How to Start a Small Restro-Cafe?

. 7 min read
How to Start a Small Restro-Cafe?

Steps, investment, profits & more

Restro-cafes are in high demand. The majority of young people and students visit café and coffee shops for studies, entertainment, and fun. Every college and university has its cafés on the campus. It is a profitable business to start as the number of students and children is through the roof in universities.

Starting a small restro – cafe is not easy. It requires a proper cafe business plan, and for an unskilled person, it would be hard. If you have relevant knowledge about coffee shops and restro-cafes, then this is a perfect business for you. Starting a café requires lots of steps, but a coffee shop business plan is the most important out of all. Business plans are divided into several categories like market research, sales strategies, finances, capital, and other required analysis. Let us read

How to start a small restro – cafe?

The steps to open a small restro-cafe are as follows:

1. Café business plan

It is essential to have a proper and detailed café shop business plan for the growth of the business. A successful coffee shop business plan consists of various parts, such as:

  • Business overview

The first step is organising a business structure. The business location and size are essential for a good small coffee shop business plan. You should know about the market better than everybody else. Millennials prefer trendy and high-end coffee shops. So, before starting the business, it is essential to look for a place in a good locality. It will help you increase your profits.

  • Market Competition and analysis

The next part of the café business plan consists of market competition and analysis reports. It is trivial to know the marketing conditions, what people like, what people don’t like, etc. You can research about your competitors and the most successful coffee shops or restro-cafes in the town. It will give you a clear picture of the working of the business.

You can structure your business plans accordingly. If you know the market trends, analysis, research, and competitions, you can make proper decisions about your company.  

  • Sales and Marketing Plan

Sales and marketing plans determine the profit of your business. It is essential that your sales are high and in line with the demand of the customers. The quality of the products and services must be good to make high profits. Sales and marketing plans include price strategy, advertising, promotion, sales, and product offering. If your services are good, people will return to your café again and again. Also, make sure to set moderate prices of products so that it can be feasible to a larger customer range.

Businessman holding pens and holding graph paper are meeting to plan sales to meet targets
  • Management Plan

The management plan of a coffee shop includes ownership structure, management, external resources, and services. It will help you set a legal business structure for the cafe. Management plans also consist of staffing and management requirements in the business. Hire professionals or interns to represent your business. If your management plans are good and the services provided by staff are top-notch, it will become successful.  

  • Operating Plans

The operating plan is the key for small café business. The operation plan explains the different types of facilities offered, staffing requirements, equipment and types of machinery, supplies, suppliers, contacts, etc. Make a proper café business plan for the size of the business, utilities, rent, lease, benefits, outdoor space, etc., to attract more customers. If you have an extravagant place, then more customers will come.

  • Financial Plans

Last but not least is financial plans. Financial helps to keep the cost and capital of the business in check. It also determines the future profits and forecasts about the revenue. Financial plans can be determined using income statements, cash flow projections, profit and loss sheets, balance sheets, breakeven analysis, and other ratio analyses. It is essential for the cash flow of the business.

2. Licenses and Permits

You cannot start a business without legal permission from the government or official body. The requirements of licenses are different for different businesses. Some licenses and permits include fire licenses, health permits, sanitation, electrical permits, food trademarks, AGMARK, quality checks, etc. These licenses and permits are required to start a small business café.

3. Machinery and Equipment

The next step is to find machinery and equipment for the café as per the requirements. There are so many coffee machines in the market. Selecting the right kind of tools and machines is important for the business. Some machines might be expensive but will save a lot of time. For example, an espresso grinder would cost around INR 50,000 to INR 1 lakhs. So, consider all the key points before making a final decision.

Diverse People Working on Marketing

4. Marketing

The last step is to promote the business. promotion can be done through various channels, advertising companies, affiliated markets, freelancers, or social media. It plays an essential role as it helps to reach a larger audience. More the customers, more will be profits.

To conclude, we can say that there are various steps required for starting a small restro-cafe, including a small café business plan, legal permits, machinery, investment, marketing, promotion, etc. You can also keep in check the maintenance of your business to cut the extra costs and expenses. It is a profitable business. If you start this business near schools and colleges, you can earn more income.

Also read:

1) How to Open a Restaurant? 10 easy steps to help you open a Restaurant of your own!
2) Top 10 Businessmen in the Industry & What You Can Learn From Them
3) Top-5 markets in India every businessperson should visit
4) Where to Get a Small Business License?
5) OkCredit: Simple, Paperless & Secure solution for businesses

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Q. Are restro-cafes or coffee shops profitable?

Ans. Coffee shops are considered profitable due to high demand in the market. Generally, coffee shops make 20% of the sales price and about 60% of labour cost. The average profit of a normal coffee shop ranges between 5 - 20% of sales.

If your coffee shop is located near colleges or schools, the profit and revenue will be higher. It depends on the location, efforts, staffing, and proper business plans of the coffee shops. If your sales increase, your income and profits will increase automatically.

Q. How much does it cost to start a small restro-cafe?

Ans. The cost of a restro-cafe depends on the locality, city, and type of business. If you want to start a small coffee shop with no seating, it will cost around INR 3 – 5 lakhs. A coffee truck costs between INR 3 – 6 lakhs.

A small restro-cafe with a proper seating arrangement can cost between INR 6 to 30 lakhs. The cost of a small restro-cafe is dependent on the interior, menu, employees, locality, etc. If you want to start a coffee shop with a drive-thru facility, the cost will be between INR 15 lakhs to INR 30 lakhs.

Q. What are the risks of opening a coffee shop?

Ans. Every business has its own risks.  The major risk is losses. Some other common business risks include high rent, high maintenance, build-up costs, renovation costs, poor marketing, fewer customers, low cash flow, poor management, etc. You can overcome all these risks by following a proper business plan for a coffee shop.

A business plan consists of business analysis, market strategies, competitor research, marketing plans, management plans, and finance plans. If you follow systematic business plans, the chances for growth of the business increase.