Why Own One Cafe in Town When You Can Own Three

by Alex Izsak 12th of December, 2022

Why Own One Café in Town When You Can Own Three

Simplicity is the key. Cafes are the perfect businesses for new entrepreneurs who want to make their mark in the business world. A coffee shop has simple operations, which only require brewing and preparing coffee as well as simple meals like sandwiches, salads and pastries. Most food items may even be prepared ahead of time, doing away with the need to have a full commercial kitchen.

A cafe may function with a lean staff, depending on the size of the premises and how busy the business gets. Often, small cafes with good traffic that generate attractive revenue may be operated by three or fewer staff members. Having small premises with a fast turnover of customers may also enable good revenue generation while minimising overhead costs.

An owner-operator who wishes to be active in operations may still do so. All they need to do is appoint point persons in each cafe to submit a summary of everything that goes on in operations. The owner-operator may then divide time equally among the different establishments or choose to focus on one that needs more hands-on intervention. If everything is operating smoothly, then an owner-operator may choose to place each café under management to enable lifestyle flexibility.

Spread out to attract more customers

A single café operating within a large suburb with a large population, such as Melbourne and its 47,285 inhabitants, will not be able to be visible to all locals even if it becomes very popular within its immediate area. As such, it would be feasible for a cafe owner to strategically position multiple coffee shops in various high-density and high-traffic areas. For example, a prospective owner of three cafes may strategically position coffee shops in the following way:

Near a residential area, whether a condominium or apartment complex, for residents who have just woken up and are about to go to work
In the CBD for working professionals who need a pick-me-up in the middle of the day
Along a busy shopping strip that is constantly bustling with traffic any day of the week

By doing so, the owner of the three coffee shops captures various customer demographics instead of focusing on only one.

diversify buy three cafes
Image: Diversify and own three cafes in the town

Diversify your revenue streams.

You may think that just because you own three cafes in just one suburb, they would all have the same value propositions as well as food offerings. While that could work, it could waste a ton of potential. A café that operates in one part of a suburb may have a completely different concept than another. Please note that the following are just examples, and each café in various locations may have varied concepts.

The café that you would operate in the CBD may be larger and have enough space for working individuals to have a meeting. It may have well-lit interiors, group seating arrangements and a simple yet diverse menu. The CBD café may have simple yet varied food and beverages because most working individuals may be more focused on getting their caffeine fix and returning to work quickly. Those conducting their meetings within the café may also be more focused on their agenda than the food. Notwithstanding this, the food and beverages of this café should still be good to attract many workers in the area.

A neighbourhood café near a residential spot may be a small operation or even a kiosk focused on takeaways. The customer demographics of these cafes may typically be those rushing to work but needing a cup of coffee or an easy-to-eat meal like a sandwich. Some may also purchase coffee to bring back to their place of residence.

Cafes in shopping strips may be a good middle ground between those in residential areas and CBDs. People who typically frequent these areas spend a good part of the day in the shopping strips. They are frequently amenable to staying in stylish boutique cafes, enjoying good artisan coffee while basking in a soothing and refreshing ambience. Menus here may be more intricate with specialty coffees and different types of food, ranging from quick bites to full meals.

Dominate the market.

It is very hard to dominate the market of a large and populous suburb with just one café with a singular concept. However, you could dominate the market by attracting various demographics with three uniquely planned cafes, each with distinct concepts.

Sometimes, acquisitions are key if you want to experience success as a business owner. Acquiring thriving cafes with unique catchment areas and target markets can be a very lucrative option for a growth-minded owner-operator.

LINK Melbourne and Tasmania are business brokers who can assist you in buying or selling a cafe.

Tags: acquisition small business buying expand entrepreneurs