How Poor Planning and Coffee Machines Sink New Coffee Shops
Many coffee shops close or go up for transfer within six months, and the cause is rarely a single bad location. Owners who fail usually skip systematic planning: renovation budgets, equipment investment including coffee machines, staff and service standards, pricing, and delivery strategy. Treating the shop as a business with profit targets matters more than the romantic image of brewing coffee for passing guests.
Location still counts, but it is only one factor among many. Preparation should cover the shop's current situation and its future, from specialty coffee understanding to takeout and delivery. Opening a coffee shop is not the hard part; keeping it alive and profitable is. Owners who picture a relaxed lifestyle rather than a commercial operation are advised to reconsider before committing their savings.
Many young people dream of opening a coffee shop, but the reality is that cases of transfer within six months are all too common. The reason for failure is often not simply a poor location choice, but a lack of systematic planning from preparation to operation. This article takes a deep dive into the common pitfalls behind coffee shops closing within six months, including location, renovation, equipment investment, understanding of specialty coffee, service, pricing, and delivery strategies, and offers practical advice. Whether you are just starting out or planning to enter the industry, you can gain insights to avoid these traps.
Opening a coffee shop of one's own is probably a thought that repeatedly surfaces in many young people's minds. Sitting in someone else's shop, imagining that someday you too could have a little space of your own, playing your favorite playlist, personally brewing coffee, and chatting with passing customers... just imagining it is pleasant enough.
However, suddenly a remark drifts into your ears: "I heard that xxx coffee shop is being put up for transfer, and it's only been open for six months..."
When you are calculating your grand plans for opening a shop, isn't this kind of talk especially deflating, even a bit like a bad omen? But from another angle, these voices may be fate reminding you: opening a shop is something that must be considered carefully before acting.
Some people think that those who cannot keep operating simply chose the wrong location, or the timing was off. A poor location choice is indeed one of the causes of many shop closures, but by no means the whole story. Whether or not there is a pandemic, the difficulty coffee shops have in staying afloat may appear on the surface to be due to the broader environment, but at root it is still because of a lack of thorough planning and preparation for the shop's current situation and future.
Opening a coffee shop is not hard; what is hard is keeping it alive and profitable. It is absolutely not the case that you can casually open one and easily make money. A coffee shop is essentially no different from running a company; it is a commercial activity, and the ultimate goal is to make money. If you think opening a coffee shop means living a relaxed and leisurely life, then you had better give up as early as possible—whether it is the savings you worked hard to accumulate yourself or money given by your parents, none of it comes easily.
The profitability of a coffee shop runs through every stage: preparation, daily operations, service level, innovation and iteration, and so on. Nothing is as simple as it looks on the surface, and every shop has its own difficulties. In many failure cases, the owner focused only on the immediate moment and ignored the long term, setting the shop's positioning and investment cost too high from the very beginning, and then being unable to sustain it once formal operations began.
Therefore, throughout the planning stage, you must act according to your means! The budget must not only cover rent deposit, (transfer fee), renovation, equipment, and ingredients, but also reserve at least six months of operating funds (rent + labor (even if it is only you, labor must still be counted) + utilities, etc.).
For friends who are just starting a business and have no experience, the first thing to think about is not how artsy the shop will be after opening, but how to keep the coffee shop operating continuously without losing money. If you want to grow the brand, then in the initial stage you must control costs even more strictly. Only after the shop is truly profitable and the brand has gained some recognition should you consider further expansion.
The following are the most common reasons many coffee shops cannot survive past six months:
"Opening the shop in a bustling area from the very beginning"
"Of course you need a busy downtown area for foot traffic!" But for a newly born independent coffee shop, even if it is located on a busy street, it still lacks enough attractive highlights. Coffee shops opened in busy downtown areas usually do not price their products low. As a new shop, the prices are not cheap, so what convincing reason do you have for consumers to enter? Even if some people come in, will they become regular repeat customers?
So the suggestion for the initial stage is that renting a shop does not necessarily mean squeezing into a bustling street. You can choose a residential community close to office buildings and not too far from the core commercial district. Compared with locations with high foot traffic, community shops have much cheaper rent, and when people from nearby bustling areas search for food or nearby options, your shop may instead gain more exposure.
The shop area does not need to be too large. The model of a small community shop + delivery can both satisfy some customers' demand for space and specialty coffee, and also avoid lacking attention and spending from mass consumers. Under the pandemic, coffee shops need even more to be "small and efficient," and at the same time must have well-established standardized operating procedures to improve order output efficiency. This not only reduces operating pressure, but also strengthens risk resistance.
"Spending too much on renovation"
Unless you yourself work in a related industry, it is not advisable for a new entrepreneur to pursue trendy internet-famous styles excessively. Not only does it easily go out of fashion, but because the style is similar to other shops, it also fails to interest consumers in visiting for photos.
If you are not fully confident, save on renovation wherever possible. If it is a coffee shop of thirty or forty square meters, keep the renovation cost within 30,000-40,000 (excluding equipment). You do not necessarily have to spend a lot of money. First get the basic infrastructure done well and give customers a comfortable and clean environment. After operations gradually get on track, it will not be too late to add things wherever you feel something is lacking.
"Spending too much on equipment"
Do not think that you cannot open a coffee shop without an EK or a La Marzocco. It is not only expensive coffee machines that can make good coffee. Whether a product tastes good depends on the quality of the coffee beans and the skill of the barista, so choose equipment that is right, not expensive. The price of one La Marzocco or EK is enough to renovate a good-looking coffee shop. If a cup of coffee is priced at 25-30 yuan, how many cups do you have to sell to earn back the equipment cost...
"Blindly pursuing specialty coffee without a correct understanding of specialty coffee"
The definition of specialty coffee is that from selecting green beans to delivering them to the consumer, every step in the entire process must maintain the highest quality. In addition to the coffee beans themselves meeting quality standards, the roaster and the brewer must also have sufficient understanding of the beans in order to extract a reasonable flavor through appropriate methods and showcase the distinctive flavors of the coffee's producing region.
Coffee beans are not better simply because they are more expensive. Many beans that seem ordinary also have their own shining points. It is not only expensive beans extracted by pour-over that can be called specialty coffee. Espresso coffee and creative coffee can also be called specialty coffee when the barista has a full understanding of the beans and the principles of brewing and carries out innovation.
"Too much personality, no service"
Do not think that service means being submissive and letting customers take a mile. After all, the hardest thing in the world is to make the other party willingly pay for your service. Anyone has to weigh whether the cost they pay is worth it.
No matter what your personality is like, the most basic principle of serving customers is to be warm and generous, and to truly win customers over. I believe that in any industry, service is the key to determining whether a shop, a company, or a brand can endure.
"Product quality and pricing are not proportional"
Yes, failing to stabilize the quality of every cup of coffee while pricing on the high side is the reason many coffee shops cannot get customers to repurchase. You do not have to use the best and most expensive beans, but you must make every cup of coffee stable and worthy of its price. Product reputation is the key to whether a brand can survive long term!
"Not doing delivery because of fear that it will lower product quality"
In an era when most people hope to drink coffee without leaving home, if you do not do delivery, how much brand exposure can you get? How many people will really walk into a brand-new coffee shop for no reason at all? Although delivery platforms charge high commissions, this is much more effective than spending money on advertising. When the weather is bad, delivery platforms are especially important for newly opened coffee shops.
After the product has been jostled along the way, the taste is certainly not as good as drinking it in the shop, but it will not be too much worse, and consumers who order coffee delivery are also clear about this. If you are worried that pour-over coffee will change flavor by the time it is delivered, then just make espresso drinks, cold brew coffee, and other beverages whose flavor will not be affected by small temperature changes.
Although the threshold for opening a coffee shop is low, the challenge of running one is extremely high. As long as it is a business, it requires dedication to last. Impulse is always the devil. Only with thorough planning can you run a coffee shop well.
Image source: Internet
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The above content is compiled by CoffeeHunters, a coffee news website.
