The Mini Guide to Café Ownership
Kate Frobisher - Owner Urban Pantry Café, Chiswick and Richmond
This post is taken from a few snippets of a longer piece I’m writing, more as a stream of consciousness and to remember those early days more than anything else.
There are plenty of blogs and ‘how to’ guides and ‘business for dummies’ books around, so we all know what our margins are supposed to be, what percentage of our takings should be spent on leasing the property, how to set up a registered company etc. Even more specifically I read blogs on how to set up a coffee shop, what the layout of the coffee machine area should be, how long you are allowed to keep food out of a refrigerated area, how to get a PRS license for music and so on. However what I would have really loved was something to read about the personal side of setting up and running a small business, how to deal with your anxiety before the opening, how to manage your expectations, how to respond when you realise you’re losing money and how to turn that around to profit, how to deal with bad online reviews and how to manage guilt of not being able to be there all the time.
I set up my first café in 2015 at the age of 24 and the second in 2020, 3 weeks before lockdown! I am the sole director of the business and run it alone, with the help of some fabulous staff.
When I was first setting up, a massive amount of people said “Oh, it’s my dream to have a café”. A lovely dream of course, but in the 5 years since we’ve been open, a lot of friends along the way have since retracted that dream! What seems to so many as a ‘hobby’ rather than a job, is actually one of the most all-consuming jobs I’ve ever come across. Small business ownership in general is so demanding because you are everything; you are the HR department, the accounts department, the manager and the toilet unclogger.
One of the main things I would suggest thinking about before you decide to set up a café/coffee shop/ restaurant (for the purpose of not repeating myself I will refer mainly to setting up a café, as that is what I know, but a lot of what I have to say will translate to many small businesses, especially in the hospitality industry), is to have a look at your support network.
People who are entrepreneur-minded tend to believe that we can do it all, that’s why we do what we do. But we can’t. I promise you. You need to make sure you have a network of people around you, parents, partners, friends, who will be there to help you. Be it moving all your furniture in when you have 1 night between the builders finishing and the staff training the next morning, taking your car for its MOT because you have no time to or simply just making dinner for you so you can just sit down after another 13 hour day. This is one thing I can’t stress enough. An ex-employee who has since become a close friend once asked me advice about setting up a food business in Istanbul, where she had lived for a few years before, although she is originally from London. The first thing I asked her was “how close are you friends there? Will they drop everything on a Friday night to come and help you put up flat-pack furniture?” The answer was no, and in that case my advice was, “Don’t do it.”
Another thing to ask yourself before you even begin to write a business plan is “How well do I deal with stress?” By nature, I am a very laid-back person and very rarely get stressed or worried, but in the 5 years since I started setting up the café/running it, I have suffered from some small panic attacks, developed psoriasis and had many sleepless nights.
The run up to opening was the most stressful for me, but since then during periods of uncertainty and difficulty with staff, as well as slow months when we are losing money, the stress has been just as bad. One of the things I have found hard is that my brain never leaves the café. Even when I physically do, I am constantly thinking about it, wondering if the staff are delivering a service that I would be happy with, if the customers are happy and just generally worrying about everything being ok. Even at night when the café is closed, I lie in bed thinking ‘how can I improve it?” “How can we make more profit?” “Are all the staff happy?”. It never bloody ends. I can imagine you’re thinking right now that I’m an insane control freak who can’t let go, but honestly I’m not (I hope.) This is why it is so important to really think beforehand, can I handle this? Can I handle never being able to switch off, being the person in sole charge of everything, having to deal with everything breaking at the same time etc?
I hope you’re not thinking after reading that, that I am a Negative Nelly who regrets setting up the café, this is not the case at all. I love my job and have honestly never had such a rewarding day-to-day life. I enjoy waking up early in the morning for the first time in my life and my confidence in my work is better than ever. But setting up a small business is an incredibly costly thing to do, both financially and mentally, and its important you know the pitfalls before you embark on the journey.
Ok, so those are things to think about before you even start writing your business plan, really ask yourself, is this right for me? If it is, amazing, I hope you carry on reading. If it isn’t, equally amazing- at least you know that now rather than £150,000 and 1 small mental breakdown down the line!
Budget, Concept and Style
All of the books tell us that we need to work out our Unique Selling Point (USP) and work out our individual style in this highly competitive market.
I agree with the idea of a USP to an extent, but also in the hospitality industry it is incredibly difficult to come up with something that hasn’t been done before. At my cafés, we specialise in fancy brunches, but it’s nothing that people haven’t had before, yet within a year and a half of opening we had won 3 national awards. So, for me the idea of a USP within a hospitality business comes more from the service that people are going to get. I aim to make everyone feel special in the café, whether they are a 72 year old man who comes in for a cup of tea and a chat, or a high profile celebrity customer spending loads every time they visit. That, I believe, is more important than doing something that no one has ever done before and being super mega elite and unique. People love to feel loved.
In terms of the concept of your place, it is so important to follow your heart (within reason obviously). There is no point setting up something unless you believe in it 100%. There will be hard times and you need to be able to say to yourself “No, I believe in this place.”
Someone who comes into the café suggested that I should rent a place near where he lives, but he said that the clientele in that area is much different to my fancy pants West London area. He mentioned that lasagne and ham and cheese toasties would be the most popular items there, and instantly I said "no." That isn’t what I love and isn’t what my passion is. I know that I can work as hard as I do because I believe in my product, I believe in the food. This means that during any hard times, I can just think "No, I am doing what I love”. If ham and cheese toasties and lasagne are what you love then perfect, and equally you wouldn’t set up a health food based café because you wouldn’t love that.
Normally, I find that if I meet someone who is genuinely serious about opening a café, they have a really clear vision of how they want their café to be. They will have created a collage in their head of various concepts they love from other places they have visited and added some ideas of their own. This is a great thing to do and I’m sure you will have moments in the beginning, when it’s all just a thought or a concept, when there are ideas snowballing around in your head and you want to write 10,000 things down at once before you forget them. You should also be aware that when it comes to actually putting these ideas into practice, a lot of them won’t work. But that’s ok! Businesses like these are all about adapting and changing to what people like and need.
Then you have to think about the budget. This will determine your business in many ways, especially your own work-life balance.
Some people who have set up a similar business may be reading this and think I’m being ridiculous and it’s not that stressful and it’s amazing working for yourself as you can have time off whenever you need it. My experience in setting up my business was all based around doing so on the smallest budget possible. I had help from private investors to set up and the pot of money was relatively small compared to lots of start-ups. My café is also in a prime location in an expensive West London area, so the rent is very high, meaning that I always have a keep a very close eye on expenses, mainly staff. This resulted in me working 12 hours a day 7 days a week most weeks for the first 2 years and only recently, from year 4, have I taken 2 days off on a regular basis. This won’t be the case with everyone, and I know some café owners who don’t have a life like this at all. So definitely have a think about your budget and what kind of life it will enable you to have.
It's important to mention that as a general rule, very few restaurants and café’s make money. It took me about 2 years to actually realise that, when I saw the (lack of) profit, even though we were relatively busy from the beginning.
I spoke to as many fellow business owners as would speak to me, and most admitted the same; they were just about making ends meet.
When doing financial projections, it may seem like you’re onto a winner, but the costs creep up on you. All that being said, you can make a great living from a café, but you must have a very tight grip on all the costings and margins; a new chef putting 120grams of avocado smash as opposed to 85 grams on each dish could wipe out your profits for one day, with margins as tight as they are in most London restaurants.
Your starting budget will mainly affect how you can decorate the café to your specific design. I had some great plans for refurbishing my café, but after having the initial quote from the builder I had to cut lots out.
I had a budget of around £70,000 for all start-up costs (known as capital expenditure, or cap ex) and our initial building quote was closer to £200,000. I had to lose a lot of elements of the design that I would have loved to keep. Even now, four years on, I still haven’t been able to afford to change some things that I initially wanted, for example the toilet area, so make sure that you don’t just think "Oh I’ll be able to change this in a few months when we’ve made some money" because there are so many other costs in the beginning.
The kitchen was the most expensive when I was setting up as we had all new equipment. My chefs make everything fresh on the premises and we don’t buy anything in (apart from our bread) so it is very important here that all kitchen equipment is functioning well at all times. For some people, you may not even have/ need a kitchen so that would definitely save some money at the beginning, although the margins on homemade food are much better than anything bought in, (and homemade always tastes way better!) so even though you may be saving money initially – it may be worth having a kitchen in the long run.
So, now having thought about your budget, concept and style, how do you think your budget will affect your vision of your perfect café? Are there things you can happily sacrifice if your budget is smaller? Are you happy with the concept you have come up with and do you think it will translate to your customers?
Location and Premises
Everyone knows the importance of location when choosing a premise for your business but it’s also paramount to understand the needs of your location and to adapt to those needs as much as possible.
If you are in a street or place that doesn’t have a naturally large footfall, you need to become a destination. From my experience I would say that my café is a destination mostly on the weekends. Hundreds of people ask for directions from Google maps each weekend (thanks Google for the data analysis you send over!), but on the weekdays we benefit almost entirely from locals and people walking past.
My café is situated on a small road of lovely independent shops and restaurants, just off a busy high street. It’s about as close as I could get to the high street in terms of rent prices and was a bit of a risk at the beginning, "were we too far down the road, too far from the high road?" The distance is only about 200 metres, but there are some weekdays when we have been really quiet and I take a short walk up to the high street and the [rubbish chain] cafes up there are full. So obviously I would suggest that budget permitting, you get as close you can to a main pedestrian area.
Another thing you must be aware of is the needs of the local area. For example, are there people around on the weekdays? Are there similar places in the area? You need to ask yourself if your business can fit in and create its own customer base.
If your café is a small coffee shop that does pastries and sandwiches at lunch and there is similar offering a few shops down, I would have a think about what you can do that will draw people towards you rather than to the shop they already know. You need to change people’s habits, where they get there morning coffee is a habitual routine as part of their day, what can you offer to make them come to your place and most importantly, return there?
Where we are located has an abundance of cafes and restaurants. Initially I was worried that there was too much competition for people to change their habits and to try the 'new' café down the road. I believe that once people came into Urban Pantry; they liked the décor, food, ambience, smiles and coffee and they started to become regulars here instead of whichever place they used to go to before we opened, or as well as. This isn’t to say that everyone likes it of course, I know there will be some who tried it and didn’t like it for one reason or another and continued to go where they went before.
Working so much in the early years definitely affected my social life in a negative way. At first I tried to do it all and still met up with friends for drinks on the weekend, but having to be in work at 7am every morning meant that I just became increasingly tired and unwell, one time I had to drive myself to hospital in the middle of a shift. After that I made a conscious decision that I couldn’t try to keep up with my 9-5 Monday to Friday friends and I have missed a lot because of that. Having said all that, when I’m at work I have a fabulous time, so much so it doesn’t feel like work. Some days when it’s not so busy, various regular customers come in and I just sit with them and chat and laugh all day, so it’s definitely like no other job!
Now, 4 and a half years in (pre this awful COVID situation we find ourselves in now), and two cafés down the line, I have managed to find a great work-life balance. There will of course be times when I go back to 7 days a week, during staff holiday or when we’re short staffed, but mostly I feel like the dust has settled and my job has become more like a ‘normal’ job.
Small business ownership definitely becomes a major part of your whole life. Whilst there are downsides to that, namely very long working hours, difficulty to ‘switch off’, potential lack of wages in terrible months, having to cover if people are sick and so on, there is a massive number of pros to counteract this list. Complete autonomy, the ability to meet and make real friendships with a huge variety of customers and staff, massive job satisfaction, the ability to be financially successful and most importantly for me, growth and learning every single day .
Kate Frobisher is founder, owner and manager of Urban Pantry. Since opening her business in 2015, she & Urban Pantry have accumulated numerous accolades: finalist in 2019 National Breakfast Awards, TimeOut Best Brunch Place in Chiswick 2018, LUX Magazine Best Café in West London 2017 and also features in Penguin book 'Breakfast London - Where Londoners Eat'.
You can listen to Kate discuss food, sustaining her business during quarantine and the importance of community on Greater than 11% podcast - Episode 75.
You can connect with Kate via instagram @urbanpantrylondon, via LinkedIn and check out Urban Pantry via their website: www.urby-p.com and for those living in West London, you lucky creatures, there is Covid19 Delivery Menu.
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