A café, whether it is in the heart of bohemian Soho or in the in the East End, is for many people the perfect distillation of what they are looking for in a business.
It could be a greasy spoon, a café restaurant, a coffee specialist, a tea room or a café bar, depending on the sort of market you are aiming for.
While cafes are no longer associated exclusively with cheap, traditional English food and continental-style cafes with outside seating and a range of coffees have proliferated, traditional businesses are still going strong and represent the mainstay of the market in working class areas.
Greasy spoons still popular
Tony Franklin, regional director of Redwoods, explains:
"People often say that fish and chip shops and 'greasy spoons' are on the way out. They are not as far as I'm concerned – 'Greasy spoons' are as popular as ever.
Selling food is wise
Another traditional type of cafe, tea rooms, can be found in market towns, where tourists flock to anywhere they consider quintessentially English and which tend to have a slightly older population than elsewhere. You might expect anything attracting American tourists to be extremely lucrative, but not necessarily.
They are "generally the easiest to sell,” says Franklin, “although they are the least profitable. A lot of people just go in for a cup of tea and a cake, whereas it's easier to make money if you are selling eggs, chips and the works.
“It's a good idea to sell food, and not just have people sipping drinks.”
Tea Rooms, after all, have such a leisurely atmosphere and people can sit for a long time with one drink.
Nevertheless, Franklin thinks in the right location a tea room can be lucrative. A tea room in rural Norfolk might struggle, whereas one in Stratford-upon-Avon would be "an absolute goldmine”.
For the latter, however, trade will fluctuate according to season. Tourist hotspots such as Cornwall might thrive in the summer, but resorts such as St Ives can become ghost towns come the winter months.
Specialist coffee shops work best in city centre locations and affluent areas, although be prepared for much heftier leases than elsewhere.
If you’re café is located in a prime town location, a student or young professional area or even near to a shift-working factory, then providing food in the evening could be a good idea. As always, it is important to tailor your menu to the market – there is no point in offering ciabattas if your customers want fry-ups.
Fitful hours
But don’t just think about your customers – think about your own lifestyle. You have to be prepared to work weekends for a start.
If you prefer to get up early and have your evenings free then a café specialising in breakfast might suit you. Deciding to open for evening meals – which is when a drinks licence could be a definite bonus – means long days.
Some operations could open at 7am and run until three or four in the afternoon, and then open later in the evening for a second shift. The exact times you open will depend on your area and when demand peaks. Such fitful hours, leave you with in limbo midday and means work consumes your morning and evening. Having enough staff to alleviate this burden is affordable to few.
"If you want to employ someone to cook for you, that will immediately cut into your profit margins," says Franklin.
And if you are pitching for the top end of the market, he adds, experienced catering staff can be difficult to get.
So why, given the stresses of the job, would you choose to do it?
Firstly, it can be surprisingly lucrative.
Franklin gives the example of a café on the north Norfolk coast that provides food throughout the day. The leasehold is valued at around £100k, but the business, which is just a husband and wife operation, makes a net profit of £70k per annum.
Of course, not all cafés will be as streamlined or as popular as this, but it does give you an idea of what can be achieved given the right location and requisite energy levels.
Paradoxically though, it may sometimes be more difficult to sell businesses that are performing well. There is a severe lack of freeholds in the sector and many prospective owners balk at the idea of paying over £100k for a lease, particularly if half of that has to be available up front.
This is especially a problem when leases in more popular locations can be worth several times this – even though, given the right market, there is serious money to be made. This is particularly true if you can turn around an underperforming business. But bear in mind that extra investment in equipment and decoration may be necessary.
One of the main reasons people want to run this type of business is the chance to meet different people every day. As Franklin says, "You have got to be a sociable person. If you don't like people, there isn't much reason to do it."
