Whether you personally love coffee or are curious about capitalizing on the booming coffee and specialty drink market, you’re not wrong for thinking starting a coffee business could be the answer to all life’s problems.

Before opening super-successful Woods Coffee, Wes Herman was traveling all over the U.S. for work, not seeing his family as much as he'd like, and wanting to empower his kids to live better. You'll never believe how he did it.

[su_quote]We started the company as a homeschool project to teach our four kids how to start a business. We hoped they would love it so much that we could work together for a long time as we grew this new brand.[/su_quote]

The family started serving coffee in 2002 when their homeschool project got a $23,000 loan. Since then, Woods Coffee has steadily grown to 19 shops over the Northwest.

Here, Wes shares coffee business secrets like avoiding tying your funds up in real estate and buying used whenever possible. By the end of this article, you’ll know how to start the coffee shop of your dreams with any budget.

[su_note note_color="#dbeafc"]

We’ll cover the following (click any link to jump to the part that interests you most):

• What is a coffee shop?
• How to open a coffee shop business
  
  • Step 1. Research the coffee shop industry
  • Step 2. Create a coffee shop business plan
  • Step 3. Create a business structure
  • Step 4. Get your business license
  • Step 5. Fund your coffee shop startup costs
  • Step 6. Choose the right coffee supplier
  • Step 7. Plan the coffee shop layout and decor
  • Step 8. Buy coffee equipment and furnishings
  • Step 9. Hire employees
  • Step 10. Create a menu
  • Step 11. Start coffee shop marketing
  • Step 12. Comply with all regulations
  • Step 13. Soft launch your coffee shop
  • Step 14. Host a grand opening
  • Step 15. Manage your coffee shop business
  • Step 16. Provide excellent customer service
  • Step 17. Grow your coffee shop business
• Opening a coffee shop FAQ
  
  • What is donut shop coffee?
  • What is a coffee shop bar?
  • What is a café?
• Go start a successful coffee shop [/su_note]

If you want to know how to start a coffee shop, keep reading to find out how Wes started his multi-million-dollar coffee empire without spending his own money.

What is a coffee shop?

A coffee shop is a small restaurant, cart, kiosk, or drive-thru that primarily sells coffee, tea, and other refreshments.

Popular styles of coffee include:

• Espresso
• Latte
• Cappuccino
• Cold brew

A coffee shop might also carry small snacks like cookie cakes. A coffee shop owner might also consider opening a café, which tends to have more tables and a full menu of food in addition to coffee.

Keep reading to learn about the coffee industry.

How to open a coffee shop business

Opening a coffee shop can be an exciting and rewarding venture, but it also requires careful planning and execution. You’ll need to perform the following steps to start a coffee shop:

1. Research the coffee shop industry
2. Create a coffee shop business plan
3. Create a business structure
4. Get your business licenses
5. Fund your coffee shop startup costs
6. Choose the right coffee supplier
7. Plan the coffee shop layout and decor
8. Buy coffee equipment and furnishings
9. Hire employees
10. Create a menu
11. Start coffee shop marketing
12. Comply with all regulations
13. Soft launch your coffee shop
14. Host a grand opening
15. Manage your coffee shop business
16. Provide excellent customer service
17. Improve your coffee shop performance

Get ready to learn how to open a coffee shop.

Step 1. Research the coffee shop industry

The first step to starting a coffee shop brand is to research coffee businesses to understand how to place yourself within the industry. You’ll have two considerations during the market research phase:

1. You’ll want to understand coffee industry earning potential and trends on both a national and local level.
2. Choose a strategic location with high foot traffic, accessibility, visibility, and proximity to other businesses.

Identify how to make your new coffee shop unique

Opening a coffee shop can be a lucrative business, but a new coffee shop needs to understand the startup costs, earning potential, fixed and variable costs, and marketing strategies of a successful business.

Companies like Starbucks, Dunkin, and Tim Hortons make hundreds of millions, if not billions, of dollars each year.

That’s awesome for them, but an independent coffee shop will take years to reach that point. Here, we help you explore your business opportunities for becoming a successful coffee shop starting from scratch.

Cautionary tale about coffee shops

We use IBIS World for all of our industry reports. They provide multiple reports about coffee shops, and there is some contradictory information.

We used the following coffee shop reports in the Industry Section:

• INDUSTRY REPORT OD6098: This report covers the retail market for coffee in the U.S. It was last updated in April 2021.
• (NAICS) REPORT 72221B: This report covers coffee and snack shops in the U.S. It was last updated in January 2023.
• INDUSTRY REPORT OD5552: This report covers coffee store franchises in the U.S. It was updated in January 2023.

We combined data from multiple reports because Starbucks gets nearly 40% of U.S. coffee and snack shop revenue. In addition, the NAICS report indicated that the industry operates at a loss when you exclude Starbucks.

The chart below is the coffee shop data from OD6098 and NAICS Code 72221B. This gives you a more adequate view of coffee shops by the numbers than including just one report's information.

Statistic	Coffee Retail Markets	Coffee & Snack Shops	Combined	Starbucks	Coffee Retail Markets Plus Coffee & Snack Shops Minus Starbucks.	Coffee & Snack Shops Minus Starbucks
Revenue	$46,200,000,000.00	$54,500,000,000.00	$100,700,000,000.00	$18,500,200,000.00	$82,199,800,000.00	$35,999,800,000.00
Profits	$3,400,000,000.00	$1,900,000,000.00	$5,300,000,000.00	$2,439,200,000.00	$2,860,800,000.00	-$539,200,000.00
Profit Margins	7.36%	3.49%	5.26%	13.18%	3.48%	-1.50%
Number of Locations	455,929	89,867	545,796	15,991	529,805	73,876
Number of Businesses	342,120	72,136	414,256	1	414,255	72,135
Location Rev	$101,331.57	$606,451.76	$184,501.17	$1,156,913.26	$155,151.05	$487,300.34
Business Rev	$135,040.34	$755,517.36	$243,086.40	$18,500,200,000.00	$198,428.02	$499,061.48
Loctions per Business	1.33	1.25	1.32	15991	1.28	1.02
Rev per Employee	$24,200.00	$59,100.00	$35,522.27	$46,020.40	$33,787.58	$69,197.65
Number of Employees	1,912,595	922,246	2,834,841	402,000	2,432,841	520,246
Average Number of Employees per Location	4.19	10.26	5.19	25.14	4.59	7.042151714
Profit per Employee	$1,780.95	$2,060.37	$1,869.59	$6,067.66	$1,175.91	-$1,036.43
Profit per Location	$7,457.30	$21,142.35	$9,710.59	$152,535.80	$5,399.72	-$7,298.72
Profit per Business	$9,938.03	$26,339.14	$12,794.02	$2,439,200,000.00	$6,905.89	-$7,474.87

How much does a coffee shop make?

The average coffee shop location makes between $150K and $600K per year with 4-10 people working at the shop, but the exact amount will depend on the coffee shop concept, foot traffic, and number of employees.

If you’re opening a coffee shop or coffee cart as a solo entrepreneur, know that you might make as little as $24K a year, though.

Pro Tip: Plan ahead from the start. Scaling and acquiring an existing coffee shop is how most of the industry improves revenues and profit margins.

How much does a coffee shop make a month?

Depending on the coffee shop location and other factors, you can expect to make somewhere between $40K and $50K per month, but the average Starbucks location approaches $100K monthly.

These numbers will fluctuate seasonally and based on the number of days in each month.

Independent coffee shops will obviously make less in monthly sales than a Starbucks until they develop a reputation and get repeat customers.

How much does an average coffee shop make a day?

An average coffee shop makes between $410 and $1,650 per day, while the average Starbucks makes nearly $3,200 per day.

Coffee shops tend to have the most business when people go to work, during lunch breaks, and after work. Of course, a great coffee business in a place like an airport or casino might have different high-traffic times.

Get ready to find out if a coffee shop is profitable.

How profitable is a coffee shop?

It’s getting harder to measure profits because business owners have established that the ideal profit amount is zero to minimize their tax consequences. That said, a coffee shop can make up to 50% gross profit and 17% net profit.

Wes shared the following about the profit potential of a coffee shop:

[su_quote]You can operate a small business very efficiently in coffee, and if you get a lot of customers, then you can make some serious dough.[/su_quote]

In Wes's case, that's definitely true considering he owns a multi-million-dollar coffee shop empire!

How much do coffee shop owners make?

Estimating how much coffee shop owners make requires analyzing various financial reports since a business owner may make money in the following ways:

1. Salary: $59,440 as General Manager or Comparable Position
2. Tips: 8-20% of revenue
3. Dividends: Up to $21,142 paid out above salary
4. Benefits: $17,565
5. Total: $59,440 to $120,000

You might make much more if you open a coffee shop like Woods Coffee. They have 19 stores and make millions per year. In that scenario, your salary would be comparable to a CEO or Operations Manager, tips would be removed, and dividends would be much higher. Check out our interview with Wes below to learn more:

[su_youtube url="https://www.youtube.com/watch?v=FOdRRuI4g5E"]

Find a great location with reasonable rent

Just because a spot is centrally located doesn't mean it’s the right coffee shop location.

High-traffic locations usually have sky-high rents and cutthroat competition. Meanwhile, a coffee shop starting as a coffee kiosk in a mall will have much lower costs and cover its operating costs quicker.

Pro Tip: Try to see potential in a location that nobody else appreciates. Wes has this to say about his Boulevard Park location, the crown jewel in his entire chain:

[su_quote]As an entrepreneur, you must trust what you see. It will always be different than what others see. There were quite a few businesses that passed on Blvd. Park because they couldn't see it working. We saw it from day one, never wavered, and built one of the finest coffee shops in the world.[/su_quote]

When you do your location analysis, consider the following factors:

• Demographics
• Regulations and zoning
• How close you are to your target market
• How far away suppliers are
• Competition
• Crime rates

Pro Tip: Learn more about picking locations.

Step 2. Create a coffee shop business plan

Virtually every entrepreneur will tell you to write a business plan when opening a coffee shop.

Wes is no different. However, his coffee shop business plan was only one page long:

[su_quote]I always like to think that a business plan can be put on one sheet of paper. It's the difference between just driving aimlessly without a map versus having a map and understanding where you're going. You'll get there faster, you'll get there more directly, and you won't be distracted trying to figure out where you're supposed to be going.[/su_quote]

The beauty of the one-page coffee shop business plan is that it pares down your idea to its barest essentials. This helps you to focus on your vision with laser-sharp intensity. It makes opening a coffee shop so much easier.

You’ll want to include the following:

• Your Elevator Pitch: Why you are opening a coffee shop and why investors should care
• SWOT Analysis: An analysis of your coffee shop’s strengths, weaknesses, opportunities, and threats
• Business Model: How your coffee shop will make money while increasing revenue and profit—the more disruptive to the industry, the higher the likelihood that your coffee shop succeeds
• Unique Value Proposition: What makes you different from other coffee shops?
• Target Demographic: Proof that you’ve performed market research
• Budget: Financial analysis to help you manage coffee shop startup costs and ongoing expenses
• Pricing Strategy: How will you approach pricing your coffee shop menu?
• Marketing: A list of strategies you’ll use to market and become a successful coffee shop
• Funding Plans: Statement of how much funding you’ll need, how you’ll get it, and how you’ll use it

Pro Tip: You can create supplemental materials such as income and cash flow statements for potential investors but save them separately.

Step 3. Create a business structure

A business structure is just how your business is treated from a legal standpoint. It can be considered a separate entity, like a limited liability company (LLC) or corporation. Alternatively, sole proprietors and partners' personal and business interests remain legally connected.

Most business owners opt for an LLC through their Secretary of State website because it’s less costly than a corporation and limits their losses to the startup costs should the business fail. Your coffee business will also need an employee identification number (EIN) to file taxes.

Pro Tip: Learn more about the different types of businesses.

Step 4. Get your business license

Complete all necessary paperwork to register your business with the appropriate local and state authorities. This will normally include:

1. A tax permit
2. Local business license
3. Fire inspection
4. Health inspection
5. Food serving license
6. Liquor or beer license (if you plan to serve alcohol)

Check with your city and state to establish exactly what you need.

Step 5. Fund your coffee shop startup costs

How to start a coffee shop with no money

Wes started Woods Coffee using none of his own money. Here's how he made it happen:

[su_quote]In those early days…we were on a very, very, tight budget. We didn't have the money, and so we needed to find the money, and we needed to be creative on how we launched the first store. So, the initial budget was $23,000—that's what we needed to pull this business off. We didn't have the dough, so we went out and asked someone to partner with us that had the money. They weren't coffee drinkers, but they decided that this would be a good investment, and it was.[/su_quote]

That's an excellent way to start a coffee shop with no money down! Of course, if you have savings or other sources of funding to work with, even better.

Cost of opening a coffee shop

Wes thinks it would cost $500,000 to start a coffee shop today.

In our interview with Joe's Fine Coffee, Joe mentions that he was able to start his coffee shop for just $100,000. You can find that interview here:

[su_youtube url="https://www.youtube.com/watch?v=Fx7tEfEXLo0"]

Our research shows that it costs about $275,000 to open a coffee shop. However, this will vary based on your location, business needs, and several other factors.

To determine your budget, you need to figure out what it'll cost to get your venture off the ground and calculate your ongoing costs. This will consist of the following three types of expenses:

• Capital
• Fixed
• Variable

Capital costs are things you only buy once (unless there is something from your equipment list that breaks down). These are things like:

• Espresso machines
• Cash registers
• Ice makers
• Building (if you buy instead of rent)

Fixed costs are expenditures that stay the same from month to month. An example of this is rent.

Variable costs are expenses that fluctuate depending on how much business you do. These are things like labor costs because the more customers you have, the more employees you'll need to hire.

Don’t forget ongoing costs

High startup costs mean that you're going to need plenty of startup capital to get your business off the ground. Here's what Wes has to say about that:

[su_quote]Most entrepreneurs forget about working capital and the need for a reserve to get you through the beginning stages of when you start your business… In most people's cases, they have to reserve enough money to get them through the first year to pay themselves.[/su_quote]

Set aside enough money to cover your expenses for six months (if not longer). An excellent strategy to minimize how much money you'll need is only securing enough cash to take you to the next stage of your business.

This is known as “the lean startup” and will dramatically increase your chances of success.

Run your coffee shop as a side hustle

You can save money by holding down another job so you don't have to siphon funds from your fledgling business (that's what Wes did):

[su_quote]I worked for a good five years in another job so I wasn't a drag on the company and I was able to keep the money flowing into the company and able to make the company successful before I started drawing salary. So, we actually got to store number six before I ever started earning money out of the company. And I worked another job during the day, and then at night I'd make all the deals, and put these things together, and before you know it, we have six stores.[/su_quote]

How are you going to fund your venture?

With all this in mind, consider how you’ll fund your coffee shop. Your plan can include personal savings, loans, investors, or a combination of these.

Are you going to take a crack at crowdfunding or find a friend willing to invest in your idea like Wes did? Or, perhaps you have relatives who can loan you some startup dough?

You can always seek out venture capital or try to get a bank loan. Whatever funding source you turn to, you're going to need enough moolah to get through the inevitable lean times.

Pro Tip: If you think you need loans or investors, check out our blog on how to get a business loan.

Step 6. Choose the right coffee supplier

Serving up a superior coffee experience is undoubtedly the most crucial aspect of your business. That's why you'll need to find an excellent source for your coffee beans, milk, syrups, equipment, and other necessary supplies.

In the beginning, it's probably best that you outsource the roasting of your beans.

When trying to find a supplier, look for:

• Superior product
• Price point that'll allow you to maximize your profits
• Exceptional assortment

Here's what Wes advises:

[su_quote]You certainly can hire somebody to roast your coffee for you. In our case, we wanted ultimate control over the process, the quality, and the consistency. And we can do that with our own coffee beans coming from specific countries.

How we control the roasting process is really important because we want to know that the process is done correctly, that it's fresh, and that it's done in the way we want it to be done.

So that's why we roast our own coffee. We didn't originally—that was a process that we had outsourced in the beginning years—but eventually, we were able to bring it in house and roast all of our own coffee, and that's been a huge advantage for us.[/su_quote]

As your profits grow, you might want to start thinking about roasting in your shop so that you have a unique product to offer your clientele.

Step 7. Plan the coffee shop layout and decor

Plan the layout of your coffee shop for both functionality and aesthetics. Consider factors like seating arrangements, counter space, and decoration. Check out some of these designs for inspiration.

Pro Tip: Want to get started with a coffee truck or cart? Get all the info you need from our Food Truck Ultimate Buying Guide.

Step 8. Buy coffee equipment and furnishings

Purchase essential coffee shop equipment like an espresso machine, grinders, brewing equipment, refrigerators, and furniture. Make sure they meet industry standards and regulations.

Wes says:

[su_quote]It's really critical to have the right machines.[/su_quote]

Check out part one of our interview with Wes below.

[su_youtube url="https://www.youtube.com/watch?v=FOdRRuI4g5E"]

Try to get high-quality equipment, even if it's not new. If you get the cheap stuff, you'll only end up regretting it later on.

Here's the list of equipment you'll need to make your small coffee shop a resounding success:

• Espresso machine
• Coffee grinders
• Drip coffee machine
• Blender
• Coffee brewers
• Airpots
• Hot water dispenser
• Reach-in refrigerator
• Ice machine
• Bakery display case
• Three-compartment sink
• Frothing pitchers
• Frothing thermometers
• Tea and coffee mugs
• Espresso cups
• Cup, lid, and straw organizers
• Microwaves or ovens (if serving hot food)
• Point of sale (POS) system

As your business grows and your services expand, you might need other coffee shop equipment like coffee roasters.

One of the biggest lures of a gourmet coffee shop is the atmosphere. Create a relaxing physical space with the right décor, and make sure your café has lots of comfy seating, too.

Step 9. Hire employees

Hire baristas, kitchen staff, and any other necessary employees. Ensure they are trained in coffee preparation, customer service, and health and safety protocols.

Stellar customer service is crucial when you own a coffee shop, so be selective when hiring new staff.

Although your baristas must know how to make beverages correctly, they should also know a little about the coffee itself. These are things like the flavor profiles of each specialty coffee and where the beans come from.

During training, you might want to teach employees about latte art, quality beans, and how to encourage customers to keep coming back.

This is need-to-know information for coffee connoisseurs, so your baristas must be armed with this knowledge.

Pro Tip: Learn more about hiring before you open your own café or coffee shop.

Step 10. Create a menu

Create a menu that includes a variety of coffee beverages, tea options, snacks, and possibly light meals. Consider catering to different dietary preferences and restrictions.

When you open your coffee shop, you need to consistently serve the best coffee and snacks. If you succeed in doing this, you'll have customers flocking to you.

When it comes to creating your menu, keep in mind that you're not reinventing the wheel—you're taking the best food and drinks offered by the top coffee shops and finding ways to make them better.

There's no way a coffee shop can remain economically viable on coffee sales alone. That's why you need to offer bakery items. Having a delicious assortment of quality baked goods near the cash register will tempt the customer to buy.

Try to come up with at least a few menu items that'll dazzle customers with their originality.

Here's what Wes has to say on this subject:

[su_quote]It's how you can make something creatively different in this space that attracts people and maybe attracts a different market segment than you're normally pulling.[/su_quote]

Check out part two of our interview with Wes below.

[su_youtube url="https://www.youtube.com/watch?v=dbbPRvrUjYI"]

Step 11. Start coffee shop marketing

Create a strong brand identity, including a memorable logo and a cohesive visual theme.

Develop a marketing plan that includes an online presence (website, social media), promotions, and possibly partnerships with local businesses.

You want to whip customers into a buying frenzy even before you open your doors.

One way to do that is a direct mail or email campaign sending out coupons for free coffee. Do a little research to find out what sort of marketing would be best for your coffee shop.

Here's what Wes has to say about that:

[su_quote]We actually don't spend a lot of money [on] marketing. It's changed over time. So when we first started, we were looking at what are other people doing, how are they marketing themselves, and we realized we didn't need to do a lot of marketing, we didn't need to put advertisements in newspaper(s), that was a thing, back 18 years ago… there was no Facebook, there was no website you could put up, and people would understand what you're doing. So, we actually realized that the best form of advertising for us was putting multiple locations within a certain geographic territory.[/su_quote]

When he first started out almost 20 years ago, his only marketing was opening up new coffee shops! Which, of course, is an atypical way to market yourself. Today, with the advent of social media, Woods Coffee has changed its marketing tactics:

[su_quote][Now], social media is big for us. We're pretty dominant in our space in this area on social media, and that's been a lot of fun. It's a great vehicle for us to show some of our creativity and how people understand who we are and what we offer.[/su_quote]

Step 12. Comply with all regulations

Obtain all necessary permits and licenses to operate a food and beverage business in your area. This may include health department permits, business licenses, and signage permits.

There are permits and licenses you're going to need before you can start serving customers. This is a long and drawn-out process, so make sure you start early.

Here's what you might need:

• Business and liability insurance
• Food and drink handler certificate
• Health inspection certificate
• Fire certificate
• Kitchen insurance
• Certificate of incorporation
• Business license
• Employment agreement
• Building permit

Step 13. Soft launch your coffee shop

Conduct a soft opening to test your operations, gather feedback, and make any necessary adjustments before the official opening. These are normally days when family and friends are invited to try the menu.

This will give your coffee business a chance to work with the POS system and inventory management system.

Step 14. Host a grand opening

Plan a grand opening event to generate excitement and attract customers to your coffee shop. Contact the local news or a PR firm to help you get the news out. Run paid ads with a promo.

Pro Tip: At the grand opening, encourage reviews by using a QR code to send customers directly to your shop's review page.

Step 15. Manage your coffee shop business

You’ll need to establish efficient operating procedures for ordering supplies, scheduling employees, managing inventory, handling finances, and maintaining equipment.

There are restaurant management systems that combine many of these into one system, or you can choose systems that work best for each process.

Pro Tip: Learn more about restaurant management systems.

Step 16. Provide excellent customer service

Focus on providing excellent customer service, quality products, and a comfortable atmosphere to encourage repeat business and positive word-of-mouth.

Your customer service at a coffee shop is heavily impacted by a few things, including:

• Speed of service: Make sure to have enough staff to get people their coffee in a timely manner. To give you an idea, Dunkin serves customers in less than three minutes, while Starbucks takes about four minutes and 30 seconds.
• Correctness of order: A study by Restaurant Business Online found that over 25% of orders have issues and 42.3% of errors were because restaurants messed up. The rest were due to delivery issues. Make sure to get it right.
• Friendliness of staff: A polite, attentive staff goes a long way. One of the things many restaurants do that should be avoided is trying to dominate the order process. Let your customers order unless they communicate they need help.
• Consistency of drinks: Make it easy for your staff to make the drinks the same every time. Provide recipes and utensils that show how much of each product to use.
• Mobile ordering: Let people order online to save time.
• Delivery apps: Find ways to make sure your cold drinks are cold and hot drinks are hot when they are delivered to a customer. You can’t count on the delivery driver to get that right.

Step 17. Grow your coffee shop business

Although opening multiple stores was always a part of the Woods Coffee business plan, it happened much sooner than Wes thought it would.

That's because the opportunity to open a second coffee shop fell into their laps in the form of a perfect location they couldn't let pass by.

They seized this opportunity and opened their second store. It was also a way to show the world they were aggressive, growing, and owned their market.

Put a second store in a 6,000-resident town, and you’re going to get a lot of attention. The bold move drove sales in both stores, and they both grew dramatically!

You can do the same thing—just make sure you open your second spot in a carefully planned way. Wes told us having multiple business locations isn’t always the best approach:

[su_quote]It has to be part of your business plan. If you follow your business plan and have it laid out exactly what you wanna do, then follow it. You can't just change midstream. Some businesses are much more successful with just one location. In our case, it just happens to be part of our growth plan and part of our experience that we have multiple locations, and it was part of that original plan that we're executing today. But the idea of ‘How do you scale? How do you grow?’—it's really important. We don't put a lot of money into real estate and buying things. We'd really like to keep our capital fluid and moving. And if we can open more stores, we feel that's better for us.[/su_quote]

Opening a coffee shop FAQ

What is donut shop coffee?

Donut shop coffee is typically an Arabica bean that pairs well with donuts. These can be anywhere from a light to dark roast, but they will normally be slightly sweeter than other coffee and work well with cream or milk.

What is a coffee shop bar?

A coffee shop bar is a section in a coffee shop where customers can order and enjoy alcoholic beverages in addition to coffee and other non-alcoholic drinks.

What is a café?

A café is similar to a coffee shop but will normally serve slightly more elaborate food than a coffee shop (without having either the size or the selections of a full restaurant).

Go start a successful coffee shop

If you do the proper market research, write and follow a solid business plan, and focus on continuous improvement, you should find success when you open a coffee shop.

Wes was able to open a coffee shop and grow it to 19 locations. That means you can, too!

What’s the signature drink you’ll use to build your multi-million-dollar coffee empire?

Unique business ideas across sectors and industries are waiting to be discovered. These businesses might cater to niche markets, invent and sell new products, or offer a traditional service in a new way.

Finding the right unique business idea can be a balancing act. You want to be different enough to stand out from the crowd, but not so different that there’s no market for your product or service. We’ll discuss the unique small business ideas that hit that sweet spot.

[su_note note_color="#dbeafc"] Click on any of the links below to jump straight to the section you want to learn more about, or just continue reading.

• Top 21 Unique Business Ideas 2024
• Unique Service Business Ideas
• Unique Cleaning Business Ideas
• Unique Business Ideas for Small Towns
• Unique Online Business Ideas
• Unique Business Ideas for Students
• Unique Brick-and-Mortar Shop Ideas
• Unique Business Ideas From Home
• Unique Business Development Ideas
• Finding the Right Unique Small Business Idea [/su_note]

Top 21 Unique Business Ideas 2024

1. Dog walking business
2. Fingerprinting business
3. Personal chef
4. Remote cleaning business
5. Ewaste collection and recycling
6. Window cleaning business
7. Flower shop
8. Mobile veterinary services
9. Specialty food store
10. Virtual interior designer
11. Online bakery
12. Voiceover business
13. Transcription business
14. Pet sitting services
15. AI book business
16. Axe throwing business
17. Sensory deprivation tank business
18. Cat cafe
19. Drone photography
20. Furniture restoration business
21. Custom treehouse business

You’ll find more information on each of these small business ideas, along with more unusual business ideas, in the article below.

Unique Service Business Ideas

1. Dog Walking

• Average Annual Revenue: $34K+
• Average Profit Margins: 16%
• Startup Costs: $500-$5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.7%
• Best For: Animal lovers and experts, pet owners, people who like working outdoors

High demand puts a dog walking business among the best small business ideas for animal lovers to start in 2024. As of 2023, 65.1 million households in the U.S. own at least one dog, and many of those need help taking care of them. That’s a lot of potential customers for your new business venture.

Another plus of dog walking is the potentially low startup costs compared to other businesses. You can set up a profile on a site like Rover and start providing services locally right away with a very small budget.

2. Fingerprinting

• Average Annual Revenue: $132K+
• Average Profit Margins: 9.1%
• Startup Costs: $500-$250K
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: -0.6%
• Best For: People with high professionalism, a commitment to security, and strong organization skills and attention to detail

Fingerprinting is another unique business idea with a potentially low initial investment.

These services have a broader customer base than many people realize, from criminal investigations to employment background checks and security clearances. If you’re able to attract customers and are skilled at providing customer service, fingerprinting can be a very lucrative business.

Dan Jurkowitsch is an expert in this unique niche market. He teaches people how to use this business model to start successful businesses. Hear his advice in this podcast interview:

3. Personal Chef Services

• Average Annual Revenue: $129K
• Average Profit Margins: 51.7%
• Startup Costs: $500-$5K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 0.9%
• Best For: Culinary experts like chefs, cooks, and bakers with strong customer service skills

Being a personal chef is a great business idea for chefs who want to avoid the stress and high startup costs of food trucks and restaurants.

Since you work one-on-one with customers, it’s much less hectic and demanding, and you won’t need a brick-and-mortar space.

Connecting with your target audience is often the trickiest part of starting a personal chef business. Having an online presence for your business, including a website and a strong social media following, can be the best way to grow small businesses in this niche.

You can even expand this online presence into another revenue stream by offering online courses in cooking techniques or connecting your chef services to an online store selling ingredients or cooking supplies.

Unique Cleaning Business Ideas

4. Remote Cleaning

• Average Annual Revenue: $74K+
• Average Profit Margins: 6.7%
• Startup Costs: $500-$30K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 1.2%
• Best For: System-driven and organized entrepreneurs who are tech-savvy with strong digital marketing skills

Offering cleaning services may not be a unique business idea on its own, but it is when you run that company completely remotely. You can set up an online booking system, hire remote team members, and run a cleaning business without ever setting foot in a customer’s home.

Neel Parekh launched his cleaning company, MaidThis, in 2013. Today, it brings in an average revenue of $166,000 per month using a 100% remote business model. Learn how Neel started and grew this unique business idea in the interview below:

https://youtu.be/kVyLriqFVdc

5. E-Waste Collection and Recycling

• Average Annual Revenue: $5.7M+
• Average Profit Margins: 2.9%
• Startup Costs: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.9%
• Best For: People who like physical work, entrepreneurs passionate about sustainability and the environment

Electronic waste, also known as e-waste, has been a growing problem over the past decade. Roughly 6.9 million tons are generated in the United States alone each year, of which only about 17% is properly recycled. Part of the problem is that many people don’t know how to properly dispose of electronics or lack services in their area to do so.

This makes an e-waste recycling service both a unique business idea with potentially high demand and a much-needed service to safeguard our natural resources.

This is another unique small business idea that could be done remotely. Kyle Landwehr started a junk removal business and has turned those systems into six-figure remote trash hauling businesses through the Junk Academy. Find out more in this podcast interview:

6. Window Cleaning

• Average Annual Revenue: $64K
• Average Profit Margins: 8.8%
• Startup Costs: $200-$5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 0.9%
• Best For: Detail-oriented and hands-on entrepreneurs who excel at customer service

One way to stand out with a cleaning services business is to focus on a niche. Window cleaning can be an extremely profitable option because it’s a relatively untapped niche with a potentially wide customer base.

Both residential and commercial customers have a need for window cleaning services. This is also something many people can’t do themselves, particularly for multi-story buildings.

On The Spot Window Cleaning has grown to a $45,000-a-month business since its founding in 1998. Learn how owner Jeremiah Hickey started and grew this small business idea in his podcast interview:

Unique Business Ideas for Small Towns

7. Flower Shop

• Average Annual Revenue: $262K+
• Average Profit Margins: 5.4%
• Startup Costs: $100,000-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 2.8%
• Best For: Gardeners, florists, and other plant care professionals, creative entrepreneurs with a green thumb

A flower shop is among the best small-town business ideas. People everywhere love getting beautiful, sweet-smelling flower arrangements as a gift, but smaller towns often don’t have local businesses that provide the service.

Small business owners in the floral niche also have several options to add revenue streams. For example, you could sell herbs, potted plants, seeds, bulbs, and gardening supplies. You can also expand your customer base by selling edible flowers to local restaurants or partnering with other small businesses in the gift niche.

It doesn’t take much experience or business savvy to start a flower business. Dylan Capshaw started a flower business online when he was only 16. He’s since expanded it into a unique business, Stemistry, that combines a flower shop with a cafe. Hear his story in this podcast interview:

8. Mobile Veterinary Services

• Average Annual Revenue: $72K
• Average Profit Margins: 11.5%
• Startup Costs: $1K-$100K
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.1%
• Best For: Veterinarians, dog breeders and trainers, and other animal care experts

Being a veterinarian isn’t necessarily a unique business in its own right, but it is once you put it on wheels!

This is an innovative business idea for a small town or rural area. Pet owners in lower-population areas often have to travel a long distance to access vet care. Mobile services go to them, making transactions more lucrative because you’re giving customers much-needed convenience.

Granted, this unique business idea isn’t for everyone. You’ll need extensive training in animal healthcare. For those who already have this training, though, a mobile business model can be a great way to start a successful business venture.

9. Specialty Food Store

• Average Annual Revenue: $9.3M+
• Average Profit Margins: 1.8%
• Startup Costs: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.8%
• Best For: Foodies, cooks, and food service professionals with strong organization and inventory management skills

People who live in small towns still enjoy unique food, but it can be hard to come by outside of large cities. This is why a specialty food store is an excellent small business idea for small-town entrepreneurs.

Successful business owners in the specialty food niche need to be responsive to customer demands. The key is to find out what items are missing from your local markets and fill that gap.

Communicating with locals, both in person and through social media, is a great way to predict which specialty foods will fly off the shelf in your town.

Unique Online Business Ideas

10. Virtual Interior Design

• Average Annual Revenue: $168K+
• Average Profit Margins: 10.6%
• Startup Costs: $1K-$100K
• Time to Revenue: 1-3 months
• Annual Market Growth Rate: 1.2%
• Best For: Designers, artists, and creative entrepreneurs, real estate industry and home staging professionals

The expansion of virtual tools has created lots of opportunities for unusual business ideas, one being virtual interior design. Designers in this niche use virtual design software to make furnishing and decoration recommendations completely remotely.

Having a website and a strong social media presence is crucial for success as a virtual designer. You can demonstrate your authority and aesthetic with an online portfolio, virtual design workshops, or online courses that teach interior design basics.

11. Online Bakery Business

• Average Annual Revenue: $1.52M
• Average Profit Margins: 5.4%
• Startup Costs: $100-$3M
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 1.1%
• Best For: Cooks, bakers, and food experts who are system-driven, organized, and tech-literate

Similar to a cupcake food truck business or bakery catering service, an online bakery business can be a great way to profit from your baking skills without the expense of a brick-and-mortar space.

Instead of buying products at a bakery, customers order their baked goods through an online interface and then get products delivered, either through the mail or local delivery.

Along with lower expenses, this mode allows the business owner to work at their own pace. It’s also easier to control inventory when you’re preparing baked goods to order rather than trying to anticipate the demands of hungry customers.

12. Voiceover Business

• Average Annual Revenue: $73K+
• Average Profit Margins: 3.7%
• Startup Costs: $100-$500
• Time to Revenue: 1-3 months
• Annual Market Growth Rate: 9.12%
• Best For: Actors, singers, and performers who are patient, detail-focused, and excel at time management

If you’ve ever been told that you have a great voice for radio, then a voiceover business should be on your list of top small business ideas.

Voiceover artists take on a range of assignments, from voicing characters in cartoons and video games to reading audiobooks or content for apps like GPS systems. The main skills you’ll need are a clear speaking voice and the ability to read from a script.

The easiest way to start an online business in voice acting is to sign up for a freelance platform focused on the craft. Snap Recordings, Filmless, and Voice123 are among the most popular sites for building a career in this industry.

Unique Business Ideas for Students

13. Transcription Business

• Average Annual Revenue: $25K+
• Average Profit Margins: 9%
• Startup Costs: $0-$5K
• Time to Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best For: Good listeners with fast typing skills

Students need a business with low startup costs—and it doesn’t get any lower than 0. While some new transcription business owners pay for advertising to attract customers, you can start for free by taking jobs through sites like TranscribeMe or Rev.

If you can type at a speed of at least 60 words per minute, transcription can be a good business idea. You can also find free and low-cost software to make the job easier. Typically, transcriptionists work at their own pace, so this is also an easy business to schedule around your classes and other activities.

14. Pet Sitting Services

• Average Annual Revenue: $34K+
• Average Profit Margins: 16%
• Startup Costs: $500-$5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.7%
• Best For: Animal lovers, pet owners, people who are patient, organized, and great communicators

Many students need to fit their small business ideas around studying and homework time. This is what can make pet sitting a perfect fit. While you’ll need to feed and care for the animals, a lot of your work is just keeping an eye on them—basically, you can get paid for hanging out with cats and dogs.

Building your client base can be the tricky part of getting started in this niche business. Many small business owners in the pet sitting niche build a client list through websites like Rover, Wag!, and PetSitter. You can also connect with clients through social media sites like Nextdoor.

15. AI Book Business

• Average Annual Revenue: Unknown
• Average Profit Margins: 23.3%
• Startup Costs: $500-$5K
• Time to Revenue: 1-3 months
• Annual Market Growth Rate: 7.80%
• Best For: Strong editors with knowledge of generative AI and digital marketing skills

Generative artificial intelligence (AI) has opened up a host of new business ideas. Using AI to generate books is one way to leverage this new technology into a lucrative business opportunity.

The key to success with an AI book business is knowing how to identify your target audience and market to them effectively. That’s how Joe Popelas made over $1M in his first year selling AI-generated books. Hear his story and advice in this podcast interview:

Unique Brick-and-Mortar Shop Ideas

16. Axe Throwing Business

• Average Annual Revenue: $454K
• Average Profit Margins: 9.91%
• Startup Costs: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.9%
• Best For: Outgoing and fun-loving entrepreneurs with strong system-building and marketing skills

If you want to provide your area with a unique entertainment option, starting an axe-throwing establishment can be both a very fun and an extremely profitable business opportunity. Originating in Canada, this is a relatively new industry that’s skyrocketed in popularity over the past decade.

Along with charging customers for axe-throwing sessions, you can expand your revenue streams by hosting tournaments, selling memberships, or having an on-site shop that sells refreshments and merchandise.

17. Sensory Deprivation Tank Business

• Average Annual Revenue: $1.1M+
• Average Profit Margins: 12.07%
• Startup Costs: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.1%
• Best For: Wellness-oriented entrepreneurs with strong customer service and marketing skills

First developed in the 1950s, sensory deprivation tanks (also known as flotation tanks or isolation tanks) have seen substantial growth in popularity in recent years. They can help people unplug from the distractions of modern life, so it’s no surprise that so many of them have popped up across the United States since 2020.

Ryan Duey’s transformative experience in a float tank led him to open his own flotation therapy spa, Capitol Floats. He’s since built on that business by making and selling his own cold plunge tanks and sensory deprivation tanks. Hear how he built his business in this podcast interview:

18. Cat Cafe

• Average Annual Revenue: $865K+
• Average Profit Margins: 5.8%
• Startup Cost: $1K-$100K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.2%
• Best For: Animal lovers, baristas and food service professionals

Some of the top unique businesses are twists on old classics. Cat cafes are one example of this, putting a new spin on the classic coffee shop.

Connecting with other businesses is a critical first step to opening a cat cafe. Primarily, you’ll need an animal partner that can provide well-socialized cats for guests to interact with (and adopt, if they fall in love with a floof during their visit).

Cat cafes can set up multiple revenue streams to increase their odds of success. This can include selling merchandise and pet-friendly snacks in addition to the typical cafe offerings. They can also charge an entrance fee for the cat space.

Unique Business Ideas From Home

19. Drone Photography and Videography

• Average Annual Revenue: $50K
• Average Profit Margins: 7.3%
• Startup Costs: $1K-$10K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 0.3%
• Best For: Photographers and visual artists, tech-literate and creative entrepreneurs

Drone photography is a relatively new industry, and that’s part of what makes it a good small business idea. While the market for photography services can be crowded, most photographers can’t take overhead shots. Offering that unique service can help a new small business owner stand out in their local market.

This niche business in the photography industry is often in high demand as a B2B business. For instance, real estate industry professionals use drone photography to sell their properties, while advertising professionals use it in commercials and other marketing materials.

Mile High Productions built a strong customer base of real estate agents, earning an average revenue of $35,000 a month. Learn how it grew in this YouTube interview:

https://www.youtube.com/watch?v=EUcv1HAAbns

20. Furniture Restoration and Flipping

• Average Annual Revenue: $111K+
• Average Profit Margins: 1.9%
• Startup Costs: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 6.55%
• Best For: Woodworkers, interior designers, creative entrepreneurs who like working with their hands

Furniture restoration is among the best home business ideas for makers, tinkerers, and other hands-on entrepreneurs. It lets you make a living from breathing new life into old things, which makes it sustainable and eco-friendly, as well.

The best business plan for a furniture restoration business often includes multiple services. You can restore pieces for clients or buy, fix up, and flip old furniture you find at thrift stores, flea markets, and antique stores.

Jennifer Beck started in furniture retail sales, then built on her passion for restoration into her own business with Saved By Design. Learn how she got started in this podcast interview:

21. Custom Treehouse Business

• Average Annual Revenue: $696K+
• Average Profit Margins: 3.4%
• Startup Costs: $1K-$100K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: -1.3%
• Best For: Carpenters, designers, and construction professionals with strong customer service and communication skills

Treehouses aren’t just for kids anymore. From unique Airbnbs to fun home offices and entertainment spaces, there are a variety of reasons people add custom treehouses to their properties.

You don’t have to only build treehouses, either. Often, business owners in this niche market build other backyard spaces for customers, like decks and sheds.

Anthony and Jamie Taylor-Weber and started their innovative business, Outdoor Office, from their home garage. Now, it brings in a revenue of $1.2M a year. See how they did it in this YouTube interview:

https://www.youtube.com/watch?v=S1z9ulIh7QU

Unique Business Development Ideas

Having a unique business concept doesn’t need to mean you’re inventing a completely new thing from scratch. Here are some tips on ways to turn any concept into a unique business idea.

Take Your Business on the Road

Convenience is king in the modern world. Taking your product or service straight to customers can give you a definite leg up on your competition.

Mobile vet services are one example of this, and you can apply the concept to just about any niche. From food trucks to mobile clothing boutiques or hair salons, there’s a way to take just about any type of business on the road.

This approach has benefits for business owners as well as customers. It often costs less to start, for one thing, and has lower overhead expenses compared to brick-and-mortar shops. It also makes any type of business super-scalable—just buy another truck for the fleet, and you’ve effectively doubled your capacity.

Combine Compatible Ideas in New Ways

One of the businesses referenced above is Stemistry, a combination flower shop and coffee shop. By bringing these concepts together, Dylan Capshaw expanded his revenue streams and target audience.

A cat cafe is another example of this. People love cafes, and they love playing with pets—so why not put the two together into one place?

You can take the same approach with other business ideas. This can be a way to put a new spin on a familiar concept, or it can add profitability to a new idea that may take a while to gain traction otherwise.

Share Independent Research and Education Resources

You might think that teaching other people about your industry is counterproductive for growing business revenue. After all, if your customers know how to do things themselves, why would they pay you?

But think about it: most people know how to clean a home, but cleaning businesses are still very profitable.

Providing educational resources, like online courses, white papers, infographics, or how-to videos, establishes your authority in your industry. You can also use these as an additional revenue stream or as marketing materials to attract new customers.

Finding the Right Unique Small Business Idea

This list of unusual business ideas certainly isn’t comprehensive. There are unique business ideas not yet implemented in every industry. Now it’s time for you to go out and find the right one for you.

What is your favorite unique business idea? Let us know in the comments!

On occasion, you'll have opportunities to answer interview questions as a small business owner. The interview questions will vary depending on what you are being interviewed about. Regardless of the type of interview, we'll provide a list of questions to help you prepare your answers. The list of questions typically falls into 6 categories including:

1. Origination of the business
2. Processes  and challenges during the startup stage
3. Operations questions
4. Financial questions
5. Marketing questions
6. Fun questions

We'll start by discussing some of the different types of interviews you might have as a small business owner, then get into the questions. Keep reading to learn what questions you might have to answer as a business owner.

Types of interviews you might have with small business owners

Many business owners are happy to answer questions on a variety of subjects. Each business owner is different, so you should probably do a little research before contacting them. The typical types of interviews that a small business owner might conduct include:

• Hiring Interviews (H)
• Subject Matter Expert Interviews (SME)
• Business Investment Interviews (BI)
• Company Profile Interviews (CP)

Once I get to the list of questions, I will use the letters (H, SME, BI, CP) to indicate which types of interviews the question is appropriate to include in the interview. Let's discuss each of the 4 interviews.

Hiring Interviews (H)

Hiring interview questions should primarily focus on the operations of the business. These would include questions about essential skills, responsibilities, company culture, and terms of employment. As a job applicant, having a good list of questions to ask shows that you aren't just looking for a job, you are interested in how the company's goals align with your own. As the business owner or hiring manager, you should be prepared to answer these questions honestly. One of the most challenging discussions will be about covid discussions when they come up.

Questions to ask business owners during covid

No one wants to talk about covid, but it's important. Everyone wants to be somewhere they are valued, and there is a broad spectrum of mentalities on covid. We don't need to be political here, but is an employee going to like working at a place where they are the only one who takes Covid seriously? During an interview there may be questions like:

1. "What are your policies on PPE involving Covid?"

or

    2.  "If someone in the workplace is diagnosed with Covid, what should we expect to happen?"

I'll warn you that businesses are adopting 3 positions on this:

• Super cautious. (I have a friend that has been quarantined 8 times since Covid started due to potential exposure.)
• Follow local recommendations (Most prevalent)
• Blatantly disregarding the local recommendations ( I have another friend who has had 6 people out with "pneumonia" in the last month, and all continued working while sick.)

As a business owner, be honest. Tell them how you handle them and move on. If you are the one potentially being hired and agree with the answer, show genuine agreement with the business owner. If you aren’t in agreement, it’s pretty easy to tell that you disagree. If you are complacent. Don’t ask about Covid. It’s a touchy subject.

Subject Matter Expert Interviews (SME)

When small business owners are interviewed as subject matter experts, the interview questions tend to focus on a specific subject matter. For instance, when we interviewed Paul Akers we tended to focus on subjects involving lean manufacturing and business growth because he is a recognized subject matter expert. Watch some of Paul's interviews if you want some great info on lean practices and business growth.  The questions in these interviews may span all 6 types of questions to ask a business owner, but make sure the questions are relevant to the subject. For instance, a question about how much the company makes wouldn't be necessary for an interview on improving employee quality of life. Often you'll see business owners or CEOs on TV answering interview questions about their industry or market share. These types of interviews can be extremely beneficial by exposing your company to new customers who didn't even know the business exists.

Business Investment Interviews (BI)

Good questions to ask small business owners when considering investing in them will be heavily focused on the business operations, financials, marketing, and strategy. These are the aspects that drive success. As a business owner, make sure you are prepared for them. Whether the interview is with a bank, a potential partnership, or family members who are considering investing in a small business, you should expect the questions to be heavily focused on whether the money will be invested in a profitable venture. Before entering one of these interviews, you’d better already have a written business plan. You'll need to make sure it is updated and you are comfortable discussing the plan in great detail. If you don't already have a business plan, check out our blog How to Write a Business Plan and follow the steps to create your own.

Company Profile Interviews (CP)

Company profile interviews are mostly focused on highlighting what the company is doing. These interviews will be more focused on their services, products, operations, and what makes the company different from its competitors. These types of interviews tend to be easy to answer questions to put the small business in the best light possible. At UpFlip, we tend to include questions from all categories because it helps small business owners get a better understanding of how each industry works. Keep reading to find out more.

Many Business Owners Answer Questions About Their Inspiration

As a business owner, you can expect most interviews to ask questions about how you started your business. You should expect these interview questions to come at the beginning of the interview because they are easy questions to help people get to know you. Let's look at some of the good interview questions to ask small business owners.

    3. What were you doing before you started (insert company name)? (SME, BI, CP)

This question is to get some background history. It is an opportunity to tell the story of your journey before starting your business. Maybe you were in a related field, and maybe you weren't. The most important part is to be honest and relatable. I'm excited to hear about all the new businesses that started because people were laid off during the pandemic and used the time and generous unemployment to start their businesses. If you are one of these people, reach out to us. We'd love to tell your story.

    4. How did you come up with the idea for (insert business name)? (H, SME, BI, CP)

This is normally going to be one of the first interview questions about the business. The interviewer is looking for a moment where you can give some background about your history and connect with your potential customers, employees, or investors. Make the store interesting, but quick. Here's how I would answer it: [su_quote]I had a lot of jobs before getting my engineering degree and MBA. I knew I loved learning and telling stories, so I decided to try my hand at business research and have been blogging ever since. I've been working for myself for 3x longer than I ever worked for an employer, and I love every minute of it.[/su_quote] It's a quick answer but explains a ton about who I am and what I am about. Make sure to practice your responses so your interview is a success. Nothing is more embarrassing than getting stage fright because you weren't prepared.

Business Formation  and Process Questions to Ask a Business Owner 

The business formation stage is the period when the business owner is in the process of turning an idea into a company. Questions in this section should be around the business plan, selecting a business location, startup costs, funding resources, creating the product, selecting vendors, and computer systems. Let's look at good questions to ask entrepreneurs during the startup stage.

    5. Do you have a business plan? (BI, CP)

At Upflip, we ask every business owner this question to find out what guides their decision-making process. Some have a detailed business plan, while others track their achievements with a checklist. Have your business plan ready if talking to investors.  Whether it's a bank, family members, or a potential partnership, you need documentation. Unless you are well known for your expertise in the market, small businesses need to prove they understand the industry before someone agrees to spend hard-earned money investing in you.

     6. Did you start the business as a sole proprietorship, corporation, or LLC? (BI, CP)

Most of the time, we won't include this in our video interviews because the most common answer is an LLC. An LLC creates a separate entity that protects your assets.  Knowing the answer can provide insight into approaches that people take to offering their services. For instance, a corporation has much more stringent requirements than LLCs and sole proprietorships. Be prepared to explain why you went with the option you did if the answer is a different answer than an LLC.

    7. What were your startup costs? (SME, BI, CP)

Questions about startup costs should be included in most lists of interview questions for business owners. It helps investors understand how much you have put into the business and helps others understand the cost of starting a business. Be prepared to document where the money was spent when the interview questions are coming from a potential investor.  Company profiles will typically include this question in a list of questions to ask.

   8. Follow-up Questions to ask entrepreneurs- Can you break down the costs for us?

Upflip will normally ask for a breakdown of the startup costs when talking to business owners to provide our clients with reasonable expectations.

9. Another followup: How do government regulations and startup costs create a barrier to entry in your field?

A subject matter expert might have to answer questions like this when talking on TV or to government officials about the costs of government regulations.  For instance, in Las Vegas, getting licensed across all 4 licensing districts in the area can be substantially more expensive than getting licensed in other places with only one licensing agency.

10. How did you fund your small business? (H, SME, BI, CP)

A business owner should be prepared to talk about funding a business in all types of interviews. How a business owner got the resources for a company can tell people a lot about their experience and the future of the company. A business owner who started a company with an inheritance might not necessarily understand how much time it takes to accomplish their goals as the business owners who spend working hours at their other job performing the same work. Investors are specifically interested in funding. Follow up questions to ask entrepreneurs include:

   11. Do you have other outstanding business debts? What are they?

   12. What will the funding you are requesting be used for?

During a hiring interview, I would not expect potential employees to ask this question unless there are sincere concerns about the viability of the company. For instance, if you are asking employees to work for equity only, this question would be reasonable to ask a business owner. If you are discussing this question as a subject matter expert, this is a great opportunity to discuss creative ways of funding a business.

13. What were some challenges you faced when creating your product? (SME, BI, CP)

For those who create a new product, you should be prepared to answer this question. It's one of the questions that most people can't answer. Most people have never created a new product and don't have an idea how to start. If you faced a scenario where you had no idea where to start, make sure to honor that in your answers. The readers or viewers will appreciate having an example of someone who went from clueless about how to accomplish their goal to a success story. I found Jason Hernandez's interview to be a great story about creating a product. Check it out below. [su_youtube url="https://youtu.be/j7UzP5dVOqA?"]

14. How do you select vendors for your companies? (H, SME, BI, CP)

While it is getting easier to find resources on vendors and services to simplify the hard work of starting a business, many people who have only worked for other companies aren't familiar with the resources necessary to start a business. Many products are purchased through distributors as opposed to the manufacturer. If you have ever tried to provide services to a corporation or government, you'll know that they have specific requirements for their service providers.

   15. Follow-up question: Once you’ve selected a vendor how do you verify they are performing up to those standards?

You can stand out as a small business by having similar standards for judging subcontractors. If you have standards, make sure to show them to your interviewers, potential investors, and even clients if they ask about them.

Questions to ask entrepreneurs about equipment computer systems (SME, CP)

When considering interview questions for business owners, ask about the computers, equipment, and software they use to support their business. Some of the questions to ask a business include:

   17. What software do you use to track your inventory and sales?

   18. What is the most profitable piece of equipment for your business?

   19. Where are the best places to buy equipment?

   20. What software can't you live without?

These are some of the best equipment-related questions to ask entrepreneurs about their business. Keep reading for questions to ask a business owner about operations.

Operations questions to ask a company about their business

Operations are focused on issues like how many employees a company needs, how to identify top customers, how to differentiate yourself from competitors in the market, and how to divide responsibilities amongst the team. Here are some of the top interview questions to ask entrepreneurs regarding managing their business.

   21. What does a normal day at your company look like? (H, CP)

Employees, take note! This is one of the best questions to ask a business owner before starting working for them. This needs to be answered during the interview to make sure the company is a good fit for your life. It's hard to find success with a company if you can't work during the times they actually need you. This question also helps people considering buying a business in the industry decide if it's the right type of company for them. Check out our blog How to Buy a Business for more information on buying a business.

    22. How do you manage customer relationships? (H, BI, CP)

Asking about managing customer relationships is a great way to understand the small business owner. Interview questions and answers about customer relationships help people get an idea of how the business interacts with customers. If the business owner has a customer relationship management tool, then that can be used to monitor sales, profit margins, and what deals tend to appeal most to each customer. Without that, each relationship is legitimately owned by the person as opposed to the company If you want to sell your business in the future, make sure to get a CRM set up ASAP. Salesforce and HubSpot are popular CRMs. It will help create value that can be passed on to the next owner when you decide to cash out of your business.

   23. How do you delegate tasks? (H, SME, CP)

Success is often a benefit that comes when you trust others to handle parts of the business you know less about. For example, people in their 20s are way better at social media marketing than someone in their 60s.  Know what you are good at and delegate the rest. Make sure to have a strategy for how to support customers and business processes. As the business owner, be prepared to determine what drives the most value and focus on those activities. Everyone can follow your sales processes if you provide them a good example of how to provide service for customers. Be prepared to answer questions on how you delegate. It can help people immensely.

Financial Questions to Ask the Owner of a Company (BI)

There are so many financial questions to discuss with the owner of a company that we created an entire blog on financial matters. Get better prepared for financial questions by reading our blog Net Working Capital. You'll need to answer these questions mostly for investors. The questions will be ones like:

   24. What was last year's net profit?

   25. What was the change in your cash flow last quarter?

   26. What was year-over-year sales growth?

   27. Do you have enough cash to continue operations and service additional debt?

To learn more about answering financial questions, check out Investopedia. They are one of my favorite financial resources.

Marketing Questions You Might Be Asked as a Business Owner

Marketing questions should be focused on how to find customers. In recent years, the majority of marketing is focused on digital marketing because it operates as a closed-loop. This means you can monitor the success at reaching customers and determine exactly which channel and marketing campaign generates the most profit.

   28. What social media channels get the best results?

   29. What are your favorite marketing tools to use?

   30. What percent of revenue do you spend on marketing?

   31. What unique marketing strategies do you use to drive results?

Fun Questions to ask Business Owners

As an interviewer, all questions don't have to be serious. If you are interviewing a business owner, be prepared to ask some fun questions. Here’s some fun and insightful questions that are typically in interviews: 

    32.What are your favorite books?

    33.Who are your favorite entrepreneurs to follow? 

    34. What are some business opportunities today that you wish someone would tackle?

Just make sure your focus is on ethical questions to ask a business owner. You don't want to ask them questions that would ruin their career. As a business owner, if someone asks you a question that could cause problems, don't take offense. Laugh it off and politely decline to answer. Whether you are an interviewer, business owner, or just a curious person, the world offers so many opportunities to learn from other people. When you see someone offer a service you appreciate, let them know and ask yourself, "How can I apply this to my market? Subscribe to our mailing list for more great articles and videos about how entrepreneurs like you find ways to make a profit doing what they love.