Top 3 Biggest Challenges for Cafe Business Owners
Running a cafe in today’s market is beyond challenging, but with some assistance and persistence, you can create a rewarding business. Your efforts can lead to a thriving cafe with a loyal customer base who can’t get enough of your product and service.
As a cafe owner, you’ll encounter endless challenges; however, the most significant hurdles we’ve identified are finance, hiring and training, and meeting customer demands.
The First Big Challenge: Financial Management
One of the biggest challenges of any business is its financial aspects, from raising capital to maintaining revenue. For most business owners, mustering capital can be one of the most significant challenges. Too often, business owners have a higher expectation of what they must achieve from day one. A business isn’t built in a day but over time with continuous R&D and investment and not through a significant investment where every fancy piece of equipment is purchased and a full-staff team is hired. A cafe isn’t started with all this fancy equipment and expensive food displays.
“The best way to start a cafe is to focus on the experience and the love you put into everything you make. This means starting with only what is essential to running a cafe.”
Few cafe business owners see these massive established cafes with multiple locations and think that what sets their business apart is the equipment and experienced staff, but this isn’t the entire truth. Because of this, business owners often find themselves in the deep end, struggling to stay afloat as they struggle to maintain the labour and equipment costs and the vast food expenses from their extensive menu. These established cafes are where they are because of the fundamentals they have worked tirelessly on.
In fact, business owners should aim to start with the minimum equipment and staff, allowing them to focus on their customers and create an unbeatable unique selling proposition: “that you are more customer-focused than anyone else.” This also allows them to grow their knowledge and grow the business.
Starting from an operational minimum also lowers overall maintenance and labour expenses, allowing for easier operations. With 75% of cafes failing in the first year, you don’t want to make it harder on yourself by throwing yourself in the deep end. Many business owners also believe they need to set a goal of creating a million in the first year, but in reality, your goal should be to survive. Start with one employee (you) and begin with coffee and a handful of simple food options. Business owners may struggle by starting from a challenging city centre, thinking this is where the greatest opportunities are. In reality, this is where your strongest, most experienced competition is. Starting from the small suburbs, around foot traffic or industrial areas, will allow greater opportunity to grow and succeed.
The Second Challenge: Hiring and Training
As a business owner, you have many responsibilities, some of which may be more time-consuming than others, such as hiring and training. Hiring is one of the largest challenges small businesses face, as hiring is more expensive and time-consuming than ever. You are no longer competing to get employees against the business down the road, but all companies in your local area, from small businesses to corporate giants, as job recruiting websites post “1000 jobs in your local area.” Jobs have never been so competitive.
However, there are many opportunities for businesses like ours where higher foot traffic allows us to advertise our job vacancies on-premise. Through our more significant connection with the community, we can also utilise community pages to post vacancies.
Additionally, many recruitment sites also carry disadvantages that small businesses like ours can take advantage of, as these recruiters are slow and lack communication and human connection, leading to the overall neglect of job seekers, through faster response times and more regular personalised communication, allowing us to scoop up good candidates effortlessly.
Through the right tools and strategies, we can also create a robust training process. For example, a training checklist can ensure that no tasks are missed and that a new staff member can complete a task to an acceptable standard. Additional tools, such as the operations manual, can be essential for information retention and training efficiency, allowing for greater accuracy and efficiency in training.
Strategies like tell, show, and demonstrate can be great to ensure that all aspects of a task are taught. Additional strategies like scenarios can be a great tool to see what the performance of future task completion would look like. For more excellent retention and accuracy of training, you can also switch roles of trainee and trainer where the trainee pretends to be the trainer and to teach you the desired task; this allows them to demonstrate their understanding of the tasks and the task’s importance, allowing you to correct any missed details. This allowed for exceptional retention and accuracy, even from the most challenging trainees.
The Third Challenge: Meeting Customer Demands
Too often, customer demands are misunderstood; customer demands rarely require a massive investment from the business. Most often, the customer’s demands are just the customer’s unmet needs or the poor execution of your business’s services. These needs are the reason for your customer visit, and yes, these unmet needs can be solved by investment.
But, quite often, an equally efficient solution can be achieved through creative changes to operational behaviour. As not every challenge in a business can be solved by throwing money at it, an innovative solution allows your business to lower expenses. It ensures the customers are heard and understood.
Customer demands take many forms, but the main ones are better speed, convenience, quality, price, and service. Operations improvements offer excellent opportunities for all of these.
These three challenges aren’t the only challenges you meet while running; however, we hope that this will help you find the right path to turn your business into a beacon of success for the future. Starting today, we hope this provides you with a realistic view of the challenges of a cafe and how success isn’t awarded from day one but the reward of your business’s growth and continuous improvement.