How to start up a Vegan Café
How to Start Up a Vegan Café
Veganism is getting very popular. In fact, we’re well past the point where that’s an insightful statement. Whether you’ve flirted with Veganuary or been on a plant-based diet since Woodstock, one fact remains. We rarely find as many vegan dining options as we do conventional ones. If your eyes light up at the sight of a vegan buffet, that’s exactly our point.
In this article, we’ll look at the why, how, and what of starting up your own vegan cafe, a la Simon Sinek’s Golden Circle for inspired businesses. We’ll even mentally test your mettle with some useful business frameworks, so you can see if you’re ready to go from diner to entrepreneur.
Why Start Up a Vegan Café?
Most start-ups that fail, do so because they don’t address a real market need. Every business deserves to be born out of a powerful “Why” that keeps you going through the hard times as well as the good. Putting those two compelling info-nuggets together, your hard-hitting “why” becomes demand. That demand may be:
⦁ Old-fashioned needs-based. There might simply be a large, long-term vegan populace somewhere who are sick to the teeth of Linda McCartney and have no other option—but it’s unlikely. In this case, though, you would have a first-mover advantage.
⦁ Tourism-based. You might see ripe opportunity in a holiday area where every other cafe looks the same: “Smoky Joe’s fish and chips”, “John’s Best cod and fish”, or some variant of the same. People go on holiday for something new, and you could be that welcome break from the status quo.
⦁ Choice. If you’ve got a sharp eye, you may see demand even where you’re not going to be the first vegan cafe around. For example, you might see sufficient market potential for more than one (vegan cafe) in an area with high foot traffic, a demographic with (at least some) disposable income, and where consumer trends seem to have some sway. In this case, you’ll have to be the best, or at least have an appealing angle.
⦁ Passion. Last, but not least, you may simply be incredibly passionate about the vegan lifestyle. This is not a demand- or market-needs based reason, but people like you (and Elon Musk) often have a ‘something’ that most of us aren’t familiar with. And what would the world be like if we all went for the low-hanging fruit?
Whatever it is, begin with some solid market research. While your friends at the pub may “love your idea, mate”, a solid basis for your venture will be based on facts.
What facts do I need?
I’m going to come clean here – you might want to whip out some business frameworks. We can’t do a feasibility study for the area you’ve got your eye on, but a few tools that can help you are:
⦁ A PESTEL analysis. PESTEL looks at the political, economic, social, technological, environmental, and legal factors that can impact your strategy. Is legislation likely to change any time soon? Will your potential supply chains be impacted by the changing economy? Is a nuclear reactor opening soon where you’d like to start?
⦁ An industry analysis. Look at how competitive the market is in your area, and think about a few things. Consider existing cafes and potential substitutes, fruit and veggie suppliers, customers, and how they each have an impact on the rivalry where you want to open. Are you competing against Quorn itself, with all its established procurement networks? Or, is Organic Farmer Edith your biggest rival? Could Edith even join forces with you as a supplier? Don’t be afraid to think outside the box!
⦁ A SWOT analysis. Really assess your idea and what you bring to the table. One example strength is that compared to meat products, plant-based ingredients can be cheaper. One weakness is that they tend to be best served fresh, so think storage. You may have incredible ⦁ digital marketing prowess that other businesses nearby simply aren’t leveraging (strength) and see a chance to pull in millennial traffic (opportunity). Or, the commercial rent in your ‘hood may be going up (threat).
Try to get others’ opinions as much as possible while you’re looking at these facts because, at the end of the day, you’re a human being who wants to create value for other human beings. Right?
How To Open a Vegan Café
Before we get closer to the brass tacks, we at FindMeAStartUp have a confession—one of us has actually already looked into this idea and done a preliminary analysis. Using all the frameworks above and then some, and using the Bristol Urban Area as a potential location. Here’s a recap of what we found:
⦁ First, you’re not just competing against other cafes any longer. Mintel research on 2019 consumer trends shows that as a vegan cafe, you’ll also be competing against what we call ‘the rise of elevated convenience’. In essence, prepared, take-home supermarket meals that are taken up several notches from your average frozen pie.
⦁ So, supermarkets are also (clearly) tapping into the vegan trend in a big way. Don’t underestimate their potential to churn out affordable, vegan cuisine that people don’t have to ‘fork out’ for—frozen or prepared in-store. Morrison’s, we’re keeping a close eye on your wonky fruit shenanigans.
⦁ On the bright side, this does present you with angles they’ll be unlikely to pursue. To compete on price, you might want to come up with your own way of keeping costs down—what about a buffet-style lunch or dinner? Or, what about ‘seriously’ local veggies (i.e. grow them yourself or hit up Edith?) What about angling for ambience, providing board games, Wi-Fi, or a sense of community?
If you’re a long-time vegan, you probably already have a sense of what really appeals to you. If not, the chart below shows the main reasons why people either want to cut down on meat or go totally plant-based (from the BBC here).
Just from glancing at that, you’ll be able to see how your target market might respond positively to different things. Then, put yourself in your consumers’ non-leather shoes.
⦁ Does your buyer persona see their ideal self as a healthy, happy, ‘less-meat-eating’ person? How can you create those good vibes for them?
⦁ Are they driven by a growing consumer trend toward environmentally sustainable living? If it’s the latter, they’ll adore that you have Organic Edith in your supply chain.
⦁ Are they simply after the most delicious vegan food ever? Or a family dining experience?
How to Start Up a Vegan Cafe: What You’ll Need
The proverbial brass tacks, then. In descending order of magnitude—at least for the first few—here are the main expenses you’ll need to consider:
⦁ Staff – in our (aforementioned) preliminary analyses, staff costs outweighed everything else—and we mean everything else—by a long shot. With minimum living wages now around the £9 mark, you’ll need to factor in your chef(s), barista, serving staff, cleaning staff, and any extras like delivery drivers. If you’re going to be serving lots of fresh and potentially raw vegan food then your staff may require extra training on hygiene standards and regulatory compliance.
⦁ Fresh food and staples – given that you’re a vegan cafe, a large proportion of the former will require refrigeration, so sufficient space is a must. Staples (think rice, pasta, sauces) are most cost-efficient when bought in bulk, so think about that too, space-wise. Any vegan will know that coconut, rice, and nut milk are disproportionately expensive compared to traditional dairy, so just a heads up for non-vegans.
⦁ Premises – depending on where you choose to start up a vegan cafe, these will have a small, medium, or huge impact on your continued outgoing costs. If you decide to buy a property(!) this will be a significant start-up cost, but even if you decide to rent, you will likely need at least a few months deposit.
⦁ Gas, electricity, and water – as we’ve seen in our ‘How to Start Up a Bakery Business’ article, these can add up quite significantly. But again, this will be determined by your menu and how much raw or fresh food you plan to serve. If you’re going to prep fancy things to wow your guests, consider a freezer and the costs of running that 24/7.
⦁ Marketing – if you’re savvy, this will be something relevant to your proposed value. Should you want to target millennials, you might be predominantly digital and this can be good for keeping costs relatively low. If you’re planning big billboards on the M25, you must already have lots of money—in that case, you don’t need this article because you already have several full-time business advisors.
⦁ Licensing and Insurance – Public liability insurance and VAT considerations are a must, and product liability insurance is strongly recommended. You can read about these in most of our other articles (like How to Start Up a Coffee Shop), so we won’t rehash them here. If you’re starting up a business for the very first time, you might want to get advice from an accountant about tax requirements and the precise registration kerfuffle (sole trading, limited liability, or partnerships).
It goes without saying, but break your costs down into your initial investments and your overheads. This will help you decide whether you need outside help (probably) to get off the ground, and how big a financial buffer you will need.
So…Can I Start Now?
Pretty much, mate. But no—not really, because here at FindMeAStartUp, we only give overviews of what you might want to consider.
You will also need an excellent menu and the mental stamina of an entrepreneur. You’ll need the ability to pick yourself up when you make mistakes, and the courage to pivot or exit when circumstances dictate. You will need a sweet business name that hasn’t already been registered, and you will need…customers. Don’t expect to break even for months, or even a couple of years, but when you do start up, please let us know. We will be there with bells on to try out your food.