What do you need to open a café?

HOW TO START A CAFÉ: WHERE TO START

Starting a new business requires not only a lot of time and effort, but also a large financial investment. You can't skimp too much on the quality of equipment or raw materials. Neither can you save on staff if you want to keep them.

You need to do the math at the beginning. The initial outlay alone for opening a café is around one million crowns. The return on investment in a café can take up to two years. Therefore, do not count on the fact that immediately after opening the cafe will start to feed you. The first year is tough. You need to think about financial reserves and especially about paying salaries.

Don't forget to insure your business. Flooded premises, fire, stolen sales. All of these things can happen to you and put your operations and finances in serious jeopardy.

WHERE AND HOW TO GET FINANCE TO START A CAFÉ

Many people are put off by a lack of finance when starting a business. The best funding is if you have enough of your own savings. Start-ups tend to be financially challenging, so you will probably need to apply for a loan. Getting a start-up loan is harder than it looks. You will be in the risk group for the lender. Many lenders are likely to ask you for security against other property or assets.

You should have a large enough financial reserve. A combination of multiple sources is best.
It is ideal to have enough of your own finances and take an extra loan. Make sure you have enough funds to start the cafe and have the security of money.

CALCULATE THE COST OF OPENING A CAFÉ

One of the first costs will be the acquisition of the premises and the associated costs. Next, you will need to equip your shop. The basics for a coffee shop are a coffee machine and a coffee grinder. However, that is not all, it is also about the bar counter and the necessary equipment, tables, stools, utensils, lighting, decorations or equipment for baristas.

Never underestimate the choice of a POS system. If you plan to offer card payment options, be careful what terms you agree to for the payment terminal. In particular, transaction fees can vary significantly between providers.

It is a good idea to invest in marketing. Your main goal is profit. That's why you need enough customers. Don't forget your staff. People will always be motivated by money. But also fair treatment and timely payment.

Other costs include things like bookkeeping, cleaning, servicing equipment or WiFi connection.

WHAT DO I NEED TO SET UP A CAFÉ BUSINESS?

If you want to open a café, you need a trade certificate for the restaurant business, which you can get from the trade office. This is a so-called craft trade. In addition to the general conditions (at least 18 years of age, legal capacity and good character), you must also meet the requirements for professional competence (education in the field or at least 6 years' experience in the field).

If you do not meet the qualification, it can be replaced by education in a related field, a retraining course or a qualification examination. Alternatively, you can appoint a responsible representative who meets the conditions for setting up this trade.

If you meet the conditions, just fill in and submit the uniform form, either electronically or in person at the trade office. About a week after you register your trade, you will receive an extract from the trade register and will be assigned an eight-digit identification number (IČO). It costs CZK 1,000 to obtain a trade certificate.

WHAT ELSE CAN I DO? SOCIAL AND HEALTH

By completing the form for obtaining a trade licence, you are automatically registered as self-employed (self-employed) with the District Social Security Administration and with your health insurance company.

The Social Security Office will send you information on when and how to pay your social security contributions. The amount is calculated according to whether the business is your main or secondary income. The minimum advance payment for 2019 from your main business is CZK 2,388 and CZK 955 from your secondary business.

You will send advance payments to your health insurance company. For 2019, the payments are set at CZK 2 208.

You can pay your health insurance. This insurance is voluntary. The minimum amount is CZK 138 and is paid into the account of the Social Insurance Institution.

STOP BY THE TAX OFFICE

With the registration form, you also register as an income tax payer. The income tax return is filed once a year and you pay the tax due at the same time.

You can voluntarily register as a VAT payer. You must do so as soon as your sales exceed CZK 1 million in 12 consecutive months. The tax office assigns you a tax identification number (TIN), which is used to communicate with the office.

DON'T FORGET TO GET PERMISSION FROM THE HEALTH AUTHORITY BEFORE OPENING A CAFÉ.

Your business must comply with the principles of operational hygiene. Operational hygiene guidelines are criteria that apply to conditions such as drinking water supply, connection to the sewerage system, heating, lighting or sanitary facilities for consumers and employees.

Hygienists most often focus their inspections on food and its use-by date, proof of employee competence, personal hygiene of employees, storage and handling of raw materials. Hygiene regulations should not be an obligation but a matter of course.

YOU WILL ALSO NEED A STATEMENT FROM THE FIRE BRIGADE

Few people know that to open a hospitality business you also need a statement from the fire brigade. This is specifically based on the project documentation.

Don't forget to include an application for an opinion, a fire safety solution prepared by a qualified person and drawings with the project documentation. All documents must be in one envelope or bound in folders.

The Fire Brigade will then inspect the premises for fire safety approval.

AS WELL AS APPROVAL FROM THE BUILDING AUTHORITY

The purpose of the use of the building and the conditions of any alterations must be checked with the relevant building authority. If your premises are not approved for that purpose, you must apply to the building authority for a change of use of the premises.

HOW TO OPEN A CAFÉ SUCCESSFULLY? THINK ABOUT MARKETING

The aim of marketing is to bring people to you, to show them your product and your shop. Marketing should be fun. It gives you the opportunity to create an identity for what you do and present your work in the best possible light.

You can write a blog, post photos on Instagram, write Facebook posts or have a radio ad. Television advertising is still the most effective form of marketing despite the rise of the internet. Using social media is the best and fastest way to get the word out about your business.

Every business needs to be able to market itself to attract customers and show them its offerings. Above all, become a place where people will go even if they are deciding between multiple options.

NEXT STEPS FOR OPENING A CAFÉ

You will need a bank account for the business. Ideally, you want to open one in the name of your business. This will allow you to better manage your finances and keep them separate from your personal finances.

The next step is to find the right location. Vibrant locations with good accessibility are suitable. Especially a place where you will have little competition. The location will also determine the amount of rent.

The name of the cafe is also very important. The name and the overall image of the cafe is what can set you apart. When choosing a name, also think about how the name will be used further, for example in advertising, on social media or in materials.

You need to do the math before you go ahead. The coffee shop business is one of the most competitive and risky areas for a business. It's a good idea to join forces with someone who has experience in this industry.