The cafe is a perfect example of a “third place”. It’s a place in a neighborhood that’s not home or work, where neighbors can relax, talk, work, and have some downtime.

It takes organization and motivation to open a cafe, but the rewards can be great. Cafe ownership is a great way to make money. You can sell delicious coffee to the entire neighborhood, provide a place for remote workers and creatives to connect, and create a supportive environment where employees can learn more than just how to pull a perfect ristretto.

8 Tips to Manage & Optimize Key Cafe Operation Costs.

1. Rent and overhead

When it comes to cafés, location is key. Most of your customers are likely to live near your cafe, and only a small number will travel across town to taste your pastries and coffee. It’s therefore important to select a good location for your café. Calculate how much money you can make in different neighborhoods. Also, determine how much overhead you will be able spend (including the location). Then choose your ideal cafe space.

Before you agree to a lease make sure that the price is right, the fine print is correct, and the landlord has not made any mistakes. Negotiate your lease to reduce the amount you pay each month. You’ll have to do this as long as your business is operating. Overhead costs are all the expenses you will incur to run your business.

2. Find an attorney and get licensed

Do not leave licensing and permits to the last moment. Look at the 10 Permits and Licenses Required to Open a Cafe and your local requirements. Then, get started on this part. You may have to renew certain permits on a regular schedule. If so, mark the dates in your calendar the moment you submit the application.

It may be worth hiring an attorney to help you with this process. Errors in obtaining permits can lead to hefty fines.

3. Find and invest in cafe staff

Staff members in your cafe, such as baristas and managers, but also dishwashers and cashiers are vital to the success of your restaurant. You trust them to take care of your customers, make the best drinks and snacks, maintain your business, and keep your books in order.

It’s important to hire and retain talented staff. Show your staff how much you value them by rewarding them, offering meaningful benefits and investing in training.

Cafe owners who have been in business for a long time may struggle to provide benefits and increase wages, but now is the perfect time to make the change. You’ll reduce turnover and save time and money by not having to hire and train new staff.

4. Food and coffee cost

The coffee markup of 80% is the main reason why cafes can generate profits. Cafes are able to achieve a cost-percentage of 20-25% due to the lower price of coffee, which is their main item of inventory.

The inventory costs of drink-only cafes can be kept low by focusing on the coffee beans, milk substitutes and other products, as well as some teas and juices.

If you offer food, it will require more inventory but also increase the average check size. For example, if someone who visits four times per week to buy an espresso now purchases a muffin each time, their lifetime customer value will skyrocket.

You can provide food for your cafe in a variety of ways: you can work with a local baker and sell the pastries and sandwiches they bring to you every morning. (And maybe you could supply their bakery with beans!) You can hire a pastry chef or baker to make sweet and savory goodies in-house. This will position your café as a bakery and cafe. You can also buy precooked baked products from large distributors and warm them each morning to increase the size of your check.

5. Social media and marketing

The best way to increase the number of people who visit your cafe is through marketing. You may be able to rely on your regulars for a steady stream of business, but if you want to take your cafe to the next level, you need to reach out to the wider community.

• Loyalty Program Punch cards can be used to turn first-time clients into regulars. Be sure that the rewards will encourage 6 or 10 visits.
• Your online information must be accurate. Google listings and cafe websites must be updated 100% of the time. You must have accurate hours and a menu. A new customer should not be disappointed when they arrive at your cafe to find that it is closed or that the item on the menu that initially drew him there has been discontinued.
• Social media marketing for cafes. You can attract new customers by posting regularly on your Instagram or TikTok page, showcasing the food, team and atmosphere of your cafe. Use relevant hashtags, such as #[your town]cafes or #[your town]coffee.
• Email newsletters. You can send out promotional emails to customers who have opted in to your virtual loyalty program.
• Flyers.
• Promotions. BOGO muffins for the end of the workday? Free flavor boost with a frappe 15% discount during the coffee happy hour between 3pm and 5pm Track the effectiveness of different promotions in your cafe.

6. Interior design and atmosphere

There are many ways to decorate cafes. But, whatever you choose, ensure that your design and atmosphere match your brand.

Social media should match the minimalistic, airy third-wave café with its wooden benches and white walls. You can create a warm, cozy cafe that offers breakfast sandwiches and baked goods to encourage people to linger with a drink and a book. Just furnish the space with comfortable couches, eclectic accents and colors that attract the eye.

Set the right expectations for your customers with social media profiles that match your cafe’s design.

7. Professional services

Every cafe needs external support at times, from espresso machine repair technicians to accountants, coffee importers and web designers. You’ll have the ability to solve problems and improve your business by building relationships with professionals who are highly regarded in your industry.

8. Technology and equipment

The initial investment in a new cafe will be significantly increased if you check off all the items on your list of cafe equipment. Espresso machines can be expensive and the rest of the equipment list, including ice machines, blenders, mugs, and trays, adds up quickly. Consider renting instead of buying top-of the-line equipment. You can also start with a small machine and upgrade once you have established yourself in your locality.

Your next investment after your espresso machine will be a great cafe. These platforms have the features that will keep your business running smoothly, as well as keep customers returning, such integrated loyalty programs and order-ahead functionality, data and analytics dashboards, and other functionalities.