The hospitality and dining industries require some specialised attention in the realm of finances. Restaurant and cafe jobs have long been associated with high volumes of stock, long hours, and a lack of office space-- none of these translate to much time or opportunity to keep up with finances; but did you know that bookkeeping in the hospitality industry is essential? The sector presents its own unique needs and challenges, but overlooking the need to keep on top of numbers could run your cafe into the ground down the line.
Below, we'll discuss five rules to keep in mind as you begin piecing together the foundation of your cafe; and you may be surprised by what you learn. Everything from how you handle general cafe bookkeeping to how you achieve compliance will determine your business' success.
Five Golden Rules for Opening a Cafe
Leverage a hospitality or cafe bookkeeping service
Companies who dedicate themselves to helping smaller businesses with their bookkeeping are well aware that the cafe business presents a host of unique challenges. The average business doesn't need to grapple with a lack of office space, odd working hours, or immense volumes of stock-- but you will, and you should partner with bookkeeping experts who know what you're dealing with.
You'll be freed up to worry about what matters most to you instead of fretting over numbers, regulations, and deadlines. Whether you need help setting up and training for forward-thinking POS systems, assistance with reporting and compliance, or somebody to handle debtor follow-up, you'll get the support you need from an established bookkeeping provider.
Plan properly
If you fail to plan, you plan to fail.
The financial aspects of opening and running a cafe are more nuanced than they may appear. You'll be well-served by conducting detailed research and planning before you ever open your cafe's doors. Budding entrepreneurs should spend time on mock pay runs to try to sort out overhead and obvious complications early on.
Consider areas for profit loss that don't immediately spring to mind, too. For example, how will you ensure you have enough storage? If you're trying to keep perishable goods from going bad, you're going to need ample space and proper conditions to avoid losing money due to damaged stock.
Make choices based on menu efficiency
The efficiency of your menu will be crucial to your cafe's success. Customers love having a wide variety of food and drinks to select from when they head into a small coffee shop or restaurant, but an extensive menu isn't always necessarily the best thing to funnel time and funds into. Aim to create variety without an extensive or cost-prohibitive list of ingredients.
There are a number of issues associated with failing to consider menu efficiency. You could run out of storage space (or find that you lack proper storage altogether), you run the risk of losing focus and turning out food and beverages that are subpar, and keeping track of sales and finances becomes trickier.
Networking and marketing -- your two new best friends
You should be funnelling your efforts into networking and marketing for your cafe as soon as you're certain it'll become a reality. Every moment that passes you by after this point is an opportunity to create customers, drive future profits, and increase your cafe's visibility. A great location and a stellar menu will serve you well, but you'll need to actively seek out connections and create content that drives people towards your business.
If you're unsure of affordable means of marketing, consider the following:
- Dropping off samples to local businesses
- Include a flyer promoting your opening day
- Leverage social media (especially Instagram)
- Sell or give away coffee or other menu items at local events i.e. fairs, farmer's markets, and so on
- Use a direct mail campaign to send out coupons
Hire slowly
There are a number of benefits to selecting and hiring your staff slowly. You'll be able to get a feel for how your cafe operates and what sort of support you need as time passes, your customer base grows, and you strengthen your experience. It's tempting to hire a full fleet of help all at once, but you won't know whether you can truly afford them until it's too late.
Spend your time implementing comprehensive, forward-thinking training that drives new hires to perform to the best of their abilities. It's better to rely on a handful of excellent workers than to haemorrhage funds paying a crew who can't be bothered to get work done. Bringing on staff slowly allows you to remain in a constant state of assessment and saves you some cash.
