Opening a cafe: The essential guide
Opening a coffee shop in the UK can be a challenge for a number of reasons, whether it’s having a low budget, abiding by a long list of legal requirements, or finding the right cafe equipment. We’re here to walk you through a 7-step guide on getting started, as well as some handy business tips along the way.
1. Create a business plan
So, you’re wondering how to start a cafe and like all great things, it starts with an idea. Working on a business plan for your coffee shop is an efficient way to kick things off, as it will give you a better idea of finances as well as break down timelines. Business plans are a huge help when it comes to defining a commercial and financial strategy for your cafe, and often confront you with the most important questions as a new business owner. What are your main goals, and what steps do you need to take to achieve them?
Concept
Defining a concept for your coffee shop is a good place to start. This can involve envisioning what your cafe will look like, what vibe you are going for, or who your target market is. How will your business be different from competitors? How will your coffee shop stand out from the crowd? How much will your vision cost? These types of questions are vital when it comes to securing loyal customers as a new business.
Once you have a concept that you are confident in, you can start thinking about the more exciting stuff. Start brainstorming names for your coffee shop, as well as create a mood board to inspire the visual identity of your business—whether it’s the signage on your shopfront or the font on your website.
2. Find funding
After breaking down your budget in your business plan, you’ll need to explore the different financial avenues on offer when it comes to getting your business up and running. Depending on your financial situation and your budget, you should think carefully about how you will sustainably finance your coffee shop in the long run.
Loans
Loans are the most common method of financing when it comes to opening cafes and restaurants. Banks usually offer flexible loans for new businesses so that you can focus on getting your business off the ground, and start paying back when you eventually see some profits. Your business plan will be essential in how you’re eligibility for a loan is measured by the bank, so make sure you’re as detailed and prepared as possible. You can find more information on the types of loans on offer to new business owners in the UK here.
Fundraising
People love to see new businesses succeed, so much so that they’re willing to contribute to their beginnings. Crowdfunding is a great way to source financing from the general public or investors. You can start by writing an exciting pitch for your new coffee shop and posting it online or handing out flyers. The people who find your concept interesting may consider supporting and investing in your business, and these investments can be made in different ways. Equity crowdfunding involves investors getting some shares of your company, whereas reward crowdfunding is when people receive some sort of incentive or reward in return for their funding. For your coffee shop, for example, this could include private events, membership cards or catering services.
3. Register your business
Before you open your coffee shop doors and start serving customers, you need to make sure you’ve ticked off all the legal requirements when it comes to registering a business in the UK. You’ll more than likely be handling or selling some sort of food day-to-day, so you need to register your cafe with your local authority at least one month before opening. You should also enrol in some sort of food safety training so you can get your hands on a food hygiene certificate, which will affirm that your business is qualified to distribute food to the general public.
Your business should also be protected in case of food safety hazards or risks, and this can be done by having a HACCP control system. In the UK, food safety and standards is rated by the Food Standards Agency, to publicly state how well hygiene is kept up throughout food businesses. As a new coffee shop, you should aim to rate as high as possible to assure new customers that your business is serious about their safety.
4. Find a location
Finding the right business location for your new coffee shop can sometimes be tricky. Establishing your business in the right area or on the right street can be crucial to your success, so you should keep a few things in mind when you’re on the hunt for your dream property.
Busy areas
After you’ve established a target market in your business plan, you should ask yourself if this demographic will populate the area you’re looking at enough to keep you going. It’s important to make sure that foot traffic will be consistent so that people can spot your business while they’re out and about, and hopefully turn into regulars. If an area has a school, university, or several offices, this could also help your business thrive with lunchtime rushes and social gatherings.
Competition
No matter what area you have in mind for your new coffee shop, it’s vital to check out what other coffee shops are knocking around and what type of services they offer. This research will not only help you in your property search but also give you some insights on what you can add to your business to stand a good chance of succeeding. Along with other cafes, you should also look into any other food and drink businesses close by, as these will play a part in how potential customers are gained or lost in your new neighbourhood.
5. Getting set up
Once you’ve found the perfect spot for your coffee shop, you’ll need to make sure you’re equipped to start making customers love your business too. The most important tools will be those you need to start serving your product, and making an equipment checklist will help you stay organised.
Offering flexible payment options won’t only make things easier for you and your staff, but it can also keep your customers happy. When customers stop by your new cafe and realise they can always pay the way they want, they’re more likely to come back for a quick and convenient coffee.
Card readers
A card machine can make payments simple, whether you’re at the counter, table or taking your business on the road. When you serve a customer their coffee or snack, they can pay with chip-and-pin or with a tap of their card. Your SumUp card reader can also accept payment via Apple Pay or Google Pay, so you never miss a sale.
POS equipment
Kitting out your cafe with point of sale (POS) hardware and software is one of the best ways to manage and run your business electronically. A POS system is an electronic cash register that not only enables you to keep track of everything you sell, but also allows you to manage things like your menu with just a few clicks. During service, your POS system will give you a clear overview of your table plan and customer activity on-screen—so you’re always in the know.
Company account
Getting a business account to manage your finances can be a great help, especially considering the huge list of responsibilities that comes with opening your own cafe. You’ll get your earnings sent safely to your account and be able to spend them easily via your contactless Mastercard. Whether you’re spending online, in-store or withdrawing cash—you’ll always have easy access to the money you make.
Selling online
Although most of your coffee shop sales will be made in-store and in person, in recent years every type of business has moved online in some way. Depending on what concept you’ve chosen, you can decide to sell all kinds of products via your own online store—whether it be your own coffee, brand merchandise or gift cards. You can share your store through your social media channels, and sell around the clock even when your cafe is closed.
6. Build your team
Finding the right people to start your new business with can set you up for success. You’ll want to meet people who share your vision and are enthusiastic about your coffee shop and its concept. As well as your great product, you’ll need great service for customers to keep coming back. This means that your staff will have a huge responsibility in making sure every customer encounter is special.
What are your needs?
A good way to think about the ideal candidate for your new team is to define and list out the daily tasks, responsibilities and level of skills your coffee shop would require of them. Once you’ve got a good idea of what each role will include, you can start actively looking for your team.
Finding suitable candidates
So, where can you look for your new staff? As well as having a dedicated section of your website and social media channels for new job openings, you can post on several official sites where potential candidates will be able to find your postings easily. Indeed, Glassdoor and LinkedIn are some of the most popular job-search sites in the UK.
7. Announce the opening
Now that you’ve followed the right steps to opening your new coffee shop, you should be more or less ready for the grand opening. To maximise your chances of a successful start, you’ll need to promote your event well to attract as many potential customers as possible.
Sometimes the more old-fashioned promotional moves can still be effective, so getting out into the neighbourhood and speaking to locals about your new business can do wonders. Word-of-mouth referrals are huge in hospitality, so go and introduce yourself to as many people as possible.
It goes without saying that the power of social media is sometimes unmatchable, so you should create accounts dedicated to your cafe on Instagram, Facebook and Twitter to communicate your event. Getting a tech-savvy, social media assistant on board can be a great shout when it comes to creating eye-catching posts that attract buzz and engagement from potential customers.
Lastly, make sure to register your business with Google My Business and Google Maps, so you’re easy to find.
Thousands of merchants in the UK are using SumUp to boost their hospitality businesses—join them today.
