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Yo Manila | Tips on Starting a Café Business | There are many people out there dreaming of having their own café or some kind of coffee shop. After all, we’re talking about the most popular drink around the world. Also, there are chances of making a good living in an interesting line of business, which makes the whole idea rather tempting. There are three main ways in which you can start a café business: starting a business from scratch, opening a coffee shop franchise and buying an existing coffee shop business. So, what is it that you need to know before you make your dream come true?
Research and make a business plan
You need a strong business plan if you want to run a profitable company. The plan should have enough structure to give you firm footing, but also enough flexibility to allow you to grow. Next, you should decide what kind of coffee shop business you want to open. Is it a traditional coffee shop, a coffee roaster, a mobile coffee cart or some other type of business? Needless to say, you need to do research and find connections in the industry. Try to come up with an original idea, something that customers would find unique and see if your idea is feasible.
Define your target market and brand
What you need to do next is develop your marketing and brand strategies. The former should have your customers at the heart of it, especially since your business will bring in different types of customers. Categorize your customers into specific target markets. Is your place of business near a university or some other institution attracting a large number of people every day? Who are those people and what do they like? If it’s students, you can expect them to want a place to study or socialize. Next, do you operate in a residential area? Are parents your main target group? Once you define who your main customers are, think about how best to reach out to them. Also, you need to develop a brand strategy. How can your unique story give meaning to your brand? Every single thing you do reflects on your brand, from choosing all-time favorite bentwood chairs, which ooze class and comfort, to your selection of coffees and other refreshments.
Location
Your success will greatly depend on the location you choose for your business. You need to find a convenient spot where the surrounding tenants bring in a lot of traffic, preferably in an area that is not already saturated with similar establishments. Whether you find the location first and then identify your target groups, or look for a location based on the customers you wish to attract is another thing you need to decide about.
Day-to-day operations
You also need to be ready to work a lot. It’s simple: if you wish your business to be popular, you need to commit. Also, all of the technology and equipment your business will use need regular maintenance, but you still need to be ready to tackle a lot of unexpected issues almost on a daily basis. What you need to remember is that people working for you will look up to you and if they see you believe in the project and are ready to invest hard work, they’ll be much more likely to follow suit. However, that doesn’t mean there should be no time to relax, so make sure you allow everyone regular breaks.
Plan your growth
Once your establishment has become popular, you can take steps which would help it grow further. There are many directions in which you can take your business, but you need to make several considerations. For example, do you have the staff that can take your business to the next level? How can you expand your product line or get more space? These and similar questions need to be answered before you take any steps. Generally, you should try to stay consistent with your original purpose and brand.
How much does it cost?
It’s very difficult to say exactly, since the costs depend on your location, size and type of shop. However, you could expect to spend anywhere between $80,000 and $250,000. If you’re starting a business from scratch, a lot of your money will be used on a location, all the necessary equipment and any repairs that need to be made or building codes that need to be addressed. On the other hand, if you’re going to operate a franchise business, you need to take into account the fact that you also have to pay an ongoing franchise fee or royalty, which is usually a percentage of the gross revenue (usually 5-6 percent). Also, the royalty could be a fixed amount, regardless of the revenue and you shouldn’t forget marketing costs, since there is usually an advertising or marketing fund that every franchise in the region or country contributes to. This fee will also be either a fixed amount or percentage, likely in the 1-4 percent range.
These are some of the most important things you need to be aware of if you’re planning to start a coffee shop business. Careful planning and execution of a solid strategy are the crucial things, apart from your passion for running a coffee shop, of course.
