How To Open a Cafe: The Realities of Opening a Cafe

Marketing 17 minute read 24th July 2023

The question of how to open a cafe is a big one. Everyone knows how rewarding running your cafe can be - personally and financially. A cafe business can be very lucrative. The coffee shop market alone has a 4.58 billion USD value in the US, not even considering food-focused venues.

Running a cafe also means more sociable hours than running a restaurant. You can even run a cafe around school hours or keep your evenings free for family time. It is easy to see why it is such a popular business model.

And we understand why you’re opening a cafe and cautiously taking the correct first steps. Starting a cafe the right way is vital to building strong business foundations.

In this guide, we’ll cover the essential steps of opening a cafe and specific advice for different cafe types. Whether you want information on opening a cat cafe business or just details of business plans, you’ll leave ready. Starting a cafe can seem overwhelming, but you’ll feel confident by breaking down all the steps and eventualities. Here’s our essential guide to the cafe startup process.

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How To Open a Cafe: What Experience Do You Need?

Often, the follow-up question to how to open a cafe is what experience new-to-be cafe owners need. Anyone can open a cafe so long as they complete their necessary research. Running all businesses comes with learning curves.

If you can learn quickly and pick yourself back up, you can open a cafe. If you are inexperienced and new to the cafe industry, you should also hire staff with experience and find mentors. Surround yourself with experienced and successful individuals, and you have a strong chance of success.

Of course, it definitely helps to have at least knowledge of the hospitality industry. Simply understanding and having experience in dealing with staffing, service hiccups, and demanding customers puts you in good stead. It is ideal for you to have worked in hospitality previously. And ideally, you’ll have well-honed customer service skills.

Number one, you should have a strong understanding of business strategies. You should understand cafe businesses and a foolproof business plan. You must understand the profit margins on dishes and be good with math. Or at least be willing to hire someone who is. Similarly, marketing knowledge is a huge plus, especially if you don’t have a budget to outsource marketing initially.

Studies say 50-74% of cafes fail in the first five years. We’ll assume you want to avoid being part of this (rather gloomy) statistic. The best way to avoid being another failing stat is to upskill yourself. The more experience you have, the better your chance of building a successful cafe business. So while no set experience level is necessary for opening a cafe, the more, the better.

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How To Open a Cafe Financially: How Much Does It Cost To Open a Cafe

How to open a cafe financially is a whole different ball game. You need to know the answer to how much does it cost to open a cafe. Plus, what your budget is. We can provide a general insight into the costs of opening cafes - which we’ll provide in this section.

The cost of opening a cafe in the UK is between £20,000 and £1,000,000. This is an approximate $25,000 minimum in the US. To open a cafe is a huge initial investment. And the lower end of this figure does not calculate buying a cafe venue - just renting. You’ll be investing in the following when setting up a cafe:

  • Equipment: $16,000 minimum, depending on what you are offering
  • Decor: $2,000 + for a basic refurbishment
  • Coffee: $500+ depending on the type of coffee
  • Food ingredients: $5000+ depending on your dishes
  • Soft drinks: $500 + depending on drink types
  • Regulations and certifications: $1000+ depending on what you sell
  • Staffing: $2,000, covering 1-2 members of staff
  • Marketing: $1000, including basic website and ads
  • Rent or mortgage: $1,500 per month, depending on area

Expect the costs of opening a cafe business to rise if you decide to open in a competitive area. These areas typically have steep rent and property prices. If you want more staff members or hire management staff, you should also increase this basic budget. And, with a larger budget, you could invest more in initial marketing and decor to attract customers.

In short, the larger your budget, the more wriggle room you have for building a successful, eye-catching cafe. But it is possible to succeed with more modest budgets if you strategize wisely.

How To Open a Cafe Legally: Regulations To Consider When Opening a Cafe

Another important (and frankly vital) aspect of answering the question ‘how to open a cafe’ is addressing the legal requirements. Legally opening a cafe means abiding by numerous restrictions on food preparation. This includes food hygiene matters and food safety hazards.

In the US, every cafe generally needs the following:

  • Vendor License
  • Health Permit
  • Zoning Permit
  • Business Insurance (including General Liability Insurance, Professional Liability Insurance, Workers Compensation Insurance)

Regulations and permits can vary from state to state, so checking your state’s requirements is essential. The same goes for those opening cafes in different countries. Check individual needs and enquire with your local authorities if in doubt.

When you apply for permits and licenses, try to get ratings. Displaying food hygiene ratings is an excellent way to increase trust in your customer/business relationship.

How To Open a Cafe With a Low Budget

What if you don’t have an endless budget? What if you have little funding but a great business plan? Well, opening a cafe on a low budget is possible. It just takes some creativity and potential sacrifices. This next section is entirely dedicated to how to open a cafe with a low budget.

1. Consider external funding.

First, consider getting external funding. It is easier to open a cafe with a comfortable budget, and you want to maximize your success, right? Approach private investors, consider business partners, research business loans, or ask friends and family members. Always loan responsibly and operate under a contract. But getting external funding can be the deal-sealer.

2. Change your business model.

Do you need a building? Could you start with a food truck or coffee van? Any adaptations you can make to your business model can reduce costs. And once you build up profit with this adapted business model, you can proceed with your initial plan. Don’t be afraid to take a smaller step first to allow you to start the race.

3. Start solo or with a small team.

Many coffee shop startups have teams of 1-2 people. This could be feasible if you have buckets of experience working in cafes and coffee shops. You don’t want to burn out, so plan precisely how long you’ll work this way and exactly what hours. If you can manage the first 2-3 months solo or with a small team, you could open your cafe much cheaper.

4. Source cleverly.

Sourcing ingredients and products is a massive cut from your budget. See if you can deal with suppliers or source locally to avoid expensive shipping costs. Where there’s a will, there’s a way - and every little penny saved helps chip off your overall spending.

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How To Open a Cat Cafe

How to open a cat cafe is far from a random question. It’s an important element of how to open a cafe. Cat cafes are all the rage. Opening a cat cafe starts very similarly to opening a standard cafe. You must first cover all the basics - buying equipment, applying for licenses, and creating a business plan.

After that, think about the cat-specific details. This could include cat security, decor incorporating cat stimulation, and a sleeping area for the cats. You also have a few additional health and safety risks to prepare for and manage.

Regarding security and cat safety measures, you must keep toxic products securely stored. You can also use a double-door system to prevent cats from running out as guests enter and exit the cafe.

For human safety, ensure the cats aren’t outrageously aggressive and warn of unpredictable animal behavior. Also, ensure that there is no contamination of food - keeping cats away from areas that need to be hygienic.

Curious about the ethics of a cat cafe? Then why not partner with a local rescue center? This way, the cats at the cafe can be available for adoption, and you pioneer an adopt, not shop mentality. It also means that cats aren’t being kept in tiny catteries while waiting for homes and are getting some socialization.

Opening a cat cafe is a wonderful idea and massively lucrative. If you plan your cafe business properly, you can make it beneficial to everyone involved - including the cats. Take your time with this cafe plan, and you’ll hit a gold mine in return for your efforts.

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How To Open a Bookstore Cafe

The answer to how to open a cafe varies depending on the cafe type. A bookstore cafe is one of the most aesthetic cafe business types. Wondering how to open a bookstore cafe? Well, here’s everything you need to know.

Start your bookstore cafe opening process like you would any cafe. Ideally, you need to source all your equipment, create a budget of at least $25,000, and source ingredients. Only at this point does the fact that you are opening a bookstore cafe specifically come into play.

At this stage, you need to decide on your bookstore business plan. Will you source and sell second-hand books? A specific genre? It is entirely up to you. Whether you collect book donations or purchase your initial stock will make a big difference, though. So figure this out in your early stages.

You could have a small library corner or a book exchange section. For a social mobility and community project, having a ‘free book’ corner could be a positive thing to do. This would allow people to come and read some of your books in your cafe. You’d provide a free enjoyable experience rather than just having a formal adjoining shop.

You’ll need to distinguish whether people can come and read your books and enjoy coffee anyway. Or if people need to purchase the books on display before reading. Get clear on your policies and decide what atmosphere best suits your vision.

Decor will also be a major difference between opening a bookstore and a standard cafe. You will cover much of the venue in shelves in a bookstore library. Get creative in designing your shelf layout. And, if you opt for a read-in environment, provide some comfy seating - perhaps bean bags and armchairs.

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How To Open a Cafe That Customers Will Love

The easiest way to open a cafe customers will love is by conducting proper research. If you are asking how to open a cafe that is instantly loveable, know that your customer is your answer.

Build consumer profiles, conduct location based marketing, measure foot traffic, and send out surveys continually asking for feedback after opening. You need to open a cafe type that is of genuine interest to the surrounding customer demographic. And then, you need to run it in a way that creates customer loyalty.

Keep the customer at the forefront of your mind when opening a cafe, and you will guarantee yourself success.

Do you want some extra help with how to open a cafe? At Beambox, we are always excited to assist you in the early stages of your business. As experts in WiFi marketing and small business improvement, your cafe business is in our utmost interest.

Beambox offers the best all-in-one WiFi marketing platform. We use a dynamic approach to keep your customers happy and connected. Start your Beambox free trial today, and let us help you maximize your cafe’s potential.

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