OPENING A NEW CAFE: HOW TO FIND THE PERFECT LOCATION?

by | Oct 27, 2020 | Open a New Cafe | 0 comments

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Have you ever heard about this say: Location, Location and Location

Acquiring a business in the right location is one of the most important steps to ensure a successful business. Depending on the area, it means whether you are having  customers walking into your store or not, how quickly your business will get busy, what will be your peak hours, what kind of menu you should create, what is the demographics of the area, and so on.

The Blue Print for the perfect location

  • When we are helping our wholesale partners / clients to source a strategic location, we start by looking at what type of business concept it is about, and what kind of area they are looking to open.
  • We noticed that many clients come to us asking for help because they dream about opening a cafe in a certain lifestyle neighborhoods, whereas strategically they should be looking whether the location fits the into the right demographics that will suit their business plan. 
  • After acquiring 5 cafes of our own ownership and assisting several of our coffee wholesale clients to succeed, we managed to put together a perfect Blueprint for the prefect location, which we have divided into for 4 different areas or categories if you prefer.

Depending on the categories your business location fits in, you will notice different characteristics regarding the customer base. 

Residential Area

Opening a cafe in residential areas, you will see a great traffic in flux during early in the morning and later in the afternoon and even greater on weekends.  If you are looking at opening a cafe in residential areas look for high density areas and having a great parking facility at the front is a must to succeed. Look up for shop strips that offer supporting businesses that will help the traffic and avoid a single stand shop isolated from supporting business even if the rent is considerably attractive. Example  of supporting businesses are Supermarkets, post offices, banks, medical center to name few. 

Your cafe will be more likely to have higher trades during the weekends as family will use your business as weekend destination. 

Industrial High Tech

Opening a cafe in Industrial High Tech areas, you will see a higher in flux of clients during the week early in the morning when people are heading to their offices, around middle of the morning as people are having their coffee breaks and definitely during lunch time. Cafes in high tech industrial areas are more exposed to great quality business which better demographics than in manufacturer industrial areas.

Cafes in industrial areas generally have very steady turnover during the week which will be peak, during business days, and lower turnover during the weekend where offices are closed. In order to succeed in these areas, having a parking facility is also a must.

In high tech industrial area, your Cafe is likely to thrive a lot faster than in General industrial areas. Just to clarify, when we mention General industrial areas, we are talking about areas that hold businesses such as panel beater, mechanics, factories, etc. In this areas you will likely have a lower income demographics, that might not be willing to pay a fair or higher price for your product, or even not willing to spend on eating out at all.

Touristic

Touristic areas are pretty seasonal, so you must plan ahead if you are opening a cafe. Essentially opening right before the peak season. Note that if you are opening a cafe in a Touristic area, having a higher foot traffic is a must. Note that touristic areas, often brings a lots of competition, so make sure doing a comprehensive marketing research and study your competition to ensure having a competitive advantage. Generally, touristic presents a lots of supporting businesses that will help improving the foot traffic in the area, hence ensure picking up a location with high exposure so tourists can see your cafe without difficulty.

Commercial

Opening a cafe in a commercial area is great way to have a 5 days sustainable business. It generally follows similar characteristics of High Tech Industrial Areas, however, with a lot more supporting businesses around. We normally avoid lobbies, as lobbies are very highly exposed to one single building, if one or two companies make the most of your clients, all you  need is one company to leave and 1/3 of your business can go way from the night to the day. We have seen great businesses falling when the whole building has moved out, specifically during COVID-19. Avoid opening cafes on the main roads, look or side streets that offer customers less noise and parking facility. Yes, parking facility is a must to have a successful cafe in commercial areas.  

Supporting businesses for Cafes

Other businesses in the areas can actually give you support. If you have a lot of accounting offices, medical center, supermarkets, banks, new agencies, post offices, gyms, dancing salons, etc. You can rest assured that these will bring constant people traffic to your store as well.  

We organized here a few tips to help you decide where to open your cafe, considering our experience in the area and things we believe can help. 

Where are the busiest cafes located?

The busiest cafes are general located in areas that overlaps at least three of these locations. For example, Sydney CBD cafes are located on Commercial, Residential and Tourist exposure, therefore capturing the most of these three areas feature as well as surroudned by several supporting businesses. Cafe’s on the Beach front, say in Bondi for example, are also exposed to Commercial, Tourist and Residential feature, but with plenty of parking.

Ok, but these primary locations must cost a fortune, how can I find cost effective hidden gems golden mine locations. 

There are plenty of opportunities out there, if you are looking of a cafe, start buy talking to a broker in regards a business which the rent is reasonable low, then applying this location blueprint on it. We have seen plenty of cafes in the border of industrial and residential area with commercial exposure, and remember if you are not in Touristic location, focus on the parking facility, this is critical to ensure success. 

Let’s begin with study, a lot of study!!!!

  • If you prepare, study and organize, the chances of your business working out are higher, it´s all about planning and strategy.
  • That being said you can start by looking into competition, analyzing good and bad aspects, so you can learn from them.
  • Other cafes are not enemies, they can enhance and transform the area into a hub. It is important to remember that if they offer the same things as your coffee then you may have problems, though, It is good to have something unique to offer in order to have competitive advance. 
  • The most important question is to find your regular customer segment and build a plan for them, creating a solid strategy that reflects on the place, and that is what we have been doing for years. 

Now, make a move!

Be sure to find a reliable business broker and a lawyer to support you, as it is a long-term investment, so do not sign anything before reading everything and consider all possibilities. Once you have your study done, be ready to move quickly as great opportunities don’t come along very often.