in the mostly-residential Outer Sunset neighborhood of San Francisco.
“Our location isn’t near anything,” says owner Lauren Crabbe, with a laugh. But that distance is intentional. It reflects the market research she completed before launching— namely, living in the neighborhood. She noticed a gap in good coffee.
“The requirement for a business location doesn’t necessarily have to be on the main drag. It just has to be where people are,” she notes.
Other shops and businesses have blossomed on Lawton Street since Andytown moved in, and the company’s second cafe opens in a few weeks in another mainly residential area on Taraval Street.
“We don’t want to go in and compete with these existing businesses,” Crabbe says of her remote real estate. “I think we helped show people, hey it’s OK to open a business out here. [The neighbors] want somewhere to go.”
Existing location or brand new coffeehouse?
Robert Myers, founder of Highwire Coffee Roasters, chose to take over existing businesses in the East Bay, asking himself, “If I were to apply my idea of coffee, hospitality, and people, could I see this working?”
Myers opened his first location after another coffee shop owner retired, and he took over a second location from a friend who wanted a different direction.
“That’s how I’ve done all my businesses,” he says. “I didn’t have any budget for a build-out or architectural drawings.”
Myers didn’t completely shut down either location when he assumed ownership, for fear of losing revenue for weeks or even months. He applied his changes to the former businesses on the fly, which rankled some long-time customers.
“The advantage is also the disadvantage,” he says. “You have an existing clientele, but their expectations are set by the previous business. It would have saved us a lot of digging ourselves out of a hole if people had been able to say goodbye to the first business. I really underestimated the importance of that.”
Nathan Wyss, co-owner of Contraband Coffee, also chose an existing location for the first San Francisco shop.
“We weren’t going to have to do a lot to throw our coffee machines in there,” he says. It was “more of a superficial remodel. The stakes weren’t all that high.”
Yet settling for an existing cafe space resulted in the frustration of being unable to arrange the layout exactly how Contraband needed it. An extensive retrofit would have required more construction permits from the city. For their second location, Wyss and his team selected the bottom level of a residential complex.
“Brand new construction, empty shelves, a long lease,” he says. “The stakes are much higher. There’s a lot more money involved and more uncertainty around cost.”
For example, the company faces steep financial hurdles if it fails to comply with certain terms of the lease.
“Signing that lease, it was a lot more stressful.”
Hiring: Being someone else’s boss
You’ve got a location and spread the word. You start serving coffee and some homemade pastries. But you and your business partner are picking up every single shift and bringing in friends to work a few hours for free, like Lauren Crabbe at Andytown.
When lines keep reaching out the door, you need hands-on help to maintain your business and grow. Staying open later in the day and on weekends.
Each of the entrepreneurs we spoke with reiterated one crucial aspect of hiring over and over again, which Crabbe sums up: “You can teach people how to make good coffee. It’s hard to teach people how to be nice.”
And experience with coffee? Overrated, according to the pros at these shops.
“Their experience is secondary,” says Contraband’s Wyss. “I can teach anybody how to make coffee, and they can practice. It’s more about the person.”
That lesson required a reality check for the Mazarine group, which initially sought to fill its roster with experienced baristas.
“The best baristas tend to be happy and part of another team,” Jason Miller says.
Instead, these owners and managers suggest choosing people who enjoy coffee and love talking to people—and don’t mind the less-glamorous elements of such the job, like cleaning. Ultimately, hiring an employee becomes less about a single individual and more about how that person meshes with your current employees.
“You want to hire people with the best attitude and train them,” Miller says. “You make them from scratch into your culture. It’s been the key to our success.”
Highwire tried it the opposite way around, retaining the entire staffs of the previous coffee shops for which Myers had assumed control.
“Everyone tells you you shouldn’t do, and you shouldn’t do it,” he says. “We thought we’d have this great team of people ready on day one because they were familiar with the space and customers.”
One employee after another exited, and Myers forced himself to evaluate the situation without succumbing to impetuous tendencies. For instance, if none of your employees can work Fridays, the tempting mistake is to search incoming resumés for Friday availability.
“Suddenly, that seems like a great hire,” Myers says. “It’s not. I had to step back and say, who have been my favorite people to work with and what were the consistent qualities there.”
All of these Bay Area owners repeatedly spoke of their employees as integral pieces of a broader whole that includes both people and product.
“You’re really creating an experience and a performance,” Myers says. “When it’s done well, there’s a level of authenticity and connection that, when it’s there, you can feel it.”
Such earnestness forms the foundation of the best coffee shops. It fosters the kind of atmosphere friends talk about when they describe their favorite cafes. For an owner, that success starts with the right team at a great location.