Coffee is the second most traded commodity in the world, with oil being the first. Part of its success is due to the extremely high profit margin involved in the finished product. Your coffee shop should have this in mind, and strive to have a very low food cost versus selling price. A goal of around 12% is reasonable. So, if you sold a latte for $5, the cost of the coffee beans, syrup, milk, whipped cream, cup, lid, etc. should be at or below 60 cents--a very attainable figure.
Based on your target audience (young adults) and your location (college town), it will be very important to your customers that your business is an ethically run, environmentally conscious enterprise. Getting your coffee beans through the Fair Trade co-op should be a bottom-line goal. Even better would be to purchase your coffee directly from one or more estates, at prices above what Fair Trade pays for similar coffee. This will have as much impact as buying exotic, expensive coffees (Kona, Blue Mountain, etc.) would, with a much lower cost to you and a much bigger benefit to the global coffee community. Also be sure to use post-consumer recycled paper products where practicable.
Being an ethical business will not on its own be enough to attract customers away from chains such as Starbucks. Although large coffee chains are viewed with more criticism and disdain than locally-owned small businesses, the brand name and multiple locations offer them a considerable advantage. You will need to have a plan to differentiate your products to give customers extra incentive to seek your business out specifically. My recommendation: roast your beans in-store daily. No major coffee chain does this, and it produces dramatically better coffee! 75% of coffee's aromatic and flavor oils break down within the first week after it is roasted, so your coffee will be head and shoulders above your competitors. Plus, green (unroasted) coffee beans are considerably cheaper and store for much longer--saving you on costs and also allowing you to buy in larger quantities, reducing costs even further. As an added benefit, that freshly-roasted coffee smell can sometimes be smelled from blocks away, pulling in customers that didn't even know you were there!
Not to go on too much about in-store roasting, but this also opens up another business opportunity for you--freshly roasted bulk coffee beans. People can enjoy better coffee at home, businesses can work with you to create their own unique signature blends, and your customers can specify which blends they want and have them roasted for whatever applications they desire: Espresso, French press, electric drip, etc.
Done properly, a coffee shop is as close to a fail-proof business as you can get. I would advise against complicating the menu too much, however. Coffee sells itself and doesn't cost much if it needs to be thrown out. Once your coffee shop starts trying to be a restaurant, things become much more complicated and much less profitable. Some pastries and baked items are your safest bet to garner add-on sales from your customers.