How to open a cafe and be successful

It’s been a few decades since Starbucks emerged from Seattle to take over the world and make coffee on every street corner the norm. As a result, the way Americans drink coffee has changed dramatically. It has also created a window for entrepreneurs who want to start a business. As large coffee chains have grown, so have specialty and independent stores. According to a New York Times article, Americans drink less coffee today than they did in the 1930s, but we are drinking better, better brewed cups. As such, many entrepreneurs are wondering how to create a cafe to serve their own high-quality breweries.

How to open a café in 7 steps

Are you wondering how to create your own cafe? These seven steps will walk you through everything you need to know.

Step 1: Decide if you want to open your own store, franchise, or buy an existing business.

When it comes to starting a business, you usually have at least two ways of doing it, and with cafes you have three. When it comes to opening a cafe, you can do any of the following:

  • Start from scratch and open your own store

  • Open a coffee franchise

  • Buy an existing coffee for sale

Each of the options has its pros and cons and varying degrees of work that you need. If you choose to open a franchise, you will be bound by many aspects of that franchise, such as the beans they use and the store décor. If you buy another cafe, you may have less work to do to arrange the space as a cafe. These options also have limitations. Once you have determined which one you want to do, you can move on to the next step, which is to develop a business plan.

Step 2: Create a business plan.

A well thought out business plan is the key to starting any business, and a cafe is no exception. If you want to open a cafe, you probably already have a love of good coffee. To create a successful cafe, you need to decide how you are going to get others to love coffee as much as you do. A business plan will help you focus your ideas and all in one place. Along with the basics of what your coffee will be and what products you will sell, a business plan also includes a marketing and sales plan, as well as financial projections.

An important consideration that you will need to take into account early on, and include in your business plan, is deciding on the business structure in which you want your business to operate. There are several business entity options you can choose from including sole proprietorship, LLC, C-corp, etc., and the entity you choose will have tax and legal implications for your business. It’s always a good idea to seek the advice of a business lawyer when making those big decisions when starting your coffee shop. if you choose to open a franchise, you may already have a business entity that you need to use.

When creating your business plan, you will need to find a name for your business and an idea of ​​where you want to open your cafe. Once you’ve found the perfect location, be sure to add it to your business plan, this can happen either before or after you write the plan.

You’ll also want to describe the price of your products, the products you want to offer, the type of coffee you want to have (sitting, driving), and more. It’s a lot to think about, but a business plan is where you can bring all of those plans together in one place. Beyond that, if you need outside capital to make your coffee dreams come true, you will need to provide a business plan for funding purposes. Fortunately, there are several options for business loans for a cafe, and whether you are looking for financing to start your cafe or want to leave the option to expand later, having a solid business plan from the start will do the trick. easier process.

Step 3: Find the right location.

This step cannot be overlooked and you should take your time and consideration when completing it. The location of your cafe can make it or break it in terms of success. There are certain things to look for when looking for a cafe. Considerations for the location of the cafe:

  • Cut: You want to make sure that enough people can fit into the space without feeling cramped. Cafes are places of relaxation where people tend to hang out with friends or colleagues and where you want the space to be accommodating.

  • Accessibility: Make sure your cafe is accessible and everyone can walk in.

  • Car park: Will you be dependent on foot traffic? Otherwise, you’ll want to make sure there’s a place for your customers to park either in a parking lot or on the street nearby. If cycling is popular in your area, consider adding a bike rack.

  • Seats: Will guests be limited to sitting indoors or are there outdoor seating that you could set up when the weather permits?

  • Rental: This should be one of your main considerations when choosing a location. How much one place of business will cost you a significant portion of your budget and you need to make sure you include it in your business plan.

Step 4: Register your business and obtain the appropriate licenses and permits.

The city or county where you plan to open your cafe will dictate the details of your business registration, the taxes you will be responsible for, the necessary licenses and permits, etc. The details of how to register a business vary from state to state, but you will need to apply for an Employer Identification Number (EIN) and establish your business structure before you can begin the process. recording.

You should also make sure that since you will be serving coffee, and most likely food, you also have the appropriate business licenses and permits for this. Usually, health licenses and permits are required to serve food. Other types of business licenses include building, zoning, and land use permits. Be sure to consult your local business resources so you have the proper documentation in place before you open your cafe.

Step 5: Find suppliers.

Customers look for a quality experience when they walk into your cafe. This means quality ingredients and coffee, but also quality service and experience.

While it is difficult to produce the same quality every time, this is crucial in the coffee business, especially in an age when people are increasingly educated about specialty coffee. Having consistent, quality suppliers, from beans to cups and whatever else customers interact with, can help keep your cafe running smoothly and a consistent customer experience.

When you first start your coffee business, don’t be afraid to spend the time it takes to find the right coffee supplier for your business. However, if you are starting a franchise, they will take this step for you with their specific reasons. You may have to try a lot to find the right one for the products you want to offer, at the right price, with the perfect taste.

The other way to create consistency is to train employees extensively. If you want customers to walk past all the other cafes in the area and come to yours, you need to deliver consistent quality.

Step 6: Create a warm and welcoming environment.

Coffee is never more than a good cup of coffee. Many people go to cafes to work, meet up with friends or take a break from the workday.

You want your cafe to have a warm and welcoming atmosphere that is great for meetings, lounging and chatting, but also easy to keep clean and tidy. When choosing how to design the store, be sure to consider how many people you want to bring into the store and what kind of vibe you’re looking to create for all of them.

Remember when we were talking about the location of your store? Here’s where that comes in, because the location can’t do a lot of the work for you. The work you do to design the cafe inside will also be very important. You create an entire atmosphere that also serves a purpose.

Step 7: Adopt a good inventory system.

Pay attention to your inventory. At first you won’t really know how much you need for things like beans and baked goods, you probably won’t even know how many cups you need per day. So follow these things carefully at first so that you can get a good idea of ​​how much you are using.

There are a number of inventory management apps available for small business owners who need a way to manage their inventory and budget. Some point of sale systems also offer inventory management, which you may want to consider when making your choice. There are specific coffee point of sale systems to consider. No matter what you choose, you want to make sure you have a way to manage what you need for your business so you don’t run out of customer favorites or over-order what you don’t need.

How much does it cost to open a cafe?

We have reviewed many of the expenses you will face when opening a cafe. Site rent, everything to do with interior design, machinery, supplies like beans and mugs, employees and more will be added. Some of these things can cost a lot more than you might expect, a good espresso machine can set you back $ 20,000.

All in all, you can expect that opening a cafe will probably cost you over $ 200,000 in the end. This also goes for some franchises, Dunkin ‘for example, requires you to have $ 250,000 in liquid assets to start a franchise with them. You may want to consider starting out smaller, with a coffee cart or a small pop-up slot if you’re unsure of the cost or don’t want to dive in head first. But be aware that none of these options will be cheap or require money up front.

The bottom line

Running a small business is no easy task, but for all those coffee lovers who have dreamed of opening their own cafe, the time might be right. Consumption and interest in specialty coffee cultivation has grown steadily in recent years and doesn’t seem to be stopping anytime soon. While competition from large chains may have been an issue at one point, modern consumers prefer to support local neighborhood stores, especially if they offer what large chains cannot. So, if you are wondering how to start a cafe, start thinking about the steps above to see if this is a feasible business venture for you.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.


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