How to Increase the Value of Your Cafe
Are You Building an Asset or a Job That You Can’t Sell?
If your cafe relies 100% on you being there to open the doors, pour the shots, and cash up the till, you haven’t built a business—you’ve built a high-stress job that most people won’t want to buy.
To increase the value of your venue (whether you plan to sell it one day or just want a life outside of work), you need to prove two things: Profitability and Sustainability.
Based on deep industry insights, here are nine strategies to move from “operator” to “owner” and maximise your business value.
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- Systematise or Struggle (The Power of SOPs)
👑 Value is about reducing risk for the next owner. If the business operations and processes are entirely in your head, the perception of value will be lower to buyers. You also have to ask yourself what would happen to the business and those who depend on you if you were unable to work for some reason.
- Create Standard Operating Procedures (SOPs): You need written systems for everything—from opening/closing checklists to station prep. This allows the business to function without your constant supervision.
- Document Recruitment & Training: Show that existing and new team members can be trained and managed by a system, not just by your personal oversight. This proves the business is a self-sustaining machine.
- Engineer Your Menu for Profit (Not Just Taste)
🍔 A menu isn’t just a list of items; it’s a sales tool.
- The Matrix: Analyse your items. Identify your “Stars” (high profit, high popularity) and kill your “Duds” (low profit, low popularity).
- Psychology Matters: Customers spend about 3 minutes scanning a menu. Use visual “eye magnets” (like boxes or icons) to highlight high-margin items. This simple trick can boost sales of those items by up to 30%.
- Ditch the Duds: If a dish is expensive to make and nobody orders it, it’s just clutter. Remove it so guests focus on your profitable “Stars.”
- Turn Every Inch into Income
💸 Rent is a fixed cost. Make every square meter pay its way.
- Retail is Essential: Don’t let customers leave empty-handed. Set up a retail shelf for beans, brewing gear, and merch.
- Bundle Up: Increase the average transaction by bundling retail items—like a bag of beans paired with a reusable cup.
- After-Hours Potential: Can your “Third Place” host cuppings, classes, or community events in the evening? An empty shop generates zero revenue.
- Attack Your Cost Controls
📉 Increasing sales is hard; cutting waste is immediate profit.
- Manage the Milk: With rising dairy costs, waste here is deadly. Train staff to steam only what is needed and use waste calculators to track every drop.
- Portion Control: Inconsistent portion sizes kill margins. Ensure the kitchen is weighing and measuring so that costs remain predictable.
- Inventory Logic: strict “First-In, First-Out” (FIFO) protocols prevent spoilage and money ending up in the bin.
- Create a “Signature” Differentiation
✨ Why should people choose you over the shop down the street?
- Premium Products: Don’t be afraid of premium pricing if you offer a premium product. Customers are willing to pay for unique, well-executed signature offerings that they can’t get elsewhere. Sell on service and quality, not on price.
- Personalisation: In an AI-driven automated world, personal connection is a competitive advantage. Train staff to engage, not just transact.
- Own Your Data (Loyalty 2.0)
📱 A loyal customer is worth far more than a new one.
- Focus on Retention: Increasing customer retention by just 5% can boost lifetime value by 25% to 95%.
- Go Digital: Paper punch cards don’t give you data. Use digital loyalty programs to capture emails and phone numbers. This lets you market directly to your customers (e.g., “We miss you” offers) rather than hoping they walk by.
- Secure Your Lease (The Hidden Value Killer)
🏢 You can have the best coffee in the world, but a bad lease makes your devalues your business.
- Longevity: A long lease with renewal options gives a potential buyer security.
- The Red Flags: Watch out for “demolition clauses” or unreasonable make-good terms. These increase risk and instantly lower your valuation.
Read more about What to look for in your lease when Selling your Business here:
https://www.gsehospitalitybrokers.com.au/what-to-look-for-in-your-lease-when-selling-your-business/
- Improve the Bottom Line
It seems obvious to mention this but we often see businesses that have the opportunity to increase profit without making too many changes.
It’s tough when you get into the mindset of selling to stay focused on profit but a few small changes can often have an impact on the bottom line that can help to increase the value and saleability of the café.
Start with your biggest impact areas:
- Wage costs – How is your wage cost percentage? Are there ways that you can tighten the rosters and save a few dollars here and there?
- Can you cut back on a few casual hours?
- Food costs – How is your Gross Profit percentage?
Along with wage costs, supplier expenses are another major weekly outgoing for cafes and often an area to make quick improvements.
- How does your gross margin compare to the industry average?
- Are you confident that you have the best deal possible from your suppliers or can you negotiate a further discount?
- Are you monitoring the food waste and stock control?
- Are you confident that the margins are right for all of your dishes? When was the last time you checked?
Why Bother?
If your café is taking $10,000 per week and the food costs are 38% a reduction of just 2% could result in an extra $10,400 in annual profit, which will in turn increase the value business, lower the risk and make you a few extra $$ whilst the business is on the market.
Use this simple KPI tracker to monitor your key metrics:
https://www.gsehospitalitybrokers.com.au/cafe-kpi-tracker/
- Drive the Top Line
One of the key metrics that buyers look at are the weekly sales of the café, it therefore makes sense to make sure you are doing all you can to maximise these, right? You would be surprised how many businesses I see that have stopped driving sales because they are on the market or the owner is thinking of selling.
Many buyers will see the lack of marketing such as social media posts, new menus and promotions as a sign that the owner has given up or is too busy with other commitments.
When I was buying cafes I was always pleased to see a neglected Facebook page or Instagram account as this signalled that I was more likely to get a deal.
Try and keep running the business like you just started it, keep the social media up to date and keep working on ways to bring in more business.
Focus on the only three ways to grow the business:
- Get more customers (advertising, social media etc)
- Sell more to your customers (would you like fries with that?)
- Sell more often to your customers (loyalty programs etc)
If you combine the impact of improving the margins mentioned above (wages and food cost) with an improved top line the impact can be very beneficial.
The value of the café is ultimately going to be determined by the net profit, so the more you can do to improve the bottom line the higher the potential value will be.
The Bottom Line: To increase the value of your cafe, you must build a machine that generates cash flow without you needing to be the engine every single day.
I hope this post has given you a few ideas about how you can increase the value of your cafe, if you need any help feel free to reach out to me directly p.leach@gsebrokers.com.au
