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Setting up a cafe: The essential dos and don’ts for success


Setting up a café is something that crosses the minds of a lot of entrepreneurs. On the face of it, it seems like a relatively simple thing to do. You rent out commercial premises, hire some servers, and fire up the kitchen. It turns out, though, that getting it right in setting up a cafe is a lot more challenging than you might think. As economists like to say, “there’s no such thing as a free lunch.”

The problem with cafés is that they’re easy to set up. There are a lot of people who could potentially enter the market. And that’s what makes the competition so fierce. The actual practical matter of setting up a cafe business is surprisingly straightforward. Once you’ve done it once, you’ve done it a thousand times. The issue is the fact that the barriers are low – anyone can do it – and customers have a lot of choices.

That’s not to say that doing something more complicated is any better. Yes – there aren’t as many people who can set up rocket businesses. But actually getting the engineering of something like that to work requires enormous effort and resources. When it comes to entrepreneurship, you can rarely have your cake and eat it too.

Success secrets for setting up a cafe

So with that said, what are the secrets of setting up a cafe successfully? How do you go about doing it? Here are some of the dos and don’ts you’ll want to bear in mind.

Do choose an unsaturated location

We’ve all walked down high streets and marvelled at the number of coffee shops lined up on either side. There’s a Starbucks followed by a Nero, followed by an independent, all vying for the same footfall. It looks competitive – and it is. Most shops in busy locations don’t make a lot of money.

Ideally, you’d like to avoid this kind of level of competition and be setting up a cafe in areas with fewer competitors. “Saturation” is a term you’ll hear a lot when you first get into the café business. Entrepreneurs will often talk about the number of coffee shops in the immediate vicinity and how this might impact their business if they decide to set one up.

You want to find “unsaturated” areas with good footfall. Finding these is notoriously challenging. It’s one of the reasons why so many cafes set up in department stores. They want a captive audience.

Do your research for setting up a cafe. Find areas around town that see a lot of people but don’t presently cater to them. Be observant of the time of day that this footfall occurs. In office districts, for instance, your shop might see the highest demand between 6 am, and 10 am, even if the number of potential customers is low the rest of the time and at the weekends.

Don’t open your shop in a generic space

So many of today’s most successful cafes manage to succeed because they set up in exciting locations. For instance, we’re seeing them pop up in the grounds of cultural landmarks, near beautiful civic features, such as fountains, and under major tourist attractions. This ploy is smart for setting up a cafe because it creates an association between your business and the nearby, better-known landmark.

It’s almost like free branding. Customers believe that you somehow have something to do with it, even though you’re unconnected, allowing you to charge a premium compared to your competitors down the street.

Do target a specific audience

There’s another way you can make your café more attractive: target a specific type of person when setting up a cafe right from the start. Targeting specific audiences is nothing new. We see it all the time in other types of business. However, people who own cafés rarely think about it. And that’s a problem.

Every coffee shop needs to appeal to one kind of audience or another. If you go for a generic appeal when setting up a cafe, you’ll wind up failing to grab the attention of anyone. You won’t be able to build a “base,” so to speak, so you’ll struggle to retain customers.

You see specialisation in the café sector all the time. Some establishments, for instance, attempt to appeal directly to a particular audience, like truckers. These diners typically serve up friend breakfasts, hamburgers, and comfort food to give workers energy to keep them going throughout long days. You also see different types of café that appeal to busy working professionals. The name “bistro” is just a marketing trick designed to elevate the brand of these establishments.

Please ensure that you research your target audience when setting up a cafe — and find out what it is that they want from you. Think about their age, the type of interiors they like, and the food and drink they are most likely to order. Cafés catering to millennials, for instance, need vegan and gluten-free options.

Don’t skimp on equipment

Running a professional café requires having equipment that can churn out food and drinks fast and to a high standard. At the centre of all coffeeshops is the coffee machine. Sites like talk about the various options available for commercial enterprises. Ideally, you want a coffee roaster that is going to produce a deep, rich flavour that keeps punters coming back for more.

The same goes for your range and refrigeration equipment when setting up a cafe. You need something you can use to prepare several meals quickly, perhaps with several chefs working side-by-side. Skimping on equipment is a big no-no. You’d don’t want to open your shop on a Monday morning, only to discover that the oven has packed up or the coffee machine isn’t working. That’s a disaster.

Do have a budget when setting up a cafe 

Getting into the café industry is extraordinarily high risk. You never know whether your investments are going to pay off. Sometimes you can do everything right and still wind up up the creek and without a paddle.

This fact highlights the purpose of budgeting when setting up a cafe. You need to write down how much money you’re willing to put on the line before you begin making a profit. Budgeting is vital for protecting the rest of your portfolio while also providing you with a concrete exit strategy. You don’t want to get to a situation where you’re completely out of cash, having burned through it all already. You want to approach it rationally.

The best advice here is to start small but dream big. If you have an excellent concept, customers will pay you to experience it. You don’t have to do anything grand, like open multiple locations at once or start a national chain. All you really need is a model that works, and then you’ll build the capital to replicate it organically, perhaps without having to go to investors.

Don’t neglect your long-term strategy

Before you even begin building your business, you need to think about the kind of enterprise that you’d like to operate in principle. Many company owners are happy to operate a single location and never move beyond that. Others want something that will spread all over the country – and perhaps, the world.

How you conceive of your enterprise will differ markedly depending on your ultimate goals for setting up a cafe. If all you want to do is set up a café that serves local people, you can choose something idiosyncratic. The more eccentric and reflective of the local area, the better. If, however, you want something that you can replicate across multiple locations, then being too wacky could be a disadvantage when setting up a cafe. You need food that will appeal to people, no matter where they are.

Do create obvious points of difference

When people think about your café, something unique about it should immediately come to mind. You can differentiate yourself in all kinds of ways when setting up a cafe. Here are some examples:

  • Placing your café next to a point of cultural or economic interest
  • Offering food and drink in a recreational area
  • Providing a unique type of cuisine, unavailable elsewhere
  • Establishing a unique interior

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