Have a go at our Cafe Business Planning Quiz below. The results of previous respondents are then explained throughout this blog:

powered by Typeform

A cup of tea and a bacon butty has fuelled the much of the nation for decades. And whilst the ‘Greasy Spoon’ café still very much has its place there are increasingly more varied café style businesses throughout the UK. From classic French to alternative vegan the café business can be as cosmopolitan and edgy as the wider restaurant sector.

There is an increasing consumer preference for quality and responsibility or ethically sourced produce. Combined with a better wider understanding of dietary health a number of new opportunities for foodie entrepreneurs are available, with great business potential for those enterprises that can develop a unique proposition, grounded in some sound business planning.

You have landed here because of your expressed interest in learning more about the cafe business sector. Please enjoy the blog below and learn more about this ever more popular sector.

You have landed here because of your expressed interest in learning more about the barbershop business. Please enjoy the blog below and learn more about this ever more popular sector.

Industry Stats

The figure below shows some of the key industry stats including market value, current market growth and number of UK based businesses. The sustained growth of the industry and the multiple areas of specialism encourages creative entrepreneurs to begin their own ventures. Each adopting and adapting subtly different business plans to carve out their own unique offering.

The café industry is often viewed alongside the coffee shop sector. The term café has no distinct definition being loosely described as a small, informal business selling light meals, snacks and drinks. A business that identities itself as a café could range from the classic fried breakfast style business to a more continental outfit that may serve food throughout the day and even have a licence to sell alcohol. The variety of operations is at the root of strong growth, currently at 6.3% year on year. The sector is dominated by independent small businesses which number over 7,000 and provide a great range of offerings to a market with increasingly diversified tastes and food preferences.

Being smaller businesses, the start-up costs are less than a more formal restaurant enterprise. With little by way of regulation or formal qualification required the main barrier to entry for newcomers to the market is sourcing the necessary finance to secure a premise and if necessary, fit out any establishment.

There are few barriers to entry and start-up costs can be relatively low compared to other similar service-based businesses. This makes a barbershop an attractive option to both seasoned professionals and newly qualified barbers alike.

A small cafe company may expect to see around 60 customers a day with a combination of sit in and takeaway customers. The number will vary depending on the exact offering with a more bistro style seeing less custom but higher average spend. The number also varies greatly with its proximity to passing trade.

The services a cafe may offer can fall into 9 general categories. Some, like cooked breakfast, can be subdivided into numerous offerings to fit a wide range of tastes. The larger cafe will be able to offer a wider range of services but smaller businesses can focus on developing a niche by specialising in one or two areas such as focusing on cooked breakfasts that use organic or locally sourced produce.

The most popular service category for cafes are the cooked breakfasts with 98% of respondents offering this option. The category it itself can be sub divided into countless other options from the classic English fry up to an American style pancake stack. Businesses that serve throughout the day and offer lunch and possible even evening meals will naturally see a higher level of customers but that does require an even better grip on supply and produce purchasing as a greater range of foodstuffs will need to be sourced, stored and inventoried.

Average Spend at a Cafe

The average spend at a café is around £14 per person. The number does vary greatly depending on the specific nature of the offer and the location. A bistro style café in London with a proper sit-down service could charge over £30 for a meal whereas a quick coffee and sausage sandwich from a café in Hull could cost less than a tenner. Given the generally high operational costs, this pricing strategy right is paramount to the success of a café business.

Outside catering

An area that some cafe businesses could diversify into would be to offer outside catering. This will help reach a wider number of customers, utilise stock better and provide protection through diversification.

The accompanying graphic shows the percentage of respondents who do offer outside catering. Provided it fits with a new businesses model and staffing capacity it could be one area to establish a point of difference to the competition.

How Do Cafes Get Financed?

As previously mentioned, the main barrier to entry for anyone looking to start a cafe is financing the set-up of the business. would also need to have the right training behind them.

Given that the certain financial barriers to entry do exist in starting a cafe there is a clear advantage in preparing a proper business plan in order to reduce some of the uncertainty and risks associated with any new venture.

‘The Copper Pig’ is a quirky café venture started by husband and wife team, Edmond and Gill. Using a combination of their own savings and a small start-up loan they opened the business with a budget of £18,000. This allowed them to take over a lease of a small coffee shop business which they renovated and turned into an English/French fusion café. The business sits right next to a local butcher and they serve handmade sausages in a range of classic English and French dishes.

A drastic change in the offering from the previous incumbent meant it took time to develop a name in the local area and a customer base regular enough to give the business long term sustainability. The business plan the pair invested in clearly outlined the projected ramp-up in operations and ensured they kept enough of a cash float to see them through to that breakeven period

A high proportion of cafe entrepreneurs have used personal savings in combination with funds secured from Start Up Loans and other debt finance from traditional bank loans. The table below shows the main sources of business finance and their associated percentage. In some cases, for larger projects, businesses may need to obtain finance from more than one source.

The layperson may be misled into thinking a fully written business plan would only be a requirement if looking for outside finance. Whilst it is true a solid business plan would be a pre-requisite for any form of form debt or equity finance the value of having a quality business plan cannot be underestimated. Even for those self-funding, a viable and robust business plan is a sure way to keep focused and accountable which will ultimately lead to better business decision making.

Importance of a business plan

Finding the right location, sourcing reliable suppliers and establishing a regular customer base is vital to any cafe business. As is the understanding the business’ revenue model, showing the number of customers it requires, in order to hit breakeven.

Any serious company should look to invest in a proper, written business plan in order to maximise its potential. The graphic below shows a high proportion of cafe businesses have invested in a professionally written plan and all new ventures should look to do the same.

So what can we say about starting your own barbershop?

Pros

  • The café sector is in a period of sustained growth
  • Wide-ranging customer tastes provide a multitude of commercial opportunities

Cons

  • Takes time to build up a customer base and cash flow planning is therefore key
  • Operational costs can be high and stock control is very important

 

How you can succeed

The best way to get ahead of the competition and eliminate the biggest unknowns and risks when starting your own cafe business is to invest in a high-quality business plan. The investment is invaluable. We at MyBizPlan provide the highest quality and yet lowest cost business plan in the UK, for a minimal outlay you can obtain a high-quality, visually stunning, financially robust business plan. It will give you a greater chance of seeking that vital finance and in the long run, could save you thousands.

If owning and running a cafe business sounds like the kind of business for you, get started with a Cafe Business Plan from MyBizPlan. See which of our solutions is right for you by having a go at our – Do You Really Need a Business Plan Questionnaire?

 

Let us tell you when this blog is ready

An example business plan will be emailed to you shortly