If you were to start a small coffee business in the United States, you would have a minimum of 200 million potential customers. It’s a market full of potential.
To begin with, here are some facts and figures. The average intake of coffee in the United States of America has been on the rise in the recent past. Based on a study conducted by the National Coffee Association, statistics show that 83% of adults in the United States drink coffee every day.(1) That would amount to a little bit over two hundred million! (2)Obviously to cater to this rapidly growing need the coffee production has also increased immensely over the last few years. In fact, the annual growth rate of coffee shops is estimated to be 7%. (3)
Here are 10 more good reasons you might want to consider starting a small bistro or cafe:
1. After crude oil, coffee is the most sought-after commodity in the world
The worldwide consumption of coffee was 135.6 million bags in 2010 and reached 137.9 million bags in 2011. During the last 12 years consumption increased at an average annual rate of 2.5% making coffee the second highest most traded commodity after crude oil. (4-5)
2. USA is the leading consumer of coffee in the world
America’s average consumption of coffee comes up to about 400 million cups per day. Multiply that by 365 and you have 146 billion cups of coffee per year. This makes the United States of America the world’s largest consumer of coffee.(6)
3. High profit margin
Once they are fairly popular amongst the local crowd the average coffee shop can serve up to 500 customers a day. So if your average cup of Joe costs $3 you can make up to $1500 a day (this is not including other drinks and snacks that those 500 people might buy along with their coffee). Being a coffee shop, you will have hardly any over head expenses compared to restaurants, so your daily profits are relatively high.
4. The rise of the coffee shops
In 2011, there were about 20,000 coffee businesses according to research carried out by the SBDC (Small Business Development Centre) network.(7) Since the annual growth rate of coffee shops is estimated to be 7% (after doing some math I figured out), by the end of 2013 there will be at least 22,900 coffee shops in the USA. The popularity of coffee seems to be ever increasing, so why not get in the game and become a part of that statistic?
5. The coffee business is growing
In addition to the ever increasing number of coffee shops in the United States, Starbucks has become the third largest restaurant chain in the USA. This is the result obtained after accounting for massive chains like McDonalds and KFC. (8) If that doesn’t say coffee is popular, I don’t know what will.
6.The neighborhood hangout
Seeing that coffee is an integral part of American culture it has held a very special place even in the social world. Coffee shops are a great hangout for youngsters after school and even for adults to unwind after work. It also makes for a convenient rendezvous.
7. Coffee Habits
A lot of working people have fallen into the routine of picking up a cup of coffee on their way to work. Some even pick up coffee for their friends or colleagues every day. People also grab coffee on their way back home from work as a way to help them unwind after a long tiring day. So if you were to strategically position your coffee shop, you would get a lot of customers, and we all know what more customers means, right?
8. Low start up costs and little training
The startup cost of a new coffee shop can begin on a small capital depending on how you handle your cash. You will need to invest in furniture and of course a splendid coffee machine. The rest is up to you. Creating an ambience in your little cafe doesn’t necessarily have to cost a bomb.
The only training you will require is how to make a decent cup of Joe. Of course since it is a business you will need some training in the business field but if you are considering starting a coffee shop then you probably already have a business degree right?
9. Coffee is versatile
There is an endless list of the different types of coffees that are sold at coffee shops. Everything from hot, cold, with milk, without milk, with froth, without froth and flavored coffee can be found anywhere you go. So no matter what the temperature, or the time of day there will always be a coffee that suits your customers’ moods. Seasonal variations are always a hit or you could even try weekly themes. There are plenty of versatile opportunities to market your goods.
10. Share the love
You have to love coffee! That’s the only sure-fire way to make your coffee business a success. Your passion will infect others and pretty soon, your little café will be the buzz on local social media networks.
So, who’s up for it? Would love to hear your thoughts!
Resources
1. “Green coffee shops cut rubbish, but at what cost?” By Megan Snedden, 22 July2013.
http://www.bbc.com/capital/story/20130722-erasing-coffee-shop-waste
2. State and County Quick Facts, United States Census Bureau, http://quickfacts.census.gov/qfd/states/00000.html
3. http://coffee-statistics.com/coffee_statistics_ebook.html
4-5. World consumption of coffee at 137.9 million bags in 2011
Press Trust of India/New Delhi 30 May 12 | 02:43 PM
6. http://coffee-statistics.com/coffee_statistics_ebook.html
7. http://www.sbdcnet.org/small-business-research-reports/coffee-shop-2012
8. Starbucks Is Third-Largest Restaurant Chain, Technomic Says, By Cecile Vannucci,
April 29, 2011, http://www.bloomberg.com/news/2011-04-28/starbucks-is-third-largest-u-s-restaurant-chain-technomic-says.html