A tale of two cafes -
There was a cafe on a corner of Crown St is Surry Hills that was forever failing and changing hands. Me and my mates used to call it Death Corner, and thought it was simply on the wrong side of the street. Then a young couple and a friend of theirs bought it as a team, put in bifold windows, gave it a funky paint job, put on a snazzy fresh-ingredients menu and focussed on getting the coffee perfect. It boomed! 3 years later they sold it, and did the same to another and another and another in different parts of Sydney one year apart each, so they now control three properties (managing one cafe each). One simple formula and a lot of hard work has done the trick for them.
Another cafe in Surry Hills (about 200m away but not on Crown St) was a fish and chip shop for many years, trying to stay alive selling second-rate product to its increasingly affluent residents. It just struggled to stay alive for a few miserable years after we moved into the area. Then some Chinese bought it and introduced a totally frozen out-of-the-carton menu. Dead of course in 6 months. Then a dodgy falafel bar, predictably dead in 6 mths too, followed by an even more dodgy BBQ chicken bar, equally dead in a surpisingly long 6 mths. What they all had in common was trying to serve rubbish to a resident population that simply doesn't eat rubbish and can absolutely afford not to. Now the place has got newpaper on its windows again and some other poor mug is evidently about to give it a go. Good luck!
This tells me you need to know your market and serve exactly what it wants, at exactly the right price point, with exactly the right vibe. At least, in the more affluent markets. Personalities matter too, of course, but they're not enough on their own.
Tale of another 2 cafes
One was a fish n chip shop competing with a carvery (roast rolls and all that) a few doors down from one another. Both doing very well, profit for each after wages/rent about 250k pa. Down the street was an empty shop in prime location doing nothing.
Carvery owner wanted to sell up for about 250k goodwill. Carvery owner did not work the site, and had a manager/staff/point of sale system in place to stop most employee theft. New owner just had to pay the goodwill, keep an eye on it etc and break even in a year or so.
Fish n chip shop owners had the bright idea of buying the carvery, closing it down, expanding their premesis, and doing both carvery and fish n chips, because the covenants in that block of commercial property forbade another food store opening up - so they figured they could merge the businesses and save on managerial costs. Why they didn't just leave it there chipping away as it was, I'll never know.
Anyway they buy the carvery, merge the businesses, and then lo and behold, someone moves into the empty shopfront down the street (500m? not even?) and starts up a combination fish n chip chicken burger place serving large portions at decent prices ($9 for a giant burger sort of thing). Revenue from the original 2 businesses shrinks, while the new place has lunchtime lines snaking out the front door and around the corner - 5 serving staff jumping all over each other in a shop that cant be more than 25 square metres.
The original businesses start work at 5am and by the time they'er done, close up at about 10pm. The new shop starts work at about 7:30am and doors are shut at 5pm. They probably make a bit more than either of the original stores despite 25% reduced opening hours.
Equipment required for new shop:
one coolroom
2 bain maries
1 hotplate
one deep fryer
1 drinks fridge
one chicken rotisserie
2 cash registers
8 tables
30 chairs
total cost: 40k plus coolroom (they're hard to price. depends.)
Had a chat with the original business owners commenting on how well the new shop is going. Sour looks on their faces and their comment was "yeah, tried a burger there once - it was greasy. Nothing special."
I LOLed. Then his face went more sour. Then I LOLed harder. Then his face went even more sour. Then I felt bad
