Oh cool, a topic around socialism that I spent a fair amount of my reading time on!
So I'm going to say, first of all, that whether or not you open that coffee shop at all and where you do so depends entirely on the economic model that exists in such a nation, of which there's not consensus yet and likely won't be until we approach a likelihood of such a system materializing.
But let's assume that issue is settled and it's a variation of market socialism, solely for the sake of simplicity in answering your questions, even though I find issues with pure market socialism personally and agree that a hybrid between market socialism and planned economy socialism is necessary. I'm going to borrow some of samoyed's words so I'm not duplicating any work.
So this is 2 differing methods of structure he's discussing here.
In a model where all employees get to decide all manner of business operations from the top down, you'd be looking at a direct-democracy model, where business decisions are decided by majority of all labourers within it. This is particularly favoured by anarchists who abhor hierarchies, but I can still understand the appeal.
Elected managers brings things closer to the co-operative model, where there is a decision hierarchy in play, but instead of outside investors or stakeholders having a say of who sits at the top of the food chain, the labour force determines who makes top-end decisions, so those at the top are incentivized to listen to the labour force with regard to how the business is operated and place value on insight. Your labour essentially becomes your buy-in to becoming a stakeholder, thereby incentivizing good labour through a sense of pride and your financial capacity either improved or diminished through one's own efforts.
Additionally, because market socialism is a more collaborative means for how the economy is run, the concept of the "small business" would still exist, but other coffee shops aren't necessarily your direct competition, so you may be more interested in forming a larger co-operative with like-minded businesses. By joining with them to form larger co-operatives, you have a larger wealth of business acumen and labour experience to draw from, which can only improve your business, your efficiency and your negotiating power with other co-operatives if they operate a function you need to operate that your own co-operative has not yet added to its repertoire.
At the same time, top-down hegemony or uniformity in offerings (as we see in the corporate market economy, where every store has the exact same product offerings prepared uniformly) can be partly or completely abandoned if it does not serve the community you're operating in. If you're not selling a product in the area you operate, it's simply not sensible to keep offering it in lieu of changing it out for something that does, and a co-operative business model would appreciate you doing so, because it improves the service to the community and thus improves earnings and efficiency.
This is one of many renumeration options for the socialist labour force. Somewhat analogous to current methods, essentially all the earnings in a solitary business or co-operative after expenses and costs of any plans for expansion are paid as dividends to every labourer within the business/co-op, with percentages to each contributor being determined collectively (though the popular method is equitable distribution to all parties).
Another method is that of the "social dividend", where all individuals in society take net earnings from all businesses and distribute them evenly across the nation/state/whatever.
And then there's central dividend planning or whatever the real name for it is (I honestly forget, it's been so long), where in lieu of taxation, labourers are renumerated to a set guaranteed income amount and all excess is all funnelled into the public purse to pay for essential social services, infrastructure needs, etc. Any excess accrued by the public purse can then be distributed as it would for the social dividend or held as surplus for emergency spending.
And there's a lot of bits in between that borrow traits from each other and are applicable with or without market socialism. I know, like samoyed, I advocate for a hybrid that can be summed up in 6 words: Regulated publicly, administered privately, owned collectively.
The primary shift, as I suggested, is a transition to collective rather than competitive economics, at least moreso than what we see now. People believe competition generates positive results, but it's shown to me that it leads to cutting costs/corners, undervaluing labour and hoarding knowledge and resources that outweigh those suggested positives and discounts that those positive results are only possible with competition. Because it's hard to not just be in it for yourself in a competitive market, where compassion and impact on others and the world costs you an edge over your competitors.
Democratic socialism is primarily just socialism with a booster shot of only the positive elements of liberalism (most specifically "the consent of the governed", but also the enshrined principles of individual equity and liberty, but maybe not liberty as liberalism typically defines it), an idea that was conceived as a near-direct counterpoint to Leninist and Stalinist socialism. Nowadays, it's mostly just a catch-all term for anyone who believes in the idea that society and all those in it are a full and collective responsibility that is constantly undermined by capitalist economics and the current form of democracy, both of which need some form of major reform or abolition.
And yes, capitalism is a hard thing to see past, because it's such a part of every single part of our lives, whether or not we want it there. A lot of that was tackled in this book, which I recommend reading if you're having trouble getting un-stuck from capitalism:
en.wikipedia.org
From the Wikipedia page, bolded for emphasis:
Overall, it's a good read and helps understand the challenges you're having for what they are. There are similar reads that do that (one of my favourites is Weber) but this book is a MUCH more accessible read.
EDIT: Just as an addition, the book also prompts a reckoning with the greatest contradiction of liberalism: that it can both extol the virtues of humanitarian actions on the one hand with things like the promotion of social equity for all people, while also suggesting that human nature has an inherent individualist bias that can only be satisfied with a capitalist economy. It's having one's cake and eating it. Are we self-interested individualists or do we care about others? The argument that caring for others can itself be an act of self-interest is not a frequently provided answer that's not terribly compelling, as the history of inequality in capitalism makes plainly clear.