Lucy - BQ Magazine EditorAre you thinking of starting a cafe business? You’ll join thousands of other entrepreneurs with the same idea – and a large proportion of them fail! While there’s nothing you can do to guarantee your new business will be successful, you still want to avoid it failing within a few months or years, and the best way to do this is by avoiding common pitfalls facing cafe startups.
Why do so many of them fail? Let’s find out…
Bad online reviews
Negative reviews are always devastating for a small business, but they’re even worse when you run a local cafe startup. There seems to be an unwritten rule among consumers that any business below 4 stars is bad. Search Engine Land did some research into this and discovered a company’s trust decreases by 67% when it goes from 4 to 3 stars. If your cafe isn’t maintaining above 4-star reviews, it will immediately see a decrease in customers.
Local businesses are usually rated highly because local communities want to support these startups. That’s why it’s extremely worrying if a local company has under 4 stars; don’t let yours slip to this and focus on two things:
- Delivering an amazing customer experience
- Encouraging customers to drop positive reviews
A poor food hygiene rating
A lot of your hard work can be undone by bad food safety or food hygiene ratings. These could be called different things depending on where you live, but the premise is the same. A third-party health & safety inspector comes to your cafe and rates how clean or safe the food products are. This rating has to be displayed for all to see and a bad one instantly moves people away from your business.
Always ensure you maintain the highest food safety and hygiene standards possible. This may mean you have to work with companies like North Industrial Chemicals to get the proper cleaning and disinfectant chemicals for optimal food safety – especially if you deal with a lot of raw meat. It also means following the correct guidelines for what to wear when preparing food, etc.
No individuality
The most recent data from 2023 reveals the US has 75,726 coffee and snack shop businesses. That’s a lot – and this increased by 4.1% from the previous year, meaning more and more people are setting up cafe businesses. Your competition will be extreme – so you need to find ways of setting your business apart from the rest.
Lots of cafe startups fail because they have no individuality. They offer the same things as everyone else; so why would consumers choose your business over one that’s been there for a long time and they know serves good food & drink? You have to differentiate your company from what’s already out there so people fee compelled to give you a go.
Terrible marketing tactics
Sometimes, you can have great individuality but the issue is more to do with how you market your small startup. There aren’t enough people that know about your business, so you’re never full of customers. You opened your doors a few weeks ago but hardly anyone knows about this!
Terrible marketing tactics will doom any business. Work on improving your strategy and using a combination of digital and traditional marketing ideas to draw foot traffic to your shop. A few quick ideas to take on board include:
- Using on-street signage to direct people to your cafe
- Running local SEO campaigns to appear in local searches
- Creating social media pages and linking with local social media accounts
There are so many things you can do to generate more hype around your business – or, at the very least, make it so people know you exist. Often, all it takes is a few people to pop in and it gets the word spreading.
Only one stream of income
The last – and we’d argue most significant – reason many cafe startups are doomed is due to a lack of income sources. How does your business make money? You rely on people coming down and paying for food/drink. That’s a tried and tested business model, but you need other ways of bringing in cash as well.
For example, you could also create an online store where people can purchase things from your cafe. This might include the exact coffee beans you use or different syrups you might create yourself. Signing up for Postmates or other delivery services also gives you a new revenue stream as you can get orders from people without them coming to your cafe. Think of as many ways as you can muster to make money and your business has a lower chance of failing.
Cafe startups are a dime a dozen, but that doesn’t mean yours is doomed to fail. Avoid all the pitfalls in this guide and your business will have a greater chance of being successful.
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