Running a cafe may sound like a dream job, but don’t forget, running a successful cafe is serious business.
Here are 7 practical things you need to think about before you start your own cafe:
1. Work out a business plan.
If you want to succeed in this super competitive market, you better have a good plan. One of the first steps towards turning your dream into reality is to create a solid business plan. This should include details on what your business is, how you plan to make profits, who your customers are going to be, who are your main competitors, how you plan to grow over time and what are your key goals.
This helps bring clarity not just for yourself but is also a requirement if you’re going to seek a business loan. Here’s a good example of a business plan for a cafe that you can customise based on your plans.
2. Scout the right location.
You’ve heard this before - it’s all about location, location, location. You can have a great coffee shop, with the most amazing menu and the most hospitable staff - but if you’re located in a place that not many people visit every day, you’re just going to have a hard time finding regular customers.
That’s why, you should look for a place that’s centrally located - the ideal scenario would be where you can have a cafe close to an office or university campus - a place where people already gather. But be warned, finding the perfect spot can take months. Even if you absolutely ‘love’ a place, take your time to sign the lease - check out your neighbours, understand the market and think if this is going to be profitable in the long run.
For more detailed tips on how to look for the perfect location for your cafe, read: What makes a location perfect?
3. Think of who will handle the accounts.
Unless you’re a finance whiz and a master multi-tasker, you should consider getting an accountant. When you’re starting out, it’s useful to have someone who can help you with multiple financial needs such as preparing financial statements, managing your tax and providing you with financial and business advice. Read this article on where to find financial help for your business for more information.
4. Plan for funding.
No matter how much savings you’ve managed to secure in your bank account, you will need to think of a financial plan to fund your cafe. You have a couple of options - you can speak with family or friends and ask if they want to to invest in your business, you can look at taking out a business loan or you can do a combination of both. No matter which way you go, like we mentioned in point number one, you’ll need a solid business plan to know exactly how much investment you’re looking at. You should also take a look at government grants that you may be eligible for while starting your own business.
Here’s another practical tip: While planning the finances for your business, think of covering your own expenses as well. You will be spending most of your time and resources towards the cafe, especially in the beginning - so make sure you have enough balance to cover you at least for the first six months with out without profits.
5. Read about recruitment and different types of contracts.
Staffing is a major issue that all cafes and restaurants have to deal with. Think about it - cafes often hire students who work part-time with casual contracts and can leave with one night’s notice. Take your time to think about how many people you need - do you need someone at the register or will you manage that yourself in the beginning? How many people do you realistically need to wait on customers? While you don’t want to be understaffed, you also don’t want to hire too many people. Start slow and understand the areas you need help with.
We asked cafe owners what was the one quality they looked for in their staff half expecting them to say ‘pleasant or social’. But the answer we got repeatedly was ‘trustworthy’.
6. Create a marketing plan.
You can’t wait until after your cafe’s grand opening to start a Facebook or Instagram page promoting your business. You want people to be able to find, comment on and most importantly, review your services from the word go.
It’s crucial to have a marketing strategy in place before you hit the cafe floor - network with other businesses in the area, advertise in the local newspaper and drop free coffees with flyers promoting your cafe to neighbouring establishments - these are your future customers and you want to get in their good books already. Read our article on Top 12 marketing hacks to promote your cafe locally for more tips.
ALSO READ: Download your marketing plan template and guide
7. Hunt down the best coffee beans in town.
Last but not the least - find the best coffee suppliers in town. Research the places with the best coffee, find out where they get their coffee from, go sample coffee from as many suppliers as possible, get obsessed with the process right from hunting down the best coffee beans to the installing most efficient equipment. Always shop around for the best products but don’t forget, there’s a fine line between best price and best value.
And on that note, one final tip: people draw comfort from their coffee and think of it as the thing that gets them through the day. If you want customers coming back to you for their crucial daily ritual, it’s very important that their coffee tastes good and that it tastes the same every day.
If you have more questions about starting a cafe, feel free to drop a comment below or submit your question in our community forum to reach out to a wide network of small business owners and supporters like you.
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