Cafe Business Plan
Most people who open a cafe do not write a business plan. They think they have got a pretty good idea what they are after. They started looking, they found something they like and then they became a cafe owner! Like any other business, a cafe business requires many skills beyond cooking and coffee making. You have to be a Salesperson, Accountant, Maintenance person, Marketing Manager and a Recruitment manager.
All these skills are achievable if you have the right attitude and stick to the business plan.
Remember: proper business planning is crucial to success; no matter what scope of operation you intend to operate.
Cafes conjure up many ideas to different people - from greasy spoon cafe to sophisticated specialty foods and beverages. We believe you are best opening a high quality cafe offering a different option to the fast-food, gas station, or institutional coffee houses.
You should aim high with your cafe - try to become the top cafe in your location. Your goal should be to create a cafe where everyone can get some great food, cold drinks, and relax in a laid-back, casual atmosphere. You should want your customers to have more fun during their leisure time.
By combining menu selection, atmosphere, ambiance, and service to create a sense of "place" in order to reach your goal of over-all value in a dining experience.
It's important with these ideas that you have the right location - you must have enough customers within reach - i.e. the local population in order to serve your requirements.
Starbucks rule the world in part because their growth is tied to the way people feel about its stores — they are clean and cozy bastions of seemingly-cosmopolitan relaxation, which trigger reward responses in the brain. Your cafe cannot compete with that system of stylized psychology, so win where you can: with personalization.
Every local cafe is a product of its neighborhood, and the employees and customers contribute to its day-to-day culture. Cultivate a pleasant and / or interesting atmosphere and the people who respect those traits will return. Embrace localism, celebrate individuality, and make your cafe the kind of place you would want to spend time in.
Your cafe should feature a full menu of moderately priced "comfort" food based upon time-honored recipes from around the world.
All the great food, ambiance and daily specials won't keep customers and attract new ones if they don't enjoy their experience. Offer excellent service with a smile and value for the money and your customers will keep coming back and help you grow your business through word of mouth.
By running a cafe you are operating a cash business, the initial cost is significantly less than many start-ups these days. The process is labor intensive and as the cafe owner you should realize that your cafe will only be successful if you have the right staff. The financial investment in your employees will be one of the greatest differentiators between it and your competition.
Your attitude to how you run your cafe will make or break your business, irrelevant of how much money you have spent, research you have done or unique products you have sourced. If your customer service is lacking, your customers will not return, simple as that.
There is no huge secret to providing good customer service, it is simply to treat others as you would like to be treated. A smile and a pleasantly goes a long way. If you don’t think this is the most important part of your business, you really should be questioning whether opening a cafe is for you.
Your cafe should provide accessible and affordable food and drink to the thousands of residents and hotel visitors located within a five-mile radius of your cafe.
It is critical that you understand what type of person you are in order to understand the way your café will work. What are your strengths and weaknesses? What do you like to do? You need to take some time out to be honest with yourself – this is essential to your decision to open a café, or to open any business for that matter. The type of person you are will have an enormous impact on both your enjoyment of running a café and your success.
Besides whether the coffee is good, there are a few things one remembers about cafes: wireless connection availability, overall vibe and atmomsphere, and bathroom maintenance. Keeping your facilities clean and restocked will keep your customers happy and coming back. It should only take a few minutes throughout the day for staff to check on bathroom maintenance, but those few minutes can be crucial in attracting and keeping customers.
Start Your Own Café
What could be better than stopping at the local cafe to meet friends? A fresh muffin and a steaming cup of coffee – robust, dark, and aromatic – would top off your day. There is only one thing better than going to your local cafe.
It is owning the local cafe.
By owning your own cafe, you become part of a rich culture that dates back to the time of King Solomon. The cafe has come to symbolize a more cultured side of humanity. It provides a place where people may gather to discuss politics, music, poetry, romance or rebellion.
In our coffee culture, cafe's is accepted as social, affluent, and downright hip.
If being a cafe owner sounds like the career of your dreams you need to create a great Cafe Business Plan
- What kind of company you will form
- What you considered when choosing a location, including foot and car traffic
- Whether you are buying an existing restaurant or cafe
- Purchasing vs. leasing a location
- Choosing a good contractor
- How you will get financing, including alternatives to traditional money sources
- Creative ways you will reduce your start up costs
- Planning your food and menu
- Equipment and supplies
- What you need to start a coffee house business
Cafe Business Plan
Cafe Business Plan
Managing Your Cafe
- How you will develop effective systems for running your business on a daily basis/li>
- How you will handle repairs and maintenance
- Working with employees
- Finding staff before your café opens and questions you will ask job applicants in an interview
- Effective ways to train staff
- Ways you willimprove morale and give your staff a sense of ownership (so they gladly assist in making your cafe more profitable)
- How to use customer feedback to develop your business
- Developing a "frequent customer" program for the cafe
- Reaching customers through the Internet
- How you will budget
- The effective way you will track sales
- How your cafe will build wealth
- A checklist of what needs to be done before opening your coffee house
- A list of equipment, furniture, and supplies you will need
In time you would hope your cafe will establish itself as a "destination" of choice to the many residents of your location, as well as numerous out-of-town visitors.
Your keys to success in the cafe business will be:
- food and drink are your products: They must be of the high quality and value.
- Service: Your patrons are paying to have a good time. Their experience will suffer if service is not of the highest calibre. Each member of the staff will be courteous, efficient, and attentive.
- Marketing: You will need to target your audience early and often. While the business is located in a central and accessible location, many people will have to be reintroduced to the neighborhood.
- Management: You will need to have a firm grasp on food, beverage, and labour costs. The cafe experience must be delivered in a fashion that will not only inspire repeat business, but also encourage word-of-mouth recommendations to others.
- Proper inventory, employee management, and quality control are key.
Substantial capital may be required to set up a cafe. Suitable premises will need to be leased and some thought should be given to location, as passing trade will be important. A central location will be expensive.
The appearance of the cafe will also be vital, therefore some consideration should be given to appropriate fixtures and fittings. It may be possible to lease some of the equipment needed and drinks companies such as Coca-Cola may offer advantageous rental terms for drinks fridges.
The Cafe Business Plan will inevitably contain information that is proprietary and confidential to the company. Therefore, distribution should be controlled and careful records kept about who has received a copy of the plan. The cover sheet should contain a conspicuously positioned management disclaimer reminding the reader that these are only the plans of the company, the success of which cannot be assured, as well as a notice of proprietary information. All applicable federal and state securities laws must be carefully considered if the Business Plan is intended as a financing proposal; however, the Business Plan should not be used in lieu of a formal private-placement memorandum. Finally, certain institutional investors will consider investments only in certain kinds of companies or industries. Research these criteria before sending a Business Plan in order to save both the time and resources of all concerned parties.
While it may be true that all cafes face certain common challenges in the areas of marketing, management, administration and finance, companies at different stages of growth (and thus facing different problems) and those operating in different locations will require that different sets of topics be included in the Cafe Business Plan.
The Cafe Business Plan should demonstrate the enthusiasm of the founders of the company as well as generate excitement in the reader; however, it should be credible and accurate. Investors will want to know all of the cafes strengths and its weaknesses. In fact, a realistic discussion of the potential problems, along with a reasonable plan for dealing and mitigating these various risks and challenges, will have a much more positive impact on the prospective investor. As a general rule, investors will feel more comfortable investing in someone who has learned from previous business failures rather than a person who has never managed a company. Finally, any budgets, sales projections, company valuations, or related forecasts should be well substantiated with accompanying footnotes, for both legal and business reasons. Unrealistic or unsubstantiated financial projections and budgets will reveal inexperience or lack of attention to detail, or even lead to litigation by disgruntled investors if there are wide disparities between what was represented and reality.
Although most Business Plans are written in connection with the search for capital, a well-written Cafe Business Plan will serve a variety of beneficial purposes to the company and its management team, among them a management tool to use as a road map for growth, a realistic self-appraisal of progress to date as well as against projected goals and objectives, and a foundation for the development of a more detailed strategic and growth management plan (especially after a proposed financing has been successfully completed).
Institutional investors are exposed to hundreds of Business Plans in any given month, and as a result will initially only devote a few minutes to the review of each Business Plan. The Executive Summary (generally one to three pages in length) will be the first and possibly the last impression that the company makes on the investor. Thus, if the reader's attention is not captured in these first few minutes, he or she is not likely to complete the review of the document. The Executive Summary should contain all of the information that will be critical in the investment decision, such as the nature of the company and its founders, the amount of money sought, the allocation of the proceeds, a summary of key financial projections, and an overview of marketing considerations. The mistake often made by entrepreneurs in preparing the plan is writing the Executive Summary first (before the main components have been drafted). It is much more effective to prepare the main body of the plan, then draft the Executive Summary last in order to ensure consistency. The Executive Summary is then truly a preview of the details of the plan.
The Cafe Business Plan must address the following:
- Will the Business Plan still be viable if 20% of the target customers that we assume will use you do not? 30%? 40%?
- What will be the impact on your Business Plan if two of the key potential competitors you have identified become actual competitors?
- What will be the impact on your Business Plan if we can't attract new employees or strategic partners that we have identified as critical to implementation?
- What if we can't raise the equity capital we need to open the cafe? What if we have to give up more ownership and control than we had anticipated to raise the capital? What if we need to raise more debt capital?
- If we planned to borrow money to open the cafe, what impact would higher interest rates have?
- What if the market rejects the pricing structure of the cafe? What if deeper discounts need to be offered to encourage customers? What impact will this have on our margins?
The bottom line is that overly optimistic or weakly researched assumptions in a Cafe Business Plan can and will come back to haunt you. Assuming conservative assumptions and adequate research, there are still many variables that can and will change that will have an impact on your cafe. No matter how carefully the Cafe Business Plan is prepared, things can and will change. Hundreds of variables will go into the development of the Business Plan, which means that thousands of things could go wrong (or right) that will affect the company's actual-to-plan performance. The actual growth results may vary depending on a wide variety of factors, including:
- Fluctuations in demand
- New product introductions and enhancements
- Ability to scale the cafes network and operations to support large numbers of customers, suppliers and transactions
- Ability to develop, introduce and market new products and enhancements to existing products on a timely basis
- Changes in the cafes pricing policies and business model or those of its competitors
- Success in maintaining and enhancing existing relationships and developing new relationships with strategic partners
- Your ability to control costs
- General economic factors, including an economic slowdown or recession.
Cafe Business Plan
Cafe Business Plan
Cafe Business Plan Outline
Don't know where to begin or what to include in your Cafe Business Plan? This outline will get you started by listing what you may want to include in each section.
- Business concept
- Current situation
- Key success factors
- Financial situation/needs
- Vision statement
- The overall market
- Changes in the market
- Market segments
- Target market and customers
- Customer characteristics
- Customer needs
- Customer buying decisions
- Competitive analysis
- Nature of competition
- Changes in the industry
- Primary competitors
- Competitive products/services
- Threats and risks
- Key competitive capabilities
- Key competitive weaknesses
- Implementing strategy
- Products / services
- Product / service description
- Positioning of products/services
- Competitive evaluation of products/services
- Future products/services
- Marketing and sales
- Marketing strategy
- Sales tactics
- Promotions / incentives
- Trade shows
- Key personnel
- Organizational structure
- Human resources plan
- Product / service delivery
- Customer service/support
Creating the financials of the Cafe Business Plan
- Assumptions and comments
- Starting balance sheet
- Profit-and-loss projection
- Cash flow projection
- Balance sheet projection
- Ratios and analyses
Great cafes do not just happen ...
They are planned that way.
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