In the last blog I compared a cafe that was busy from before the day it opened to one that never opened. Arguably more thought and money was put into the second cafe but in the end that didn't matter. We don't know exactly why the cafe failed but as the landlord changed the locks on the place we can presume that the tenant didn't pay the rent. The point is when working out finances for one's new cafe it is important to budget for the worst case scenario. Don't expect to be like the first cafe and be busy from day one. In fact, don't expect to turn a profit for the first two years.Most businesses fail in their first two years. You need enough money to get through the bad times - you will need to pay rent, wages, taxes, council fees and services such as electricity, telephone, gas, wi-fi, water, trade waste; you will need to buy stock, packaging supplies, disposables. You most probably will need to do some advertising. All this adds up!
Don't base your business plan on forecasts. That's pie in the sky stuff. Sure, your cafe will be the best ever but hey, that's just in your head at the moment...
There are two things you need to bear in mind - it will take longer than you think to open your cafe, and it will cost you a heck of a lot more than you initially thought.
In coming blogs, we will workshop this in more detail
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