Business Plan: How to Start A Coffee Shop Business (Outdoor Cafe & Coffee Kiosk)？
When choosing an industry to implement a successful business, many entrepreneurs prefer the catering industry, which is well justified.
Opening a cafe is a great way to start a business.
Such projects usually pay off quickly and bring big profits in the long run.
That is why all kinds of coffee houses, waffle stores, pizzerias, coworking centers, and cafes appear at every step.
We will figure out what actions need to be taken to open a cafe so that it becomes popular. How to open a coffee restaurant? We will draw up an approximate business plan, but first, we will deal with the features of this area.
In Canada, the catering segment is considered quite free, despite the demand for such a business, thats why half of the establishments close during the year.
The situation can be explained by competition, an unsuccessful concept of institutions, or poor-quality services.
That is why drawing up a cafe business plan is so important. Those who approached this responsibly managed to operate in the market successfully.
Bubble tea, fresh fruit juice bar, and ice creams are good options and ideas to add to your cafe shop menu.
Each new cafe has its characteristics, which invariably attract visitors, some of whom become regular customers.
There are plenty of reasons why such a business is in demand among newly minted entrepreneurs:
- growth in the well-being of the population;
- striving for a modern way of life;
- the opportunity to communicate in a relaxed, comfortable environment;
- development of office centers and shopping and entertainment complexes, whose employees need to eat;
- interest in thematic institutions;
- the existence of lovers of culinary delights, as well as bachelors;
- Celebration of celebrations.
Planning as the basis for success
Honestly, assessing your strengths and capabilities is important at the very beginning.
Indeed, to feed people, it will be necessary to obtain many permits (IP, sanitary and epidemiological service, firefighters).
Subsequently, all standards and norms must be strictly observed. When “laying the foundation,” a competent and attentive approach is important. Otherwise, additional costs cannot be avoided.
The organization of the cafe should not be the result of yesterday’s “insight” with this idea. Any business needs to be calculated to the smallest detail!
And This is the secret of a successful business. The result begins with the planning of indicators: budget, scope, the timing of the launch, and implementation of the project.
The success of the enterprise rests on these three pillars. Think about how much you are ready to invest in a cafe, how long it will operate, and how long will the investment pay off?
If you can answer these and many related questions and understand the relationship between all processes, your project to open a cafe will certainly bring significant income.
The level of service provision in a cafe restaurant is simplified compared to a restaurant, so there is no need to perform a super task.
Let us consider in detail what issues need to be given maximum attention.
Permits and Required Documentation
The organization of a cafe requires a mandatory solution to such legal issues :
- business registration;
- choice of taxation system;
- collection of documents (lease agreement; permission to place a catering establishment in a specific room; results of a medical examination by staff);
- licensing (for trade activities, sale of tobacco and alcohol products);
- registration of cash registers;
- conclusion of contracts for garbage disposal, fire examination, fire alarm, panic button (security), derivatization and disinfection, accounting support;
- obtaining the conclusion of the SES (on the compliance of the selected premises with all sanitary standards);
- obtaining permission to carry out activities from the fire safety authorities;
- Signing contracts for the products.
In any case, you will not be able to avoid the documentary component, so use all your strengths and connections to resolve the issues listed.
Planning to open your cafe should be based solely on sanitary standards, and Customizing the project for them is not the best solution.
All rules for catering establishments regarding compliance with sanitary standards are reflected in the provisions of San Pin 22.214.171.1249-01. Following them manifests respect for the clients who provide your earnings.
Market and competition analysis
Analysis of the catering segment is very important, and it will help you find out which type of cafe is most in-demand and which will be a novelty. Initially, you need to define the following parameters:
- the total number of the population and the proportion of young people and people of working age in it (they will make up the main contingent);
- the average level of income of residents;
- a breakdown of the number of cafes by niche;
- territorial location of establishments;
- demand and supply for services;
- Average check size.
By comparing all these parameters, you will be able to understand the trends inherent in the market, correctly build a pricing policy, create a menu and choose the concept of an institution.
Then study the activities of such establishments in your city, analyzing their pros and cons and the target audience.
The flaws that competitors make are especially important.
Try to avoid them by improving the best practices and contributing your ideas.
It is important to identify the factors that determine the attendance of an institution in a particular place. And Order the Market analysis from consulting agencies if you have free funds.
In this case, a professional niche assessment with detailed specifications and a forecast of industry trends is provided. If the prospects of your idea turn out to be illusory, such companies will select a more profitable project.
Selecting the type of institution
The budget is based on a business plan based on the cafe type. Focus on both your preferences and the number of similar establishments.
Children’s cafe – interior
Today cafes are considered promising on the market:
- Internet cafe;
- with karaoke;
- sushi bars;
- fast foods (providing takeaway food);
- anti-cafe (paid for the time of stay, not the cost of dishes on the menu);
- thematic (literary, sports, musical, national style, etc.).
Whatever type of establishment you choose, consider the specifics of the establishments. For example, the presence of dishes “from the chef” and the branded labeling of cutlery are characteristic of the artsy restaurant style. Do not pursue luxury you do not need, which will only entail extra costs.
But bags of sugar, on the packaging of which comics from your institution are depicted, will be just right. You can also make napkins with a logo or name, a special uniform for the staff, or a compliment from the establishment to regular customers.
Remember, “zest” is always welcome, no matter where – in the menu, interior, or service.
If you are counting on a wide audience, make sure that the location of the cafe is convenient for people:
- was in the first zone of visibility;
- disposed to rest (absence near busy highways and noisy highways);
- provided parking and transport access.
Location, of course, affects the attendance of the institution. You need to choose places with high traffic (central squares, walking areas, shopping malls, entertainment centers, train stations, and metro stations) or focus on the main idea.
The concept is an important factor in determining the location of the institution. Understanding the target audience will help you choose the right area, street, or shopping center. For example, youth cafes can be placed near the main places of entertainment in the city, and restaurants for vegetarians – near the centers of spiritual practices.
Regarding the main focus on business lunches, you should choose places near business centers in the city’s business districts. You can count on banquets near motor transport hubs in a residential area for quick snacks.
Coffee houses are popular in the city center because it is convenient to meet there to talk about business for 15-20 minutes.
Features of the room and interior decorations
The premises for the cafe can be bought, built or rented. When choosing, the following criteria are taken into account:
- rent or cost;
- room dimensions;
- the presence of halls and utility rooms;
- layout design;
- proximity to public transport stops;
- remoteness from automobile and pedestrian traffic;
- number of stories (preferably the first one);
- availability of entrances and exits (preferably from the street);
- window exit (great if the room is located at the intersection, and the windows face 2 streets);
- view from the window;
- availability of ventilation systems;
- compliance with the norm (firefighters, SES);
- the condition of the electrical wiring (what is the maximum load the room can withstand);
- previous purpose of operation of the premises;
- the need for repair or restoration.
It is necessary to clearly understand how many halls and seats are in them for guests. and what will be needed to implement your idea on a full scale. According to the regulation, the best option is an area of 280 m² / 50 seats.
Do not forget to calculate, in addition to the area of \u200b\u200bthe dining area, the dimensions of the kitchen, toilet rooms, storage spaces, staff rooms, accounting, and management. The more accurately you draw a plan, the clearer it will be for you and investors, and the more likely it is to bring the project to life in its original form.
The interior design should correspond to the cafe’s name and reflect its concept. Come up with a “chip” to help attract customers and make the institution recognizable in the market. And This can help designers, decorators, florists, and marketers.
We can recommend a win-win trick to attract guests’ attention – fresh flowers on the tables. It’s not that expensive, but it always “works.” For a themed container cafe restaurant, the idea should be traced in everything: from paintings and musical accompaniment to staff uniforms and names of dishes on the menu. This is a prerequisite for such establishments.
Don’t skimp on the budget to beat the idea. After all, this factor allows you to inflate prices on the menu. Remember, in the right atmosphere, the client loses a sense of time and reality, and a feeling of relaxation arises. And This can compensate for the shortcomings in the kitchen and service.
Equipment For Coffee Shop
The estimated cost of purchasing equipment for the full-fledged operation of the cafe depends on the business plan, which sets out the list of dishes you will offer visitors.
Because some products must be stored under certain conditions, this may require additional lockers, and others require special processing devices. Evaluate all the nuances of cooking before adding them to the menu.
For a cafe, a standard set of equipment includes:
- bar counters
- cutting tables;
- display carts
- refrigerators and freezers;
- combi steamer;
- washing equipment;
- Counter top display cases;
- kitchen equipment (mixers, coffee machine, slicers, microwave ovens, blenders, toasters, etc.).
Also, calculate the amount of furniture, lamps, decorative elements, dishes, textiles, appliances, and appliances necessary for decorating the hall.
It is advisable to divide the estimate (calculated in the business plan) by the type of goods (kitchen equipment, furniture, plumbing, interior elements). This will allow you to receive volume discounts when delivering products.
Hiring unqualified staff is undesirable for a new institution to risk its reputation from the first days. It is foolish to hope that employees will learn everything directly at the workplace.
Food that doesn’t taste good or doesn’t match the name will turn customers away from you once and for all. The impolite and awkward staff, dirty dishes, and “stale” halls do not contribute to the popularity.
Employees must be:
To operate a small coffee kiosk, 2 to 3 staff is enough. If you open a cafe or larger coffee shop, no more than 10 employees work in turns will do:
- 2 cooks;
- 2 waiters;
- 2 washers;
- 1 bartender-cashier;
- 1 administrator;
- 1 accountant;
- 1 cleaner.
We compose the menu.
To work, you need a basic and banquet menu, which considers the institution’s specialization.
It is important to work out a meal plan:
- diet menu;
- children’s menu;
- business lunches (complex lunches);
- compliments for guests;
- alcohol card.
Try to avoid banal names of dishes. Introduce something unusual or change the terms.
The breadth of the range is welcome. However, it is worth observing the measure. Too many dishes on the menu indicate that they are prepared from semi-finished or stale products in violation of sanitary standards.
In addition, choose only trusted suppliers. Random purchases at low prices can turn into a big problem.
A standard full menu should contain up to 50 dishes and up to 50 items of various drinks. And This is quite enough, and it is better to update it every quarter and for holidays (Halloween, Easter, New Year, etc.).
Advertising and PR
An advertising campaign is necessary, but it is better to do it on an ongoing basis (in this case, these costs must be included in the cafe business plan). When developing a marketing policy, consider two components of a successful campaign:
- internal marketing (implies ensuring the maximum level of competence and loyalty of the staff);
- external marketing (presupposes a series of activities to generate demand from potential customers). You can use:
- advertising booklets;
- business cards;
- discount flyers;
- radio advertising.
You can also open coffee kiosks in shopping malls, office centers, and crowded places. Good partnership option. You place taxi business cards in your area, and they, on the contrary, advertise you. At the same time, small mutual discounts on each other’s services will have a double effect.
Creating pages and groups on social networks and placing information about your cafe in thematic directories is appropriate. Of course, if the budget allows, you can make your website. But remember that it needs to be promoted, which is costly and quite difficult.
Therefore, it is better to postpone it until the cafe is “untwisted.” Think about how to keep your customers. Perhaps you should introduce loyalty programs for regular customers.
The profitability of such institutions depends on:
- the scale of activity;
- the location of the object;
- institution themes;
- working hours;
- the quality of the “kitchen”;
- staff qualifications;
- pricing policy;
- amenities and atmosphere;
- the amount of investment.
For example, now fashionable Internet cafes and anti-cafes have profitability of about 100%! But they are in demand only in metropolitan areas.
The children’s cafe is characterized by profitability of about 30%. Equipping a children’s playground with animators and hiring a confectioner can double the profitability of such an establishment.
Cafe business plan with calculations
Here is a brief example of a business plan for opening a “Coffee Lover” cafe.
Purpose: organization of a compact cafe or pastry shop.
Description of the project. Cafe “Coffee Lover” is located in the center part of the city in a rented room with 1 hall (capacity of 50 seats) and 1 kitchen area.
The assumptions used to function as a cafe to reduce the purchasing equipment costs.
It is supposed to open an institution with the concept of national cuisine in a low-price category.
The average price of a check is expected to be $5.5. Target audience: students, employees of the office center, and tourists. Working hours: 10-22 daily.
Market analysis. The place is popular for walking among residents and visitors of the city. There are a lot of similar establishments with a similar concept – only one.
You can obtain Competitive advantages by extending the cafe’s opening hours by one hour, holding “dish of the day” campaigns, and reducing prices by 5%.
Marketing policy. Large-scale advertising is necessary once. Further, it is supposed to advertise through social networks, the sale of booklets, discount coupons, and business cards.
Equipment. Most of the equipment in the room is (in good condition). Need to buy:
- refrigerators – 2 pcs.;
- microwave oven – 1 pc.;
- bar counter – 1 pc.;
- production table – 1 pc.;
- new tables for visitors – 10 pcs.;
- armchairs in the hall – 40 pcs.;
- hangers – 2 pcs.
Staff. According to the plan, it is supposed to hire 6 employees: administrator, cook, waiter, bartender, washer/cleaner, and accountant (incoming).
Financial indicators. The costs will be:
- rent – $ 2 thousand / month;
- purchase of products (including alcohol) – $ 3 thousand / month;
- utility bills – $ 1 thousand / month;
- cosmetic repairs of the premises – $ 2 thousand;
- furniture – $ 5 thousand;
- equipment – $ 7 thousand;
- advertising – $ 1 thousand;
- payroll fund – 3 thousand $ / month. (including deductions).
Investments in the amount of 40 thousand $ / month are expected. Projected net profit – 3-4.5 thousand $ / month. The return on investment is 1-1.5 years. The planned income is possible at 50% load. The profitability of the cafe is 30-40%.
Many visit mall coffee kiosks, cafes, and coffee shops during the day. Some want to have a bite, others want to celebrate a joyful event, others want to meet friends, and others want to hold business negotiations.
For urban residents, this is the norm of life, and for entrepreneurs, it is an interesting and promising type of business: Stylish cafe – opening.
The organization of a cafe seems quite expensive, but the efforts and invested funds will pay off with a vengeance if you approach this issue correctly and balanced.