Author: Kit Kilroy
Date Posted: 13 December 2019
If you’ve taken all the steps to fulfil your dream of opening a cafe, odds are you’ve already thought of all the major expenses: rent, food and labour costs… the list goes on and on. And while those considerations should be your primary financial concerns, it’s important to remember that there are many other, smaller hidden costs that will arise upon opening.
If you haven’t run into any of these hidden costs yet, odds are you will soon. It’s best to be prepared and start pinching pennies now, because the last you thing you want is for one of these to come as a surprise, putting a dent in your overall budget.
No matter how quality the appliances are, you’re going to run into repairs and maintenance fees somewhere down the line. Rather than scrambling to make these fit your budget as you go, it’s best to set aside a bit of income each month. You never know when you’ll need it.
By having backup funds, you know your cafe will never be out of commission due to a necessary, and often costly, repair. Chron suggests “researching figures through National Restaurant Association reports” to get a reasonable estimate of what similarly-sized operations pay in repairs each year, giving you a good baseline number to keep in mind.
If you haven’t already, you’re going to need consultation from a lawyer at some point or another. Whether it’s to draw up contracts for the staff or to ensure that your business structure meets requirements, you’re going to run into situations that require professional legal insight. As imagined, this insight is sure to come with a price tag.
Depending on what you need and who you go to, legal fees can cost anywhere from a few hundred to a few thousand dollars. It’s best to keep this in mind from the outset so that you don’t end up blindsided by a big bill. Budgeting for legal fees is smart, even if you don’t see yourself using that money anytime soon. Like repairs and maintenance, you never know when an occasion arises that requires expert insight.
In the hospitality industry, insurance is a must. With customers, staff, equipment and drinks all operating in the same space, there is a lot of opportunity for risk. When you open your cafe, you will first and foremost be required to have general liability insurance. But it doesn’t stop there. According to Insureon a business owner’s policy comes in at about $900 per year.
On top of that, worker’s compensation is about $1,020 on average. And the aforementioned general liability lies at about $405. Considering just those alone, that adds up to $2,325; and those figures are only median estimates.
To operate a cafe, you need permits, and — big surprise— those will also cost you. Once you get going, you’re sure to uncover more and more licenses that you’ll need to apply for. According to Toast, there are fifteen different types you might need before opening. Maybe it’s time to bring in that lawyer, no?
It sounds overwhelming, but these licenses and permits are necessary steps to opening a successful cafe. Different types of permits cost different amounts of money, and most require renewal after a certain amount of time. If you couldn’t already guess, this means yet another hidden cost. Keep in mind that when you get a permit, it’s not the end-all-be-all, and failing to renew on time will only incur a late fee. Keeping a calendar of all your permissions, including when you need to apply for renewal is a good idea.
While it can be tempting to ask your staff to uniform themselves, you run the risk of portraying a dishevelled aesthetic to your customers. Too many cafes rely on simple formulas for their staff outfits (think all-black) — but then run into issues down the line. Even if you create the most structured examples, there will always be someone showing up in an inappropriate outfit, wearing white shoes when you specifically told them black for example. No matter what your cafe’s general vibe is, something as simple as an apron can tie the look together and add a sense of professionalism.
Even if you’re aiming for a more casual atmosphere, there are a variety of cafe aprons to suit your needs from rustic-looking options to denim fabrics. Not to mention, it will keep everyone’s clothes clean. Many new cafe owners overlook this component and end up skimping on aprons last-minute, but if you’re serious about having a well put together team, and coherent theme, setting aside for uniforms is a must.
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