Running a café may seem like a daunting task, but the journey of growing a business you are passionate about is one that is well worth going on. Luckily, there is no need to ignorantly stumble into the world of café management. You have access to a wealth of knowledge when it comes to establishing and managing your business.
We have assembled the ultimate guide to running a café, with tips and strategies covering everything from setting up a new café, managing an established business and navigating a café out of a downturn.
How to set up a café
Building a new hospitality venture from scratch is a major undertaking. It is critically important to dot your Is and cross your Ts to ensure you have a strong foundation to work from. For more information on establishing a business, read our full checklist for opening a new hospitality venue.
Select a business structure
The first step to establishing any new business is to choose a structure. Some of the most common business structures for cafés are:
- Owner-operated: Owner-operated businesses offer complete control as you finance and manage your café by yourself. This structure allows you to collect the profits of your business for yourself. However, they also require you to work without much support from anyone else and take on greater financial liability.
- Partnership: Partnerships are similar to owner-operated businesses. However, they include several more individuals at the head of the company. This structure allows you to take advantage of the knowledge and acumen of a greater number of individuals.
- Franchise: One way to take some shortcuts in establishing a café is to go for a franchise model. This business model allows you to pay a flat fee to a franchisor, and receive assistance such as a business name, marketing strategy and supplies.
Create a menu
What's a café without a menu? Now is the time to sit down and decide on the menu items you'll offer to ensure your diners have a wonderful experience. Check out our complete guide to designing a menu here.
When creating a menu, consider which products you'll be able to consistently and affordably source, and the overall image of your restaurant your menu will represent. If you already have any chefs in your team, ensure you get their input here.
Write a business plan
The next step to opening a café is to create a business plan. A business plan should begin with a SWOT analysis, laying out the strengths and weaknesses of your prospective café, and the opportunities and threats presented by the broader market.
Then, create a mission statement synthesising the core aims of your business into a short description. Finally, you're ready to make a business plan, which will help you outline the nature of your business and nail down some financial projections.
Your business plan should include the following elements:
- Company description
- Ideal diner experience
- Sample menu
- Location analysis
- Market overview
- Marketing strategy
- Financial analysis
Any new café venture will require an initial investment to make everything possible. It is important to source this money in the early stages of establishing your café.
Possible sources of investment for hospitality venues include:
- Your own savings
- Family and friends
- Business partners
- Bank loans
- Private investor
Choose a location
Location is crucially important when it comes to establishing a café. Securing a consistent flow of foot traffic is essential to any successful hospitality venue. Of course, the most premium locations will come with higher rent to pay, so you will need to work hard to find the perfect middle ground for your business.
Once you have selected your dream location, there is the small matter of securing a lease. You will want to ensure you get a good deal on your lease, so consider contracting some professional help. This can be a lengthy and difficult process, so don't get disheartened by rejections and continue to work towards setting up your café in a great location.
Licences and permits
You are likely to be surprised to find just how many licences and permits you need to operate a café. Your local council or jurisdiction should have resources available with a complete rundown of all the licences and permits you need for food business registration. Be sure to set aside plenty of time in your launch plan to handle this lengthy process.
Next, you will need to bring your staff on board. From chefs to baristas to waitstaff, conduct thorough interview processes. This will ensure you've attracted the best candidates committed to helping your business succeed.
Find quality food and beverage suppliers
Establishing relationships with local suppliers is a great way to ingrain yourself into the community and secure high-quality products at affordable prices. Use any connections you have to get in touch with esteemed suppliers and build a working relationship. When it comes to establishing a café, high-quality coffee beans are a particularly important consideration.
Get your equipment
With coffee machines, fridges, freezers, cookware, ovens and more, there is a massive amount of equipment needed to run a café. Make sure you have robust equipment ready to go for your big launch. Purchase in bulk wherever possible to cut down on costs.
Design your café
The final step before you can open your café doors is to design it. When designing a café, ensure you establish a unique and pleasant identity. Creating a distinctive and aesthetically-pleasing location will make your location more "Instagrammable", boosting the number of eyeballs on your business.
When it comes to this step, you can contract the assistance of a professional interior designer or take on this challenge yourself. Read our guide to maximising floor space in your restaurant to ensure you can get as many customers as possible inside.
How to run a café
Establishing a café is a massive amount of work, but the fun doesn't stop when you're up and running. Here are some of the top steps you can take to boost your chances of success.
Enact a marketing strategy
You should begin developing an effective marketing strategy when your business is in the development process. After your café is established, it's time to step it up. Some of the most popular marketing strategies for cafés include:
- Placing traditional advertisements in local areas
- Online marketing such as search engine optimisation
- Social media marketing
- Partnering with local businesses
- Encouraging customers to leave reviews on Google and other review sites
Build relationships with regular customers
Your regular customers can be one of your café's most valuable assets. Humans are creatures of habit, and when we find a great coffee shop, we can be inclined to stick with it for the long run. If you notice a customer repeatedly returning to your venue, make a special effort to connect with them, and encourage your employees to do the same.
Loyalty programs – such as offering free coffee for each number of cups purchased – can also be instrumental in ensuring repeat business from customers. ResDiary offers a range of services including Dish Cult Rewards to help you drive repeat business.
From the quality of your food to customer service to your dress code, maintaining consistently high standards across all fronts of your business is essential to continued success. We tend to remember negative experiences more strongly than positive ones, so one bad day in your café can be enough to erase 5 great ones.
Establishing your business as a consistently excellent one is the only way to firmly cement yourself as the place to be in your community.
Track your finances
Owning and operating a café is a financially complex endeavour. It is important to ensure your books are balanced and you know exactly where you stand.
Table management systems like ResDiary can help you track your finances by managing your reservations, yield, inventory and more. Tracking all these different financial facets in a central location makes it much easier to understand the full economic picture of your café business.
Source customer feedback
The best way to improve the experience of your customers is to hear from them directly. Solicit customer feedback in face-to-face interactions, or encourage them to fill out a digital survey. Either way, you will come away with valuable insights on how your business can be improved.
How to bring a café out of a downturn
Every business goes through tough spells, and your café is no different. Considering present economic conditions, it is important to have a clear strategy in place to help you navigate a significant down period in your business.
Optimise your menu
When first establishing your café, your menu is a chance to establish an identity and serve the type of food you have always wanted to eat in a restaurant. In pursuing this goal, financial efficiency might fall by the wayside. When a tough period hits your business, you will find plenty of opportunities to tighten your purse strings. Replace more expensive ingredients with cheaper or seasonal ones, and take a long hard look at the dishes which are not selling.
Manage food costs
You should always be looking to keep a cap on your food costs, but it is especially important during periods of low profits. You can manage food costs by:
- Performing frequent inventory checks
- Tracking, measuring and minimising food wastage
- Revisiting negotiations with suppliers
- Performing more bulk purchases
- Conduct staff training on topics like portion control and First In First Out (FIFO)
Keep business expenses under control
Overhead is the bugbear of every restaurant owner. Ensure you are using as little energy as possible by turning off idle appliances, buying energy-efficient equipment and having separate temperature zones for cooling and heating appliances.
If you find that labour costs are throwing off your finances, consider switching to a rotating roster. This style of roster can prove to be more optimal for hospitality staff, ensuring you have the right number of staff on the floor at all times and keeping employees happy.
Turnover, turnover, turnover
As any restaurant owner knows, turnover is the name of the game. Firstly, you need to make sure customers know about your business. This could involve stepping up your marketing strategies and conducting competitor research to attract customers. You might consider a makeover to refresh the aesthetics of your café.
Maximising floor space is also key to ensuring high levels of turnover. Revisit staff training to ensure all your employees are taking the necessary steps to efficiently serve patrons and move on to new customers.
How ResDiary can help you run your café
When it comes to running a successful café, you need all the help you can get. Use ResDiary's wide range of functions and integrations to help out all across your business. From expansive table management functionality to EPOS integrations and helping out with marketing, ResDiary is a worthwhile investment for any hospitality business.
With over 60 integrations from leading hospitality software companies, ResDiary helps maximise your reservations and do so much more. To find out more about how ResDiary can help you run your café, book a free, personalised demo today.