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Starting a café is a popular choice amongst new entrepreneurs and can be a profitable and rewarding business to run. If you’re a ‘people person’ and enjoy the ‘café culture’ vibe then starting a café business could be perfect for you.
Why start a café business?
Despite the strong competition provided by national food outlets and coffee shops, many independent cafés continue to thrive and can be profitable. Running a café is a very sociable business – you will get to know your regular visitors and it can certainly be very rewarding. Your café could offer both food and drink, or you could choose to offer mainly drinks with a few food items as a sideline – and there is great potential to specialise in a particular item (for example, paninis or sandwiches), a strategy which many of the most successful cafés use.
What skills will I need?
Many people start a café business after previously working in catering or a related industry. There are food courses available in most colleges and these could provide you with essential skills if you lack previous experience. More generally, you’ll need to be highly personable and enjoy dealing with people. Running a café also requires you to be extremely organised and efficient in what you do.
What are the keys to success in this business?
The location of your café is very important – and you need to know your main target market. Many cafés are positioned in prominent high street locations which get lots of passing trade, but that isn’t the only place you could open a café. You could, for example, open a café on a busy industrial estate that has lots of workers or in a lay-by on a busy A-road (you have probably seen such businesses that exist in converted buses or similar). Aside from location, creating a nice café ambience is very important and you need to offer a menu that appeals to your market. Being highly organised and providing a fast service is also important – many of your customers may be on a one-hour lunch break and don’t have 15 minutes to wait for their food to be ready. Cafés rely heavily on repeat business and the overall customer experience needs to be good.
Compliance and insurance
There are strict regulations regarding food hygiene and health & safety, including keeping food at the correct temperature and handling food in the correct way. The Health & Safety Executive (HSE) can advise you on such things and show you how to become compliant. You’ll also need insurance – including protection against fire and theft, public liability insurance and product liability insurance. This can be expensive for a café, so consider using a specialist insurance broker who may be able to negotiate you a better premium.
Starting a café can be expensive. You’ll need to allocate a significant amount of money to acquiring or renting a premises and then fitting it out. The more passing trade your chosen location has, the higher the rent is likely to be. There are also costs associated with food compliance certificates – and you’ll need to take on staff. Don’t forget marketing either – people need to know that your café is there and be persuaded to change from their regular café or coffee shop.
Should I consider buying an existing business?
There are usually a good amount of existing café businesses on the market, which could provide a good alternative to starting from scratch, especially if they are already successful. Always investigate a business thoroughly, paying particular attention to the books and financial records and exactly why the owner is selling the business.
Your next steps
Market research is essential before starting your business. Take a look at other cafés in the area you intend to start your business and research menus, prices, etc. Is there a gap in the market for a particular kind of specialist café? You might also want to conduct some primary market research, for example by doing a street survey or, once you have found a potentially suitable premises, observing the number of people who go past it in an hour around lunchtime.
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