To start a successful cafe, you'll need suitable premises, friendly staff, and the ability to serve food that keeps customers coming back.
As well as dreaming about the delicious dishes you'll create, you will have to think about more mundane things too: like food hygiene, licensing, staff, suppliers and balancing the books.
If starting a cafe sounds like your slice of heaven, check out our guide for everything you need to know.
Remember that the current coronavirus outbreak has a significant impact on cafes and restaurants. You should keep this in mind if thinking of starting a cafe at the moment.
What do you need to set up a café in the UK?
King of the kitchen? Queen of cuisine? If you love putting a smile on people’s faces with your cooking, you might be considering opening your own café. To start a cafe you are going to need:
- the motivation and dedication to make it work - running a cafe is a labour of love that can mean long hours and slim margins
- good business sense - you'll need to plan your business and balance your books if you want long term success
- customers - think about whether there is an appetite for what you'll offer and how you'll get customers through the door
- appropriate premise - a venue that is both accessible for customers and equipped for the safe preparation of food
- reliable staff - as a minimum, you'll need someone to prepare food and someone to serve customers
- a good supply chain - you can't serve sandwiches if you haven't got bread; your supply chain is integral to your success
We'll go into more detail about all of these below.
Have you got what it takes to run a cafe?
Whether you’re thinking of a vegan sandwich bar or a coeliac cupcakery, a cat café or a dementia-friendly deli, cafés offer so much scope to follow your personal passions. A love of cooking and making people happy is a large part of running a cafe.
But that isn't all it takes. As with all small businesses, you'll be responsible for all aspects of running your business. From promoting your business and balancing your books, to negotiating with suppliers and taking on staff.
But make sure you understand the realities of running a café before committing, especially in the current Coronavirus climate.
Speak to other café owners to get the lowdown on life running an eatery of your own.
Are there customers for your cafe?
Before you get started, you need to think about the type of café you want to run and who you're trying to appeal to. For example, are you planning:
- a friendly café at the heart of the local community, where the staff greet customers by name and pass the time of day?
- a slick and speedy café offering great coffee and fast service to caffeine-craving commuters rushing to work?
- a cat / dog café where people can pet a furry friend over a foaming cap-paw-chino?
This will help inform everything about your business, from the branding and business plan to the location and décor. Writing a customer persona can help you visual your ideal visitor, and our Guide to Branding includes an in-depth example of how to brand a cafe business.
Don't forget that you're going to need to attract customers to your cafe too. This might be as simple as installing signage and putting out a chalkboard on the pavement.
But it could be more sophisticated, using social media to promote your cafe or creating a website to take bookings. You might also want to consider using third party apps to promote your service, such as JustEat, as well as price promotions such as BOGOFs. Learn more with our introduction to marketing.
What's the best location for a cafe?
Picking the right premises is key. Ideally you need somewhere that:
Don't forget that, as well as the rental or purchase price of your premise, you'll have to pay business rates too.
What facilities do you need for a cafe?
Businesses that serve food to the public must have certain facilities. These include:
- handwashing facilities for staff
- toilets and changing facilities
- facilities to clean food and equipment
You can find commercial properties to rent on your local council website. They’ll be able to point you towards properties that comply with the necessary regulations for food businesses.
What equipment do you need for a cafe?
You also need to invest in the right equipment: whether that is an espresso machine to create amazing Americanos, or display chillers to showcase your scrumptious cake creations.
- coffee and tea making equipment
- refrigeration equipment
- cooking equipment
- tables and seating
- a way to process payments
Secondhand equipment is an affordable option for startups with a smaller budget. If it’s not too macabre, take a look into the liquidators of failed businesses, who will sell their assets on.
Hiring staff for your cafe
The success of your café doesn’t just depend on the quality of your food; great customer service is key too. Serving staff will be the face of your business, so it’s important to hire people who are:
- the three Ps: presentable, personable and professional
- calm under pressure
- able to multitask
- always wearing a smile
You’ll need to provide staff with food hygiene training that is appropriate to their role in the business. They don’t need to have a food hygiene certificate, but it is a good idea.
When your business success relies on positive reputation and reviews, one case of food poisoning could destroy everything you’ve worked so hard for. So why take the risk?
Read our guide to hiring staff for your startup business..
Finding reliable suppliers for your cafe
Sourcing reliable, reputable suppliers can make or break your business. From coffee beans and fresh bread, to IT systems and taking payments, if your supplier lets you down you can lose valuable business.
Ask around to find out what other local businesses recommend. Local networking groups on Facebook can be a great way to canvas opinion and get recommendations quickly. Always have a plan B – you can’t sell sandwiches with no bread!
The business of running a cafe
Running a food business isn’t just about shooting the breeze over your latest bakes. If food is your focus, it can be tempting to overlook the business side. But business admin is very important and can take up a lot of your time.
You’ll need to liaise with suppliers, manage and pay staff, promote your business and more. Investigate the different tools you can use to make this easier, such as accounting software and social media scheduling.
Before you get started with your business, you’ll need to create a business plan to check it is viable. Especially if you are hoping to secure a loan to fund it. Find out what to expect when applying for a business loan.
Business planning might not set your world alight, but it is essential groundwork that will help you build your business success. Read our step-by-step guide on How to Write a Business Plan.
What are the legal requirements for setting up a café in the UK?
1. Registering your food business
All food businesses must register with their local authority. This allows them to check your business is meeting food hygiene requirements. Failure to register can lead to a big fine, so get this done! It’s free and you can’t be refused, but you need to do it at least 28 days before you open for business.
2. Registering your business with HMRC
Like any business, you’ll also need to decide on your company structure and register with HMRC so you can pay tax. Read our article on company structures to find out more. You might want to make a coffee first… Food is also subject to VAT in certain cases. It even differs depending on whether the food is served hot or cold. So check out Gov.uk for information about the VAT rates for different products.
3. Food hygiene
It is essential that the food you serve is safe to eat. The Food Standards Agency provides invaluable guidance on this and points to the 4Cs of food hygiene: cleaning, cooking, chilling and cross-contamination. Make sure you read up and are aware of your responsibilities.
Your local council will inspect your premises to check you’re complying with food law and give you a rating. Having a top-notch rating can boost your business and protect your business from risk. If you get a great rating, make sure you display your sticker with pride.
You will need a license for certain business activities. For example, serving alcohol or playing music in a public space.
5. Health and Safety
If you have more than five employees, you must have a written health and safety policy. Check out the Health and Safety Executive for the most up-to-date advice in this area.
6. Fire risk assessment
You must carry out a fire safety assessment and make adequate plans in the event of a fire. The risk of fire is higher in a premise serving hot food so this is really important.
There are lots of insurances to consider when you run a café. The biggies are:
- public liability insurance – to protect you if a customer has an accident on your premises
- employers’ liability insurance – to protect you if a staff member has an accident or falls ill as a result of working for you
- building and contents insurance – to cover the cost of replacing anything lost due to theft, accident etc
Others to consider include: vehicle insurance, personal income protection and stock insurance. It is worth talking through your options with a financial advisor to find the right cover for you. Without insurance, one bit of bad luck can devastate your business finances.
How much does it cost to set up a café in the UK?
You’ll need to factor in the following costs for starting your café in the UK.
- Internal décor / fit out
- Wages / payroll
- Stock and supplies
- Advertising and promotion
- IT systems
- Professional services, if you use them (eg accountancy)
- Training (eg food hygiene)
Working out your start-up costs will be an essential part of your business plan. Once you know how much money you’ll need, you might want to look at business finance options. Our guide to funding a new business can help you explore your options.
Ready to start making those dreams a reality? Take a look at how much you can afford to borrow from Transmit Startups.