Start An Independent Coffee Shop or Cafe – Small Business Guide
Coffee Shop culture is king in Britain. Many of us now fantasize about running our own little, self-styled food outlet. However, whether you are starting up a cool, little canteen in Shoreditch, a festival food van/popup for farming the festival circuit, or a provincial deli in the Cotswolds, you’ll need to cast romance aside for a moment and concentrate on the realities.
Restaurants and coffee-shops can be a fulfilling career, but many owners underestimate the long hours that are required to make it work. Many food entrepreneurs enter this market-place without realizing what a high-risk sector it is: research shows that 60% of coffee shop ventures fail. Why do they fail? It seems that while food entrepreneurs know a lot about food, they fail because they aren’t great at running businesses or marketing.
That’s why I developed this small business guide to starting and running a coffee shop.
1.Essential Business Self-Help Books from Coffee-Shop Start-up Gurus
This is a sector, literally brimming with self-help books, written by specialist foodie entrepreneurs who have built and run their own successful independent restaurants and shared their secrets. These are pretty much coffee-shop bibles and you’d be foolish to start without reading one of these.
Setting Up and Managing Your Coffee Shop
The most valuable read is probably: Setting Up and Managing Your Own Coffee Bar: How to open a coffee bar that actually lasts and makes money . . . (Coffee Boys Step By Step Guide)
With 87 reviews, averaging 4.5 out of 5 star, it’s the most positively reviewed book of it’s kind. The authors, John Richardson and Huge Gilmartin, (the Martin Lewis of coffee shops), have opened dozens of their own coffee and sandwich shops and have distilled all their knowledge into this book, creating a road-map to success in the coffee-shop sector.
The ‘Coffee Boys’ book above is probably aimed at the more strategic end of the advice spectrum, and if you want more day-to-day advice, then a good, more nuts-and-bolts-geared, companion to this Coffee Boys book is: Start and Run Your Own Coffee Shop and Lunch Bar: 2nd edition (How to Small Business Start-ups). Written by Heather Lyon, who runs her own successful coffee shop, this books is written from a first-time shop owner’s perspective and gives practical advice every step of the way. Once again, it’s been heavily reviewed, averaging a 4.5 out of 5 star rating on Amazon.
Authored by successful sandwich shop entrepreneur, Jill Sutherland, this heavily reviewed book, Start and Run a Sandwich and Coffee Shop, also has a great 4.5 out of 5 star average rating. Operating at the more practical and realistic end of the advice book genre, it offers check-list, anecdotes, real-life examples, and a step by step guide for the 1st year, including tips on concept, business plan, location, fit out, menu, budget, launch. This is an essential nuts and bolts guide for starting a coffee-shop.
The Daily Grind – How To Open and Run a Coffee-shop That Makes Money, by Andrew & Clare Bowen, serial coffee-shop entrepreneurs comes highly recommended, averaging 4.5 out of 5 stars on Amazon. These successful independent coffee shop entrepreneurs have written a detailed road-map to setting up your coffee-shop, starting from choosing your location, selecting your team, WOW service, menu, layout, equipment, and so on. Another essential read.
2. Four Essential Legal Documents for a Cafe/Coffee-shop Start-up
This is not an exhaustive list, but here 3 essential legal documents which you must have before launching your start-up.
1. Employment Contract: hospitality and leisure industry
Staffing levels will be hard to predict in the early days and you’ll need to have the flexibility to increase or decrease staff hours from a week to week basis. A casual or zero hours contract is used to do this and is a very popular choice of contract in the hospitality sector.
I’d recommend this specialist Employment Contract: hospitality and leisure industry from Netlawman, a reputable online provider of legal documents. It’s aimed at people who work in coffee shops, bars, pubs, restaurants etc…. It allows for unsociable hours working, flexibility in where the employee will work, casual or zero hours working, restraint of trade making it hard for staff to set up in competition against you. It has a large focus on hygiene and health and safety too and includes a job description focused around Cafe customer service.
2.Business Sale Agreement – Cafe or Sandwich shop
If you are looking to buy an independent cafe or coffee shop then use this, Business Sale Agreement – Cafe or Sandwich Shop from NetLawman. This agreement governs and lays down the rules and regulations for the purchase of a retail food business where food is consumed on the premises. It also includes the legal wording to to enable the transfer of leasehold premises. This means you can buy the business and take over the lease using this document. They also have a Business Sale Agreement: restaurant or pub or bar.
3.Fire Safety Policy
The presence of a kitchen creates a clear fire hazard and it’s essential that you have in place a fire safety policy from the outset. This, Fire Safety Policy from Netlawman will help to ensure that your cafe complies with legal requirements to monitor, record and assess fire-related safety risk.
4.Employee Handbook
If you have employees you will need an employee handbook which sets out the appropriate staff entitlements and the rules and regulations around employing staff in the UK. You can purchase a UK employee handbook here. If you have more than 5 staff you will also require a written health and safety policy, a template of which you download here from the Health and Safety Executive government website.
3. Business Insurance – Coffee Shop or Cafe
You simply can’t operate a cafe or coffee shop in the UK without appropriate business insurance. AXA Business Insurance suits small businesses in the UK, and covers areas such as Public Liability Insurance, Shop Insurance, Employers Liability and Business Insurance. Insure your cafe or coffee shop start-up today with AXA Business Insurance
4. Staff Rota/Scheduling Software for Coffee-shop
One of the biggest potential headaches you will face as a coffee shop owner is scheduling staff, especially, casual, part-time staff who want to work flexibly and switch shifts etc..
Doing all this on paper will cause you a headache and is not necessary when this can be carried out much more easily and relatively economically with specialist staff rota software which allows you to run your rota through mobile advice and even allows staff to switch hours with each other, saving you lots of labour. Doing it on paper is a false economy as you will easily recoup the money spent on the software from efficiency savings. Below are some rota software tools that I would recommend for coffee-shops,
1. StaffTRAK Rota is a downloadable, staff rota, smart Excel template that enables you to manage your next staff rota efficiently and easily. It is cost effective too, being a fraction of the price of online subscription software. Click here to try it.
2.Planday. This is an online and very sophisticated, subscription based staff rota tool for cafe, coffee-shops and so on. It’s works on desktops, tablets and mobiles and has a simple drag and drop style interface, meaning you can populate your shifts quickly, literally while stood behind the counter. It includes a library of schedule templates that you can copy and modify, or you can copy shift templates from one week to the next. It also integrates seamlessly with Sage Payroll Software which is an essential piece of kit you’ll need too.
Click here to give Planday a try.
For a full list of online rota software tools for coffee-shops click here.
5. Payroll Software
Rota Software and Payroll Software go hand-in-hand in cafe and coffee-shops. If you have one you invariably need the other. That’s why it makes sense to use rota and payroll software that are easily integrated together so that working hours information can be seamlessly and automatically transferred to the payroll software tool. As a busy coffee-shop owner this saves you lots of admin time, meaning you can focus on customer service.
1.Sage Business Cloud Payroll Software is the entry level tool that will probably suit your independent outlet, as it’s suitable for up to 25 employees. What’s great about this payroll tool is that it assumed no prior knowledge of payroll, meaning that the absolute novice can run payroll, produce payslips, pay staff and submit required information to HMRC all at the click of a button, without any training. Sage offer 24/7 web/phone support too, just in case you do run into any trouble. This tool also integrates with Planday rota software seamlessly and will automatically import weekly staff hours (once submitted via planday), and do pay calculations. It couldn’t be easier. Click here to try Sage Business Cloud Payroll today.
2.Quickbooks Online is another payroll software option that integrates directly with PlanDay rota software too. Through this system you can manage your coffee-shop payroll, accounts, VAT and MTD.
6.Point-of-sale (POS) Software
Your coffee-shop won’t get very far without a Point-of-sale system. There is lot’s of choice out there. Lightspeed Restaurant is one of the market leading POS systems for independent restaurants and integrates with Planday. Why is this integration beneficial? This means that you can co-relate revenue data with payroll costs to help you create more cost-effective schedules. Izettle is another POS which also integrates directly with Planday and this is well-suited to small coffee shops too.
