The Coffee Industry
The last couple of decades have seen an explosion in the coffee and café industry, largely thanks to large chains, today you’ll be hard pressed to find a high street without a Starbucks or Costa. The UK is beginning to embrace the café culture that our European neighbours are so well known for. As the pub industry continues to suffer, the demand for boutique and independent cafés is blooming, offering alternative spaces to connect with friends, sit and read, work or just enjoy a hot drink.
Research has suggested that most of us value convenience of location over the brand of our coffee. This might suggest why so many independent coffee shops are springing up and doing so well. However, just being convent is not enough to run a successful business. As consumers become increasingly aware of the quality of their coffee, how it sourced and how it is roasted, quality often overrules convenience. While big brand coffee is booming many customers are still enticed by the intimacy of an independent.
Is the Coffee Business for You?
Setting up a coffee business can have some significant set up costs and margins won’t be fantastic until you’re well established or even have a few outlets. It’s definitely worth considering a business loan to help you financing starting a café.
Setting up a coffee shop or café could be a great option if you’re looking for a lifestyle business which provides you with a modest income, but if you’re after a high margin, rapid growth venture this is probably not the route to explore.
You’ll need to consider the amount of work involved in setting up a business like this. Anyone who has working in catering or hospitality can tell you that hard physical work is involved, so unless you afford to employ staff from the outset, running a café will involve being on your feet all day.
It’s not essential but this is an industry where experience will go a long way. If you haven’t worked in a café before, spend at least a few weeks working somewhere similar to the establishment you want to open. You’ll be able to see how things are run, what works and what doesn’t, and you’ll likely find that people are more than willing to give advice, providing you’re planning to open in a different area so you’re not directly competing.
You’ll also need to be clued up on the basics of food preparation (see rules and regulations).
As with any business having a well thought out business plan is a must, read more here.
The most important decision you’ll make when setting up a café or coffee shop is your premises. Finding a good location and size will set you up for success, and should not be rushed.
Looking for a busy urban area with a high rate of footfall is a wise choice as two-thirds of consumers buy coffee when out and about. However, choosing a location like this will be expensive and the amount of space you will be able to get will be less than if you choose somewhere suburban. You’re dream coffee shop may well have been a large airy space, with huge sofas and coffee tables stacked with reading material but if you want your business to be successful this is not the most important factor. Two thirds of consumers consider the quality of the coffee to be the most important factor when choosing a coffee shop, so could well be more profitable investing in better beans and saving on the location.
When looking into properties it’s important to know your competition. Consider what the most popular brands are offering and how you could improve upon that, as well as how you will set yourself apart from local competition.
When you’re searching for a space it’s important to consider what is already provided and what you’ll need to add. Carefully consider the layout and how you might use the space. As a rough guide a small café (15-45 covers) will need between 500-1000sq ft., for 45-100 covers you’ll want at least 1000sq ft and for 100+ covers you’ll want a space bigger than 2000sq ft.
Make sure to check what commercial classification your proposed site currently falls under before negotiating the lease or purchase. If the property doesn’t currently have the correct classification for a coffee shop you’ll need planning permission from your local authority.
Rules and Regulations
It’s important to be up to date with food hygiene and preparation if you’re planning to open a coffee shop or café. The Food Standards Agency (FSA) is responsible for all food safety standards and can provide you with advice on all matters food hygiene. The FSA has a publication called ‘Safer Food, Better Business’, which will help you comply with the law, making your premises safe for the public. Reading this will ensure you know your stuff when it comes to serving food, covering key areas like contamination, cleaning, chilling, cooking, management and keeping a food diary. You can order the book by contacting the FSA on their email [email protected]
As an owner, you must make sure that you and anyone working with food in your establishment has appropriate training and/or supervision to do their job properly. However, there are currently no laws stating that you must undertake formal training to open a café or coffee shop. The legal responsibility lies with the business owner so make sure you have all the information you need.
You must register your business with the local authorities and you will likely face inspections once your café is up and running.
A failed inspection is something to avoid at all cost, your business could be closed down, it’s certain to be bad publicity, and worst of all you might be endangering your customers by contaminating their food. In order to avoid this you should learn the HACCP; Hazard Analysis Critical Control Point. This is an internationally recognised system of food safety management. The HACCP focuses on identifying the ‘critical points’ where food safety hazards might arise and putting steps in place to prevent things from going wrong.