How Profitable is it to Start a Breakfast Joint & Coffee Shop?

Breakfast is that part of the day that many families tend to skip due to insufficient time, which can impact health in the long-run. Mostly students and working professionals tend to miss their breakfast as they have to reach their colleges, schools and offices on time. Thus, starting with a breakfast joint will be a profitable business and help the busy commuters to satisfactorily eat their breakfast on their way to work or at their desk.

A coffee shop is also a viable option because after a long day at work people need to grab their favourite cappuccino to loosen up. With steady sales, your breakfast cafe can expand and start delivery service to families and people. Profitability of a breakfast cafe depends on growth which depends on repeat customers and positive word of mouth.

So if you want to know how to start a cafe or how much does it cost to open a cafe so that it can be a profitable venture, continue reading this blog.

How to Open a Cafe/ Breakfast Joint?

1. Effective business plan

An effective business plan has to be designed before starting the business. The first point to consider is the budget - how much does it cost to open a coffee shop. Come up with a unique idea for your breakfast joint, conduct a market survey and feasibility check so that your projected sales are more than enough to keep you buoyant. The investment mainly involves infrastructure, workforce, daily supplies and taxes.

2. Defining the Local Territory

Keeping in mind that the breakfast joint and coffee shop will be largely focussed to serve local customers, it is essential to conduct a research of local market demographics before starting the business. To know if a location is right for the breakfast joint business you should check the existing breakfast joints and coffee places, look into what they offer and compare them to what you are offering. It would help if you asked a breakfast cafe owner about their insights on how to open a coffee shop or a breakfast joint.

3. Market research

Prior to opening of coffee shop and breakfast joints market research shall be done to keep a check on the competitors. If the level of competition is way too tough, then you need to think of a unique selling proposition to drive sales and attract customers. Knowing your market, your target customer group and your competition shall help in fixing up the menu and pricing. If you are wondering how to open a cafe with a low budget, restrict your menu to a niche and hence limited variants of that niche at first.

4. Identifying your niche

Identification of the target market and niche must be made as soon as possible. It will save a lot of time to the owner from pleasing to a lot broader customer base. A wide category of people might belong to a diverse population who are not willing to try new foods and are looking for something related to affordable and self-service foods. With the increase in health awareness, the owner can start selling healthier breakfast options such as oatmeal, black coffee, and green tea. The demand of every customer cannot be fulfilled thus it must be kept in mind that the owner does not have to deviate from their decided niche and target market.

5. Applying for permits and licenses

Before starting the breakfast joint or the coffee shop, the owner must properly go through all the legalities. The owner will require a business license, liability insurance and tax identification number. A check must be made with the local agencies to know about the permits for serving and handling food. The owner must require an alcohol license if you are willing to serve drinks like mimosas and bloody marys along with eggs and bacon. The health code and regulations regarding the kitchen have to be followed.

6. Equipping the restaurant

Proper equipment has to be purchased according to the requirements for serving and making of the food. Breakfast joints will require multiple coffee stations as many people tend to have coffee with their meals. Other essential items such as computers, telephone, fax machine and accounting software will have to be purchased for recording the orders and sales. Point of sale computer systems can be installed to submit the customer orders electronically.

7. Deciding the menu and pricing of the food and services

The menu for the joint and coffee shop has to be decided according to the customer base the owner is willing to target. The menu which has been decided must include seasonal items to keep the menu fresh and attract new customers and make loyal customers. Summer breakfast can consist of fresh fruits and cold coffee, while winter menus can include pumpkin muffins and apple-flavoured lattes. The main advantage is that breakfast is comparatively a low-cost meal as dinner. The owner may try to differentiate its menu from the local joints and cafes to attract more customers.

While deciding the prices at which the food items and drinks will be sold to the customers, the owner must keep in mind the profit margin, ingredients cost, delivery, and preparation time. Prices must be set after comparing them to mid-price restaurants and fast food joints. The owner’s joint must be making the best breakfast in the whole town, but it won’t sell in the market if they are priced very high. But if the prices are kept too low, it will reduce the profit margin leaving very little money to compensate the owner for their hard work.

8. Promotion

The word about the breakfast joint and the coffee place has to be put out in the market. Investment can be made towards designing a website that will display the photos of the ambience and delicacies being served there and the place's menu. It will make interaction with the customers easy, and online deliveries can also be made using this website. Word-of-mouth technique can be used to spread good reviews about the joint in the market. Flyers can be distributed, and social media can also be used for the promotion of the joint and coffee cafe.

Also Read:

1) How to Start a Small Restro-Cafe?
2) How to Start a Gold Jewellery Export Business?
3) How to Start a Notebook Manufacturing Company?
4) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. How much does it cost to open a coffee shop?

Ans. A basic coffee shop will not require a huge investment. Minimal investment can be made to start a coffee shop. The owner can choose to open a franchise sit down coffee shop or a small kiosk in the beginning and expand with time.

Q. Why do breakfast joints and coffee shops fail?

Ans. The places mentioned above fail due to poor management, bad employees and service and lack of sales due to high prices. It might as well happen that the joint has failed due to huge debts.

Q. How much profit can be earned by the owner by setting up a coffee shop?

Ans. For a small coffee shop, the average profit is estimated to be around 2.5 per cent, whereas, in large operations, they earn huge profits by selling coffee. If proper sales volume is built, the coffee shop owner can make huge profits even while owning a small coffee shop.

Q. How to promote the breakfast joint and coffee shop in a better way to earn sufficient profits?

Ans. Various methods can be adopted, such as giving out incentives and discounts to the people who visit, reaching them out with feedback cards and considering their suggestions.