Don’t be confused by the sign in Dinkytown that promises cheap coffee and appears to be pointing to a hair salon. It’s really pointing down the stairs to the newest coffee shop in the area.

Sarkis “DJ” Djerdjian is the owner of Starlight Coffee Shoppe on 14th Avenue Southeast, which shares an awning with Hair by Stewarts.

The basement shop, fully equipped with large purple couches, tables and chairs for studying, as well as wireless Internet, advertises itself as the home for cheap coffee, Djerdjian said.

Here a 16-ounce cup of coffee or tea, hot or cold, costs $1. The shop also carries espresso drinks ranging from $2 to $4.

The reason these prices are cheaper than the other four coffee shops in the area is simple: Djerdjian owns the whole building – from US Bank to China Express – and doesn’t have to pay rent for his shop.

“I’m passing the savings to the customers,” he said. And the customers seem to appreciate it.

Philosophy and Greek senior Stacie Thyrion said she comes to the coffee shop almost every day.

Thryion found the Starlight shortly after its May 28 opening when she was on her way to Espresso Royale, a coffee shop just down the street.

Djerdjian saw her and invited her into his shop. Since then, she’s been hooked.

“It’s quiet and I love the people who work here,” she said.

The Dinkytown area has five coffee shops and plenty more places to eat that also sell coffee, said Skott Johnson, president of the Dinkytown Business Association.

Most of these places have been in the area for a long time, Johnson said.

Businesses tend to thrive in this area because the people support local, small businesses, he said.

Johnson said he’s never heard of any residents or frequenters to Dinkytown complain about a lack of variety, but it is a concern.

“You can only cut the pie so many ways,” he said.

But with all the other places to get coffee, Djerdjian is not worried about his shop going under.

He thinks the competition is good and helps to drive down prices, bringing more customers to the area and giving people more choices.

Djerdjian plans on having an opening celebration in September and will start advertising more and selling soups, sandwiches and salads. He said his shop serves between 50 and 80 customers a day.

Becky Smith, who also was studying at the shop, said she enjoys the smaller coffee shops, like Starlight, because of the charm they have.

“A lot of students seem to like more unique things,” she said.

Dan Zielske, the owner of Espresso Royale, two shops down from the Starlight, said he’s not too concerned about losing business.

His shop has been there since 1988 and serves between 400 and 500 people a day.

Zielske said he’s felt the impact from some of the chain businesses moving into the area.

He now pays higher rent because a larger business had offered more money for his space. But, determined to stay just where he is, he decided to give up more money for it.

Zielske said big businesses are putting the pressure on smaller ones and not offering enough variety to customers with the repetitive nature of some of the shops.

“You can only eat so many meals in a day,” he said. “I think we need a nice mix.”

Marianne Baum, an English senior, said she frequently goes to Espresso Royale for her coffee fix and would never imagine going to a chain.

“They drive small business out,” she said.