Business plan for a cafeteria

It is difficult to define the concept of a cafeteria, since this type of establishment between bars and restaurants can be more similar to the former (focusing its services on the sale of coffee and drinks) or more like the latter, with practical food services, almost within the fast food sector, and sometimes without table service (with a buffet). Precisely for this example of a cafeteria business plan we are going to assume the case of a place that sells elaborated but simple food.

We recommend the reader to complete the reading of this article with the publications we made about the business plan of a restaurant or the business plan of a bar. If you want to know the difference between a bar, a cafeteria and a restaurant, I recommend you read this article that explains very well the different licenses and the associated requirements.

The business idea

We propose a cafeteria based on the concept of a buffet, but with control of the dishes consumed (it is not a free buffet). The clients enter with their trays in a closed circuit where they can choose different first, second, desserts and drinks, before passing by the cash desk and paying for their food before going to the table area to enjoy the meal.

It is a concept that can be considered as fast food, which allows users not to waste time and generally has an economic price. It is common in large companies or public places (hospitals, airports, highways).

What is the need for the business idea?

The crisis we experienced a few years ago has substantially reduced the purchasing power of consumers. Despite the subsequent economic recovery, an important part of consumers got used to looking for cheap alternatives to eat out.

On the other hand, there is a market of workers who look for variety in the dishes and speed of service, while having to pay for their meals every day is a major monthly expense.

Size of the sector

Because coffee shops often have a service offering halfway between the bar and the restaurant, it is difficult to find specific statistics on their turnover. However, they belong to the hotel industry, one of the main creators of jobs and wealth in Spain. According to the business organization Hostelería de España, bars, restaurants, cafeterias and pubs in our country employ 1.3 million people, contribute 5.5% of the GDP and have a turnover of around 99,000 million euros.

Location of the project

When considering a business plan for a coffee shop, the ideal is to look for a location near a large work center. For example, in the vicinity of industrial parks, shopping centers or business centers. It is necessary to take into account that the main clientele is the employee who does not have time to go home to eat and is looking for a cheap and varied place, so it cannot be located very far from those work centers.

Although there may be small cafeterias, in order to take advantage of economies of scale it is important to be able to count on a certain volume, which increases the importance of locating an area with a sufficient number of workers.

Promotion team

It is highly recommended that people who are going to run a project in the catering sector have the necessary experience. Although it may seem simple, there are important logistical and sanitary aspects, and it requires organization and know-how to guide a group of employees that is usually important.

In the case of a buffet system, the staff is smaller (no waiters), but a significant number of people are still needed for cooking, cleaning and checkouts.

Competence study

Competing with the concept of a buffet cafeteria for hard-working customers who have a small budget and little time are several important players.

  • In the industrial parks, there are usually large restaurants with tight menus, which vary their proposal every day and try to combine speed of service and treatment as at home. In principle the concept of the cafeteria should offer better prices (you can buy each of the dishes individually) and more variety.
  • In shopping centers, free buffets are common, as well as a large number of restaurants. In general, both the free buffet and the restaurant (chain or not) offer prices that are considerably higher than the proposed cafeteria concept.
  • It is necessary to count on the competition of the internal cafeterias of the big companies. They usually receive some kind of subsidy from the company so it is practically impossible to compete against them. If a major workplace has its own cafeteria, it is better to exclude its employees from the potential market.
  • It is quite common to find hamburger, sandwich or snack shops with very competitive prices. In this case, the concept of the cafeteria provides a greater variety and more balanced dishes for a not much higher price.
  • Other cafeterias could also be working in the area. For example, the Corte Inglés in some of its centers has a buffet service. In this case they would compete for price and some services.

Marketing and communication strategy

It is very important to take into account the marketing and communication strategy within the business plan for a coffee shop. That strategy varies a lot depending on the location of the center. If it is a cafeteria located inside a shopping center in a very visible area, most of the people in the place will notice its opening almost immediately (which does not mean that it is not advisable to advertise).

In the case of an industrial estate, it is very important to make a communication work with all the companies located in the industrial area, and also in other nearby estates. Many of the potential clients will have to take a car to go to lunch anyway, so for this purpose a distance of 2 or 5 kilometers matters relatively little.

For this type of business, the most profitable strategy is to get an agreement with a company for their employees to come to eat. You can lose a little margin (you have to negotiate prices), but in return you ensure a significant turnover. On the contrary, when the market study is done, it will be necessary to check that important companies do not already have long term commitments signed with competitors.