It seems as though nearly every time a new business emerges on the high street, it’s some sort of café. And as these businesses come and go, though I am thankful every time that the empty unit hasn’t become another Poundland, I always wonder why coffee shops are always popping up where so many other businesses fail. What is it about cafés that make them such a staple among small businesses? And what can that tell us about small businesses as a whole?
The strength of cafés and coffee shops is that they are a place to socialise, a meeting place for many which can appeal to anyone. They can become part of the community in smaller areas, and the key role they can fill in daily life allows them a consistent market. A hot drink and a place to sit together is something people will always want, even as trends like bubble tea and dedicated smoothie bars come and go.
When setting up a café, it’s important to know what you’re doing and to consider some key points. You need a certain amount of business knowledge. Make a business model and work out the expenses you need to cover. Ensure your profit outweighs the cost. You’ll also need to get good stock, make sure what you’re selling is high quality and something people will pay for. On top of this, you’ll need a good location! Few people will go out of the way to find a coffee shop so put yourself in as visible and prominent of a location as possible. Many small businesses often open and close in quick succession in a single location because it’s simply too out of the way to draw the customers it needs to sustain business.
The Difficulty of Small Businesses.
So why do so many local coffee shops and cafés not last? Well first, when setting up a business, if you don’t know what you’re doing it’s easy to overlook something crucial. Even if you have a good idea, being unprepared to run a business and missing the basics of setting up something financially viable is the biggest reason so many businesses disappear so quickly.
Fatal errors are easy to stumble into, such as spending too much on set up when you can’t make the money back quickly enough. Setting up a business is expensive and not accounting for these costs can kill a business before it starts! The equipment needs to be functional before you go for buying the top-of-the-line equipment. Remember your budget.
Also, the location of the business is vital so remember to search for the best location you can afford. You may not have much choice in terms of where is available, but sometimes it’s best to keep looking. Make sure the location will draw customers and enough pedestrian access. I feel that this is why my local area goes through so many! There’s a certain area rich in small businesses but hidden away from the High-street, so many businesses that open there don’t seem to last. If no one knows you’re there, what’s the point? Also find out why it’s for sale. If the last business failed, make sure you know why. Does the location seem too good to be true? Setting up a business is always risky so be careful.
You’ll also need to know how to find customers and keep them. As such, your staff will need to be trustworthy as well, bad service will undo all the setup. If your café is an unpleasant place to visit, no one will want to come back again.
Finally, a business owner will need to plan out their prices to account for the competition, as well as what people will realistically pay. You should also make sure that the profits are more than your expenses in the long run. You should charge enough to cover yourself with a bit of profit, but if the prices are too high your customers may go somewhere cheaper. The benefit of cafés is that they are something you can’t do online, so you aren’t competing with Amazon for a better deal on a decaf Americano.
So why do so many come and go?
I was expecting to find a tale of corporate oppression and the evil power of Starbucks and Costa Coffee taking down these small businesses like the 1920’s New York Mafia. But it seems that coffee shops have wide enough appeal for that to not be an issue. It’s entirely possible to start a successful business if you can afford to get started, and a coffee shop is a business that seems to be in great demand in our modern life. It appears to always be coffee shops because they work and there is an audience for them, and in looking into their success, the basics of supply and demand are made clear. People drink coffee, so if you want to make a business the demand is there.
In terms of what this says about business, it shows us that even though some business types are certainly stronger than others, there are no fixed formulae that’ll do it all for you and as times change, so too may their success. You still need to know what you’re doing. Though they are more likely to succeed, you still need to be responsible about it and know how to do it right. Coffee shops come and go because there are customers for them. Good ones stick around!
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Thanks for reading!
Oliver is a writer and journalist who loves fantasy fiction and table top gaming, with a bit of acting on the side!