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Starting A Cafe?

Discussion in 'Business & Startup Investing' started by welchy92, 28th Feb, 2013.

  1. welchy92

    welchy92 New Member

    Joined:
    28th Feb, 2013
    Posts:
    1
    Location:
    Central Coast, NSW
    Hi all, i am new to the forums and am just seeking some advice on the idea of a cafe.

    Lately i have been wondering about how much a cafe could potentially make in a nice and busy area by the beach (on the central coast, terrigal if you know of it).

    I just want to be the owner, i am happy to put in all of the work in getting the cafe up and running and all the employees and what not, but i do not want to work inside the cafe, i would rather employ a full time manager.

    That being said, i wanted to know if anyone had any idea on how profitable that would actually be. Let's just say the cafe was 'successful', i have read that you can net between 10% and up to 30%.. Would these kind of figures be for someone who might be working full time in the cafe as well as being the owner, or does that whole idea seem doable if everything runs smoothly?

    What i am basically wondering is, would i profit from owning a successful cafe in a good area, without working in the cafe. All the behind the scenes stuff i am willing to put the work into.

    My searches haven't given me much of a clear indication on what profits a cafe owner can make, or what the average gross or net profits for a relatively successful cafe can be, if they have said anything it is unclear whether the owner was working as the manager or not, which would change things.

    Anyway, it's all thoughts at this stage, wondering if anyone has any light they can shed on the situation from experience or research or just general idea.


    Thanks, Ben.
     
  2. jodie123

    jodie123 Active Member

    Joined:
    15th Aug, 2012
    Posts:
    34
    Location:
    Brisbane, Qld
    Hi Ben

    I'm certainly not an expert but I would have thought that for a service-based business such as a cafe to earn you a decent profit, you'd have to actually work in the business. This would mean that you'd have to put the hours in at the cafe (at least initially - the first couple of years even) to work on getting the name out there and creating the goodwill. Sure, you can pay a manager to do this for you but to keep someone decent you're going to have to pay a decent wage and that eats into your profit margin. If you are capabale of being a hands-on manager yourself, you'll be much better off.
     
  3. Nofngidea

    Nofngidea New Member

    Joined:
    21st Apr, 2013
    Posts:
    2
    Location:
    Brisbane
    Your post has warning bells all over it for me. Having a number of years working in cafes, nightclubs, pubs, restaurants in good and bad times has shown that owners who aen't the face of the biz and take a "back seat" as you are suggesting, often fail. If it is just a business where you can sit back and count coin, forget it, cafes aren't a passive earner. Regulations alone wil bury you. It is an industry that loves to "eat their young" so to speak.
    The strong businesses I have been a part of have great success through setting examples to management and staff. Those prepared to clean the toilets, mop the floors, carry the plates. You have to do the hard graft to understand what the manager may have to deal with, because there will be a time when he/she wants a holiday, to which they are entitled, and you need to step up. If restaurants were a set and forget business model, we would all have one. Unfortunately the failure rate is high 75% plus in the first year. Restaurant and Catering Australia (the peak body) would be a good place to check info and perhaps talk to in NSW to get the real warts and all story, and debunk myths and tell truths. Hope this helped.
     
  4. jodie123

    jodie123 Active Member

    Joined:
    15th Aug, 2012
    Posts:
    34
    Location:
    Brisbane, Qld
    Well said, Nofngidea! That's what I was trying to get at but you put it so much better than me!