Jul 23, 2019 in Online Consultations
So you want to open a cafe...
What are the first things to consider when opening a cafe or coffee shop? A series of articles to give you some ideas
The old adage 'location, location, location' may be a cliche but sadly, many cafes and restaurants have struggled to attract customers simply because they are in the wrong location. As a cafe serving lunches to shoppers you might expect a High Street or shopping mall position would be ideal but shopping habits are changing. The rise of shopping online and the decline of the High Street does not just affect the shops in the vicinity. Services like coffee shops will also suffer if shoppers are buying elsewhere. High Street premises also have the drawback of expensive rent and rates. Think about your offering - sandwiches, jacket potatoes, soups etc may be more attractive to workers in their lunch breaks so look for opportunities on trading or industrial estates. A tea room offering afternoon teas, cream teas, coffees and cake appeals to customers with time to spare. Look for the proximity of attractions that customers might visit for a day out. Parks, museums, landmarks, beaches. Just be aware that many places are weather dependent and a wet windy day in February in a seaside town can be a lonely place. If you are buying an existing business, visit at different times of the day, different days of the week and in good and bad weather. What looks like a thriving business one day can be deadly quiet on another. If the premises had previously been a cafe, find out why it closed. Speak to other businesses nearby, speak to the previous owners if possible. If they are not selling a going concern they will not have a vested interest in 'bigging up' the business and will probably be a lot more honest about the problems they faced. Look up the previous business on the Companies House website (it will be on there if the business traded as a limited company but not if the proprietors operated as a sole trader) and find out the names and addresses of the directors. To be honest, the financial information shown on the Companies House website will not give you much information about the business. Published accounts are very limited in the information shown. Google the previous business name and see if there are any news stories or social media items that will give you an oversight in to what went wrong for them.
Finally consider all the possible problems your chosen location may face. Parking problems, high rent and rates, competition, lack of visibility. But also consider the good points, (there will be many or it's not worth considering at all). You will be in a better position to make a balanced judgement on whether you think the business will be successful for you.