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Wednesday, April 7, 2010

the hidden costs of running a cafe in ireland!


Happy April everyone!!
I have been putting off writing this blog...due to me trying to work out the hidden costs of a cafe...ie: going through my bills, looking at a budget for this year..so for those of you who are interested in opening a cafe in Ireland, here is a little advice..that i wish someone had given to me.
1) make sure you have a very good accountant who understands the food service industry.
I went into my accountant before opening my business, and he never informed me about the 3 different VAT brackets for a cafe...so, now that i have a great woman doing my books for me, she is going through everything with a fine tooth comb, my VAT bill is going down! YAY...now i have had to pay her 4,000 euro to do that, so we will see how the savings work out..
2)with each employee you hire set aside at least 20 euro a week per person to pay into PRSI, you can take it out of their pay, but since i am small and have many staff coming and going i pay it for them...again i wish my accountant would have set up a better payroll system before i started my business..
3)insurance, we all need it and it is not really a hidden cost but an extra cost(which all of the above are really not hidden either, i just didn't know about them)...my insurance runs about 1,400 per year, that is also including my market insurance...
4)servicing your equipment! just paid 275 before i even opened the cafe to service my espresso machine...money well spent, it is extracting beautiful shots of espresso! however, sometimes you buy new equipment and it breaks after a year...ie: our pastry case in the old shop, 500 euro for a new motor...150 euro to have a guy come and look at a brand new ice machine that when plugged in did not produce ice, 500 euro spent in 2 years on our oven, due to a wire coming loose, so the temperature would not go up.....leaky plumbing or backed up plumbing, can average about 100-200 euro per year
5)money or goods given to charities.. we give out about 200 a year in goods and cash for local projects...
6)up-grading your kitchen...1000-3000 a year depending on the equipment you want to get...i would like to get a second oven with a 6 burner gas cooktop, even second hand they are 1,200.
we could also do with a small sheeter, now that we are baking croissants and making more puff pastry...but so far it has been manageable hand rolling...
7)paint, flowers, and general interior up keep, adding shelves, improving seating etc.,..1,000-1,500 per year depending on how much work you are doing..
8)staff outings, these have been curbed during the past few years...maybe 200 last year, but in the past could be 500 plus(that includes gifts etc.,)
9)opening parties or "thank you" parties for your customers...these little shin digs are two fold...last year in november we had an art exhibition that included our christmas catering menu...we had mini bites of all that was on the catering menu, so that our customers might like to use us for any extra catering for christmas..that took a bit of time and food, i reckon we spent including labour, 350-400 euro, not including booze..but we did get a good few christmas catering jobs out of it...but on average i would say you could budget about 200 extra a year...
10)rubbish collection...1000 a year
11)electricity...2,000-3,000 per year....gas bottles roughly 750 per year
12)advertising...500 plus a year
ok, this is depresing!!!!
There are more costs...but i won't go into these now...rent, labour, food costs...it all is out there..so the bottom line is...you had better be doing this job as a labour of love cos' you have got ALOT of bills to pay before you see the money hit your hand!!
Whew, with all of that talk about money I think in need a break...
I am going to have a glass of wine(maybe several) a hot shower and to bed with my hot boyfriend!
by for now....
Shannen

10 Comments:

At April 16, 2012 at 12:00 PM , Anonymous Anonymous said...

Thank you for your insight to what is involved in running a business. I am thinking of opening my own business, although a hair salon not a bakery! But this was very helpful, alot of hidden costs and so much to think about. Good luck, it sounds as though it has all been worth it for you!

 
At October 1, 2012 at 10:11 AM , Blogger Diva Boutique Bakery said...

Hi there! I have only just spotted this...I am happy that you found this useful..I am thinking of doing a "Hidden Costs Part2" there are a good few things that I have forgot to mention. It looks like this post is one of the most view, so maybe it might be useful to people..! :-)

 
At December 23, 2012 at 8:37 AM , Anonymous Anonymous said...

Hi there,
Thanks for this, it is really usefull. We are looking into setting up a coffee shop and currently preparing our Business Plan. We don't want to talk to local owners of similar outlets due to conflict in interests etc. Don't worry we are looking at North Ireland for our proposed coffee shop. Any further advice would be greatly received.

 
At February 8, 2013 at 5:13 PM , Anonymous Anonymous said...

Looking forward to Hidden Costs Part 2!

 
At March 12, 2013 at 3:38 AM , Blogger Diva Boutique Bakery said...

hi there!! i am so sorry...i only just saw this...i will be posting a Hidden Costs Part 2 soon...This post is one of the most viewed posts!! Crazy! i have learned a lot in the last few years since i wrote this... Good Luck with your new venture...It really is a fun business to work in :)

 
At March 12, 2013 at 3:40 AM , Blogger Diva Boutique Bakery said...

Hi..thanks for the Comment...sorry for the delay in my response... Like I said to the previous post, I will be writing another Hidden Costs post soon :)

 
At March 18, 2013 at 3:45 PM , Anonymous Anonymous said...

thanks for all the advice on this blog and looking forward to part 2

 
At April 9, 2013 at 5:54 AM , Anonymous Anonymous said...

Wow, I am looking at setting up a cafe in my village, but had no idea of the hidden costs, this is very useful. I start my SYOB course tonight and look forward to seeing your part 2 also.

 
At April 22, 2013 at 11:05 AM , Anonymous Anonymous said...

This is really benneficial. There is nothing out there telling potential start-up's what the actual costs are in setting up a business. Bring on Part 2!

 
At June 12, 2013 at 3:09 PM , Anonymous Anonymous said...

Hi Diva,
I am really glad that you wrote that. I`ve always dreamt to open my own café and I really would appreciate if we could talk more about it. I have no idea how to start a business, all what I know is cooking and I am really passionate about food. Cant wait for part 2.
If you are interested in help me more my email is tatyrosa3@hotmail.com

thanks again
Taty

 

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