For many people, opening a café is a dream; it’s both a lifestyle and career choice.
Just like any hospitality-based business, cafés and coffee shops require a huge amount of work to both start up and ensure long-term profitability.
Get it right, and your dream of running your own busy café will become a reality.
More importantly, it’ll provide you with more opportunities than you thought possible to grow into this fascinating, vibrant and rewarding sector.
We’re a population that loves our coffee. In fact, there are expected to be over 32,000 coffee shops in the UK by 2023.
Are you ready to number among them?
If you’re right at the start of your café journey, this guide is for you. And that’s because there’s probably one thing on your mind.
Opening a café in the UK: how much does it cost?
Setting up a café isn’t cheap. Depending on your location and the requirements of the venue, you can expect to pay anywhere between £20,000 and £100,000 in startup costs.
You’ll have to spend money on rent, refits, furniture, technology, staff, stock and all the other elements that go towards creating a great café experience.
Here are the most common costs you’ll need to take into account, but please note they are for guidance only.
You can’t run a café without premises, and this will be one of your biggest expenses. However, the location and type of lease you opt for will determine how expensive it’ll be.
For instance, in London, a leasehold café can be anywhere from £100,000 to £500,000. In the rest of the UK, that drops to between £50,000 and £150,000.
The lisenses the property holds, it’s condition and the price of similar properties in the area will all have an impact on the price you’ll pay.
Furnishings and fittings
You can really drive down the cost of this element - particularly if you’re going for a mismatched chic look or vintage interior.
However, if you’re buying new fixtures and fittings, budget for a maximum of £3,000 if the premises are already fitted out, and up to £10,000 if it’s just a shell.
You’ll need a point of sale (POS) system, which you will use to receive and manage payments at your café.
There are some great options on the market now, and you can pay as little as £30 per month for the ability to take payments and record stock movements. Shop around!
Don’t forget your Wi-Fi, either. It not only offers an expected guest service - it’ll provide you with plenty of marketing opportunities, too.
Staffing and payroll
Second only to your rent, staffing and payroll will be a large overhead, but an essential one.
The average hourly wage for baristas will be anywhere from £7 to £9 per hour. If you’re offering food, expect to pay around £20K per year for a chef.
As a rough guide, if you’re running a small café with two baristas outside of London, they’ll cost you around £30,000 per annum.
The science of stock
When running a café, you’ll get used to paying out regularly for stock.
From coffee beans to milk, flour and cooking oil, you’ll get through it rapidly (hopefully - that means you’re busy, after all!) but you cannot run out.
You can keep costs down, though, which starts with great supplier relations, so make sure you shop around and look for those who offer bulk discounts.
When first stocking up your café to get yourself off and running, budget for a maximum of £3,000 outlay.
Getting bums in seats
You’ll want to make everyone aware of your existence for your launch. The good news is that these days, you can make an awful lot of noise without spending a penny.
The trick is in starting early with your social media efforts.
Here are a few ideas to get you started…
- Join local Facebook groups and post your journey
- Use Instagram to share pictures of your launch progress and timeline
- Start running competitions on social media for brand awareness (get people sharing your content!)
- Use Instagram Reels to get more exposure with your local audience
- Create your Facebook business page and begin building its audience
- Make sure you are using the right hashtags to get in front of your local audience
- If you want to go big or go home with pay-per-click (PPC) advertising, budget no more than £1,000 during those early days
Insurance and licences
You’ll need the following before you can open up:
- employers liability insurance;
- public liability insurance;
- gas and electrical safety certificates; and
- food hygiene certificate.
You need to check out the government’s licence finder to understand exactly what your café will need to meet laws and regulations.
How can I lower the cost of opening a café?
There are some smart things you can do to avoid overspending during those early days:
- Spend only on the stuff you absolutely need to get going, it’s easy to get carried away. To fight temptation, make a list in advance and do not deviate from it.
- Buy second-hand furniture. Make it part of your interior design style and take advantage of the lower costs.
- Lease your equipment while you get going (espresso machines can cost as little as £5 per day leased, versus up to £10,000 purchased)
- As a rule of thumb, aim to keep your staff bill at less than 35% of turnover. Payroll is always a killer.
- Learn how to market your café. You’ll save big time on consultancy fees and take control of your café’s destiny.
5 things you can’t miss when opening a café
1. It’ll take time
If your café becomes successful overnight, you’ve either been very lucky or know a magic formula that is yet to be unveiled to the rest of us.
In reality, opening a café takes time, persistence and acceptance that you’re going to hit a few roadblocks along the way.
2. It’ll take more than coffee to keep them coming back
Modern café customers want more than great coffee (although that’s very important, of course).
From the Wi-Fi to the type of seating you choose, it all adds to the experience - and that’s what will keep people coming back for more.
3. Know your numbers
If you come away from anything after reading this blog and doing your own research, make sure the numbers you’ll need to start up and sustain are ingrained into your plan.
4. Don’t do it on your own
You’ll gain strength from your café’s plan and your desire to see it through, but there’s nothing like bringing someone else in for moral support.
Whether it’s a business partner, friend or loved one, get them involved and run your ideas, fears and frustrations by them.
5. Focus on happiness - not millions
There are very few millionaire café owners. Most are in it for the love of the industry and the desire to make a difference in their community.
Go into it focusing on the latter, and you’ll be happy, and that’s far more important than the constant pursuit of fortune.
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Is opening a café a good idea?
Opening a café isn’t for everyone.
If it’s something you’ve decided to do on a whim, or because you like the ambiance of your favorite local coffee shop, make sure you research the realities thoroughly.
People often jump into opening a café without really knowing what the experience will be like. And, while that’s like any big venture, it really does pay to get some real world experience of this sector before taking the plunge.
If you can, try working a few days at a local coffee shop first, or at least grab a few minutes with the owner to quiz them about their experience.
Food for thought: delivery service costs
Online delivery is gaining significant prominence in the café industry. In fact, it’s so important that you’ll often be lagging behind the competition if you don’t offer it.
The good news is that it’s one of the easier hospitality business to start up and doesn’t need to cost you a fortune.