Cafe Business Planning
This section will take you through the essential steps on creating a successful business plan for a cafe which will ring in the profits.
There are 3 parts to the whole process:
PRE-OPENING: A checklist of action points that you’ll need to tick one after another:
- Step 1: Written Business Plan
- Industry Research
- Research Legal requirements
- Step 2: Cafe Theme & Concept
- Step 3: Finalise Location
- Step 4: Menu Engineering
- Step 5: Equipments & Machinery
- Step 6: Interiors
- Step 7: Vendors
Step 1: Business Plan:
One of the first serious steps you’ll take toward your Cafe/QSR Startup is to create a business plan. This document spells out exactly what your business is, your products, USPs, capital expenses estimation, profitability projections, your customer base, explores competitors, plans for growth, and provides troubleshooting strategies should you need help achieving your goals.
Pls remember opening a cafe, like any other business, has its own challenges of planning and execution. Theoretically, many blogs will tell you how to plan your F&B biz in a particular step-by-step order but unfortunately it doesn’t work like that in the real world. All the elements of the plan are interlinked and circular in nature. For example, your CONCEPT decides your TARGET AUDIENCE and the MENU, which guides the CAFE EQUIPMENT LIST, the LOCATION, the INTERIORS, which in turn will help you form a BUDGET. But that doesn’t necessarily mean that you leave your budgeting till the very end. Hope you get the drift.
The common components of a business plan include:
- Executive Summary, in which you summarize your vision for the company.
- General Company Description, in which you provide an overview of your cafe and the service it provides to its market.
- Products and Services, in which you describe, in detail, your unique product or service.
- Target market – your primary TA, and how you intend on appealing to them.
- Operational Plan, in which you describe how the business will be operated on a day-to-day basis.
- Marketing Plan, in which you describe how you'll bring your product to its consumers.
- Management and Organization, in which you describe the structure of your organization and the philosophy that governs it.
- Financial Plan, in which you illustrate your working model for finances.
- List of licenses and statutory requirements
a). The cafe industry
Ok now that you’ve decided to take the plunge, we suggest it’d be wise to have some functional knowledge of the industry before even writing the first para of your business plan. This knowledge will be particularly useful in avoiding mistakes and setting a template for success.
A quick trip to the internet will give you the macro-data. The big picture. But you definitely want much more than that. You want the local market trends, offerings, what works what doesn’t in your target geography and demography.
You’ll notice that while the market is dominated overall by a few big brands, the independent Cafe/QSRs have their own niche and are faring rather well. The number of smaller yet ultramodern-format QSRs has risen dramatically in the past five years. Especially since the independent formats have the flexibility to adapt to local demands and trends which the larger brands lack.
A word of caution though. Although the cafe & casual dining culture has seen a definite boom globally in recent years, it’s important to remember that this does not automatically guarantee success in starting an F&B Business.
b). Budgeting for Your Cafe
This is one area where you don’t wish to go wrong. At all. For this error can be costly.
Since Cafe/QSR is a small budget business, hiring a hospitality consultant maybe expensive. But still we do suggest you speak to some of them to get an idea if a consultant fits your budget. Chosen wisely, it could turn out to be one of your best investments. Click here to find out Consultants / Consulting Chefs
If you have absolutely decided to do it on your own, our Pre-Opening Budgeting Checklist will help you create a budget for your venture.