Coffee-houses

Whether it's a drip, latte or cappuccino, Americans are hopelessly addicted to their coffee. According to the Specialty Coffee Association of America, specialty coffee was an $11 billion industry in 2005, up from $9.6 billion in 2004. But some historians theorize that what Americans are really looking for in their cup of joe is a sense of belonging. "We spent so much of the post-[World War II] period in this country retreating inside suburban houses [with] fenced-in backyards," says Bryant Simon, a professor at Temple University in Philadelphia who has spent more than a year studying Starbucks. "The coffeehouses play to that desire of being out, even if you don't talk to anyone." While Starbucks has established itself as providing that "third place" environment, the door is certainly not closed to other entrepreneurs.

For Jeff Furton, 29, Beth Livedoti, 29, and Stephanie Lemmo, 28, entering the brewing industry in 2004 meant opening a window--or two. At The Daily Rise Expresso, a double-sided coffee and smoothie drive-thru in Ogden, Utah, customers come for more than just a caffeine fix. "[Some customers] come in two to three times a day just to talk," says Livedoti. "We are their little piece of sanity." A second location opened last year, 2007 sales are projected at more than $400,000, and franchising is in the coffeehouse's future.

If a traditional coffeehouse doesn't get your heart racing, think organic like Java Juice, a liquid extract straight from the bean. Other niches include aftermarket products like Coca-Cola Blak, a carbonated soda with coffee essence, and those that incorporate coffee for its health benefits--caffeine has been linked to a decreased risk of diabetes, liver cirrhosis, Parkinson's disease and even gallstones.

To brew up success in your own coffeehouse: Use your size to your advantage. Being small has its benefits--especially when it means you can accomplish what the big players aim to do but sometimes fall short of doing. Study the coffeehouses in your community and examine what they fail at, advises Simon. By doing so, you'll have a better chance of finding your niche.

Aim for excellence. "People clearly want the milieu of a coffeehouse," says Simon. "They want the intellectualism, the music, the art. So do it. Really play music that you haven't heard a million times before; really put up local art on the walls; really emphasize your relationship with the community. If you really want to have a coffeehouse, go out and educate people. People want to know about coffee. It's like wine. Educate your baristas." Establish a presence in the community. Furton, Livedoti and Lemmo make it a point to stay involved in the community--whether by providing refreshments at the local farmer's market, concerts and the Fourth of July celebration or donating to local schools and fundraisers. Says Livedoti, "People start to see us around town, and I think that sets us apart because we support them, so in turn, they come back to support us." Don't underestimate your customers. Make sure you do your homework and find quality products to truly satisfy your customers. The founders of The Daily Rise Expresso considered 25 to 30 different roasters before making the final selection. "People really know their coffee," says Livedoti. "So it's very important that you're starting out with a good-quality bean." Listen up. "It's about attention to detail and figuring out what that person wants, what that person is really going to enjoy and what's going to get that person coming back time after time," says Lemmo. "People appreciate that you make an effort to figure out what's going to be best for them." Coffee: � Bad Ass Coffee Co. www.badasscoffee.com � Barnie's Coffee & Tea Co. www.barniescoffee.com � Beaner's Coffee www.beaners.com � Bearclaw Coffee Company www.bearclawcoffee.com � Caf� Ala Carte www.cafealacarte.com � The Coffee Beanery www.coffeebeanery.com � Daily Grind Coffee House & Cafe www.dailygrindunwind.com � Dunn Bros Coffee www.dunnbros.com � It's a Grind Coffee House www.itsagrind.com � Java Jo'z Coffee & Moreb www.javajoz.com � Port City Java www.portcityjava.com � Rockn' Joe Coffeehouse & Bistro www.rocknjoe.net � Scooter's Coffeehouse www.scooterscoffeehouse.com Originally published in the February 2007 issue of Entrepreneur's StartUps

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