Coffee is always a high-demand product, and while some big coffee brands are expanding rapidly, customers are often enticed by an independent. For this reason, many entrepreneurs consider starting up a café or coffee shop. But to do this, a well-thought-out business plan is essential to save yourself time, money and stress.
The Appeal of The Industry
Cafés and coffee shops are a part of the quick service restaurant market in the UK, alongside bakeries and sandwich shops. Over the last decade there has been an increasing trend in the number of coffee shops operating in the UK, including independent operators and non-specialists.
Despite the explosion in coffee chains leaving few high streets without their branch of Costa or Starbucks, many consumers value the convenience of location as opposed to brand name, meaning an independent can still thrive on the high street.
Is This Industry Suited to You?
There is a lot to think about when entering such a saturated market. Despite the success of household-name brands such as Costa and Starbucks, this is not the type of business to set up if you are expecting to make huge profits initially or make a quick multi-million-pound exit. Profit margins will only become significant if you open multiple outlets. But, if you are looking for a lifestyle business with a modest income, then this could be a great business for you to start up.
As with any start-up, there is a lot of work involved. Industry experience is not vital with this type of start-up, but as with any business, experience can go a long way. Whether, that’s working in a café or coffee shop, working in a customer service role or in a financial role – any experience is valuable.
Café Premises, Planning, Regulations and Rules
One of the biggest decisions you will have to make is regarding the café premises. The location of your new café, as well as the size of the premises are the two main factors to consider. The majority of consumers buy coffee and other hot drinks when they’re out and about, so busy urban areas are a great place to start; albeit an expensive one. The amount of square feet you will be able to get in places such as this will be less than if you choose a more suburban or rural location. Alternatively, if you are looking for a spacious coffee and tearoom you might be more restricted on the kind of location you can afford. It may be worth considering investment in better beans and saving a little on the location as two thirds of consumers consider the quality of the coffee to be the most important factor when choosing a coffee shop. Before you negotiate the lease or purchase of a property you must also check what commercial classification it currently falls under. If the property does not already have the correct classification for a coffee or tea shop you will need to get planning permission from your local authority.
The main thing to note when it comes to your café premises is that you need to be flexible.
Further, researching and knowing your market is essential. Look into the big brands and the locations in which they have been successful, there is likely to be room for a new independent café in the mix. Additionally, think about what these big brands are offering and how you can compete and improve on that. As a part of your business plan, this type of market research will help you in the long run. Checking competitor annual reports and profitable areas will also help you learn about the structure of your business. You will also be expected to provide this type of in-depth information if you are looking to secure a loan from the bank.
The Food Standards Agency (FSA) is worth researching and getting into contact with when gathering advice on all rules, regulations and standards when it comes to food. There is currently no law that states you have to undertake any training to open a café, but anyone handling food for your business will need to have appropriate training. The legal responsibility of this lies with you, as the business owner.
Meeting all standards is important in this industry due to the fatalities that food can cause regarding allergies, dietary requirements, contamination and food poisoning. Therefore, it is vital that things do not go wrong. In order to avoid issues, learning the ‘Hazard Analysis Critical Control Point' (HACCP) is recommended. This is an internationally recognised system of food safety management to help you put steps in place to prevent things going wrong.
Why Create A Business Plan?
Creating a business plan for your café or coffee shop is so important if you want your new business to hit the ground running and become successful. By laying out your vision and creating the necessary planning you can build your business with much more ease than blindly diving straight in.
Just skimming over what you need to know for your business to function, can actually spell future disaster for a coffee shop business owner. By knowing where you stand with all aspects of the business, you will be able to make appropriate decisions in launching your coffee shop.
How Can We Help You?
One of the ways to make sure that you are doing everything right, keeping on-track and not missing out anything important, is to have a business plan.
When you start any business, it is easy to surpass your original budget estimates. A business plan can help significantly reduce your costs and timings as well as allowing you to allocate your resources more effectively.
Starting a business is daunting and there are a lot of steps to be mindful of. Therefore, if you would like any help with putting together your business plan from an expert team, please get in touch! Contact us online using the form on the right or call 01604 420 420.