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What is a Café Business?
There are more than 25,000 cafés and coffee shops in the UK, with the industry worth an estimated £4.4 billion. A café business is often a staple of the local community, with many people visiting cafés to eat, drink, socialise and work.
95 million cups of coffee and 100 million cups of tea are consumed in the UK every day. These statistics, combined with the UK’s love of eating out, explain why the café industry remains strong, despite the decline of the high street.
The term café can have many different meanings but typically refers to a small eating and drinking establishment which serves a variety of drinks, snacks and light meals.
There are many different foods and beverages which can be served in cafés, but the most popular are:
- A variety of teas, e.g. English Breakfast, green, mint and fruit tea.
- A variety of coffees, e.g. cappuccinos, lattes, Americanos, flat whites and iced coffees.
- Other hot beverages, e.g. hot chocolate.
- Cold beverages, e.g. milkshakes, juices and soft drinks.
- A variety of cakes, pastries, cookies, desserts and other baked goods.
- Hot and cold sandwiches.
- Afternoon tea.
- Breakfast foods, e.g. bagels, Full English breakfast, pancakes, waffles and avocado toast.
Some cafés choose to offer a varied menu with a wide range of food and beverage options. Others choose to focus their menu on a specific type of food or beverage.
If you are thinking about starting up a café business, you will first need to decide what type of café you want to set up.
There are many different types of cafés, for example:
A café bakery
As well as hot and cold beverages, café bakeries specialise in baked goods, such as sandwiches, cakes, pies, muffins, cookies, doughnuts and pastries. You may offer a sit-down and takeaway service to target a variety of customers.
A themed café
As the name suggests, themed cafés focus on a particular theme and create their brand around the theme. They usually design and decorate their café to fit their theme and may also serve themed food and drinks. Examples of themed cafés include a cat café, an Alice in Wonderland café and a jungle café.
A grab-and-go café
This type of café isn’t designed for people to spend long periods of time, instead, it targets takeaway customers. Although you may have a seating area, this will be smaller than a regular café and the area will be less cosy and comfortable so as not to encourage customers to stay for a long time. You will likely utilise takeaway cups and paper bags and boxes so customers can take their food and beverages with them.
A hangout café
This is the opposite of a grab-and-go café and instead encourages customers to socialise, work and hang out. You will likely offer free Wi-Fi, comfortable seating areas and inviting décor.
A speciality coffee shop café
A speciality café usually focuses on speciality coffee – premium coffee that has been grown, cared for and sold with specific care and attention. The coffee you serve must score above 80 points on a 100-point scale. The coffee will likely be organic, and your business will have a barista who operates as a coffee aficionado. Although coffee will be your main priority, you may also serve other items.
A niche café
This type of café will focus on a specific niche or speciality to attract a specific type of customer. For example, you could open a vegan café, a gluten-free café or a French Patisserie café.
The type of café you choose to open will have a significant impact on the types of food and beverages you serve, your décor and aesthetic, your typical customer base and your price points. When deciding the type of café business to set up, consider your location, your local competition, the demand and your experience and abilities. For example, if you are located on the seafront, you may opt to set up a beach-themed café with a variety of food options and lots of areas for your customers to sit and relax, whereas if you are located in a business district, a grab-and-go café that targets busy professionals on their lunch break or after work may be more beneficial.
There are many different responsibilities associated with running a café. These responsibilities can vary depending on the type of café you set up, the size of your café and the number of employees you hire, the types of food and beverages you serve and how involved you are in the day-to-day running of your café.
The typical responsibilities associated with running a café include:
- Sourcing and ordering stock and ingredients.
- Purchasing, cleaning and maintaining equipment and machinery.
- Preparing, cooking and baking any food and preparing beverages.
- Ensuring the cleanliness of your café, including the kitchen area and the café.
- Complying with all legal guidelines and health and safety requirements.
- Pricing your products.
- Packaging and displaying any pre-prepared products.
- Speaking to customers, taking orders and handling payments and receipts.
- Serving or packaging food and drinks.
- Handling customer collections and deliveries (if applicable).
- Marketing and advertising.
- Completing business and administrative tasks.
You do not need any formal qualifications to open a café. However, you will need the necessary skills required to bake, cook and prepare beverages, a high level of knowledge in the café industry and an understanding of how to run a café. If you have strong business skills, a solid business plan and are a sociable person who enjoys working in a face-to-face capacity, then starting up a café business can be extremely rewarding.
Types of Customers
Cafés are frequented by people of all ages and demographics. However, determining the types of customers your café is likely to appeal to can help you to plan your advertising and marketing strategies, focus your business and maximise your profits.
Multiple factors can determine your typical customer base, for example:
The type of café you run
This will have a significant impact on the type of customers you are likely to attract. For example, a hangout café may be more likely to attract university students and groups of friends whereas a themed café may be more likely to appeal to tourists and people celebrating a special event or looking for a unique experience.
Your location
This will be one of the biggest determiners of your typical customer base. Many people visit a café that is conveniently located near their home, place of work or study, an area they are visiting (for example, a beach, a lake or a popular walking destination) or a popular tourist destination. For example, if you are located close to a train station, you are more likely to attract commuters, whereas if you are located close to a park, you may be more likely to attract families.
Cafés located in busy areas with high footfall (such as a city centre) are more likely to attract passers-by so should focus on how to appeal to these customers, whereas cafés located in a village are more likely to attract local residents. Consider people who typically visit the area close to your café when identifying your typical customer base.
The types of food and beverages you sell
This is another important factor that will influence your typical customer base. Some cafés offer a varied menu with a large number of food and meal options. Others offer a smaller menu that mainly focuses on drinks and baked goods. Alternatively, you could offer a specialised menu, such as a specialist coffee or vegan food. The types of food and beverages you sell will significantly impact your customer base.
Your business brand and aesthetic
Your branding and aesthetic are key to attracting customers. Your business name, logo, and the design of your café are all key to the types of clients your business will appeal to. Consider the outside of your café, your café window and your décor, furnishings and accessories.
Whether your café is dog friendly
This is something that many café owners don’t consider but can be a major factor in your typical customer base. This is especially true if you are located in the countryside or in an area with local walks or popular outside areas (such as a beach, lake or park). Dog owners often search online for a café that allows their dogs onto the premises, and cafés that go the extra mile to welcome dogs, for example, by providing water bowls, dog treats or even a doggy menu, are likely to be even more popular. The UK is a country of dog lovers (with more than 12 million pet dogs), and the rise of the ‘puppuccino’ shows how popular it is becoming to bring your dog along to a café with you.
Your pricing strategy
Your price points will be a key determiner of your customer base. Customers can typically be separated into three pricing categories:
- Budget: This type of customer is looking for the lowest-priced food and drink and is usually happier with a more basic menu and a simpler café.
- Mid-range: Mid-range customers are looking for a combination of quality and affordability. Although they don’t want to pay premium prices, they don’t look for the cheapest option and instead look for quality service at a reasonable price.
- Luxury: This type of customer wants the highest quality, best-tasting food and drink with a luxury experience and is willing to pay higher prices. They are more likely to look at factors such as the aesthetic and design of your café, your furnishings and your menu, rather than your prices.
Equipment You Will Need
The type of equipment you require will depend on the type of café business you set up, the size of your business and the types of food and drink you offer. Choosing the right equipment is essential, as without it you will not be able to operate your business.
Although your equipment requirements can vary, below is a list of equipment typically required by a café business.
Kitchen Equipment
An industrial fridge and freezer
A fridge and freezer are essential in your café. You will need to store any perishables and fresh stock or ingredients in your fridge or freezer. Consider how much you will need to store when considering what size you will need. Ensure both the fridge and freezer are set to the correct temperature.
An industrial oven
The type of oven you purchase will depend on the types of food you plan to make. Most bakery cafés opt for a convection oven, which uses internal fans to circulate the air to create even browning and uniform baking. However, other types of cafés opt for a different type of oven. For example, a conveyor oven.
A dishwasher
A dishwasher is a necessity, not only because it will help you to save time in the kitchen and reduce your kitchen duties, but also because it will demonstrate the hygiene standards and cleanliness of your café. Opt for an industrial sized dishwasher to allow you to clean a larger amount at one time.
Cookware
Depending on what you cook in your kitchen, there are several different pots and pans and other cookware you may require, including:
- Saucepans.
- Frying pans.
- Woks.
- Grill pans.
- Sauté pans.
- Baking trays.
- Roasting pans.
- Skillets.
Bakeware
Bakeware is the type of equipment you will use to bake your products. Investing in quality bakeware is recommended as it will likely be heavily used and can be susceptible to dents and warping.
Some pieces of bakeware you may need to purchase include:
- Bread pans.
- Baking trays.
- Moulds.
- Muffin tins.
- Cake pans.
- Pie pans.
Shelving
Shelving creates a safe and organised area for storing non-perishable ingredients (such as bread, seasoning and coffee beans), as well as equipment, accessories and utensils. Shelves also allow you to maximise the space in your kitchen.
Sheet pan racks
If you are baking large quantities of food at one time, a sheet pan rack allows you to cool multiple products at the same time. You could choose a tiered rack, allowing you to conserve space, and a rack that is on wheels, enabling you to transport your products around your kitchen more easily.
Kitchen accessories
Some kitchen accessories you may require include:
- Chopping boards.
- Kitchen knives.
- Mixing bowls.
- Food processors, mixers and blenders.
- Temperature gauges.
- A strainer and colander.
- A timer.
- Weighing scales, measuring cups and a measuring jug.
- Oven gloves.
Cooking utensils
Some cooking utensils you could require are:
- Spatulas.
- Tongs.
- Stirring spoons.
- Whisks.
- Ladles.
- Peelers and graters.
Dough proofer
If you make baked goods in your café, including sandwiches, pizzas, pastries and cookies, dough will be an important ingredient and you will likely need a dough proofer. A dough proofer can help to simplify the dough-rising process, helping you to ensure your products are uniform in shape and size, and that the production process is streamlined.
Storage containers
Storage containers can be used for safely storing any opened stock, to prevent spoilage or contamination. You can also use the containers to store any cooked or pre-prepared food, such as salads, to keep them fresh for longer. Ensure your storage containers are strong and airtight.
Date labels
These are necessary to label when ingredients were opened and when certain items were cooked. It ensures that all stock, ingredients and food products are completely safe to use and that your kitchen is operating in line with food safety and hygiene guidelines.
Stainless steel worktops or worktables
You will use the worktops for all your food preparation tasks. Your worktables should be stainless steel as this material is non-porous, meaning it is resistant to most bacteria and germs. It is also easier to clean and will help you to maintain high standards of hygiene.
Equipment sink
This sink should be used specifically for cleaning, disinfecting or storing food equipment and utensils and should not be used for handwashing. You must ensure the sink has both hot and cold running water. Depending on how big your café is, you may require two sinks for equipment.
Handwashing sinks
You will need separate handwashing facilities and cannot use the same sink for handwashing and food preparation or equipment. This sink must be exclusively used for handwashing.
Kitchen Display System (KDS)
This is a digital screen that is used instead of handwritten or printed orders. A KDS manages your orders and helps you to prioritise, edit and track your orders. It creates a more streamlined ordering system that can help your café to be more organised and efficient.
Personal Protective Equipment (PPE)
PPE is a necessary purchase for all food businesses, as it helps to protect your food from contamination. PPE can also protect you and your staff from harm (e.g. when using sharp instruments or hot equipment). Some PPE you may require includes hairnets, gloves, oven mitts, anti-slip footwear and aprons.
Rubbish bins and a waste disposal system
You will need rubbish bins in all food preparation areas. You will also need different bins for different items to ensure you are disposing of rubbish correctly and following recycling guidelines. Colour-coded bins are the easiest way to ensure your waste disposal system is operating correctly.
Cleaning equipment
Keeping all areas of your café clean is imperative. Food preparation, cooking and storage areas are particular areas that should be cleaned regularly throughout the day, to avoid cross-contamination and the breeding of bacteria. You will likely need different cleaning materials for different parts of your café. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser, dishwashing soap and a sweeping brush and mop.
Café Equipment
Coffee machines
There are many different types of coffee brewers and coffee machines. Depending on the type of café business you set up, you may opt for one type of coffee machine or purchase multiple.
The most popular types of coffee-making facilities are:
- An espresso machine: An espresso is a typical Italian coffee, which has grown extremely popular. This machine uses high pressure to force pressurised water through finely-ground coffee beans in a few short seconds. The end product is a small coffee (‘shot’ size) that is rich and creamy in flavour and has a thicker consistency. It can be drunk alone or used as a basis for other types of coffee, such as cappuccinos, lattes and macchiatos.
- A drip coffee machine: This is a system through which water automatically drips into a heating tube and is then poured onto ground coffee. It then goes through a filter before being poured into a cup. This type of machine usually makes a larger amount of coffee, allowing you to serve multiple customers at one time. Drip coffee has a stronger coffee taste.
- Coffee bean grinders: Some coffee machines come with an in-built bean grinder, whereas others require a separate piece of equipment. A coffee bean grinder is used to grind whole coffee beans into a small, uniform size ready for brewing.
- A coffee machine: A coffee machine can usually make a variety of different coffees, such as cappuccinos, lattes and macchiatos. Many coffee machines can also make other hot beverages, such as hot chocolate. They often include a milk frother.
Coffee accessories
With the rise in popularity of specialist coffees and flavoured coffees, there are several different types of equipment and accessories you may require, including:
- Coffee cups.
- Flavoured syrups and syrup dispensers.
- Decanters.
- Coffee beans.
- A milk frother.
- Coffee stencils.
- Coffee spices and flavours (e.g. powdered chocolate, cinnamon and nutmeg).
- Coffee spoons and stirrers.
Tea-making and serving equipment
Tea is a quintessentially British drink and there are multiple pieces of equipment and accessories your café could need, including:
- A kettle.
- Tea pots.
- Cups and saucers.
- Tea strainers.
- Tea baskets (to hold the tea while it is steeping).
- Milk jugs.
- Sugar dispensers.
- A tea bag dispenser and display unit.
- Teaspoons.
Blenders and juicers
If you are making fresh milkshakes or juices in your café, you will require a blender and/or juicer. A blender can also be used to make soups and smoothies.
Display cases
If you sell any pre-packed food, such as sandwiches, cookies and muffins, or pre-packed drinks such as cans or bottles of juice or fizzy drinks, you will need glass-fronted display cases to store your products. You may opt for a refrigerated display case for perishables and a room-temperature display case.
Shelving
Shelves may be required to store a variety of non-perishable food, utensils and equipment. You may have shelving behind the counter and on your shop floor area. Shelves can also be used to decorate your café and you can add decorative items, plants and flowers to your shelves.
Tables and seating areas
The majority of cafés offer a seating area for their customers. Choose tables and seats that fit the design and aesthetic of your business and portray the type of café you are choosing to set up. You could opt for traditional wooden or plastic tables and chairs, sofas, armchairs, booths, long banquet-style tables, high-top tables and stools and outdoor seating. Some cafés even offer alternative seating options, such as beanbags, hammocks and sofa cushions. You may also offer outdoor seating options and high chairs for babies and toddlers.
A counter
This is where your customers will place their orders. It will likely include an area for you to stand behind and may feature display cases and shelving, your till and a menu that clearly displays your products, prices and any allergen information. You may opt for a long counter to give your customers a place to queue or a smaller counter.
Cash register and Point of Sales (POS) system
This can help you to record sales and manage the financial aspects of your café. Your payment system should allow customers to pay cash, debit card, or credit card for their purchases.
Cups, utensils and cutlery
Depending on the type of café business, you may only need to buy takeaway cups, packaging and wooden stirrers for your customers. If your café business offers a sit-down area, you may also need to invest in reusable or porcelain plates, bowls, mugs, cups and sauces and glasses and cutlery. If you are happy to spend a little extra, you could choose cups and cutlery that matches your brand or are branded with your business name.
Other equipment
Some of the other equipment you may require for your café business includes:
- Napkins and linens.
- Table cloths.
- Paper straws.
- Decorative items and accessories (to fit the aesthetic of your business).
- A sanitising station.
- Bins (recycling and non-recycling).
- Serving trays.
- Signs (inside and outside your café).
- Menus and menu holders.
Food labels
All food businesses in the UK must ensure their food is properly labelled and includes information about any of the 14 allergens. Invest in labels or a labelling system that securely attaches to your products and is easily readable.
A CCTV system
A CCTV system is necessary for protecting your café from theft and burglaries. It can also help to protect you in the event of a threatening customer or an allegation against your business. A CCTV system can cost between £300 and £5,000 depending on the specification of the equipment, how many cameras you require, and the installation costs.
A fully stocked first aid kit
A first aid kit is a necessity, as you will be working with potentially dangerous equipment and products. A first aid kit can also be used if any customers sustain an injury in your café. Ensure your first aid kit is restocked regularly and is easily accessible.
Wi-Fi
If your café features a seating area, your customers will expect you to provide Wi-Fi. Because multiple devices will be connecting at one time, you will need a Wi-Fi system that is reliable, fast and can handle a higher capacity. Depending on the size of your café, you may require multiple routers or Wi-Fi boosters.
A music system
Cafés generally play music as background noise. You may require a music player and multiple speakers, depending on the size of your café.
Typical Costs
When you are setting up your business, an important consideration you will need to make is the approximate costs associated with starting up and running this type of business. Calculating your typical costs allows you to estimate your initial investment requirements, any monthly and annual costs, your pricing strategy, your profit goals and your acceptable profit margins.
There are multiple costs associated with setting up and running a café business. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.
Although typical costs can vary, depending on the type of café you set up and the size of your business, the typical costs you can expect to be responsible for include:
Your café premises
Your business location will likely be your biggest expenditure. You will need to rent your premises on a monthly or annual basis. Rental prices can vary significantly, depending on the location and the size of the premises. City centre locations and newly built premises usually have the highest rental costs. Rental costs are often calculated per square metre. They can range significantly, from £500 to £15,000 per square metre annually. Your rental cost may be higher if you are renting an already established, refurbished or equipped café.
Refurbishment and installation costs
Unless your premises previously operated as a café, you will likely need to refurbish or convert your venue to install the equipment and furniture you need for your business and make the area fit for purpose. You will also want to refurbish and decorate your premises to fit the aesthetic of your business and make it attractive to customers. Renovation costs can vary, from £500 to £20,000 depending on the level and scale of work required. As part of your renovation costs, consider how you can make your café easy to clean and ensure it is safe and in line with health and safety regulations.
Equipment
Your equipment is an important purchase, as without it you will not be able to run your café. The cost of equipment can vary based on how large your café is and the type of equipment you require. The bigger your premises and the more customers you want to accommodate at one time, the more equipment you will require. You may choose to purchase less equipment initially and expand your equipment as your business grows. Equipment for your café business can cost between £5,000 and £50,000.
Maintaining, repairing and replacing equipment
Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment and machinery will come with warranties, repairs and replacements are inevitable – particularly because the equipment will experience heavy use. Cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.
Stock and ingredients
This is an ongoing cost you will have to factor into your budget. It includes any stock and ingredients you will need to create your products, such as eggs, milk, coffee beans and vegetables. Because many of the ingredients you require are perishable, you will need to order stock regularly (you will likely take stock deliveries at least twice per week). You can reduce the cost of your stock by buying wholesale, buying in bulk and shopping around. To maximise your profits, your food stock cost should be no more than 30% of your food sale price. The higher the return, the higher your profits will be. Some stock will be more expensive, for example, organic coffee beans.
Running costs
These are the day-to-day costs associated with running your business. Some running costs are paid monthly, and others are paid quarterly or annually. Your running costs can include electricity, gas, water, council tax and insurance. To maximise your profits, try to keep your running costs as low as possible.
Staff
You will need to hire staff such as chefs and other kitchen staff, front-of-house staff and cleaners. You will need to pay any staff you employ at least the national minimum wage of £9.50 per hour and account for other expenses such as holiday pay, sick pay, maternity/paternity pay, National Insurance and any company pension contributions.
Branding
When creating your brand identity, consider how you want your business to be perceived by potential customers. When creating your brand, consider the type of café you are setting up, the food and beverages you sell and your typical customer base. Branding can include creating your business’s visual identity, design and aesthetic, your business name and logo, your signage and your website. You could hire a professional to help you with branding or do some or all of the work yourself. Branding can cost between £500 and £10,000, depending on the level of work required.
Advertising and marketing
To ensure your café attracts customers and creates maximum profits, you will need to spend money on advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £100,000, you should spend between £1,000 and £3,000 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business. To reduce your costs, capitalise on free marketing strategies, such as on social media or in your local community.
Training
You and your employees will need to obtain food hygiene training before you open your business. You will also need to refresh your training regularly (at least every three years). You may also opt to undertake other training courses, such as manual handling, first aid and electrical safety. You can expect to pay approximately £20 per training course per person.
Business insurance
There are multiple coverage options available for a café business, including:
- Public Liability Insurance.
- Employers’ Liability Insurance.
- Product Liability Insurance.
- Equipment Insurance.
- Building and Contents Insurance.
- Business Interruption Cover.
- Personal Accident Cover.
Insurance prices can vary, depending on your insurance provider and the level of coverage you require. Prices typically start from £15 per month.
Typical Pricing for Customers
Once you have calculated the typical costs associated with setting up and running a café business and the approximate costs of your stock and ingredients, you can then determine your price points. Each item on your menu will be priced individually and you may also offer your customers the option to add extra items to their order for an additional cost, for example, by adding caramel syrup and oat milk to their coffee or halloumi to their breakfast sandwich.
The price of your ingredients and the time taken to make each item will be the biggest factor in your pricing. For example, a chicken and bacon ciabatta has more expensive ingredients and involves more preparation and cooking compared to a cheese sandwich. Consider your ingredient costs and your time when pricing your menu.
However, there are other factors that will influence your pricing strategy, including:
Your location
Cafés located in a desirable location, such as in a city centre or close to a famous landmark or tourist attraction, typically charge higher prices. Your location can also mean you are more likely to attract budget, mid-range or luxury customers.
The type of café you set up
Different types of cafés have different pricing structures. For example, niche cafés (such as a vegan café) and themed cafés can typically charge higher prices as they have less direct competition and may be more likely to attract customers who are happy to pay higher prices. Additionally, the price points for grab-and-go cafés are usually lower than for hangout cafés as customers are typically looking for convenient food and beverages at an affordable price.
Your furniture and décor
Customers are usually willing to pay higher prices in cafés that are aesthetically pleasing, comfortable and well-designed. Consider your signage, your café window, your décor and your furniture (particularly the tables and chairs your customers will sit on) when creating your pricing plan.
Safely Running a Café Business
Safe practices in your café help to protect the health, safety and well-being of you, your staff and your customers. They can also help to protect your business.
Some ways you can safely run your café business include:
Safely store food
All food must be stored safely to prevent contamination and ensure any food and drink is of good quality and safe to consume.
Some safe storage practices you can follow include:
- Keep storage areas clean and tidy.
- Check food deliveries are safe and of good quality before accepting them.
- Follow the First In First Out (FIFO) stock rotation system.
- Pay attention to use-by and best-before dates.
- Ensure fridges and freezers are set to the correct temperature.
- Follow the storage instruction on pre-packaged food.
- Store raw food and high-risk food correctly (e.g. below ready-to-eat foods).
- Keep foods that contain allergens separately.
- Store any chemicals away from food.
- Label any chilled or frozen food with the date.
- Ensure hot hold food is kept at the correct temperature (63°C and above).
Use a chemical safety data sheet (SDS)
If you store any chemicals, you should create safety data sheets to list the properties of each chemical, any potential physical, health and environmental hazards and any safety precautions for handling, storing and transporting the chemicals. An SDS can help to prevent exposure and reduce hazards and prepare emergency responses and procedures.
Ensure the personal hygiene of all staff
Good personal hygiene is essential when working in the food industry. Good personal hygiene can include:
- Following handwashing procedures.
- Tying back hair or covering hair.
- Not wearing false nails or nail varnish on your fingernails.
- Not wearing jewellery or watches when preparing or cooking food.
- Not wearing strong perfume or other chemical products that could contaminate the food.
- Wearing Personal Protective Equipment (PPE).
- Following good habits, such as not coughing or sneezing near food and refraining from touching your hair or face.
Be aware of staff illnesses
If any of your staff are ill, they should not be working around food or near your customers as this can compromise food safety. If any of your staff have an infection or gastrointestinal symptoms (such as vomiting or diarrhoea), they should not handle food and should not attend work. Any cuts or sores should also be covered with brightly coloured, waterproof plasters or dressings.
Implement pest prevention and control methods
Pests can be a major issue for food businesses and can result in contaminated food and your café being shut down by an Environmental Health Officer (EHO).
Some ways you can prevent pests are:
- Fill any gaps or holes in your building.
- Keep your external areas free from food, rubbish or vegetation.
- Dispose of food properly in closed bins.
- Keep your premises clean and tidy.
- Store food in sealed containers.
- Use fly screens on open windows or doors.
- Check your deliveries for signs of pest damage.
Be aware of food hazards
Food hazards are any contaminants that could enter food and cause harm to consumers. The main food hazards are:
- Biological: These hazards are microorganisms that contaminate food, usually during the cooking, reheating, chilling, storage or defrosting processes. Biological hazards can also occur through cross-contamination. Examples of biological hazards are bacteria, fungi and viruses.
- Chemical: Chemical hazards occur when naturally occurring or human-made chemical substances contaminate food. For example, chemicals from cleaning products, toxins produced by animals, plants and microorganisms or chemicals that are added to food and drink.
- Physical: This refers to foreign materials or objects that enter food or drink during preparation or handling. Physical hazards can include natural hazards, such as bones, shells and pips, and unnatural hazards, such as hair, fingernails, plastic and wood.
- Allergenic: Allergenic hazards can cause an allergic reaction or anaphylaxis in people with allergies. Allergenic hazards can occur through cross-contamination, such as the foods being prepared in the same workspace.
Ensure correct cooking temperatures
All food businesses, including cafés, must ensure they are cooking and baking at the correct temperature. This is to reduce or eliminate the risk of food poisoning. Ensure your oven or other cooking equipment is set to the correct temperature and use a food thermometer to ensure food is thoroughly cooked.
Cleaning and washing of equipment and surfaces
Having effective cleaning procedures is essential to any food business. It is recommended that a cleaning schedule or cleaning policies are in place that cover the cleaning of equipment, surfaces, and food preparation and storage areas.
Conduct risk assessments
Although not a legal requirement for businesses with fewer than five employees, risk assessments can help to eliminate risks and ensure safe practices in your café. As part of your risk assessments, you should:
- Identify hazards.
- Determine who could be at risk.
- Evaluate any potential risks.
- Implement relevant safety measures.
- Record the results of the risk assessment.
- Review the risk assessment regularly.
You should keep physical records of your risk assessments as evidence of your commitment to safe practices.
Keep clear and accurate records
When you are inspected by the EHO, they will likely request to see up-to-date records of your business’s cleaning schedules, risk assessments, health and safety policies, allergen information, and temperature checks. Keeping such records not only helps to protect your business and improve the likelihood of you receiving a higher score, but it also ensures procedures are followed at all times.
Wear Personal Protective Equipment (PPE)
Some of the PPE you may require include latex gloves, protective aprons, hair coverings and protective footwear. PPE can help to prevent cross-contamination of the food and help to protect you and your clothing.
Implement security measures
Security measures can be implemented to protect your business. Your café will likely store a lot of expensive equipment and may keep cash on site. Some ways you can protect your business include installing a CCTV system, using secure and reliable locks and installing an alarm system.
Legal Requirements
Complying with legal requirements is essential when setting up and running your café.
Some legal requirements you should be aware of are:
Comply with the Food Safety Act (1990)
The Food Safety Act applies to any business that sells food. It covers food safety, consumer protection and food information. It makes it an offence to make or sell any food which could be harmful to health and lays out hygiene practices you should follow.
There are several responsibilities laid out in the Act, including:
- Not taking away or adding any ingredients that could cause the food to become harmful.
- Not treating the food in any way that could cause it to become dangerous.
- The nature, substance and quality of the food must be to the standard that customers expect.
- Your labelling and presentation of the food should not be false or misleading.
Comply with the Food Safety and Hygiene Regulations
These regulations specify the standards relating to the control and management of the steps that are critical to food safety, including the cleanliness of your premises and equipment and temperature control in food preparation, storage and serving.
The regulations differ depending on where in the UK your business is located:
- England: The Food Safety and Hygiene (England) Regulations 2013.
- Scotland: The Food Hygiene (Scotland) Regulations 2006.
- Wales: The Food Hygiene (Wales) Regulations 2006.
- Northern Ireland: The Food Hygiene Regulations (Northern Ireland).
Comply with The Food Information (Amendment) Regulations 2019
These regulations set out the responsibilities of food businesses to provide information regarding the 14 allergens (celery, cereals, crustaceans, eggs, fish, lupin, cows milk, molluscs, mustard, nuts, peanuts, sesame seeds, soya and sulphur dioxide). The regulations were updated in 2019 to include Natasha’s Law. You must ensure that any packaging, menus, signs or labels clearly state if any of these allergens are present.
It is also a legal requirement that pre-packed for direct sale (PPDS) food is labelled with:
- The name of the food.
- A full list of ingredients.
- Any allergens that are present.
Obtain Food Hygiene training training
Any employees who prepare, handle or sell food must be supervised, instructed and trained in food hygiene. Although a food hygiene certificate isn’t a legal requirement, it is the easiest way to demonstrate your compliance to the Environmental Health Officer (EHO) that will inspect your business. Training will need to be refreshed regularly.
Implement a waste management system
Café businesses should have appropriate provisions for the separation, storage and removal of waste.
Some guidelines you should abide by include:
- Have appropriate bins inside and outside your café which are sufficient in number and specified for different types of waste.
- Do not allow waste to accumulate.
- Use bins that have fitted lids and foot pedals.
- Have a specific waste disposal area.
- Do not dispose of food waste in the sink.
- Use commercial sink strainers to prevent fat, oil, grease and small bits of food from entering the sewer network.
- Apply for a waste carrier registration if you transport any waste.
It is also recommended that you clean and disinfect bins regularly.
Comply with premises regulations
When choosing or refurbishing a commercial location, there are some guidelines and regulations you should comply with. These guidelines ensure your business is in good condition, clean and maintained and allow you to follow good hygiene practices.
- Handwashing facilities: There should be separate handwashing facilities with hot and cold running water and materials to allow hands to be washed and dried hygienically.
- Changing facilities: There should be adequate changing facilities if a member of staff needs to change their clothes.
- Ventilation, lighting and drainage: Your premises must have adequate ventilation, lighting and drainage in all relevant areas.
- Food preparation areas:
– Floors and walls must be in good condition, easy to clean and frequently disinfected.
– Ceilings must be in good condition, easy to clean, free from condensation and mould and free from flaking paint or plaster.
– Windows and doors must be easy to clean and disinfect and if they open to the outside, fitted with removable insect-proof screens.
– Surfaces should be maintained in good condition, easy to clean and frequently disinfected. - Facilities for washing food: You should have separate sinks for washing food and cleaning equipment. These sinks should have hot and cold running water that is of drinking quality.
- Equipment: Any equipment that comes into contact with food must be in good condition and cleaned and disinfected frequently.
Register as a food business
Any business in the UK that sells food must register as a food business with their local council. You must apply for your food registration business at least 28 days before you begin trading. You can apply for your registration on gov.uk, and it is free of charge.
Display your food hygiene rating
Once you have registered your business, you will receive an inspection from the Environmental Health Office (EHO) to determine your food hygiene rating.
The inspector will assess your:
- Food storage.
- Food handling.
- Food preparation.
- Food cleanliness.
- Food safety management system.
Once you have received your food hygiene rating, this information should be clearly displayed on your premises.
Comply with the Bread and Flour Regulations (1998)
If you bake bread or other baked goods, you must follow The Bread and Flour Regulations. The regulations state the nutritional value of bread and flour that must be adhered to.
These regulations also cover information such as:
- Essential ingredients.
- Iron powder specifications.
- Non-permitted ingredients.
- Composition of flour.
Implement a Food Safety Management System (FSMS)
Food businesses in the UK must implement a Food Safety Management System. An FSMS is a systematic approach to controlling food safety hazards. It ensures that your business is following safety protocols and will influence your food hygiene rating.
Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013
RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve employees or customers.
Comply with the Control of Substances Hazardous to Health (COSHH) Regulations 2002
The COSHH regulations state that you must control any substances that are potentially hazardous. You should also assess, control and reduce any risks or potential hazards and protect people from harm.
Some hazardous substances you should be aware of are:
- Flour dust.
- Concentrates of flavour, citrus oils and spices.
- Cleaning substances.
Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998
PUWER regulations apply to you and any employees you hire. You must ensure any equipment in your café is fit for purpose and is maintained and inspected regularly. You must also ensure that health and safety risks are minimised to an acceptable level, that you have the correct knowledge and training to use the equipment, and that protective measures are put into place. Equipment should also be used under appropriate conditions.
Comply with the Electricity at Work Regulations 1989
The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT). This includes any electrical equipment in your kitchen.
Comply with gas safety regulations
If you have a gas boiler you will need to have it inspected by a gas-safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate. You will need to display your gas certificate clearly for your guests and other visitors to your business to see.
Comply with fire regulations
As the business owner, you are responsible for fire safety measures in your café. There are multiple fire regulations you must ensure you comply with. For example:
- Perform a fire risk assessment.
- Comply with the Regulatory Reform (Fire Safety) Order 2005.
- Implement any necessary fire safety measures.
- Implement emergency procedures and ensure these are clearly displayed.
Comply with the Manual Handling Operations Regulations 1992
Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high and repetitive movements. You will likely be performing manual handling activities when performing tasks such as kneading and rolling or carrying heavy pots or trays of food.
Appoint a competent person
A competent person should be appointed to help your business meet your health and safety legal duties. You can act in this role yourself or appoint another person to fulfil this role. The competent person should have the skills, knowledge and experience to identify any hazards in your business and put controls in place to protect people from harm.
Prepare a health and safety policy
The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your business and state who is responsible for specific tasks and how and when these tasks are completed. Follow the recommended tips from the Health and Safety Executive on how to write a health and safety policy.
Comply with employment legislation
If you employ any staff, you must ensure you follow employment legislation, including the Employment Rights Act (1996) and the National Minimum Wage Act (1998). You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.
Register your business
You must register your business with HMRC before you begin operating. You can register as a sole trader or as a limited company. You will need to register your business name and any other relevant information. You will also need to register for self-assessment tax.
Positives of Owning a Café Business
Running a café can be rewarding in many ways. Some of the main pros associated with this type of business are:
Be part of your local community
Cafés are a fantastic social hub. Owning a café will give you the opportunity to meet new people, get to know your customers and socialise while you are at work. A café is an important part of the community and can act as a central hub for people of all ages. You can create rewarding social and professional relationships in your community.
Fewer food options
Even if you love cooking and baking, ordering stock, preparing food and cooking, baking and decorating can be extremely time-consuming. Cafés typically offer fewer food options than other food establishments, such as restaurants, which can save you money, time and effort. Having a less extensive menu also reduces your food waste.
Work in your dream industry
If you love food and drink and spending time with people from all walks of life, running a café can be very rewarding, Running your dream business can make your job feel less like work and more like a vocation.
Customer loyalty
If your customers enjoy your food and drinks and the atmosphere of your café, they are likely to return time and time again. Many customers return for their favourite cup of coffee daily or lunch with a friend every week. Not only does this give you the opportunity to get to know your customers, but customer loyalty can also help you to grow your profits. Loyal customers may even recommend your café to other people which can help you to grow your customer base.
Be creative
You can be creative with your food and beverages. You have the opportunity to be creative with your designs and decoration and the flavours, textures and ingredients to create the perfect products. If you love being creative and artistic, running a café can be enjoyable and rewarding. Creativity can even happen in small ways, such as a fun design on a cappuccino or a well-decorated table.
Create your dream business
You will have complete control over all business decisions, allowing you to set up your dream business, in line with your business goals and vision. You can decide the type of café to set up, the products you will sell, your brand and the café culture you want to create – the opportunities are endless. Owning your own café gives you the opportunity to be creative.
Hands-on work
As a café owner, you won’t be sitting around staring at a computer screen all day. You’ll be active for a lot of the day, involved in different tasks, running your café and talking to staff and customers. This is great for people who don’t want a traditional office job.
Create a positive work environment
You will be responsible for hiring staff and creating staff policies. This gives you the opportunity to create a positive work environment. You could hire staff that you know will bring positivity to your café and will be an asset to your business. Your staff will also likely be like-minded people who are also passionate about food and beverages and also enjoy talking to customers.
Face-to-face interaction
If you are an outgoing person and you enjoy speaking to people from all different walks of life, you will likely enjoy working in a customer-facing business. You can get to know your customers and spend time talking to them every day. Because café businesses usually experience a lot of repeat business, you can really get to know your customers.
High profit margin
Many of the products you sell will have a high profit margin, meaning the price of your products will significantly exceed your costs. For example, a cup of coffee can have a profit margin of 70%, once you factor in the cost of the ingredients and your time. A high profit margin can help you to maximise your profits and increase your business’s income.
Potential for growth
There are many potential ways you can grow your business. You could extend your premises, grow your menu, hire more staff and even open additional café franchises. Even Starbucks started out as one coffee shop and now has more than 35,000 locations worldwide. Having multiple options for growth gives your café business an unlimited income potential.
Free advertising on social media
You can easily gain exposure on social media by posting photos or videos of your café and arty or appealing pictures of your food and beverages. Your customers may also post pictures to their own social media accounts which will be seen by their followers. This can help you to gain exposure and be noticed online. Social media is a form of free advertising which can help you to grow your customer base and increase your income.
Choose your own schedule
You can choose which days your café opens and the hours you want to work. You can choose the opening hours, based on your busiest days and your own preferences. As your business grows, you can also work fewer hours and allow your employees to handle the day-to-day running of your business.
Be your own boss
You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the type of café you open, the food and beverages you sell and how you want to run your café. You can make the best decisions for you and your business.
Seasonal opportunities
Holidays and celebrations such as Christmas, Valentine’s Day, Halloween and Easter can result in a huge increase in business. You can decorate your café and sell themed products, such as Valentine’s Day cupcakes and Christmas cookies. You can even offer deals or special events at these times of year to help attract customers, for example, a chocolate egg hunt or breakfast with Father Christmas. Capitalising on special occasions can help you to attract new customers and increase your profits.
Negatives of Owning a Café Business
Although owning a café can be rewarding in many ways, there are some potentially negative aspects to running this type of business that you should be aware of.
Lack of work-life balance
There are a lot of business and administrative tasks associated with running a café that can be time-consuming. Not only will you be responsible for the day-to-day running of your business, but you will also have a large number of administrative tasks to handle, such as ordering stock, completing staff rotas, advertising and marketing and ensuring health and safety. Being responsible for such a time-consuming enterprise can negatively affect your work-life balance.
High start-up costs
The equipment needed for a café business can be expensive. You will also be responsible for the rent and renovation costs. The high start-up costs mean you may need to source outside investment. It will also take longer for you to begin turning a profit.
Ingredients and stock can be expensive
Depending on your menu, you may require expensive ingredients, such as speciality coffee beans and expensive cheeses. Although you can price your menu accordingly, prices that are too high will deter customers. Expensive stock and ingredients can affect your profit margin and your overall income.
Spoilage can affect your profits
You will be dealing with a lot of perishable ingredients and baked goods which spoil quickly. Some of the products you make will need to be sold the same day to prevent them from spoiling or going stale and becoming food waste. This can have a significant impact on your profits, as the ingredients and time required to make them are wasted.
Accountability and liability
The food industry is highly regulated with a large number of laws and regulations you must be aware of. You need to ensure you follow all policies and procedures, particularly those relating to health and safety. Not only can it be time-consuming (and sometimes expensive) to ensure compliance, but failure to comply, even unintentionally, could have serious consequences. If a customer contracts food poisoning after eating at your café, you could be held liable.
Highly competitive
Not only are you competing with other local cafés, but you will also be dealing with popular chain cafés and coffee shops, such as Starbucks and Costa. You will also have competition from local restaurants, bars and other food establishments. Having such high competition can make it more difficult for your business to succeed, particularly if your local competition is popular and well-established.
Managing staff
You will have a lot of responsibilities in relation to staffing, including hiring and firing, payroll and managing your staff. This can be stressful and time-consuming. It can also be difficult if the motivation of your employees doesn’t match your business values. If your employees demonstrate a poor attitude or don’t complete their tasks in line with your expectations, this can be viewed negatively by customers and can result in negative reviews.
Issues out of your control
This can be one of the most frustrating aspects of running a café, as things that are outside of your control can have a negative impact on your business and your profits. For example, your supplier raising their prices, your stock delivery being cancelled or your equipment breaking can prevent you from properly running your business, which could not only affect your profits but also result in negative customer reviews.
Difficult to grow your business
Many new café businesses fail to succeed because they find it difficult to successfully market a new business and grow their customer base. Successful cafés may spend years building up their client base. This could mean you initially receive less custom and earn a lower income. If you have invested a lot of money into your business, this could result in your business failing.
Long working hours
Your café could be open 7 days a week, including weekends and, depending on your location, may be open early in the morning to target workers grabbing a morning coffee or breakfast. You may find yourself working long hours which can not only be tiring but can also impact your personal life and family life.
Physically demanding
Working in a café can be physically demanding. You will be spending long hours on your feet every day and will be engaged in many physically demanding tasks, such as reaching high and bending low and carrying heavy items.
This can cause multiple health concerns, such as:
- Neck or back pain or strain.
- Pain, strain or injuries to your fingers, hands and wrists.
- Pain in your feet or legs.
It can be stressful
There are many responsibilities associated with running a café which can be stressful. Not only will you be responsible for the day-to-day running of your business, but you will also need to ensure your customers are satisfied. You are also responsible for your business’s success, which can be stress-inducing.
A lot of skill, knowledge and experience are required
To help your business succeed, you will need to be highly proficient in a variety of skills and will need to have a lot of experience with different foods and beverages. You will also need to have extensive experience working in a café and have a high level of knowledge about health, safety and hygiene legislation. It can be time-consuming to gain the appropriate skills, knowledge and experience to make your business succeed.
High risk of your business failing
Starting up a café business can be risky. Many new businesses fail which could result in you losing money or getting into debt. Your business could fail for several reasons, such as high local competition, an ineffective business plan or if the UK encounters another recession or period of financial difficulty. Because your premises and equipment will require a high initial investment, if your business fails, you will potentially lose a significant amount of money.
Complying with legislation
There are many different pieces of legislation and legal guidelines you will need to comply with. Not only can this be complicated and time-consuming, but any non-compliance (even if this is accidental) can be punished with a fine or the forced closure of your business. Some types of legislation also require you to go through specific training and/or gain a qualification, which can be costly and arduous. A café can have high liability which can be a lot of stress and pressure on a business owner.
No benefits
As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.
Bad reviews
Although the majority of customers leave honest reviews, some customers are difficult to please and will leave a negative review because of the smallest complaint (even if it is something outside of your control, such as other customers being too loud). Sometimes a fake customer also leaves a fake review, which can be extremely difficult to disprove and remove. Negative reviews can be extremely damaging to your business, particularly if your business is new or you’ve had relatively few reviews.
Planning Your Café Business
An effective and well-designed business plan is essential to the success of your café. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.
When creating your business plan, ensure it contains information such as:
- Your company information.
- Your company description.
- The services you will provide.
- Your branding, marketing and advertising plan.
- The structure of your business.
- The operational plan for your business.
- The financial plan for your business.
Some of the factors you will need to consider when creating your business plan are:
Your business summary
Your business plan should include a detailed overview of your business, including your location, the size of your business, the type of café, the products you will sell, your equipment and your business goals.
The type of café you are going to set up
Deciding what type of café you are going to set up is the first step you will need to make when creating your business plan. For example, you could choose a grab-and-go café or a hangout café. Alternatively, you could opt for a themed café or choose to operate in a specific niche, such as gluten-free or vegan. The type of café you set up will impact your premises, staff requirements, your target customers, and the types of products you sell. Consider your local competition, your budget and your own skills when deciding what type of café you will run. You should also ensure the design and aesthetic of your café fit in with your chosen niche.
The food and beverages you will sell
Cafés generally have a smaller menu than restaurants and other food and drink establishments. You may choose to offer a limited food menu and mainly focus on speciality coffee, tea and other beverages. If you plan to sell food, you must decide whether to offer a more extensive food menu, such as soups, sandwiches and breakfasts or only sell baked goods, such as cakes, brownies and cookies or pre-packed foods. Some cafés choose to specialise in a particular product, whereas others offer a more varied menu.
Your local competition
Being aware of other cafés in your area can help you decide what type of business to run and how much to charge your customers. If your local area already has several successful cafés, you may want to focus on an untapped niche and target different customers. On the other hand, if there is already a vegan café operating close to your chosen location, you may opt to open a different type of café.
Your target market
Determining your target market is a key step to helping your business succeed. Different types of cafés, different foods and beverages and different designs and aesthetics are likely to attract different customers. Your pricing strategy will also be a key factor in determining your target market. Once you have identified your typical customers, you can then focus on how to attract them to your business.
Your equipment and stock requirements
Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of café you set up and how big your premises is. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment and the monthly replenishment costs, e.g. for stock and ingredients.
Your business location
Your location will have a significant impact on the types of customers you are likely to attract. It will also impact your premises’ rental costs. If your business is located in an area with high footfall or a place popular with your target market, the increased custom and higher profits will be extremely beneficial to your business. Consider your rental budget and your size requirements when choosing your premises.
Your start-up costs and running costs
Consult the list above to help you calculate the approximate costs of setting up and running your business. Determine what equipment you need and the amount of equipment, as well as the cost of your premises, to help you determine your start-up costs and what your initial investment requirements will be. You can then calculate whether you can finance your business yourself or whether you need to source outside investment, for example, from a bank or an independent investor. Determining your start-up costs and running costs can also help you to create a budget and predict when you will begin to turn a profit.
Your sales forecast
What is your average footfall likely to be? How many sales do you predict you will make each day and week? As your business grows, your sales forecast is likely to change. You should also consider whether certain times of the year are likely to have increased sales, for example, if you are located close to a beach you will likely be busier during Spring and Summer.
Your strategy for growth
Your strategy for growth is the actions you will take to realise your goals for expansion and any potential challenges your business could face and how you will avoid or overcome them. For example:
- Expand your menu.
- Hire chefs or bakers.
- Open another café location.
Your brand
Creating your brand is a key way to ensure you stand out from your local competition. Branding can help you to focus on your target customers, attract clients and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on your business’s visual identity and creating a brand story. Your business name and logo are also part of your branding so ensure you consider these when creating your business plan.
Your business goals
Determining your business goals is an essential part of creating your business plan. Your business objectives highlight the targets and goals of your café business and help you to create a one-year, three-year and five-year business plan.
Your business objectives should be SMART:
- S = Specific
- M = Measurable
- A = Achievable
- R = Realistic
- T = Time-bound
Legal requirements
Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.
