Owning and running a café is a secret desire of many people – and it isn’t hard to understand why. Serving coffee and cake, and watching customers chat and relax from a hectic day’s shopping, seems more fulfilling than any 9-5 office job.
There is a certain warmth to a café, but the image a café evokes can be very different to the truth. In fact, anyone who wants to run a café needs to be prepared for a battle for survival.
Statistics show that, in Australia, the vast majority of newly opened cafés fail, with 70% closing within 12 months. What is more, the average term of ownership of a café is between 2 and 3 years, before they are sold on to the next owners.
But for all the risks associated with the industry, choosing to run a café can be a hugely rewarding undertaking, both financially and personally. So, what is needed to make your café a success? What are the pitfalls to avoid, and the advice to hold on to?
We’ve put together an 11-point guide on how to run a café, that should start you in the right direction.
1. Buying a Café Not a Dream – when first buying a café, there are no shortcuts to a good deal – and if any are taken, a serious price will be paid later on. Negotiations can have a litany of pitfalls, with most new café owners finding out later the asking price was hugely over-valued. So, ignore the setting, appearance and interior décor, and keep emotions out of the deal completely. Trust us, emotion will turn your dream of owning and running a café into a complete nightmare.
2. Have Business Plan – in keeping with the ‘emotionless’ theme, it is essential that a realistic business plan is developed before buying a café. Map out the intended course of action for both marketing and running the café, and refer to them continuously. And remember, it is impossible to secure funding without one – banks and investors need to examine it before making a decision.
3. Cross All The T’s - another obvious step, but worth repeating, is the need to have all the legal issues in order. Before starting to run a café, don’t dilly-dally when seeking business permits, food and beverage licenses, and insurance of all kinds.
Running Your Café
4. Follow A Theme – it’s easy to provide the safe, usual and run-of-the-mill, but let’s face it – your café is not going to be talked about much. A theme helps a café to stand out against the local competition, but it should run through the menu as much as the interior décor.
5. Professionalism At All Times – professionalism in both image and attitude is essential if you want to run a café successfully. Spend time properly training your staff, make sure they know how to handle every situation, insist on the highest presentation standards, have attractive menus, and a website that visitors find informative.
6. Swap Shoes – not literally of course, but figuratively. Consider your customers’ experience and what they would expect from your café. Looking at your service, menus and facilities through their eyes provides an honest evaluation, often revealing where the cracks lie.
7. Keep Instructions Simple – consider your staff, and how important clear communication is with them. A key to effectively running a café is ensuring no confusion. Policy inconsistencies are a key contributor to confusion, and in a café, this inconsistency can frustrate customers. So, develop clear procedures and make sure your staff understand them.
8. Suppliers Are Your Friends – it sounds a little soppy, but it is true. Developing positive relationships with your suppliers and distributors means they will look after you, especially when emergency orders are placed. If your café is a success, you’ll be surprised how often those emergencies crop up.
9. Change Is Good – experience has taught those who run a café never to be afraid to make changes. In fact, a café is a fluid business that must adapt to the tastes and preferences of the existing market as they develop. Flavour of the month really can mean flavour ‘of the month’, so be prepared to alter your menu regularly.
Marketing and Promotion
10. Never Stop Marketing – a major challenge when running a café is to stay popular, but no matter how adventurous your menus are, or great your coffee is, nobody can rely solely on word-of-mouth. People who already run a café will testify that marketing is the heaviest weapon in their armory This includes flyers, posters and the normal advertising channels, but mastering the potential online and social media have to offer is essential too.
11. Building A Group Of Regulars – your relationship with suppliers is important, but your relationship with your customers – and developing a group of regulars – is perhaps more so. This is where loyalty programs can be of great value. The incentives received from repeat custom is proven to keep people returning, and a simple card-stamp system can work perfectly.
Sources and Recommended Reading:
- ‘How To Start A Café’, Wikihow (website) – http://www.wikihow.com/Start-a-Cafe
- ‘10 Tips for Running a Successful Coffee Shop’, Justin Kownacki (blog) – http://www.justinkownacki.com/2009/11/12/10-tips-for-running-a-successful-coffee-shop/
- ‘How To Run A Café’, Businesses For Sale (website) – http://uk.businessesforsale.com/uk/search/Cafes-for-sale/articles/How-to-run-a-cafe
- ‘Attributes Of A Successful Café Owner’, Craig Reid, The Café Ninja (blog) - http://www.thecafeninja.com/running-a-cafe/
- ‘My Top 5 Tips For Café Success’, Craig Reid, The Café Ninja (blog) - http://www.thecafeninja.com/2012/02/my-top-5-tips-for-cafe-success.html
- ‘A Passion for Caffeine: How To Start A Coffee Shop’, Sydney Morning Herald - http://www.smh.com.au/small-business/coaching/a-passion-for-caffeine-how-to-start-a-coffee-shop-20100729-10wvd.html
- The 11 Biggest Mistakes You Can Make When Buying a Café That Could Cost You Tens Of Thousands Of Dollars’ (pdf), Rita Srblin, The Café Coach (website) - http://www.cafe-coach.com.au/11_Biggest_Mistakes.pdf
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