Opening a small, cozy, and “sweet” cafe is the dream of many small and medium business owners. However, just "sweet" does not guarantee the success of your business. Cafes have tight profit margins, require a large initial investment, and a long service life and a lot of burden on the mind of the owner who doubles as manager. However, before getting discouraged, know the steps needed to open a cafe first. With careful planning, your cafe will be able to survive and become the small business of your dreams.
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Part 1 of 3: Planning Your Small Business
Step 1. Write a business plan
No matter what type of small business you want to open, a detailed business plan is an important first step. A good business plan analyzes your business, market and future plans for several years. In essence, planning is a “map” to the success of your business. Planning also serves as the primary “selling concept” for potential investors and suppliers of funds.
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Here are some of the main components of writing a business plan:
- Title Page and Table of Contents
- Executive Overview, which summarizes the company's vision.
- Company Overview, which provides a brief overview of the company and the services/products provided to the market.
- Products and Services, which describe in detail the uniqueness of the product or service that the company provides.
- Marketing Plan, which outlines how you will market your product/service to consumers.
- Operational Plan, which describes how the business will operate on a day-to-day basis.
- Management and Organization, which explains the organizational structure and the philosophy that underlies it.
- Financial Planning, which illustrates your working model for funding and your needs from investors.
Step 2. Familiarize yourself with the legal requirements
Opening a cafe involves not only managing the various legal “barriers” that new SMEs have to go through, but also the hygiene, health and safety requirements of the health department. For example, in the US SMEs must obtain licenses and permits (and proof of insurance) at the local, state, and federal government levels.
- First of all, you must determine the type of organization your business is in. You can choose (but are not limited to) individuals, partnerships, and limited liability companies (PT). Each type has its own advantages and disadvantages.
- Next, you can start to find out about the licenses and permits needed to open a business. Try consulting the Chamber of Commerce and Industry, the SME Licensing Information Center, or other similar agencies for assistance.
- For commercial reasons, you should also apply for a corporate NPWP.
- Consider hiring a business attorney to help you through the legal process.
Step 3. Secure your business funding
In business planning, you determine the amount of funds needed to open a cafe. To get these funds, you have to be creative. Contact investors, apply for loans, peek at savings, and take advantage of all possible reasonable resources to get your business start-up capital.
- Take the time to research the best small business loan options from a trusted financial institution. The bank you've already used (eg for savings) may have the best offer. The Ministry of Cooperatives and SMEs can help you get the best loan process.
- Your funding options don't have to come from bank loans and personal savings. Try to persuade investors or partners with your business plan. If you dare to take the risk, ask for a loan from family or friends. Creative options can range from crowdfunding to renting out the third floor of your home. Always monitor prospective funding sources.
Step 4. Create your brand identity
Create your logos, graphics, business cards and all your promotional materials. Try to find a theme that is consistent and reflects your cafe's vision. That way, you can coordinate colors for decorations, menus, and other marketing items.
- Consider your target potential customers based on the results of monitoring and research on the surrounding community and your business goals. Whether your cafe visitors are office workers, students, tech-savvy people, or looking for a comfortable place to chat. This information will also help guide your branding.
- Your ultimate goal is to create a “single voice” that reflects everything from promotional materials, to lunch menus, and even your cafe's bathroom décor.
- If you're having trouble developing a brand identity, or feel the concept is getting too complicated, consider hiring a professional who focuses on this area.
Part 2 of 3: Preparing Your Cafe
Step 1. Find a strategic location
Investigate multiple potential locations. Look through the various places available for rent or sale. Choose a place that fits your budget and is strategic for customers to visit.
- If the location has been used as a cafe, this can benefit you because you don't have to waste time and money turning it into a cafe. However, also consider the reasons the previous cafe failed.
- Scout potential locations in real time. Count how many cars and people pass in an hour at various times of the day. People will be looking for good food and drink, but new cafes are more likely to get loyal customers if they are in a busy area.
Step 2. Adjust the layout and decor to match your brand
Even though the previous location was a former cafe which is still in good condition, it's a good idea to polish and revamp it further to suit your cafe's vision. However, make sure it doesn't exceed your budget.
- While important, don't just focus on things like wall color and lighting. Especially for cafes, make sure you create an effective kitchen area so the chef can cook without moving around a lot.
- While you may want the cafe to be a comfortable place for customers to sit and enjoy their time, make it easy for customers to buy take-away orders. People who buy take-out orders are cheaper and easier to satisfy.
Step 3. Prepare the equipment needed to run the cafe
If you are renovating a former cafe, maybe the tables, chairs, booths, credit card machines from the former cafe can still be used. However, you will still need to buy or rent some of the equipment you need.
- Look for possible savings. Perhaps a mix-and-match theme, eclectic furniture décor could be a good fit for your cafe so you can save money by making use of used tables, chairs, and other equipment whenever possible.
- However, for cafes, don't skimp on the key equipment. If the cafe is going to focus on coffee, make sure the product is of high quality. People who buy premium coffee tend to know the difference.
- Research equipment rental providers in your area. Consider several options to find the best deals as you should save at all times.
Step 4. Compose your menu
The decor, atmosphere and other things are important to the success of your cafe. However, visitors will not return if the food and drinks are not up to their standards and tastes. Take the time to put together a menu with maximum appeal without going over your budget.
- Especially for cafes, you should limit the menu, especially in the early days of opening. Focus on key food-beverages that complement each other, such as a selection of cakes that come with your choice of coffee, or a variety of easy-to-make soups and sandwiches.
- Make sure you are familiar with all the food and drinks on the menu, regardless of size. If you don't know coffee well, study it extensively. Know where your product is coming from. You should be able to address the source of the meat in the sandwich. Bring a personal touch to your food to make it look unique compared to big restaurants.
Step 5. Build relationships with suppliers and distributors
You need to secure the best and most efficient way to to get all the food and goods needed to run the business on a daily basis. In this way, build solid relationships with trusted suppliers who are able to prepare new meals, napkins and menus for you on time and consistently, and at the right price.
- Suppliers are the lifeblood of a cafe. Without a product available when you need it (at a reasonable price), you have nothing.
- Ask restaurants and other small businesses in your area about the suppliers to use. Once you have selected your supplier, start building and maintaining a good working relationship with them. However, don't be afraid to change suppliers to get a better price and quality.
Part 3 of 3: Opening a Business
Step 1. Market and promote your cafe
If no one knows that your cafe will open anytime soon, you won't get the number of customers you want. Start marketing early and continuously. Use newspapers, social media, word of mouth, posters, and any other method you can think of to get more people to know about your new business.
- While marketing your business, keep your promotional materials consistent with your brand identity.
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The article on how to open a small business provides a wealth of information on how to prepare for opening your business. Read Part 3 of the article for related information:
- Create a marketing budget for the grand opening (which usually covers 20% of your first year budget).
- Use traditional media such as television, radio, and newspapers.
- Use digital media such as social networks, websites, and marketing technologies like Google Adwords.
Step 2. Hire and train your kitchen staff and waiters
They will be the backbone of your business. You will depend on the kitchen staff to make the food and drinks that customers love, and the waiter staff to provide a satisfying customer experience and service.
- Experience working in a cafe is definitely a plus, but also pay attention to the personality, temperament and attitude of your prospective staff. Do a thorough interview, and ask questions that broaden your horizons (for example, how to deal with adversity at the cafe where he worked previously and how to handle a particular case in the cafe).
- Remember, when you are not in the cafe, the employees will be the face of your business.
- Again, the How to Open a Small Business article provides useful information about hiring employees, including details of your initial responsibilities as an employee.
Step 3. Open your business when it's ready
When all the preparations are in place and the business is ready to open, open your cafe. Be prepared for the difficulties to come, and deal with them quickly so that your business runs smoothly.
- If you want your cafe's grand opening to be flawless, it's a good idea to do a “soft opening” to run a test run. Invite a group of guests, maybe even your friends and family. Monitor your cafe's weaknesses and strengths before making a grand opening.
- Splendid the grand opening with lots of advertisements, giveaways (free services/products for promotion), and in any way that makes other people curious and interested in entering your cafe. Also, think about the best days and times to open your cafe. When will customers visit? Workday morning? When it's lunch time? Breakfast on the weekends?
Step 4. Maintain customer loyalty
Inviting customers into your cafe is only the beginning. Most cafes need loyal guests to survive. Good products, a comfortable atmosphere, friendly waiters, and affordable prices will help your cafe survive, but don't be afraid to test your creativity to find ways to maintain customer loyalty.
- For example, offer a loyalty program. This method not only retains customers, but is also great for understanding and building strong customer relationships. The temptation of free coffee after all the boxes are stamped is enough to keep customers coming back until it becomes a part of their daily life.
- Apart from stamp cards or coupons, there are various ways to maintain customer loyalty using QR codes. No matter what method you use, don't think of a loyalty program as a giveaway. Instead, think of it as an effective marketing tool.
