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Many New Zealanders dream of opening a cafe and starting their own business in the food industry. Running a cafe can be extremely rewarding and give you the opportunity to become a fixture in your local community. However, due to a range of factors, it can be a difficult path to making your cafe business a success, particularly early in your business journey. The food industry in New Zealand is heavily regulated and competitive, and it can help to know what mistakes to avoid. This article sets out three mistakes to avoid: 

  • underestimating your competition; 
  • not prioritising your cafe brand or marketing; and 
  • forgetting your licencing obligations.

Underestimating the Competition

The same reasons why you wanted to start a cafe are why the competition in the cafe scene can be fierce. While it depends on your local community and where you specifically want to open the cafe, you will likely be up against several established competitors when you begin your new business. This is something to take seriously when planning out your business and what to do first. The worst mistake you could make is underestimating your competition and designing your cafe in isolation from what is happening in your vicinity. 

You are starting at a disadvantage as your competitor cafes have already built patronage and existing customer bases. To have a sustainable business, you will need to develop your own base of loyal customers who choose your cafe over those in your vicinity. To do this successfully, you should conduct research into your competition. You should have a sense of how many cafes are in your local area including:

  • what their likely target market is like; and 
  • how long they have been operating in the area. 

It can also help to get a sense of what they are offering in terms of food and drink and what they are charging. This should feed into what you are offering at your own cafe.

Not Making Your Cafe Brand a Priority

A common mistake is to assume that your cafe brand and reputation will build over time, organically. While this is true to some extent, you should absolutely make the building of your cafe brand a priority in the early days of your business. This is because you need to stand out from the crowd and give your new customers something to remember. Also, it will help spread the news of your new cafe to attract new customers. Some tips to help your cafe brand include:

  • having a strong social media presence from day one, ideally before opening the cafe; 
  • advertising to your local community, such as with signage or social media ads; and 
  • offering a discount or freebie to early customers to encourage them to get in early and spread the word.

Forgetting Your Ongoing Licencing Obligations

Another important mistake to avoid is forgetting about your ongoing licencing obligations when you are operating a cafe. You likely already know that you will need a food licence to serve food, an alcohol licence to serve alcohol on-licence, and so forth. However, remember that you need to keep these licences active. This involves ongoing obligations and fees to keep your licences and making sure you are clearly displaying them to give your customers confidence and keep the regulators happy.

Key Takeaways

It is not easy to be successful when opening a new cafe in New Zealand. This is partly due to the strong competition in the cafe industry and partly because it can be tricky to make any new business a success. A mistake to watch out for includes a failure to appreciate your competition and how they are operating. Being undercut by an existing cafe next door with an established customer base may be hard to recover from. It is also important to quickly build your cafe brand and reputation. Finally, make sure you remember to renew your licences and do what you need to continue operating legally! If you want to know more about starting a cafe in New Zealand and making it a success, contact LegalVision’s business lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Do you need to continually renew your licences to operate as a cafe in New Zealand?

Yes, you do. You will need to continually ensure your licence to sell food to the public is active and does not expire (the same is true for the other licences you require to operate). 

How do you get information about your competition as a cafe?

When opening a cafe, you can do some research yourself by looking up each competitor cafe online, seeing if they are part of a chain, and how long they have been active. You can also go to each cafe yourself to get a sense of hour busy they are in off-peak and peak hours, what their menu offerings are, and how much they are charging. 

How do you attract customers as a new cafe?

There is a range of tactics you can use to get attention and patronage as a new cafe. Brand and marketing are key to this. Make sure that you have a strong social media presence and consider advertising so that locals are aware of your new cafe. You can also offer discounts or freebies in your first week to help convince new customers to give your cafe a go. 

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