How to open a cafe - Part 108 Oct 2014
So, you’re thinking about opening a coffee shop? Before you start dreaming of pouring the perfect flat white, bantering with the locals and joining the foodie vanguard, you’ll want to get the basics in place. In the first of a three-part series, Ross Brown, the owner of the highly-rated Browns of Brockley, provides a quick guide to getting started.
Here, in part one, Ross focuses on the early basics, i.e. the things you’ll want to get in place before you start frothing all that milk. (Read Part 2 here)
This may differ depending on where you’re looking to open but the basic principle stays the same: Good location matters. Once you’ve put down your six-month deposit and set the concrete bar you’re not going anywhere for a while, so make sure you’re more than happy with your location. Visit your potential location during different times of day. Consider the obvious like foot traffic, visibility and potential competition.
Get yourself a good estate agent
Estate agents are slippery eels at the best of times, so keep talking to as many commercial agents as you possibly can. Lots of commercial property deals are done offline so constantly refreshing the letting section on Rightmove won’t always work. Take a bike ride through your desired locations and make a note of not only ‘To Let’ boards, but shops that might be closing down or just looking a little drab. Don’t be afraid to go in and talk to shop owners - you never know they might be gagging to sell their bakery/record store/Costa franchise. If all else fails you can access freehold ownership data via the Land Registry website for £3 per title.
… and a good solicitor
What good is finding the perfect location if you don’t have someone to act on your behalf and make sure you’ve got a watertight lease? You don’t necessarily need a £300/hour partner at the firm - in fact you don’t even need to be using a solicitor based in the same city - but you’ll need a good solicitor. Ask for recommendations from friends and most importantly other business owners who’ve been there before. Your solicitor is there to work on your behalf, to negotiate the best deal possible for you and your business. Unless you’ve sat the GDL yourself (in which case, I’d really re-consider that 50% drop in salary and paid holidays) this isn’t something the average joe on the street can competently manage along with the 50 other tasks you should have on your hands as a fledgling business owner.
Remember that a lease is a legal agreement to pay rent for a period of time. That £10,000/year lease for five years might seem like a quick side-project before your next big venture, however you’re agreeing to pay that landlord £50,000! So make sure it’s done right.
Find the best tradesmen
The UK is perhaps not known for its fantastic craftsmanship and hard work ethic. Finding the right people to do the best job possible whether that be plumbing, electrical, carpentry or basic building can be very hard. There are various listing websites but the Guild of Master Craftsmen, while not being the cheapest, offer accreditation and slight peace of mind. I’m sure every friend of a friend has a great builder who did their side return but commercial work is a bit different. Time costs money and every day you’re not trading stacks up, so having tradesmen that understand time restrains and are able to work unsociable hours are vital. Not only that but you’ll need people who understand that they can’t walk off site with a list of small odd jobs they’ll come back to at a later date. Are you certain your plumber will come out when your pipes burst in the busy Saturday morning rush? What about the builders who installed those two tonne hanging lights, they’re definitely not going to fall and crush a customer? Cutting corners and getting a cheap deal is not worth the headaches and heartaches further down the line.
… and a great accountant
As with tradesmen, people tend to skimp on professional accountants, some people scrap the idea altogether and do it themselves. While that is certainly an option, hospitality is one hell of a black hole and the last thing you want to do after a 12-hour shift trying to perfect that silky milk swan is to search for a missing invoice or wrap your head around the compulsory auto-enrolment pension scheme.
The ICAEW have a good database of Chartered Accountants. Beware of firms who give the impression of being Chartered Accountants without actually having the accreditation. Talk to other business owners and if possible other coffee shop owners (if you can) about their accountancy practices. It’s no use using a local accountant who doesn’t understand what you do or is more used to convincing HMRC that your builder really does only earn £8k a year.
There are also great online accountancy packages out there like Xero and Kashflow that allow you to operate reasonably complex accountancy systems quite simply for small monthly fees (around £20 a month). Both of these platforms operate training days on how to use the software and offer good online help. Whatever you do, I recommend trying to fit in some basic bookkeeping training into your hectic schedule. Basic maths, spreadsheets and invoices might not seem as enthralling as constantly telling customers why coffee should cost more than £1 or sweeping croissant crumbs off the floor – but it will make your life easier in the long run if you have a good understanding of how your business functions financially.
Recommended reading material:
Long before you sign off on that Oxford Street corner unit you may want to read some words of advice from others who have been before and not necessarily in the same field. Here are a few books to get you started:
‘The Coffee Boys’ Johnnie and Hugo may seem a little outdated but the basic principles of selling coffee haven’t changed. I’ve always found their first book ‘Wake up and Smell the Profit’ hugely accessible and packed full of business fundamentals.
If you’ve got to the point of opening your own shop one hopes you’ve mastered your art. However I think everyone can benefit from reading and re-reading Scott Rao’s ‘The Professional Barista’s Handbook’. I doubt there is a better practical book available.
‘Setting the Table’ by Danny Meyer is more focussed towards his New York restaurant empire but I still found his attitude to hospitality and particularly service really enlightening.
AVOID ‘Anyone Can Do It; Building Coffee Republic from Our Kitchen Table’ by Sahar Hashemi. If the title wasn’t embarrassing enough for the failed Coffee Republic co-owner Sahar Hashemi the actual content is abhorrent. Essentially a business founded out of a love of fictional Friends café Central Perks and oversized muffins.