It’s Just a Café, What Can Go Wrong?

March, 2015

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Many coffee shop or cafe owner jumped into this business thinking that as long as they have a nice setup or are able to make a decent cappuccino, their cash registers will ka-ching incessantly. Quickly, they find themselves failings into the traps of labor laws, food regulations, local issues, unions, competitors, and more. The best way to avoid those traps is to learn from the successful cafes and to know one's limitations. Definitely, the primary reason for many coffee shop failures is the ability to still be pulling in revenue after meeting month in- month out of financial obligations. Many cafes fail over little things like not having six months of operating capital, a broken machine and no money to buy a new one, or insubstantial plans that change every week. It all lies in that delicate balance between the pricing of products, in a way that would give a sound return on time and money invested, and pricing based customer and market expectations, as margins don't pay for employees or the rent but turnover does.

Much too soon, suppliers' trust and customer loyalty will be lost. Attempting to cheat suppliers on prices or customers on portions, by being overly stingy with portion sizes and worrying too much about the profit instead of concentrating on building the more important aspects of the business such as customer satisfaction, partnership and, service standards to 'win the customer will lead to a new trade to failure. Reducing staff count is also a wrong step to take because service standards Will suffer for sure.

Its Just a Cafe What Can Go Wrong

An unsuitable location can also be one of the biggest reasons why cafes Fail. A wise step for new owners to take is to invest in dealing with a reputable and experienced real estate agency. Some locations have too Much unfocused traffic while others have too little traffic. New owners should target positive aspects such as a good location in the center of the district and some of its busiest intersections, high visibility and vehicular traffic, nearness to office complexes or a number of up-scale apartment buildings and houses, minimal competition, and nearness to art centers, theaters, or shopping areas. Negative aspects of a location that should be avoided could be the lack of parking spaces near the cafe or inconvenient and costly ones around it. Your real estate agent should guide you through this hectic process without difficulty, making use of his extensive knowledge of the areas under his coverage.

The construction phase needs to be simple and not too expensive. Overpaying for construction should be avoided by searching for places that already have ample electrical power and plumbing systems. Same goes for over investing in a state-of-the-art kitchen rather than the customer experience in the 'front of house'.

The design and concept are a key factor when preparing your cafe. The layout, music, decor, furniture, customer flow and even the equipment behind the bar are crucial for a cafe's success. Poor ergonomics in design is a common pitfall that a lot of startups fall into.

The coffee workstation and layout need to be carefully designed so that the barista has enough space in performing all their coffee making duties, without competing for the space with waiters and other staff members.

Order taking and payment systems should be efficient and effective. Keeping important factors such as placing the cash register on the front counter in close proximity to the barista's workstation should be kept in mind. Avoid human lots of movement in the food production process. Installing the correct height bench top, perfectly laid out with easy access to supplies, storage, and cleanup, may support a cafe's sustainability.

coffee shop investment

Choosing the right staff is another obstacle startups can bump into. Coffee shops don't just offer drinks and food, they should also offer a stress-free atmosphere, loyalty, a sense of belonging, and other intangibles that come from the customer interaction with the owner and his staff. Continuous training and advancement for the whole team is just as important. Coffee shop owners must also play an active role by being on-scene regularly. Customers are more liable to forget what they bought more that how they felt in a place.


It goes without saying that if the business starting is a coffee shop, then owners as well as their employees need to be well informed about their primary product; coffee which is a high margin item. However cafes serving coffee only, while being very busy, can hardly cover their daily expenses, falling behind on payroll, and rent. A cafe must have a 'coffee plus ' strategy at the startup if it is going to secure sufficient turnover to be sustainable. Adding a nice assortment of baked goods or Food on the menu to upsell the coffee, remembering to make it fresh, interesting and very flavorful. The choice of the product is crucial. Wide menus, can result in increase of overheads, poor quality and ultimately, lost customers and sales. Sometimes, the moment business slows down a little, new owners will panic or lose their patience and resort to expanding their menus too early with the false hopes of attracting customers.

It's not all just about having capital and Skills! Enjoying your business, creating a family atmosphere, together with professional and well trained waiters and quality oriented workers will guarantee the business to remain a step ahead of the rest.

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