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Has opening a cafe – specifically the next Starbucks – been your dream? Many aspiring small business owners would love to have their very own cool, charming, hipster cafe. Unfortunately, it’s not just about the building’s design.
The reality is that cafes exist on strict profit margins, require a large initial investment and are generally demanding in terms of time and effort.
However, before you toss away your coffee bean dream, you should know the steps required to run a successful cafe. With the right frame of mind and plan of action, you will stand a good chance of owning the best shop on the block.
Regardless of the type of business you intend to start, a detailed business plan is vital to begin the process. A good business plan is like a roadmap for success; it will help you see your goals on paper and is a good start for potential investors.
It’s best to take note of what other coffee shops have listed on their menus, as well as the average prices. “Decide which products you want to sell. Think of extra drinks or menu items you could sell that would differentiate your cafe from your competitors,” says Houston Chronicle.
“Use the search function on the BusinessUSA.gov website to determine which business licenses you will need for your cafe. Obtain a vendor’s license for collecting sales taxes within your state,” the Houston Chronicle recommends. You should then complete the application for your vendor’s license and DBA via your city or county office.
In the business plan you created, you should specify exactly how much money is required for opening a cafe. Be creative when attempting to meet these startup quotas. Plan to reach into your savings, contact investors, and possibly apply for loans. If you opt for the latter route, “Apply for a loan through the Small Business Administration at SBA.gov. You will likely need to create a three-year sales forecast for a bank or SBA loan, according to the SBA,” adds the Houston Chronicle. The tried but true “family and friends” is another possibility, but think carefully about this one. Are you prepared to lose the hard-earned money of those closest to you?
Find an appropriate storefront for your cafe. It is best to choose a high-traffic area close to a downtown district or a strip mall.
Visit the National Restaurant Association website at restaurant.org. The Houston Chronicle recommends, “Email or call the main NRA office and get the association to send you a list of food and supply wholesalers. Look up food suppliers in your local business-to-business phone directory.”
Call multiple food supply wholesalers and ask them which products they distribute. It is easiest to limit the number of wholesalers to one as this will streamline the ordering and shipping process. Choose the food wholesaler who offers you the lowest unit cost on the best quality food.
After you arrange your finances, order all necessary food and supplies and bring in all desired furniture, style and decor. If affordable, considering bringing in an interior designer (and some artwork) to help you create the most inviting atmosphere for the cafe.
Consider putting a ‘Help Wanted’ ad online and/or in the newspaper. Before opening day, ensure that all additional employees are trained in food preparation and the cash register. Run the business for a week or more on a “soft opening” basis to get employees trained and build their confidence. You may have to offer free food during this period so budget accordingly.
It is time to spread the word about your brand new cafe! “Ask business owners if you can leave flyers on their counters,” advises the Houston Chronicle. “Plan on a grand opening with large balloons and banners. Advertise your cafe business in coupon magazines that are distributed by mail. Consider placing a print and online ad in your local phone directory.”
Although opening a cafe will undoubtedly take a lot of hard work, energy, and planning, your dream can come true. You’ll be sipping coffee and specialty teas in your own cafe in no time!
