Is there a cafe out there actually making money?

Cherry

Moto are you roasting now? Would you like to learn?

blanyon

I roast for personal use using a kkto but I leave the commercial roasting to the professionals, as I always say never say never but right now I am happy just making coffee. Brett

askthecoffeeguy

I dont rate the coffee from a lot of cafes that roast for themselves - roasting is one thing but palate structure is another and that cant be taught, it needs to be aquired over time... Happy to be proven wrong with this one though or maybe I just need to get out more often?

blanyon

I put it in the same category as something like baking bread for your cafe, you will probably save money doing it and if you do it well you will end up with amazing results but....subway bake their own bread and look at what they produce. Not sure that I have made my point very well but I think it just adds a layer of complexity to an already complex business and the chances of mucking it up and doing my business more harm than good is not worth all the hassle (and there is a lot of hassle!!!) Brett

Cherry

Maybe a few start up roasters would be more open to feed back, as they would listen and change for their customers. As for franchise models, they are really stuck to make any changes. Roasting is a journey, can be learned . Every batch is like an espresso, each one prepares you for the next batch . Not jamming idea, thinking out loud.

askthecoffeeguy

Cherry wrote:

Maybe a few start up roasters would be more open to feed back, as they would listen and change for their customers. As for franchise models, they are really stuck to make any changes. Roasting is a journey, can be learned . Every batch is like an espresso, each one prepares you for the next batch . Not jamming idea, thinking out loud.

Actually I think that there are a few startups who are doing an outstanding job of roasting - especially considering how new they are to the market - everyone's tastes are different, but I know what my preferences are!

cafelawyer

Yes, yes and yes. Plenty of cafes make money, but its not surprising that the profit is hard to find.

thecafeninja

cafelawyer wrote:

Yes, yes and yes. Plenty of cafes make money, but its not surprising that the profit is hard to find.

Guys - I'm not a broker - I'm a cafe consultant. I help improve cafes and also help clients assess cafes that are up for sale. I think my question has been answered. There are a few cafes out there making money, but the summary of the feedback is "not a lot". Considering the huge effort and commitment involved to earn $50-70K pa you would earn more money per hour working in a call centre doing customer service. So the bottom line seems to be, if your passion for the business can overcome earning very little and working really hard then it's worthwhile.

Dodger

Hi guys, I realise I'm a bit overdue here but I came across this conversation when exploring the subject question and found it pretty insightful. Hopefully everyone is still active!? So basically it sounds like there is an average wage + profit to be made running an above average cafe. I just wanted to know what everyone is selling apart from coffee to come to this conclusion. Anyone licensed, late hrs, serve dinner etc? I would've thought late wknd and maybe wk day-night hrs with alcohol would make a substantial distance. Anyone there? Helloooo!

Koffee_Kosmo

Dodger wrote:

Hi guys, I realise I'm a bit overdue here but I came across this conversation when exploring the subject question and found it pretty insightful. Hopefully everyone is still active!? So basically it sounds like there is an average wage + profit to be made running an above average cafe. I just wanted to know what everyone is selling apart from coffee to come to this conclusion. Anyone licensed, late hrs, serve dinner etc? I would've thought late wknd and maybe wk day-night hrs with alcohol would make a substantial distance. Anyone there? Helloooo!

I have been self employed for a few decades Previously in shops and now in the building services industry There was on many occasions that I would work for years without a holiday My record is 9 years straight / 7 days per week / with one or 2 days taken off at Easter or Christmas 1) In reality! - any profit a boss makes is not enough for the hours one puts in compared to employed staff 2) There are more hidden costs in business then one normally assumes KK

Dodger

Cheers for the reply KK, what where your shops if you don't mind me asking? Me and my girlfriend have been discussing going into the cafe business for a while now and we are coming to a stage where we are setting goals and thinking seriously about what we want to offer people, apart from a great coffee, that could make it work. So I wanted to know what everyone is having luck (if any) with, if anyone is selling alcohol, selling some signature meals/snacks/deserts or doing any sort of entertainment etc. I've been in bands for yrs and wanted to put on live acoustic music at night with drinks and real simple menu. Basically want to get some insight in what areas people have tried and failed/succeeded in with their cafes. Tried a dinner menu and wasn't worth the effort and overheads?...etc.

Koffee_Kosmo

Dodger wrote:

Cheers for the reply KK, what where your shops if you don't mind me asking? Me and my girlfriend have been discussing going into the cafe business for a while now and we are coming to a stage where we are setting goals and thinking seriously about what we want to offer people, apart from a great coffee, that could make it work. So I wanted to know what everyone is having luck (if any) with, if anyone is selling alcohol, selling some signature meals/snacks/deserts or doing any sort of entertainment etc. I've been in bands for yrs and wanted to put on live acoustic music at night with drinks and real simple menu. Basically want to get some insight in what areas people have tried and failed/succeeded in with their cafes. Tried a dinner menu and wasn't worth the effort and overheads?...etc.

I myself had fresh produce shops The rest of the family had Fast Food, Cafes , Restaurants and Delis ect (And still do) So although I did not run a Cafe I lived around it What worked best is 1) A themed style of food that changed with the seasons (in the family's case it is Greek & Aegean Island themes) 2) Value for money 3) Good coffee or beverages (and most were licensed) 4) Very overlooked? -- don't assume the customer is satisfied -- make sure the customer is satisfied This is done by the owner & staff in several ways Remember regular patrons Make new patrons comfortable to (a) come back (2) recommend you to others Never overlook the lunchtime trade as it could be the busiest time of the day Put on extra staff so frustration does not become a negative Common sense goes a long way Hope that helps KK

Brett_H

I'm a musician so any live music at a cafe is an instant turn-off. I don't want music I want good fuel and downtime with conversation or a magazine. I don't care if youre the guitarist for Pink Floyd, if youre playing your guitar while my meal is late and the coffee over extracted I'm not coming back and most likely Ill warn off anyone who asks. Do you still want to run a cafe knowing that you are relying on a pain in the arse like me X 950/week to make a living? What is my point??? I suppose that it is that there is no magic formula for a cafe. My family cafe went gangbusters early on so much so they opened three more. Despite all of this and doing a roaring trade they have not made good money for themselves the owners until they sold the business keeping one only for retirement. The cafes were all run by my Aunt, Uncle, cousins and nephews like me who were cooks paying their way through Uni. They paid themselves a wage in line with the regular staff. These people were diligent about doing the sums and keeping the books on a daily basis irrespective of the late hours. They were the first there in the morning and the last to lock up and they visited every site every day during the morning and afternoon lulls. One could argue that with that work ethic any venture is most likely to succeed but many of their rivals who seemingly walked the same walk, failed. Good luck to all the dreamers who want to open a cafe. Your dreams potentilly provide us with quality of life, employment opportunities and potentially the betterment of a craft we all hold dear. Just please go carefully!

mycuppa

I'm with Brett on this one. Oz is not like New York where Music and cafes doing late nights provide punters with an experience. In Oz, late nights mean alcohol, security, fights and people doing it to excessive levels. Strategy is but 5% of the exercise. Having a great location (smart people can wait years for the right locale to become available), excellent staff and selecting the right suppliers and working with them in partnership all come down to how well you can execute. You can't expect the blueprint for a successful cafe to appear in a forum. The smart people keep their game-plan to themselves for fear of being copied. You have to assume that any innovative idea has been tried before. Keep it simple and effective. My advice to you is to work in a cafe for at least 1 or 2 years and take on the "leader" role so you can gain true insight as to what it takes on both the customer and the supplier side to be successful. We work with one of the more successful cafes in Regional Vic. They built it up over 18 hard months and they are now ready to look at selling - the whole family works very hard and as a result they are all worn out.

Dodger

Thanks for the pointers KK, seasonable food is a great one and completely agree with the staff-customer relationship. The previous owners of our local Italian were awesome people, treated locals like family and everyone else like friends of the family, I honestly believe we ate there more because we liked going in and saying big hello's and taking the piss with them a little. BH and MC, by live music I mean a guy/girl or band playing acoustic on a Fri or Sat night for an hr or two over drinks and light food. I've been to loads of restaurants that have had live music of a night and it creates a happy vibe. As far as pissed people fighting and security etc, I dont think that's something to worry about. I go to packed pubs to watch gigs and haven't seen a fight since I was a kid. When there is no standing area for people to start getting rowdy with strangers that problem is reduced even more. I agree with the idea to work in a cafe for 1-2yrs as leader. My girlfriend could probably do that, bit hard with my current job and money being earnt/saved. Definitely should be done by at least one of though, agreed. The right location should be worth waiting out for, agreed. So easy to get excited and jump at the best lease price in the middle of nowhere. Heard a number of people talk about the crueling hrs/work involved which I believe and is understood. I dont believe there is much that comes for nothing. I've been working in construction since I was 15 and I've done physical labour until I've spewed, then dealt with stress of leadership for years later as a supervisor. I can be stubborn as hell when It comes to getting something done, which could be the end of me, but can also be a good thing. So ye, I'm not after the blueprints for success or anything like that, I just know that if you don't have experience then you talk to people with experience on the rd to gaining some of your own. Just from this discussion I have been given pointers that have given me ideas. Basically want feedback, not anyone's secret muffin recipe, haha. If there's any other advice anyone can give for this know nothing, It would be much appreciated! Cheers!

plantation_coffee

Interesting read here guys , been absent from this forum for a while due to being pretty busy with roasting etc. I've made it a habbit of mine for at least 3 days of the week for the last year to be out there visiting places seeing places and personally i think all those factors above are very important but what gets me is that here in brisbane at least people are either crowded in shopping centres or if you're near the city fringes people are out for brekky on saturday n sundays. knowing this ive kind of made up a theory on owning a cafe - for starters you should either be placed near city fringes where boutique outlets are rampant and popular or if you're in the suburbs go for a shopping centre- only because that is where the passing trade really is shopping centre cafes - the majority of customers dont give a crap about what kind of coffee they consume price-wise its all the same , no variety required and no education required. city fringes - you must have something exclusive to make yourself different from competition your own custom blend for example , signature meal , create a destination for customers. mobile coffee van - forget about it most people are wanting to sit down and enjoy theyre coffee no matter how educated they are about coffee chances are its going to be a franchise , royalties , signage etc not cost effective to make yourself different sure the franchise brand might be big but , people want to sit down somewhere. about the only thing is going to be meat pies and cucmber sandwiches that youl sell. that is the picture i generally get these days correct me if i am wrong this raises a question in my little head now - what about the areas between city fringes and suburbs? are they the new areas capable of delivering good coffee , to families outing for breakfast where the rent is going to be a lot cheaper ? cheers shaf

askthecoffeeguy

The conventional wisdom as I understand it is that in the current economic climate it takes two years just to break even (so be prepared financially and emotionally to run at a loss for that period of time) - and that the money to be made in cafes is to build them up from scratch into a profitable entity - and then sell them The return on investment at time of sale involves a lot of factors but if you can double your startup / ongoing investment costs - then you're doing pretty well And if you can do better than that - then you are in a minority My business broker says that they're are more cafes now on the market, and less buyers than in any time during his 20 or so years in his trade Which is pretty indicative as to where many cafes are at in terms of resell value... P

UNM

So, ACg, sounds like buying one of the profitable entities might be the best option at this point in time rather than starting from scratch. So why do you have a business broker? Selling up, or buying another business?

cafelawyer

you will never meet a business broker that says the market is red hot and its never been easier or quicker to sell a cafe, brokers tend to undercook the market deliberately. my perspective is that cafes themselves are commodities and the market for cafes is very transparent. learn to negotiate a lease and you can turn a decent profit into a monster resale. have a good easter peeps

cafelawyer

just wanted to add that i enjoyed reading everyone's comments on this topic, there are some great inputs

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