Starting a café can be daunting especially when you’re on a tight budget, but it can be done even if you don’t have much capital or even knowledge. But be sure that you’re familiar with the essentials of opening a cafe first.
As long as you are passionate, have an idea or plan in mind and have done sufficient research and planning, you can start putting together the pieces that will make your dream café a reality.
To help you get started, we’ve put together a list on how you can open a café with a low budget!
- Decide on your café type and concept
- Find the right location
- Plan your menu
- Buy or rent your equipment
- Digital marketing
- Omnichannel management
1. Decide on your café type and concept
Coming up with a coffee shop concept that fits your budget and target audience purposefully will help you save money from the very beginning. It should centre on the type of experience you want your customers to have.
With the coffee scene growing exponentially in Malaysia, a large portion of this is contributed by consumers that buy coffee-on-premise, outside the home. So the very first thing you want to consider is the type of café you want to open and the customers you are looking to attract.
The landscape of this business includes multiple types of coffee-consuming experiences. A few different types you can choose from include:
- Coffee shop – a sit-down cafe where customers can enjoy a dine-in experience
- Coffee bar – a boutique-style coffee establishment that focuses on high-quality coffee
- Convenient coffee kiosks (grab-and-go) – a place where customers can grab a quick cup of coffee/bite to eat and be on their way
You’ll also need to consider the type of customers you intend to serve when making your decision. Do you want to attract people who just want a quick coffee and bite to eat before going about their day? Or do you want customers to stay and hang around your café?
Regardless of which coffee shop models you choose from, coffee trends affirm that customers will come, so a good first step is to decide which type best suits your business!
2. Find the right location
Once you’ve decided on your café concept, you can then choose where you’d want to set up shop. The location of your café can either make or break your business as it will impact your bottom line if you’re not careful in the decision-making process.
Keep in mind that the best location for you is the one that minimises costs while maximising income, especially when you’re in a tight budget.
Although you might be keen to select mature townships as your go-to-café location, it might be best to avoid them as these places are already densely populated with intense competition. Most importantly, the cost of rental would also be sky high!
Instead, search for places that are located close to these areas.
These growing locations pose huge potential for your business as they often benefit from the spillover effect from the overpopulated townships. Not only do you get to tap into the prime location’s reputation, you’ll also get to save cost on lower rental!
Remember that if there is low supply and high demand, that should be the area of choice.
You can learn more about how to find the perfect location for your café here.
3. Plan your menu
Depending on the type of café and concept you’re going for, your menu offering will either be more beverage-focused or paired with a selection of food.
Either way, having a huge menu will contribute to high costs. Instead, simplify it and consider offering unique items on your menu to stand out or take advantage of seasonal produce that can be bought at lower prices.
Just bear in mind that it’s always better to start with a small and simplified menu, enhancing it as you go along.
Other things to consider when planning your menu include:
- Portion sizing to avoid leftover and wastage
- Identifying local suppliers and building relationships to get the best prices on ingredients
- Calculating the food cost percentage on each menu item
Keep it simple, and always prioritise quality over quantity.
4. Buy or rent your equipment
Your equipment is entirely determined by what you plan to offer on your menu.
It it important to understand how frequently each equipment will be used as that will influence your purchase decisions. For example, if the equipment is not used as often, you can consider a second-hand option instead of a new one.
Creating an equipment list in order of use and priority will help you determine what equipment you should invest in and what you can do without.
Investing in multipurpose equipment will also help you avoid overspending.
You should also create a list or spreadsheet to compare prices for the equipment you want to purchase to secure the best deals.
5. Digital marketing
Let’s face it, people are online all the time now. By leveraging digital marketing, you’ll be able to reach out to your current and potential audience effortlessly.
It may seem intimidating at first, but it’s actually not as difficult as you think. In fact, it’s relatively simply and cost-effective in helping you increase sales and brand awareness.
Three ideas that you can run even without a budget include:
- Social media marketing
- Blog writing
- Claiming your Google My Business profile
Social media marketing
We can’t deny the fact that social media plays a vital role in our everyday lives. As such, it should also play its part in your business. Be sure to at least have a Facebook Page and Instagram Business Profile for your business even prior to opening.
The key to social media is consistency. By constantly sharing your content and engaging with your audience, it will allow you to have a strong social presence that will eventually help your café build customer loyalty and increase your sales.
Click here for the ultimate guide to social media marketing for cafés.
Blogs can be a powerful marketing tools for your café as people nowadays turn to the internet for information.
Sharing informational and helpful content will establish your business as an industry leader, giving you the upper hand against your competitors. By appearing more knowledgeable, your audience will learn to trust you and eventually be converted in loyal customers.
Not convinced? Well here are other reasons why you should start blogging:
- Drives traffic to your website – putting out regular blog posts and utilising SEO strategies increases your chances of showing up on the search engine results page and drive traffic to your website in organic search
- Creates opportunities to generate leads – adding a lead-generating call-to-action to every blog post like a free demo that that customers would be willing to exchange their information for
- Drives long-term results – once a blog is indexed in the search engine it stays there, meaning your blog will continue to gain traffic and generate leads for months and even years after
So many benefits, you should definitely take advantage of blogging as a marketing strategy.
Claim your Google My Business profile
Google My Business is a free-to-use tool that allows businesses to manage their presence on Google, this includes Google Search and Google Maps.
Simply by claiming, verifying and editing your profile, your customers can discover and learn more about your café.
6. Omnichannel management
Opening a café with a low budget is tough enough as it is and the thought of having to keep track of daily operations and monitor sales from multiple order channels – deliveries, takeaways and dine-ins can be daunting.
This is why introducing omnichannel management to your business is important as it’ll help streamline your day-to-day workflow and automate your business operations.
StoreHub’s POS system is THE system you need for your business as it has everything you need to grow your business especially on a low budget!
With StoreHub, you’ll be able to:
- Gain remote access to real-time-data anywhere and anytime with its cloud-based accessibility
- Optimise operations and streamline HR tasks with an automated employee management system
- Collect customer data so you can turn them into repeat buyers
- Keep track of your stock with composite inventory management
- And much more!
Don’t give up on your dreams just yet!
Remember that opening a café will be challenging at first, but with perseverance and consistent effort you’ll be able to successfully open your café even with low resources!
Keep these tips in mind and make your coffee shop dream a successful reality!