It is estimated that globally, we drink approximately 2.5 billion cups of coffee every single day. Between 2020 and the end of 2022, sales in the ready-to-drink market – which includes coffee shops – are expected to increase by 67%. Research from the Allegra Group states that in the UK alone, we drink approximately 55 million cups of coffee per day, with 80% of those who visit coffee shops and cafes doing so at least once a week, and 16% on a daily basis.
We’re a nation (and world) of coffee-lovers it seems. This should assuage many concerns a new or prospective cafe business owner may have. However, setting up a cafe requires a lot of planning and consideration – including ensuring that you have the right business insurance in place should unexpected events occur. Therefore, in this new cafe business guide, we outline what you might need to do – from researching your competitors and creating your cafe business plan, through to sourcing the best suppliers and the grand cafe opening. This is an exciting time, and with our help, we hope to help make it smooth sailing.
Your New Cafe Business – Getting Started & Things To Know
Opening a new business requires a lot of time, planning and money. It’s key that time is spent understanding what it takes to make yours a success. This could involve reaching out to cafe owners and learning from their very valuable experience. Find out what works and what doesn’t. And what’s great about this – especially if you visit them – is that you’ll gain professional advice and inspiration for decor, business equipment and cafe layout, and how you can build on this to create something quite unique. Asking questions around the customer base, their needs and how best to meet them is also a good idea, as well as learning more about price points and how to create a menu that entices customers too. This lays the foundation for your new cafe business and shouldn’t be rushed or overlooked.
Creating A Business Plan
Next comes the cafe business plan, which helps you learn more about the local cafe market and allows you to take a closer look at the numbers required to make your business successful. A cafe business plan will take you through every step of developing and managing your cafe or coffee shop and will act as a road map for how to structure, manage, and grow your business.
When drafting a cafe business plan, you should consider the following:
- Where you’re going to open your cafe and what your lease strategy will be.
- Your investment plan – think about the money that you’ll need to get started, and where you’ll get this from.
- The local market, your target audience, and how you will appeal to them.
- Your competition, and how you can capitalise on opportunities and gaps in the market.
- How you will market your business – consider your unique selling points (USPs), chosen marketing channels, and how you will keep customers coming back.
- Who you will have as a team – what work needs to be done, and who needs to be involved, when it comes to getting started? Once you’re up and running, who will you hire?
- Your financial projections, including your cash flow, projected profit and loss over time.
Deciding A Location
Picking a location is crucial, as is ensuring that it’s open to foot traffic, can be easily found and provides good space for your intended design. Consider how much parking space is available, what the location means in terms of demographics and the activities that the local community gets involved in, and how you could potentially support them. Other considerations include whether it may be near other cafes and restaurants and the impact this may have on business, as well as details such as the retail lease and the resale value. It would be wise to consult with a solicitor who specialises in retail leases before agreeing to anything – even if you think you’ve found the perfect spot.
Finding Good Suppliers
Because it’s the coffee, tea, soft drinks, hot drinks and cakes that will draw your customers in and determine whether they’ll be repeat business, finding good suppliers is also paramount. It’s not just ingredients you need to think about, it’s the cups, napkins, coffee stirrers, teapots and plates too. Make a list of all the supplies you need, and then you can begin researching suppliers who may be able to support you. Check out their reviews too, and what other businesses have claimed about their level of service. Don’t forget the equipment either. Making a list of all the cafe equipment you need is key here too. You can source your cafe equipment by:
- Buying it outright.
- Lease it through a trusted provider.
You might also consider a blender, fridge, dishwasher and cash register – among other useful tools.
Insuring Your Cafe
Setting up your new cafe business is one thing. Keeping it secure against the unexpected is another. You may place high priority on health and safety and do all you can to ensure you sell products that have been sourced from trustworthy suppliers, but sometimes life intervenes, and can cause trouble. That’s why employer’s liability insurance is a legal requirement for most businesses.
As well as this, any business can suffer from flooding and stock spoilage – also caused by refrigeration faults and power outages. With stock and contents insurance, you can receive compensation for losses that have occurred due to an insured peril, and your business equipment can be covered too with insurance for cafes. And what if your cake causes food poisoning, or there is damage to your customers’ personal property due to a clumsy staff member? With product liability insurance and cafe public liability insurance, you can protect your business too.
Along with business interruption insurance, seasonal increases, buildings insurance and personal accident insurance, as well as cover for fixtures and fittings, portable equipment and business legal protection, your cafe business insurance policy can be very extensive. Here at The Insurance Octopus, we can help you find cafe insurance quotes that cover all of this and more, ensuring you only pay for what you need. For your cafe insurance quote, please click here, or call us today on 0161 968 2030.
Decor, Design And Marketing
Now for the fun stuff – cafe layout, menu design and cafe marketing. Your cafe concept will largely depend on your target audience. If you’d like it to be family-friendly, you may want to include a toy area. If you’d like it to be health-focused, you could provide menus that showcase the health benefits of each of your menu options. It may be tempting to try and please everyone but choosing one theme and sticking to it will create a far stronger identity.
Take storefront design, furniture, lighting and signage into account too, and how this can bring your vision to life. When it comes to cafe layout, think about efficiency – from both a staff member and customer point of view. Will staff be able to work best in the permitted space? Will customers understand the ordering process once on the premises? A good ambience can make all of the difference and reduce risks, such as slips, trips and falls too.
With your menu showcasing everything you have on offer, this should be thought through carefully. From the excellent food options and images through to the menu design, colours, fonts and prices – you should ensure this is all clear and concise. With the popularity of vegetarians and vegans today, having alternative options too would be wise, as would be providing gluten free choices. Your menu should also be profitable, and therefore, calculating the ingredient costs and margins is important too.
Marketing your cafe is key, as otherwise, not many will know about the grand opening, and how to find you when searching online. Social media is a great place to start, so creating Instagram, Twitter and Facebook profiles with images of your creations will build up the hype before you’ve even begun trading. Claim your Google Maps listing, and for something even better, claim your page on websites such as Tripadvisor so you can be reviewed and gain feedback. You could even consider creating your own website that provides useful information such as recipes, guidance and video content that your audience can engage with. Offering discounts and promotions often bodes well for new cafes too, and their customers.
Finally – The Opening
Lastly – the grand opening! All the months of hard work, planning and preparation have been worth it, as is finding the best staff to ensure your cafe is the place to be. Your cafe opening allows you to showcase your great work and the best your menu provides. For a great cafe opening, plan early, ensuring no other local events clash, and that you have enough staff to support your customers. Ensure the place is clean, tidy and looks inviting, and that your cakes, pastries and other such desserts taste as delicious as they look. You’ve got this, and the potential customers to make your cafe business the best it can be.