Our collective love for coffee is no secret. When 75% of the nation are coffee drinkers and 28% consume three or more cups of coffee in a day, it’s obvious that the daily cuppa runs this region. As of 2024, there are 26,124 cafes and coffeeshops in business in Australia — that’s more than half of all food and drink establishments across the country. Plus the 9,036 in New Zealand, these venues have been growing steadily over the years.
If you’re reading this, chances are you’re elbows deep in cafe management or are thinking about taking a sip of this world. Either way, we have answers.
This extensive guide will tackle the most frequently asked questions around cafe and coffee shop operations, from opening to hiring, profitability and success in the ever-evolving hospitality industry.
What are the operational activities in a cafe?
Day-to-day operations in a cafe can look very similar or very different from a restaurant. This depends whether your venue is focused on speciality coffee, hot food, baked goods or all of the above. As a general rule to ensure smooth and efficient service, key activities include:
- Sourcing coffee beans, produce and ingredients
- Brewing and calibration
- Recipe development and menu planning
- Baking and kitchen prep
- Quality control and tasting
- Ordering and receiving (for cafes that outsource supplies)
- Cleaning and equipment maintenance
- Inventory management
- Distribution, sales and marketing
- Cash handling (for cafes that operate mainly on cash transactions)
- Staff management, training and coordination
- Table and floor plan management
- Customer engagement
- Budgeting, cost control and financial reporting
- Compliance and record keeping
What roles and responsibilities would a cafe or coffee shop manager have?
A cafe manager’s duties often involve all of the above – overseeing sourcing, brewing and calibration, managing inventory for coffee beans and ingredients, coordinating pastry and food prep, managing rosters and staff, training, finances and providing great guest experiences.
Are there any must-haves for cafe management?
The cost of opening a new cafe in Australia can range anywhere from $200,000 to $500,000. It’s certainly an expensive grind, so you want to be prepared to put in the work. Considering cafes and coffee shops perhaps have the most (albeit shorter) touchpoints with customers, cafe management requires outstanding customer service skills.
The ability to organise well is also an advantage as inventory turnover tend to be high in a cafe — think about baked goods that are prepared fresh daily. Experience in the hospitality or production industry is always a plus, in addition to management skills. But as we like to say in hospo, all you need is heart!
Are cafes profitable?
Cafes can be profitable, but success in boosting the bottom line depends on many factors such as location, management, and market demand.
Let’s break it down –
Location, location, location
This business mantra holds true in the cafe industry. A strategic location can significantly impact your cafe’s footfall, which means it’s essential to choose a spot that attracts your target demographic. Think about proximity to offices, universities, or residential areas; accessibility via public transportation; and ample parking facilities.
Cost control and competitive pricing
As we said, cafes can be expensive to run! That’s because quality ingredients such as coffee beans tend to cost more with a thinner profit margin. Managing cafe expenses, especially ingredient costs and overheads, is crucial for getting your cafe across the profitability line. Set prices that balance customer expectations with cost coverage.
Quality and service
78% say that when it comes to coffee, quality, taste and sustainable practices come before price. Customers are willing to pay if you serve the good stuff. Plus, when we think about our favourite local cafes, it’s the little things that we remember; the way the barista always calls you by your name and remembers your usual and the unmistakable consistency of a beautifully laminated croissant with a creamy, aromatic flat white in the mornings. Your profitability and success as a cafe relies heavily on the quality and service you provide!
What licenses are required to operate a cafe in Australia and New Zealand?
Operating a cafe in Australia and New Zealand requires obtaining several licenses and permits, which may vary by region. Check with your local state for specific requirements. Commonly, these are:
- Food Business License: Required to operate a food service business and ensure compliance with health and safety regulations.
- Liquor License: If serving alcohol, a liquor license is necessary. The type of license depends on the nature of alcohol service (e.g., on-premises or off-premises).
- Health and Safety Permits: Compliance with local health regulations, including food handling and sanitation standards.
What are some common challenges in managing a cafe or coffee shop?
As with any hospo venues, managing a cafe comes with its own set of challenges. Here are some that you should be prepared for:
- Staff turnover: Cafes often rely heavily on part time staff, which also equates high employee turnover. These changes can disrupt operations and increase training costs.
- Managing costs: Balancing ingredient costs, labour expenses, and overheads can be especially challenging for cafes in this economy.
- Adapting to new trends: When the cafe and coffee shop landscape is so competitive, staying updated with industry trends and customer preferences becomes crucial. This goes onto an already long list of duties of a cafe manager.
Tips on managing a successful cafe
1. Find your unique selling point
Given the saturated cafe industry, the world is basically a customer’s coffee-flavoured oyster. A slight difference that sets you apart from another local cafe will go a long way. Take a look at these examples from Now Book It venues:
Menu diversity and special dishes: Kirrawee’s 7th Heaven leans into its vibrant, colourful spiced lattes like beetroot cocoa and sticky chai.
Cause for support: Auckland’s Crave Collective brings the community together with profits that go towards combating social poverty.
Strong local branding: Perth’s Good Things identifies itself with the neighbourhoods, centering its marketing around definitive illustrations of local coffee lovers and cafe doggies.
2. Implement an online reservation system
An online reservation system can streamline your cafe operations and improve customer satisfaction. With labour shortages plaguing cafes, efficient reservations and table management can help reduce the load on your staff. Choose a system that integrates well with your existing operations and provides features like real-time availability, automated confirmations, and thank you emails.
3. Make smarter decisions with booking data
An online reservation platform that provides you with customer booking data is critical to your cafe’s success. With valuable data on booking patterns, peak times, and customer preferences, you can make informed decisions about staffing, menu adjustments, and promotional campaigns. Running your cafe with data-driven strategies can help protect your profits and ensure that cash doesn’t fall through the cracks.
4. Put your customers first
We spoke a little about the importance of quality and service in the cafe and coffee shop industry. Consider this your not-so-secret recipe to cafe success! Cafe goers are often creatures of habit, whether it’s the remote worker who comes in everyday for a morning cuppa, the family who makes it a tradition to have a cafe brunch every weekend or the post-pilates group grabbing a light bite. Your team’s ability to make them feel welcome and seen is what puts you ahead of competitors. As does the consistent quality they can expect from your food and drinks.
How to start and successfully manage a cafe
It’s all about doing what you love – let your coffee and creativity lead the way and focus on serving quality cafe food and drinks that customers will come back for. Running a cafe can be incredibly challenging but as cafe owners and managers would know, it pays off in more ways than one. With people at the heart of the business, you just need the right systems to streamline operations and a shot of espresso or two to fuel the journey.
Looking to run your own cafe or coffee shop with success? Request a demo of Now Book It today.
