Coffee Cafes can be a fun and exciting business to open. Owners may believe that they will have no problem opening and sustaining a business, but the truth is that most business do fail. The following are the top reasons that coffee cafes fail.
1. No Budget
Perhaps one of the biggest mistakes that rookies make is not formulating a budget prior to opening the doors. While it may seem easy to open a coffee cafe, there is a lot of planning that needs to go into it. The budget should be the first focus. Make sure that there is enough of a budget allocated for overhead startup costs. Also, know what all of the overhead costs will be and plan. At first, people will flock to new businesses. However, after time the newness wears off and the budget must be able to withstand the dip.
When naming the business and the products, make sure not to pick too exotic of names, otherwise there is the risk of customer's not knowing what products are or that the business is even a coffee cafe. Confusing the customer leads to a decrease in customers, which in turns leads to the business failing.
Whether it is the variety of products on the menu or the actual size of the building, size is an important thing to consider when opening a cafe. If there are too few products to choose from on the menu, customers may grow bored with your selections. However, if there are too many it can overwhelm the customers. It is best, at least at first, to have a few varieties and then to slowly introduce new flavors. The size of the building is important because people do not like to feel cramped if they are sitting at a table. However, the more space that is present the more the overhead cost goes up.
Most people are not going to drive out of their way to get their morning cup of coffee. They will go where is convenient. Cafe owners need to make sure that the location of the cafe is their one of their top priorities. If there is no drive thru, they need to ensure that their location has plenty of parking. People who are trying to get to work will not wait for a parking spot to open up; instead they will go somewhere else. If everything else about the cafe is perfect, it will still fail if the location is bad.
Jonah Engler is a financial expert from NYC.