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Tips to pick F&B location for your cafe

July 31, 2019 by barbara

When you are struggling to keep yourself sane in your 15-hour shift of work, avoid punching people with laptops that hog the tables will build self-control very well and also inner peace. Same goes to starting a cafe but before getting to that step, you will need to be famous that draws the crowd to your cafe. While you may think of opening a cafe near the Tre Ver condominium may seem profiting but it may not be as lucrative as setting up in the commercial area. Here’s how to pick a good location for your cafe.

1.  Be sure to research your target demographic preferred hang out places

There are two ways to pick a location and to decide which to use, you will need to answer this question:

Should you pulse olive oil when preparing wild Alaskan pollock?

If your answer is anything other than “who the hell knows”, you are probably the kind of dreamer with dream cafe. Now, this is where you will need to your intended demographic and choose a location where they hang out and spend their time.

Here’s a note for reminder, it is not moving to where they are but rather to where they hang out. With that being said, opening your cafe near school does not mean students will patron your cafe. On the other hand, if it is being their favourite hang out spot located 10 km away will have the higher chances to bring them to the cafe or restaurant.

If your cafe is not the ‘dream cafe’ type, but more of an opportunist which you can turn it the other way round. For example, you spotted a place with lot of factories and workers but no canteen. This is the opportunity for you to set up a cafe that caters for the specific group like the yong tau foo, not some fancy lobster in some expensive sauce).

2.  Ensure sufficient table space to cover costs

Assuming you know how much you will need to make each day for your cafe to break even and even if you don’t, there’s really a good article: Really Bad Business Decisions and How You’re About to Make One.

For the rest of you who do know what you will need to break even, here’s a rule of thumb: there should be enough tables for you to hit that break even point after the first turnover. Restaurants or coffee shops can count on multiple turnovers even if they are lack of table space because people eat and leave quickly. However, if you are running a cafe, you tend to get lesser turnovers and its because students sit around your space with laptops, financial advisors talking to their clients, or people hanging around for an hour or so till their appointment or movie begins. But then again, it’s pretty pointless if you intend to get twice more tables if you cannot fill up most of them.

3.  Check the URA Master Plan

If you are expected to stay in the area for some time, do keep a check on the Urban Redevelopment Authority (URA) frequently for the neighbourhood you are working. The consequences of rezoning or redevelopment can have a drastic impact on an F&B outlet.

For example, considering what happens if most of your customers are from an industrial nearby and URA decides to tear it down next year. Even if there’s a replacement that can be meant two or three years without the bulk of your customer base.

As mentioned in Point 1, your target customers may move or migrate around if the area is redeveloped. If a small neighbourhood mall turns into a range of wine bars, the students who were the intended demographic may leave. What’s even worse is that the new F&B outlets provide competition for the new customer base. You can treat it like a football match: where players run to where the ball is going to and not to where it is right now. Besides, if you are doing well, you can still blame the referee for the unfairness. Thus, be agile and flexible of your business, you can open up the second branch.


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