beans mean… coffee how to set up a cafe

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february 2006

Beans don’t always have to mean an internationally recognised brand name – of the baked, or coffee variety - and when it comes to the latter there are plenty of independent people who have decided to take the plunge to coffee cups everywhere, but do you have what it takes?

The first thing you need to ensure is that you know your cappuccino from your frappuccino, espresso or americano… then, if you think you have the passion and dedication to run a coffee shop, you need to think about how to do it and whether or not you should gain some first-hand knowledge of the industry.

Adrian Hawtin, owner of successful coffee shop BREW in Preston says: “I would not recommend opening a cafe without some catering experience. I have a degree in hospitality management as well as food preparation qualifications and I also worked as a food sales rep for five years. This has definitely been to my advantage.”

So, if you find yourself overflowing with the necessary insider knowledge, have seen a premises in a location that will allow you to create the necessary ambience we coffee connoisseurs have come to expect, then you need to know what to do next. When setting up BREW, manager Adrian spoke to local business venture groups as well as his bank business advisor and this is the best way to gain as much information as you can. Most banks give new businesses access to free business advice when setting up so ask around - if it’s free, it really doesn’t hurt to take it.

One thing to consider in the beginning is whether to offer food. Remember that the more you offer a customer, the higher the average spend will be which in turn will increase your turnover – never a bad thing! If you do decide to go all the way from the start then you need to work out what you are going to offer, whether you need to employ a chef or if you can do it yourself and bear in mind any special licences you may need.

Running a coffee shop will mean you will be subject to a wide range of legislation and although your bank business advisor can probably advise, do make sure you are as knowledgeable as you can be. You need to look at Food Premises Regulations, Food Safety Act, Consumer Protection, Environmental Protection, to name but a few, and you will also want to get up to speed on Public Liability insurance, Employers Liability insurance as well as good old buildings and contents insurance! Don’t be scared – a lot of information is out there and with some sound advice, you will be fine… just be prepared to experience some hiccups along the way. In the long run, this probably won’t be a bad thing.

As far as capital is concerned, depending on what size your venture is and what you want to provide you could be looking at upwards of £30,000 to set yourself up with premises, staff, equipment and various licences. Make sure you consider your marketing costs and how you are going to approach this part of the business but bear in mind that often the best way for independent businesses to get known is through word of mouth. If customers are getting something different that they like, they will keep coming back. Adrian says “listen to customers, they are your business but don’t lose sight of the competition” and in coffee, there is competition there – often in the shape of internationally known brands with a lot more money than you for marketing so be creative. Check out what they are doing and come up with something different always ensuring you are one step ahead.

If you feel a yearning to serve coffee and food to your adoring public but you’re not quite sure that you are ready to start from scratch then consider a franchise. When George Lilley bought The Pie Man franchise in Kensington in April 2005 he was taking on a well-known brand as well as the first-hand knowledge of another manager. “The shop already had regular customers and had proved to be extremely busy during its history albeit not in recent years. I also liked the fact that there were 2 other ‘Pie Man’ shops and have spent some time with the other manager understanding his successful products and learning from his experience” said George.

Taking on this franchise meant that he was able to spend time building up custom but with the added support and knowledge of another manager and without the main costs. A franchise can involve a cost of about £10,000 with an additional available overdraft, however this isn’t indicative of every franchise opportunity. The points to remember with a franchise is that you will probably strike a deal where you have to stock a certain amount of product and take part in marketing campaigns but depending on the franchise, you could end up with a great deal of autonomy. The most important thing is to make sure you cover all areas before signing on the dotted line. George’s advice is “research all costs intensively, and make sure your contract is water tight paying particular attention to points around things like who is responsible for maintaining the equipment in the shop.”

Whatever way you decide to do it, whether well-known or little-known beans, starting a café business is going to take a lot of commitment, long hours and dedication, but if you have a passion for coffee and making your customers smile, then there could be a coffee-pot out there just waiting for you to plunge into.

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about the author

Alice Griffin has vast and varied experience in the working world: design, print, marketing, research and publishing. She has worked for herself as well as corporate companies and her in-depth knowledge and down-to-earth approach provides direct no-nonsense advice. See more of Alice's work on her website www.keramay.co.uk

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