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PESTLE

Political

• Where am I importing the beans from? Is the country known for exporting quality coffee beans?
• As the beans are imported, are there any trade restrictions such as tariffs or import bans?
• Will strikes impact the

Economic

• Where will I set up the shop in London?
• What is the price of commercial property leases in that area of London?
• What are my main competitors? How many coffee shops are there?
• Who will I need to seek a loan from and how much will I need to borrow? How will fluctuating increasing interest rates impact this and future debt obligations?
• Where will I source my equipment and furnishings from (e.g. coffee machines, kettles, fridges, storage units, furniture etc)? How much will I need? Would it be more cost-effective to purchase this from a retailer or from a wholesale supplier?

Social

• What is the main demographic of customers who I am targeting?
• What kind of area is that part of London? Is it in the City/business area, a residential area or an area popular with tourists?
• What is the spending pattern of this customer demographic? Are there other complimentary products I can cross-sell (e.g. pastries, cakes, sandwiches etc.)?
• Are there any consumer concerns about where the coffee beans are sourced from?
• What are the publicity strategies leveraged by my competitors?

Technology

• What platforms (social media and on the internet) can I use to enhance my business’s publicity and public engagement.
• What payment platform will be used – how secure is it? Are there any major cyber-security considerations which need to be made?

Legal

• Sorting out a lease agreement
• Are there any legal restrictions in the form of trade measures restricting my ability to import coffee beans and any other foreign-sourced ingredients etc.
• What are the various legal and compliances measures I have to follow (e.g. filling out the necessary permits, charges etc., employment regulations, health and safety standards etc)
• Are there any specific business regulations which apply to the particular part of London where I plan to establish my coffee shop?
• Can the business access any government support schemes (e.g. business grants, energy support scheme) and if so what is the legal process?

Environmental 

• Key issue will be factoring what consumer expectations are – since it is a small independent coffee shop, consumers might have an expectation that the beans are produced and sourced in a manner which is both ethical and sustainable.
• What kind of packaging and materials will I use in my shop – are these sustainably (e.g. paper v plastic cups, reusable mugs etc.)?

SWOT

Strengths

• As small independent coffee shop, one of its biggest USPs is that it offers an alternative to est. coffee shops chains like Pret, Starbucks, Café Nero, Costa etc. – if the shop can source beans from a certain country/region, it can offer an unique alternate.
• London is a highly populated area – always demand for independent coffee shops.
• Business itself could be an extremely profitable one as the operating costs are relatively low compared to building a chain or another food/drink business.

Weakness

• Existing market of independent coffee shops in London is very saturated; barriers of entry are high in that building a reputation and customer base v quickly will be difficult.
• Clearly being able to distinguish itself from other small competitors – could make branding and publicity difficult.

Opportunities

• With London still having decent availability of commercial leases to rent post-COVID, the business should have a good selection of choice and location – ensures that we have an opportunity set up in a busy area or near the City/other business districts.
• Impact of WFH post-COVID; lots of workers no longer exclusive spend the working week at their offices. Shop could be a sort of internet café offering people who want to work online an ambient atmosphere.
• Alternatively, if the leasehold has a small allotment, the shop could be a eco-coffee shop which offers customers a relaxed, natural environment to work in.

Threats

• Biggest challenge is the cost of living crisis – energy and utility bills have been very high; government has announced that it will scale back its energy support scheme for businesses so operating costs will be high. Furthermore, consumers look to cut their spending, it could impact demand and sales of shop coffee, when consumers may choose to have it at home (even more so with the fact that UK is heading for a recession).
• Stiff level of competition alongside costs of entry means that the business is at a disadvantage compared to more est. chains or independents.