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Advice and costs to opening a cafe
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06-05-2021 8:49pm#1Hey all.
I am eager to open a cafe and would love to hear from peoples experiences and get ball park figures as to what it would cost to open a cafe.
I have always wanted to work for myself. Having said that I hope to continue my job(electrician) while having a cafe on the side. I live in a town with plenty of empty shop fronts where the best coffee is found in a petrol station. I would love to open a small cafe, mainly aimed at take outs but maybe having 3 or 4 tables. I would aim to have a simple but tasty menu, great coffee(and smoothies). I don't think rent would be too expensive for the area I am in but may have to install a small kitchen and make the place appealing, alot of which I could do myself.
I wonder are there grants or loans available for small business start ups?
All advice is much appreciated0
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Plenty of threads here on the same subject.
There are no grants for retail / food service businesses
There is a huge failure rate too so banks will not give loans without some very good security and will want you to put u a lot of the investment too.
Rent is the least of your worries - rates, wages, usual bills, equipment, food wastage.
If someone has not done it before, it is unlikely to work. The take out / casual coffee trade is dependant on decent disposable / discretionary income. If the town has a lot of vacant units it would suggest that the discretionary income is not strong.
btw, a family member had one in a very busy business park. They were busy for about 90 minutes each day. People thought it was doing well, but as she did not have the early morning "caffeine rush" trade or an afternoon trade, it didn't work and she closed it. Her rent was free and there were no rates either as her husband was related to the property owner! It didn't "lose" money, but that's because she didn't take an income from it.0 -
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2nd post on this thread from not long ago basically points you to another thread with plenty of reading on the subject and everything else Jimmii mentions is pretty much nail on the head.0 -
Thanks for your reply. I've been reading many entrepreneurial books lately so I'm eager to take a risk and see if it works. I do come from a hospitality background and have a number of handy contacts but I will definitely give it more thought after that example you used.
I just can't help but wonder how some places survive when the standard of their food and drink is so mediocre.
While I think my town needs a good coffee shop there may not be the money in the town to make it sustainable. Thanks again0 -
OK, you’ve answered one query I would have had, namely if you had any relevant experience. If you hadn’t, that would be my first recommendation.
The first thing I’d say is that cafés are an extremely competitive business: in most locations there are way too many of them and where that isn’t the case there probably isn’t sufficient business there in the first place.
The second thing I’d say is that it is possible to succeed, but you have to give people a reason to visit you as opposed to somewhere else. "Me too" is not good enough. The simplest way of doing that is to focus on quality and value rather than price. When we started our first place six years ago, that was sufficient. However, in some places (e.g. much of Dublin), that’s no longer enough, as there are loads of places doing high quality coffee and food.
Speaking of which, to make a living you’ll need to offer food as well as coffee. It is also next to impossible to make the numbers work with a handful of tables unless you have significant take-away business.
Unless you’re taking over an existing café you would probably be faced with costs in the 10s of thousands at the very least, together with potential planning and fire cert issues. Banks and other finance suppliers will expect you to povide a significant portion of those costs.
I think a better strategy would be to start really small and with minimal expense; for example, to site and run a coffee machine within some larger retail unit or some other form of pop-up operation that can be used to test the market and your ability to deliver.
I’d certainly have a word with a few of the coffee roasters out there, to get their views on supplying you and potentially pointing you at others who have started in recent times. If you’re aiming at having a quality offering, your coffee supplier is a key partner: they can advise on equipment and provide training as well as just selling you coffee.0 -
Thanks for your indepth reply. You've left me with a lot to think of. Seems like there's a reasonable risk factor as well as lot of savings and time involved in getting set up then I thought. May go back to the drawing boardPickYourName wrote: »OK, you’ve answered one query I would have had, namely if you had any relevant experience. If you hadn’t, that would be my first recommendation.
The first thing I’d say is that cafés are an extremely competitive business: in most locations there are way too many of them and where that isn’t the case there probably isn’t sufficient business there in the first place.
The second thing I’d say is that it is possible to succeed, but you have to give people a reason to visit you as opposed to somewhere else. "Me too" is not good enough. The simplest way of doing that is to focus on quality and value rather than price. When we started our first place six years ago, that was sufficient. However, in some places (e.g. much of Dublin), that’s no longer enough, as there are loads of places doing high quality coffee and food.
Speaking of which, to make a living you’ll need to offer food as well as coffee. It is also next to impossible to make the numbers work with a handful of tables unless you have significant take-away business.
Unless you’re taking over an existing café you would probably be faced with costs in the 10s of thousands at the very least, together with potential planning and fire cert issues. Banks and other finance suppliers will expect you to povide a significant portion of those costs.
I think a better strategy would be to start really small and with minimal expense; for example, to site and run a coffee machine within some larger retail unit or some other form of pop-up operation that can be used to test the market and your ability to deliver.
I’d certainly have a word with a few of the coffee roasters out there, to get their views on supplying you and potentially pointing you at others who have started in recent times. If you’re aiming at having a quality offering, your coffee supplier is a key partner: they can advise on equipment and provide training as well as just selling you coffee.0 -
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It is difficult to make money from food the margins are very tight. The advise given above is very good. Do some market research go out in the town see if people want a cafe and if they do what sort of food would they like. You need to have a unique selling point ie have something really really good that everyone in the town is taking about. The other thing is what time to have cafe open do research on this has some will like morning others evening it is hard to find a cafe open in the evening so this might be an option. If you are a member of credit union it might be easier to get a loan from them than the bank. If you do decide to open a cafe make sure you arrange a rent free period also if you had a family member that could help out for no pay for a few months that might be useful. When you make money you could then pay the family member. Try not to get into too much debt. Your local enterprise board might be able to help you with courses etc. Micro finance Ireland give out loans up to €25,000 to new and established businesses.
If you need any help with the books/accounting send me a PM. If it is what you would really like to do go for it you only live once!0 -
Another thing to consider is Location, Location, Location, and local population.
Ideally you need t be situated where you have some sort of significant footfall and/or plenty of parking.The aforementioned petrol stations do well simply because people have to stop there and it's convenient.
in a small town then you need to be near a school, preferably on a corner site and/or near somewhere that the locals go walking or to a local park.
Stay away from side streets or laneways where people may have to seek you out. The rent might be cheaper but nothing else will be.0 -
I live in a small town where a few cafes have thrived and a few failed. The ones that lasted all do food, and good, reasonably priced food, and possibly own the buildings as they have been there ages.
A guy here started a coffee takeaway from a pod type unit that looks something between a mobile home and a storage unit and he just pays rent to the guy that owns the carpark. He probably has low costs and lower risk/debt from that setup and before covid turned the town into a ghost town he had a lot of people who worked in the town getting cofeee there on lunch breaks. He says as so many people are still going to WFH and many might have bought coffee machines for the house he basically isn't sure it will be worth to open again, but if not he is going to use the pod for something else.
A small ice cream place that opened up a few years ago that also does coffee seems to be doing pretty well. The ice cream is excellent home made stuff though which would require more know how than coffee. But if there isn't anyone doing anything other than 99s in your area maybe adding ice cream is an option that could be also done easily from a pod unit. 99s are great too but they are from a machine which is probably expensive to buy and maintain vs tubs of ice cream, and are only one flavour.
On warm days where some might not drink coffee other than in morning it would give you something else to sell, and there are always more people out and about on those days.0 -
twowheelsonly wrote: »Another thing to consider is Location, Location, Location, and local population.
Ideally you need t be situated where you have some sort of significant footfall and/or plenty of parking.The aforementioned petrol stations do well simply because people have to stop there and it's convenient.
in a small town then you need to be near a school, preferably on a corner site and/or near somewhere that the locals go walking or to a local park.
Stay away from side streets or laneways where people may have to seek you out. The rent might be cheaper but nothing else will be.
That may be true of retail in general, but it's not really the case for cafes, especially if food is a key part of the offer. If you're offering something people want - and you really have to in order to survive - then people will go to you. The really sucessful independent cafes in Dublin are almost all in secondary locations, off the main retail streets. In smaller towns, the primary market will be from locals and they too will find you, so side-streets are fine (obviously, 2 kms up the road in the middle of nowhere is a bit more of challenge).0 -
PickYourName wrote: »That may be true of retail in general, but it's not really the case for cafes, especially if food is a key part of the offer. If you're offering something people want - and you really have to in order to survive - then people will go to you. The really sucessful independent cafes in Dublin are almost all in secondary locations, off the main retail streets. In smaller towns, the primary market will be from locals and they too will find you, so side-streets are fine (obviously, 2 kms up the road in the middle of nowhere is a bit more of challenge).
It's true that they will find you if they're local but you could comfortably be missing out on 20% of your trade if you're not instantly visible to passing trade. Dublin, and the bigger centres will get away with it as they have the volume of footfall even on side streets and are within short walking distance of thousands of people each day.
Rent may be cheaper on a side street as well but your rates and other costs will remain pretty much the same. Aside from that your biggest advertisement starting out is your shop front - a corner site provides you with two fronts and captures traffic from two directions.
With coffee shops or cafés every single cent counts. In a small town especially I don't think that you're giving yourself any sort of sporting chance by going down a side street.0 -
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twowheelsonly wrote: »It's true that they will find you if they're local but you could comfortably be missing out on 20% of your trade if you're not instantly visible to passing trade. Dublin, and the bigger centres will get away with it as they have the volume of footfall even on side streets and are within short walking distance of thousands of people each day.
Rent may be cheaper on a side street as well but your rates and other costs will remain pretty much the same. Aside from that your biggest advertisement starting out is your shop front - a corner site provides you with two fronts and captures traffic from two directions.
With coffee shops or cafés every single cent counts. In a small town especially I don't think that you're giving yourself any sort of sporting chance by going down a side street.
Well, that’s certainly an opinion, but not one that aligns with the evidence, as I said, or indeed my own experience of owning and operating multiple cafes. I’d be curious to know what basis you have for the opinion, especially things like specific numbers like 20%.
It’s just not the case that successful places in Dublin depend on footfall; many of them are located in locations that have next-to-no footfall at all: they’re destinations in their own right.
Far more important to success is (a) having a large natural market close-by and (b) reputation. By “large natural market” I mean a lot of people living, working or visiting within a short distance. I n major urban areas, the first two (living and working) are more important, outside them it’s visiting. I’d be far more concerned about the overall prosperity of a town centre than the specifics of exact location within it. Some towns are suffering badly because of developments on their edge: even if you are bang in the centre on the main street you won’t do well if everyone is spending their time in retail parks at the edge of town. Similarly, if you do have a busy town centre, it really doesn’t matter that much if you are down a side street.
It’s also not the case that your biggest advertisement starting out is your shop front: these days, your online presence and reputation is far more important.
I’m not saying location doesn’t matter, it clearly does. Even seemingly tiny differences can make a difference (e.g. the sunny side of a street is usually busier than the other one). However, it’s a lot less important than other issues.
If I were opening another place, the first thing I’d look to is the general immediate area and its demographics, next whether a suitable property is available and then the specifics of exactly where it’s located. I’d take an ideal property down a side street over one on it that is compromised in some way any day: you can build a reputation at both locations, but you’ll be stuck with the compromises (typically, lack of adequate space) and extra costs for ever.
Finally, and just to be clear, it’s not so much the cost saving of location off prime retail streets that’s the issue: it’s availability of suitable premises that’s the problem, especially if you’re starting out. The notional “best sites” simply aren’t available. My point is that isn’t as much a problem as some make out, and the evidence is there to back that up.0 -
Cheers for your reply and offered regarding accounts.It is difficult to make money from food the margins are very tight. The advise given above is very good. Do some market research go out in the town see if people want a cafe and if they do what sort of food would they like. You need to have a unique selling point ie have something really really good that everyone in the town is taking about. The other thing is what time to have cafe open do research on this has some will like morning others evening it is hard to find a cafe open in the evening so this might be an option. If you are a member of credit union it might be easier to get a loan from them than the bank. If you do decide to open a cafe make sure you arrange a rent free period also if you had a family member that could help out for no pay for a few months that might be useful. When you make money you could then pay the family member. Try not to get into too much debt. Your local enterprise board might be able to help you with courses etc. Micro finance Ireland give out loans up to €25,000 to new and established businesses.
If you need any help with the books/accounting send me a PM. If it is what you would really like to do go for it you only live once!
Luckily I do have family full of foodies who had their own restaurant and would be happy to help out(was actually hoping I could employ one of them as I feel a job locally would suit them far more then their current job. Being in to food and coffee myself I feel I know what the area is missing, plus I believe coffee is a growing industry so I feel it will only be a few years until we have people in country towns looking for their skinny chai lattes. Thanks again for your advice, very helpful ��0 -
But the thing is, there is very limited options food wise for an area of our size and the few places here do alright food, nothing special but then again it's a country town and I don't know if many people want anything beyond say a fry and a cup of tea. I was in a bigger town not too far from us recently. My girlfriend and I saw a place that said coffee & smoothies on the outside so we said we had to get one. Went inside and it was such an anti climax. The smoothie was awful, don't think the guy even had a sink, no fresh ingredients, a pack of 500ml bottles of water used for smoothies and probably coffees.The DayDream wrote: »I live in a small town where a few cafes have thrived and a few failed. The ones that lasted all do food, and good, reasonably priced food, and possibly own the buildings as they have been there ages.
A guy here started a coffee takeaway from a pod type unit that looks something between a mobile home and a storage unit and he just pays rent to the guy that owns the carpark. He probably has low costs and lower risk/debt from that setup and before covid turned the town into a ghost town he had a lot of people who worked in the town getting cofeee there on lunch breaks. He says as so many people are still going to WFH and many might have bought coffee machines for the house he basically isn't sure it will be worth to open again, but if not he is going to use the pod for something else.
A small ice cream place that opened up a few years ago that also does coffee seems to be doing pretty well. The ice cream is excellent home made stuff though which would require more know how than coffee. But if there isn't anyone doing anything other than 99s in your area maybe adding ice cream is an option that could be also done easily from a pod unit. 99s are great too but they are from a machine which is probably expensive to buy and maintain vs tubs of ice cream, and are only one flavour.
On warm days where some might not drink coffee other than in morning it would give you something else to sell, and there are always more people out and about on those days.
That's a good point regarding the ice cream, hadn't crossed my mind. I remember gelato parlours in sydney and your mouth would water just looking at the ice cream on offer the way it was presented. A local place is also doing iced coffees at the moment and they seem to be a hit despite them been sold from a hotel bar about 4km outside of town. Smoothies and juices is another thing the place is lacking. Was in a town not too far from here recently and went in to a cafe having seen a sign for smoothies and coffee. Coffee was probably instant, we had a smoothie, no fresh fruit or veg and it wasn't really drinkable. That makes me wonder how these places are making money0 -
Demographics is key. This town has just a few thousand and does not have any major developments on the fringes of the town apart from a dunnes stores. Nor do we have a bypass whether that would be an advantage or not. Definitely agree with you regarding sunny side of the street. A nice bright premises could make a big impact. Whereas social media. To say it's essential would be putting it lightly, its only way to advertise and people travel going by what they see online so that's a job in itselfPickYourName wrote: »Well, that’s certainly an opinion, but not one that aligns with the evidence, as I said, or indeed my own experience of owning and operating multiple cafes. I’d be curious to know what basis you have for the opinion, especially things like specific numbers like 20%.
It’s just not the case that successful places in Dublin depend on footfall; many of them are located in locations that have next-to-no footfall at all: they’re destinations in their own right.
Far more important to success is (a) having a large natural market close-by and (b) reputation. By “large natural market” I mean a lot of people living, working or visiting within a short distance. I n major urban areas, the first two (living and working) are more important, outside them it’s visiting. I’d be far more concerned about the overall prosperity of a town centre than the specifics of exact location within it. Some towns are suffering badly because of developments on their edge: even if you are bang in the centre on the main street you won’t do well if everyone is spending their time in retail parks at the edge of town. Similarly, if you do have a busy town centre, it really doesn’t matter that much if you are down a side street.
It’s also not the case that your biggest advertisement starting out is your shop front: these days, your online presence and reputation is far more important.
I’m not saying location doesn’t matter, it clearly does. Even seemingly tiny differences can make a difference (e.g. the sunny side of a street is usually busier than the other one). However, it’s a lot less important than other issues.
If I were opening another place, the first thing I’d look to is the general immediate area and its demographics, next whether a suitable property is available and then the specifics of exactly where it’s located. I’d take an ideal property down a side street over one on it that is compromised in some way any day: you can build a reputation at both locations, but you’ll be stuck with the compromises (typically, lack of adequate space) and extra costs for ever.
Finally, and just to be clear, it’s not so much the cost saving of location off prime retail streets that’s the issue: it’s availability of suitable premises that’s the problem, especially if you’re starting out. The notional “best sites” simply aren’t available. My point is that isn’t as much a problem as some make out, and the evidence is there to back that up.0
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