Thinking of Starting Cafe?

Having this master class by BGA’s director named Daniel Liew who shared the knowledge about how to start a cafe. The whole session was very enlightening for people like me who wanted to open a cafe in the near future. I knew cafe operation was not easy but didn’t think of to that extent whereby I had to deal with partnership, staffing, strategizing concept and career path, marketing, be competitive in skills, maintaining a good and stable supply chain and so on. All of these aspects will directly or indirectly affect the cafe business and ultimately decide the mortality of the business.

He is a very experienced person who trained and allied with different well known local cafe like VCR, The Owl and many more brands. Here were some great take away from him:

1. Fulfill the demand for every customer needs, be it a low grade coffee or a high grade one. Never bias and never look down on someone because of their taste. They pay for the coffee thus they deserve the respect.
2. Service is the key to a sustainable business. Think about the business that revolves around good service, that will definitely be one strong unique selling point for the business.
3. Cash flow is the king. As always, cash flow will kill the business if not done right. Minimize the wastage, streamline the process, pay the suppliers and staff on time and etc.
4. Create a good environment for the customers and make different instagrammable spots for the customers to become your social media marketer for free.
5. Without 60% margin, don’t think of opening a cafe. You will die sooner or later.
6. Do not put all your saving in one bucket, especially a cafe business. So far, there was none who succeeded with first try from his experience.
7. Clear about your budget, your concept, your customer segment (the lifestyle you want to tackle) and also the spending power of the customer.
8. Set 3 pricing points, give every reason for the customer to buy!
9. Have this sales skills to up sell or get the customer to go for second purchase like: would you like to have our..., would you love to get this home..., this is fresh from the oven, would you like to takeaway... and so on.
10. Location matters, suburban, malls, urban, institutional and other different locations have different management skills to cater the different needs. Cafe who do well in suburbs do not necessary thrive in malls as the customer segment is different and there’s mall management as well to liaise with.
    So my final take is that, better to experience a cafe business with the smallest investment and fail quickly. Then only I could seriously think about starting one.