Finding your Location    Coffee Talk : February 2003

You can have great tasting coffee, fabulous marketing , great people and superb value for money but if you don’t have the right location you will not make money. Today Hugh outlines some key factors in the process of finding a good coffee bar location.

Finding Your Location
One compelling reason why location is critical in this business is that while people love good coffee, American research indicates they will rarely go more than a few yards for it. You have to put your business "where the action is," so to speak. Finding a good location generally requires effort, persistence and patience. Your location considerations will, of course, depend upon your concept. You will need a different type of location for an upmarket, sit-down coffee bar than for a cart, kiosk or sandwich bar style operation. One factor common to all desirable locations, however, is the proximity of a large population of potential coffee drinkers. Finding such locations can often prove difficult, but the net result will be profit.

High Visibility
Because coffee is primarily a convenience product and an impulse buy, your customers are not likely to go far out of their way to find you. You have to count on high visibility and high numbers of people passing by your location on a daily basis. This is not easy in Northern Ireland, however, there are lots of potential sites. You task is firstly to find them . . . then to negotiate the space.

High visibility is more important in some businesses than others. If you are going into business as an accountant, it’s probably not important to have an extremely visible location. A dry-cleaning establishment is another type of business known as a destination business, where location is not a critical factor. People will drive out of their way because you are the only dry cleaner in the area and they like your work.

Gourmet coffee businesses, on the other hand, are convenience businesses. Most of your customers come to you for coffee because it is convenient for them. Do not expect your customers to drive in circles on one-way streets and go a mile out of their way to find you. The fact that there is a good potential to have them do this if you make fantastic tasting coffee should not be considered when looking for the right location. This will be the cream. Your business needs to be in a convenient location for customers - on their way to work in the morning, around the corner from their place of work or in the centre where they shop.

Exercise Patience
Probably one of the hardest things for people to realise is that the right location is worth waiting for. Generally people get excited about starting a business - preparing a business plan, tasting the coffee, visualising the space - and they just want to swing the doors open and get going. They might grow impatient and frustrated during the process, compromising their values on the type of location they want. This is a decision you don’t want to regret. Take time to find the right location, even if it takes six months to a year.

Two Types of Locations
There are basically two types of locations appropriate for coffee retail: high-migratory locations and captive-audience locations.
High-migratory locations include shopping centres, sports centres, theatres., cinemas, amusement parks, and tourist attractions. Large numbers of people - not necessarily the same people - pass by these locations daily and comprise the customer base for your coffee operation. In an airport, for example, many people coming through may never pass your location again. But enough bodies flow through on a daily basis that you can pull the percentage of business you need to become profitable.

High-migratory locations typically charge a higher rent, however, the scary part of marketing and serving your customers in high-migratory locations - particularly airports - is that you will usually not have repeat business to support you.

You have to market in a different way than in a captive-audience location, where repeat business accounts for a large part of your intake and you rely on drawing the same people back day after day.

Examples of captive-audience locations include large office buildings, business and industrial parks, hospitals, college and university campuses, key city centre sites.
Of these locations, colleges, hospitals, and large office buildings are excellent options, given the unusually high numbers of coffee drinkers as revealed in most demographic profiles.
Many university-based operations do their best business during finals and midterms. But unless a school has a well-attended summer program, business could drop by up to 60 percent out of term. Hospitals, on the other hand, usually supply a steady flow of customers year-round. Large office buildings are also ideal. One appealing factor is the hours of operation of an average office building: Monday through Friday from 7 a.m. to 5 p.m. Yes, you can have a normal life and own a foodservice operation.

Captive-audience locations are more appealing to most of us, because many of the same people will come back five to seven days a week, and you can keep building your business on a solid customer base. On your first day of business in a captive-audience location, you may sell 35 cups of coffee, but if you produce a good quality product and deliver good customer service, you will probably get 25 to 30 of those same people back the next day. Maybe half of them told their friends. If you constantly build on a captive audience, you should succeed.

Here are the two main types of coffee retail operations in the US and a few pieces of advice on the ideal location for each. They are on their way to Northern Ireland although on a smaller scale.

Carts
Look for:
• High visibility
• High people traffic counts
• A space close to your commissary, so you can access it easily.
• A safe location. (Security is always a factor. You want a location where you can lock up your cart, stabilize it in place, or push it to a safe place, nearby location each evening.)
Make sure you talk to locals passing by and neighbouring shopkeepers. Find out what they think about a location. If you are planning an outside operation, survey potential locations on a typical working day during the eight- or 10-hour period when you would be open. Check on:
• How the sun will hit you at various times of day.
• What type of protection one location might offer over another, given a driving rain, prevailing winds, etc.
• How much it will cost to run electricity and utilities to the location.

Coffee Bars
Self Service coffee bars / Cafes generally require a significant investment. For this reason, choosing the right location is much more critical because of the greater potential capital loss should you make a bad choice. You will not have the advantage of relocating to a better spot, because your business will not be mobile. You will not recover the money you invested in flooring, electricity, plumbing, lighting, built-in counters, and so forth.
So what should you look for in such a location?
• High people traffic numbers and high visibility.
• An area that is demographically rich in the types of customers you wish to attract.
• Close proximity to other businesses that sell upscale products and draw a similar clientele to yours.
• A maximum amount of shop front. A space 80 feet deep and 10 feet wide requires more ingenuity to be visible, and will be harder for you to make an impact.

Call a Professional
Finally, a good piece of advice for new businesses is to consult a professional when looking at locations. There’s a natural tendency to think the differences between a good location and a bad location are very obvious, but that is always not the case.
The factors that add up to a great location may not be visible to people who don’t have retail in their blood. Newcomers often don’t see what the professional sees; they do not understand the subtle nature of the business especially coffee that looks so simple. At the very least, talk to as many people as you can especially other people who are successful in retail and ask for their opinions.