Dreaming of opening an independent coffee shop? This could be the year to make your dream come true!
The 2020 global pandemic created many obstacles for small business owners.
Yet, against all odds, Crimson Cup helped 19 new independent coffee shops in eight states open their doors in 2020.
Based on our reading of several key business trends, we believe 2021 will be a banner year for opening a profitable coffee shop. Read on to learn why.
1. Specialty Coffee Demand Grew Over 50 Percent in the Last 5 Years
Coffee is the second most popular beverage in the world, after tea. In the U.S., coffee reigns supreme.
According to the National Coffee Association, 62 percent of adult Americans drink coffee at least once every day. The average coffee drinker consumes three cups. That’s over 474 million cups of coffee per day!
The coffee industry grew by 5 percent over the past five years. Specialty coffee remains the fastest-growing sector.
In its 2020 Atlas of American Coffee, the NCA found that coffee drinkers are flocking to espresso-based beverages at specialty coffee shops.
Consumption of cappuccinos, lattes, and other espresso-based drinks increased by a staggering 50 percent between 2015 and 2020. Strong popularity among 25- to 39-year-olds drove the growth. This younger audience is likely to keep drinking specialty coffee for decades!
Specialty coffee drinkers care about coffee so much that they’re willing to pay $4 or more for a latte. They will travel out of their way, even past other coffee shops, to get to the shop with the best coffee. And they’re happy to pay a little more for a higher quality beverage.
So, even if your neighborhood already has a specialty coffee shop, chances are there’s room for competition – especially if your shop serves up better coffee, drinks, service and atmosphere.
2. You Can Lease a Prime Coffee Shop Location at a Discount
Real estate markets froze in 2020 during widespread lockdowns. A record number of retail businesses and restaurants closed their doors, leaving lots of vacancies.
According to the National Association of Realtors, retail property remains under stress. Empty stores, flatlined growth and customers who prefer to shop online make it hard for landlords to find new tenants.
In this tight market, you can lease a prime location for an independent coffee shop for far less than anyone thought possible a few years ago.
Since no one knows how long these conditions will last, now is the time to secure an incredible location for your coffee shop.
3. Interest Rates Are at Historic Lows
If you need to borrow money to start your coffee shop, the costs have seldom been lower. Interest rates have been stagnant for over a decade and remain at historic lows today.
Banks set interest rates based on perceived risk. The interest rate for your small business loan will vary depending on your qualifications as a borrower, the loan you’re applying for and which lender you select.
As of March 2021, small business loans from traditional lenders, such as banks or credit unions, have annual percentage rates (APRs) ranging from around 3 to 9 percent. Rates from online or alternative lenders are higher.
Some U.S. Small Business Administration loans carry interest rates as low as 2.231 percent. Typically, you must apply through an approved SBA lender.
A compelling coffee shop business plan can increase your odds of obtaining financing for your coffee shop.
4. Owning an Independent Coffee Shop Can Be Fun and Profitable
Do you love terrific coffee? Are you a “people” person? Do you want to create a local gathering place for friends, neighbors, students and other entrepreneurs?
If you answered yes to these questions, owning an independent coffee shop could be right for you! It’s a fun, rewarding and exciting business. Done right, it can generate profits to fund your dream lifestyle.
Crimson Cup knows all about running a coffee business for fun and profit. That’s what inspired Founder and President Greg Ubert to open Crimson Cup in 1991.
Just ask Tracy Heitmeyer, owner of 5 Bean Coffee in Reynoldsburg, Ohio. Tracy started her coffee shop with Crimson Cup in 2008 – during the height of the Great Recession.
After 12 years of success, she now works only a single weekly shift. “I have a glorious life,” she says. “The shop has provided for me financially and keeps my heart happy!”
Tracy is one among hundreds of independent coffee shop owners who are enjoying their lives running profitable businesses with support from Crimson Cup.
5. Your Odds of Success Are High, With Our Proven Coffee Shop Startup Program
Looking for a coffee business partner who knows what it takes for an independent coffee shop to succeed? Put the Power of the Cup behind you!
Follow over 150 coffee shop owners in 30 states who have achieved success through our 7 Steps to Success coffee franchise alternative program.
Founder and President Greg Ubert first laid out this program nearly 20 years ago in Seven Steps to Success: a Commonsense Guide to Succeed in Specialty Coffee.
Today, several of our customers are doing so well they have opened a second, third or fourth coffee shop.
To ensure that our program takes advantage of the latest specialty coffee trends, we test innovations at four Crimson Cup Coffee Houses, the Crimson Cup Innovation Lab and our new Crimson retail flagship.
Our team of coffee, training and café management experts is eager to help you start out right – and keep operating profitably for years to come.
Ready to explore how Crimson Cup can put you on the path to a fun, profitable coffee business? Start by buying the 7 Steps to Success book, call us at 1.888.800.9224, or ask us a question by filling out a simple form. No pressure. No obligation. Just a friendly chat about your vision for your coffee shop business.