How to Open a Cafe with Low Budget- 9 Baby Steps

Did you know that more than half of adults in America, who are 18 years old or older, drink coffee every day? That’s over 150 million people! On top of that, the average coffee lover drinks about 2.7 cups of coffee per day.

So, in just one day, we consume more than 405 million cups of this amazing drink! With so many people loving coffee, it’s not surprising that many consider opening their own coffee shops.

But is it a good idea? Can you actually make enough money to live comfortably without worrying about finances? hence the topic of this article how to open a cafe with low budget.

Is Owning a Cafe Profitable?

If you have a great location, good prices, amazing coffee, and make smart business choices, your coffee business is likely to be successful and profitable. Surprisingly, it’s usually poor business decisions that cause coffee shops to fail, rather than a bad location or bad coffee. See 60 smart budgeting tips to save money

So, if you’re wondering whether it’s worth becoming a coffee shop owner, we say go for it. Just make sensible decisions, and you’ll have a good chance of succeeding. If you’re unsure about how to start, keep reading, we will show you how to start a cafe with low budget.

When opening a cafe or any coffee business, marketing is important. A great way to advertise your business is by using coffee sleeves. They’re affordable and you can customize them with your business name and address.

If you’re unsure about the idea, start with a small order to see how it works for you.

How Much Does a Cafe Owner Make a Year?

Coffee is a popular beverage that brings in more money compared to other food items. Coffee shops usually have lower expenses than other types of businesses. On average, owners of small coffee shops earn between $60,000 and $160,000 per year. It’s important to note that the coffee industry as a whole generates a massive $70 billion in sales across the country annually.

Related: How to Grocery Shop on a Budget

How to Open a Cafe with Low Budget

1. Decide on your café type and concept

When planning your coffee shop, it’s important to think about your budget and the kind of customers you want to attract. This will help you save money from the start and create the right experience. In Malaysia, the coffee scene is booming, and many people prefer to buy coffee from cafes instead of making it at home. So, the first thing to consider is the type of café you want to open and the customers you aim to serve.

There are different types of coffee shops to choose from:

1. Coffee shop: A place where customers can sit down and enjoy their coffee.
2. Coffee bar: A stylish café that focuses on serving high-quality coffee.
3. Convenient coffee kiosks (grab-and-go): Quick spots where customers can grab coffee and food on the go.

It’s important to think about the kind of customers you want to attract. Do you want people who want a quick coffee on their way somewhere, or do you want customers to spend time at your café?

Remember, regardless of the coffee shop model you choose, customers will come. So, take this as a starting point to decide which type suits your business best!

2. Make a plan

To open a cafe on a small budget, start by making a plan. First, identify the main issue and set clear goals for your cafe and each department. Next, think of different solutions to achieve these goals. While it’s helpful to learn from others, remember to adapt their ideas to your own circumstances. Lastly, make sure your goals are challenging yet attainable for where you live and work.

Related: How to Eat Healthy on a Budget

3. Keep it simple

To start a cafe on a small budget, focus on what’s important and do it well. Every owner has different priorities, but it’s crucial to highlight your strengths, not weaknesses.

For instance, if you’re great at cooking and managing staff but struggle with marketing or bookkeeping, don’t worry. Dedicate time during the day to handle those tasks yourself while managing other responsibilities.

Simplicity is key in various aspects. When decorating the space, don’t splurge on fancy furniture or decorations like wall art or big plants (unless they’re fake). Instead, consider investing that money in new appliances or furniture that will attract customers and bring them back.

Lastly, if possible, keep new hires simple too. Stick to straightforward roles and responsibilities that are easy to handle.

4. Find the right location

Once you know your café idea, you need to pick the right place to open it. Where you set up your café is crucial because it affects your profits, especially if you have a tight budget.

Remember, the best location is where you can make more money and spend less. Avoid popular areas with lots of competition and expensive rent. Instead, look for places nearby.

These growing locations have great potential for your business. They benefit from the nearby busy areas, so you can attract customers easily. Plus, the rent is usually cheaper, which helps you save money.

Always remember, if there are more people wanting something than there is available, that’s the best place to choose. So, find a location where there’s high demand and low supply.

5. Get creative with your menu

The type of café you have will determine if it focuses more on drinks or food. Having a big menu can be costly, so it’s better to simplify it. You can stand out by offering unique items or using seasonal ingredients that are cheaper. Start with a small menu and improve it over time. Other things to think about are portion sizes to avoid waste, finding local suppliers for better ingredient prices, and calculating the cost of food for each item. Keep it simple and focus on quality, not quantity.

6. Buy or rent your equipment

The equipment you need for your cafe depends on the menu you plan to offer. Consider how often you’ll use each piece of equipment to decide if you should buy new or used. Make a list of equipment in order of importance and usage to figure out what you really need. Buying multipurpose equipment can save you money. Create a list or spreadsheet to compare prices and find the best deals when buying equipment.

7. Don’t spend your initial budget on furniture

Starting a cafe can be a profitable venture, but it often requires more money than expected. However, there are ways to begin with a limited budget.

Firstly, you can save money by using tables and chairs from your home or office in the cafe. These can be temporary until you can afford to buy new ones.

Renting furniture may seem like an option, but it’s not ideal. It would require a lot of storage space, and renting from different suppliers ends up costing more than buying everything from one vendor at once. Additionally, there’s no guarantee that the rented pieces will fit well together. It’s better to consider buying new items right away.

By being resourceful with furniture and avoiding costly rentals, you can save money and allocate your budget wisely for other important aspects of your cafe.

8. Find creative ways to market your café

To attract customers to your cafe, you need to market it. Use tools like social media, flyers, or word of mouth to spread the word about your business. Since people are always online, focus on digital marketing. It’s not as hard as it seems and can help boost sales and brand awareness without costing much. Here are three ideas you can try without spending money:

1. Use social media: If you have a Facebook or Instagram account, regularly post updates and interact with users. This expands your audience beyond friends and family, making it easier for people to recommend your food to others.
2. Write a blog: Share interesting stories or recipes related to your cafe on a blog. This can attract readers and potential customers. see how to start a blog.
3. Claim your Google My Business profile: Make sure your cafe is listed on Google with accurate information. This helps people find you when searching for cafes in your area.

You can also consider traditional advertising like radio or TV ads, but make sure they’re affordable to avoid cutting into your profits.

9. Take advantage of crowdfunding platforms

Crowdfunding platforms are websites you can take advantage of to raise money for your project. It’s like online fundraising. You can use it to get funds for your cafe or to test if people want your product before spending a lot of resources and time. Kickstarter and GoFundMe are popular platforms that accept different types of projects. If you have a specific project, there are niche sites like Indiegogo for creative projects, Patreon for content creators, or Plumfund for non-profit causes. These platforms help you gather support and money from people who believe in your idea.

10. Opening a cafe doesn’t have to mean breaking the bank

You don’t have to spend a lot of money to start your cafe. Keep it simple and work with what you already have. Instead of buying expensive furniture, use what you already own or consider buying secondhand items.

Is it Hard To Run A Cafe?

Running a small cafe can be challenging, but with careful planning, it’s achievable. Consider startup costs, location, staffing, and advertising. Manage costs wisely, investing in equipment, licenses, and furniture while staying within your budget. Choose a location that considers competition and your target customers, whether you build or lease the space. Hiring and training staff is important too. Promote your cafe through social media, community networks, and flyers. It may be tough, but with proper planning and dedication, running a small cafe can be rewarding.

How Do You Attract Customers to a Cafe?

1. Loyalty rewards: Create a program that gives discounts or freebies after customers visit or buy a certain number of times.
2. Fun events: Organize activities like coffee tastings, art workshops, or live music to make your shop more interesting.
3. Team up with local businesses: Partner with nearby stores to promote each other and bring in new customers.
4. Social media buzz: Use Facebook, Instagram, and Twitter to showcase your shop, share daily specials, and interact with potential customers.
5. Free Wi-Fi: Offer customers a comfy place to work or study by providing free internet access.
6. Special drinks: Invent a delicious signature drink that’s unique to your shop, giving people a reason to try something new.
7. Happy hour deals: Have discounted prices or special offers during slower times to attract customers.
8. Collaborate with influencers: Work with popular local influencers or bloggers to promote your shop to a wider audience.
9. Seasonal promotions: Create limited-time offers or themed drinks to build excitement and bring in new customers.
10. Great service: Train your staff to be friendly and attentive, ensuring customers have a positive experience and recommend your shop to others.

Conclusion

Like every other business, opening a café may be tough, but if you work hard and never give up, you can make it happen even with limited resources! Remember these tips and turn your coffee shop dream into a successful reality!