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Starting a cafe business in Australia: 9-step checklist guide

If you have designs on starting your own cafe business, you will likely already have big ideas and a vision for your cafe. You may have even written down the goals you have for your new cafe and thought about the atmosphere you would like to create, and what your menu will look like.

To open a cafe, having a clear vision can be critical for its long-term success, and it all starts with a rock-solid plan. So, in this opening coffee shop checklist we will cover off the nine essentials for setting up a cafe and making it a raving success.

1. Have a business plan

When considering how to start a cafe, it all starts with a business plan. The real value of a business plan is not in the final product, but in the process of creating it. Writing a business plan enables you to get to know your market and determine the numbers that will make your business a success.

A written plan is essential for any business venture, whether it’s to attract investors or to help you decide what your priorities are as a business owner.

Choose a location

Storefronts located in busy downtown areas tend to have higher rents because of the higher foot traffic and consequently, higher turnover. You should also consider whether the location is close to restaurants or shops and if it has the right plumbing and electrical infrastructure. Also, how affordable the rent is in relation to these other factors.

When starting a food business your business plan will help you navigate each step of starting and running your cafe. It will also serve as a guideline for how to build your business and how to grow it. You may consider including these elements in your cafe business plan:

  • Summary: What your company stands for and how it will stand out.
  • Analyse of the local market: Who are your customers and who is your competition?
  • Your team: Who are you going to hire to help run your business?
  • Marketing plan: What is your point of difference and how will you communicate it?
  • Money: How much capital you will need to start and where are those funds coming from?
  • Financial projections: Projected profit and loss and cash flow management.
  • Location: Where will you base your cafe? Will you lease a premises? How much space will you require.

2. Carefully consider your costs

The reality is that there is no one clear answer when it comes to answering the question of how much does it cost to open a cafe. This is because the costs to open your cafe will be determined by your location, any renovation work, restaurant marketing costs, employment costs, and your supply needs. In all likelihood you may need a business loan to get your cafe business up and running. There are various way to approach business funding, so take your time and carefully consider which path feels right for you.

While there are many things to consider, taking the time to plan for each aspect of your cafe business can help set you up for long-term success.

3. Select a location

Storefronts in busy downtown areas have higher rents for a reason – higher foot traffic equals higher turnover for your cafe business. Other factors to consider include:

  • whether a location is central and close to other restaurants and shops
  • if the space has the right electrical and plumbing infrastructure
  • and how affordable the rent is

4. Focus on coffee and tea – but don’t forget the rest

Coffee and tea are the lifeblood of any cafe, and cafe customers are increasingly discerning. This means that it’s important to establish a robust supply chain. Decide on the different varieties of coffee and tea that you will sell to ensure your cafe stands out from the competition. High-quality tea and coffee beans cost more, but they can draw tea and coffee enthusiasts from further afield to your business.

However, as well as hot and cold beverages, cafes typically also offer light meal options, such as soups, salads, sandwiches, bagels, and sweet baked goods such as doughnuts. Keep it simple, get feedback on all items before you open, and make sure your menu evokes your unique brand and culture.

5. Obtain all required permits, licences, and certificates

Depending on what beverage products you intend to sell through your new cafe, you may be required to hold a valid and current on-premises licence (cafe or restaurant) in NSW (referred to as a restaurant and cafe licence in Victoria).

Each state has different legal requirements for cafes in Australia when it comes to licenses, and there can be different license requirements and different coffee shop laws for cafe owners when it comes to selling alcohol from their premises. So be sure to check the requirements in your state if you intend to do so. To serve alcohol with no other service (for example, to serve alcohol but not food), your business will also need a Primary Service Authorisation (PSA), which can be applied for when you apply for your on-premises liquor license.

If you intend to apply for an on-premises license (cafe/restaurant) you may be required to provide the following:

  • A floor plan that shows the proposed boundaries for licensed premises
  • Details of the property owner
  • Contact details for you, or another authorised person
  • Your requested liquor trading hours
  • A copy of your Development Approval/Consent (if applicable)
  • a completed applicant declaration – PDF (if applicable)
  • a Community Impact Statement (CIS) (if applicable)
  • A completed PSA application (if one is being applied for) and
  • your licence fee payment

If you are applying as an individual, then you will also need to provide the following:

  • Evidence of your Responsible Service of Alcohol (RSA) qualifications
  • A current National Police Check Certificate issued within the past three months
  • The three identity documents that you used to apply for your National Police Check
  • Your ABN, ACN or Y/INC.
  • The names and birthdates of all directors and officeholders (if yours is a proprietary company)
  • A current Australian Securities and Investments Commission extract
  • Details of an Approved Manager appointed (if applicable)

Council certificates that you may be required to apply for include:

  • a zoning certificate
  • a construction certificate
  • a fire safety certificate
  • a compliance certificate and
  • an occupation certificate

6. Hire the right people

Ask any cafe owner who has been in business for a while what their number one problem is and they will most likely say that it’s finding and keeping great employees. Cafe owners start their search for skilled staff. This is understandable. My experience has taught me that attitude is more important than experience.

While skills can be learned, attitudes are not as easy to acquire. You can target employees who have some hospitality or cafe experience, especially in the early stages of your business. But building a great team culture is only possible when you hire the right people. So put in the effort to find, screen, and hire the best people for your cafe business.

7. Source commercial equipment

There are a variety of options when it comes to equipment sourcing. Equipment can be purchased outright with your own money, or it can be leased through commercial kitchen suppliers. Many cafes can also rent equipment from their coffee roaster or pay off their equipment costs over time.

A commercial blender, fridge, dishwasher, cash register, and other items may also be required, depending on the size of your cafe business and the products it will offer. Some equipment items may not be necessary immediately, so you may prioritise certain equipment for the time being.

Here is a list of equipment that most cafe business owners will likely require to get up and running:

  • a POS system and a cash register
  • espresso machines
  • French presses
  • drip coffee makers
  • industrial coffee grinders
  • freezers and refrigerators
  • ovens, toasters and other cooking devices
  • industrial blenders
  • security system and
  • storage and shelving systems.

This can all be costly, so it is worth looking for secondhand options to make it work financially.

8. Opening day

The opening day for your new cafe should be a momentous occasion. In the lead up to your opening day, spread the word far and wide in your local area. Draw passersby into your cafe by offering opening day promotions, freebies, and giveaways. You may even have entertainment features such as live music, or a jumping castle for families with young children. It’s all about making the biggest splash you can with your new cafe business.

9. Market your cafe

You have the opportunity to build your network and create a groundswell in the weeks leading up to your cafe’s opening day. Social media is your word of mouth. Use it to build your reputation and excitement in your community.

It’s not hard to see why cafe owners love Instagram, but don’t stop there. Claim your Google Maps land Google My Business listing to make sure that you appear prominently in local searches. Also, you might consider claiming your company page on Tripadvisor.

If you engage in online promotions, be sure to make them personal, interactive, and engaging. To encourage social sharing and engagement, use eye-catching images and videos. Invite your customers to visit your social media pages and like/follow them for information and promotional offers. You can also invite customers to register for your email communications to keep up to date and follow your business on social media to receive updates, specials, and other offers.

Have you got hospitality and restaurant insurance for your cafe business?

Many unexpected things can happen when you run your open a cafe, which is why many cafe business owners reduce their risk with hospitality and restaurant insurance, also referred to as insurance for restaurants and cafes.

From food poisoning to losing power and having to dispose of food products, to damage to property owned by a third party due to negligent business activities, business insurance can be an effective way to reduce your risk.

Build your start-up food business by reducing your risk via food business insurance – also referred to as insurance for restaurants and cafes, or hospitality and restaurant insurance.

BizCover – the small business insurance experts

BizCover specialises in hospitality and restaurant insurance. Because we only work with small business owners, we know what works when it comes to helping small business owners reduce their risk.

As you start your restaurant checklist learn more about insurance for restaurants and cafes and how hospitality and restaurant insurance can help reduce the risk to your cafe business. Compare competitive hospitality insurance quotes from Australia’s leading insurers online, get covered in 10 minutes, and get on with your day.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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