How to Run a Successful Cafe in Toronto
Two years and three months.
That’s about how long it would take you to visit all 1680 (and counting) of Toronto’s cafes—assuming you visited two new Toronto cafes every single day. Needless to say, the cafe scene in Toronto is saturated.
All the more reason to determine—as a restaurateur—what makes the best cafes truly stand out and how can you use that to your benefit?
The answer is that it’s a complex set of factors, but it’s not rocket science. To rank at the top of this bustling market, you need to understand what makes the best spots shine for guests. A few key questions to consider:
How do I even begin thinking about opening and running a cafe in Toronto?
What does a high-quality loyalty program look like for a top-notch Toronto coffee shop?
How should cafe owners handle their vendors—specifically how many should they have and when should they switch?
What’s a good way to think about how to structure the menu in a great Toronto cafe?
Lastly, and perhaps most importantly, what type of community are you building for and with your guests?
We walk your through all of these factors and much more below. Take a peek:
Get prepared to run your cafe in Toronto
First, it’s important to get your ducks in a row.
The initial steps involve a good bit of learning and make smart choices that set your Toronto cafe on a path toward profitability. You’ll need to study hard, choose a coffee source wisely, and surround yourself with the best team possible.
Learn the industry
As with most big ventures, do your homework first.
Check out local Toronto coffee shops
Hit the streets and check out as many Toronto cafes as you can (maybe even all 1,680). Sip the varieties of coffee that they offer. Get a strong sense of the differences in quality, style, and taste that are out there in the wide world of coffee. Same goes for teas and other products you’ll have on offer.
Expect your guests to come with lots of questions about everything coffee and tea-related. They will see you as the expert whether you’re ready or not, so be ready. Show them that you’ve earned the right to arm them with caffeine on a daily basis.
Think about the vibe you want to create in your Toronto coffee shop
Consider the relationship different cafes have with their guests. Coffee shops like Fahrenheit make a point to know everyone who comes through the door. They learn all of their names. You walk into Fahrenheit as a stranger and you’re welcomed with high energy, good conversation, and you’re surrounded by other guests who feel the same.
Compare this experience with a cafe like Starbucks where most guests stop by for a quick grab-and-go coffee, there are fewer one-on-one connections, and people are hunkered down studying or working more so than chatting with friends.
Shape the space in your Toronto cafe to the match the vibe you want
Lastly, consider the look and feel of your coffee shop. What do you like or dislike from the cafes you have visited? How do they use their space to attract the right type of guest they’re looking for (grab-and-go vs. sit-and-stay)? Shopping around local Toronto cafes and answering this question for yourself as you will help you get prepared as you learn the industry.
Select a solid coffee source
We sat down with Alfonso Tupaz, Founder of Hatch Coffee to learn more about important considerations for restaurants when selecting the right coffee partner. According to Alfonso, in specialty coffee, it’s important to find a roaster that is:
Coffee is in hospitality, and so we should expect great service at every level of the value chain. Every buyer has their preference for interaction with a supplier. But with coffee, it's great to have that personal connection with your suppliers. For cafes and roasters, be sure to visit the roastery and get a feel for the operation.
Plugged into the community
Your roaster should understand the industry landscape. They should be able to advise on the market and help you with your marketing efforts on a (hyper-)local basis. Your roaster should also know global trends and how that may affect you or your guests.
Passionate about coffee
They should be excited to share that passion and know-how with your team. By definition, they'll know a lot about coffee, be open, and will come with extensive knowledge. Some roasters will assist with cafe setup, from design to equipment installation.
Running a shop is not just about selling coffee. There's everything else around preparing a cup, such as the cup itself, and many other sundry items. There's supply of syrups, and alternative milks. Even lunch napkins. Find a roaster that is able to assist with sourcing these items - they may not sell them directly to your shop, but it's great if they can help in sourcing (especially if they have this service already running for several of their clientele).
A coffee expert
Coffee selection may be the most important in selecting the right roaster for your cafe. It's the primary ingredient in your core beverage offering. You have to like it. Actually, you have to love it. Because if you love it, then your love for your product will show. It's important to understand that not everyone has the same tastes for coffee. So be clear in what you like, and what you want to offer - not what others think you should offer. Your roaster should be able to help you select the best beans for your shop and provide you with the knowledge and tools to do so yourself.
For example, Hatch Coffee offers free Masterclasses for cafe owners (or would-be owners) about the non-glamorous side of running a shop. You can check out their classes here.
Looking at these varied criteria will help you determine the best choice for your Toronto cafe.
If you’re going the independent route, look for a steady source of top-quality coffee beans that offers a simple arrangement that doesn’t take up a lot of your time. You can also build community with other cafe owners who can support you on issues of maintenance, staff training, and support. Creating economies of scale like this saves you time, money, and stress.
Hire the right baristas
We all know the stereotype of the brooding barista with the bad attitude who serves up an electric cup of Joe.
Time to let go of that.
Hire for attitude, train for skills. It really is that simple.
Remember that your guests would much rather get their morning cup handed to them by with a friendly smile (rather than an off-putting scowl). They will remember both how the coffee tastes and how they were made to feel when they received it.
You can always figure out a way to get experienced baristas in the door (on loan from another cafe owner even) to train your team. Teaching someone good manners is another matter entirely
Pick a good name
If you drink coffee in Toronto, you've probably heard of or been to local coffee spots like Jimmy's, Pilot or Dark Horse Espresso Bar. Each cafe has their own brand and personality that they've built around their name. You should do the same.
Pick a name that conveys the environment and atmosphere you are striving to create. Perhaps reference the neighborhood you’re in—people have a lot of pride in where they live and work and will likely appreciate that. Choose something unique to your personality as a cafe owner.
If you choose a meaningful name that captures the essence of your caffeine outpost and take it seriously, your guests will too.
2. Run a Strong Guest Loyalty Program
Offering up the best coffee in Toronto? Did local college students vote your cafe the best coffee shop to study in Toronto? Got great reviews on your team’s customer service skills?
That won’t cut it.
In a tight market like cafes in Toronto, you’ll want to offer your guests a strong loyalty program to reward them for walking through your door everyday. There are a number of ways to do it:
Pick a system for your customer loyalty program
Loyalty programs are not one-size-fits-all solutions for cafes. They shouldn’t be. Here you’ve got a few options:
Visit-based: Emphasizes the frequency that guests visit your cafe
Product-based: Focused on the number of items guests purchase
Cashback-based: Offers rewards for guests with each purchase
Points-based: Allows guests to accrue points based on each purchase
Also think about your guests and what they’re more likely to embrace when it comes to your loyalty program. Do you seem them carrying around punch cards in their wallets? Would it be better to link it to your point-of-sale (POS) system? Are they more motivated by gaining tangible benefits over time?
Feel free to test out different approaches and ask your guests directly to help shape your loyalty program.
Choose rewards that keep guests engaged
Here’s a chance to really hone in on your guests and personalize. While most loyalty programs offer customers a basic cup of coffee on their tenth purchase, is that what will truly entice every guest to keep coming back to your Toronto cafe?
Let’s look at few examples to illustrate the point:
Free Mugs/Cups: For the guest with the well-used recyclable mug, offer them a new one with your branding on it on their 25th purchase.
Bag of Coffee Beans: If you notice a guest really enjoys a particular roast in-house, offer them a free bag to go as part of your rewards program.
Apparel/Swag: Have a guest who always walks in wearing clever t-shirts? Offer them a free shirt with your brand on it.
Rewards for guest loyalty should truly be rewards--something valuable and useful to that particular guest. If you arm yourself with a good system to track guest loyalty and a solid menu of different reward options, you’ll be able to personalize and truly enrich each guest’s experience.
Keep them loyal by noticing them and acting on it.
Set up different tiers for different guests
It’s important to remember that different guests fall into different categories in terms of how they engage with your Toronto cafe. They generally will fall into three tiers:
The Regulars: They’re in your cafe everyday and spend significantly more.
The Casual Guest: They stop by often but do not purchase a great deal.
The Passersby: They’re walking by, like what they see, and stop in for the first time.
Each generalized groups demands a different treatment when it comes to your loyalty program. For your regulars, consider offering higher value rewards that are more personalized (as discussed above) to keep them engaged. For your casual guests, offer them things that they both need and are able to redeem in fewer visits like a coffee size upgrade or a few snacks.
For guests just passing by, reward them for making their very first visit with something memorable that will keep them coming back such as a free drink on their second visit or a free pastry on their third visit. Focus on escalating the rewards with this group in ways that keep them interested in what your Toronto-based cafe has to offer, again and again.
3. Find a Great Vendor
Want to be known for serving up the best latte in Toronto?
One place to start on that journey is with your vendor. While each cafe is different and requires different levels and types of support from coffee vendors, each vendor is unique as well. Here are some of the support services a typical vendor might offer:
Advice on cafe location
After-hours and/or weekend supply orders
Cross-promotion of events
Maintenance for equipment and supplies
Menu and drink development
Support with fundraising for a new cafe
Training for baristas
Think long and hard about what types of services you require while running your cafe and select your vendor accordingly. Consider joining a trusted network of suppliers so that you’re not relying on just one vendor for your whole operation.
4. Set a High-Quality, Yet Simple Menu
It’s one of the biggest jokes in the coffee industry: all of those complex names for drinks!
Part of that comes straight from a diverse, global coffee culture that inherits many of its names from locales around the world. It’s easy for cafe owners to get caught up in this and try to satisfy every guest when setting the menu.
In this case, be the opposite of Nike: Just don’t do it.
You’ll confuse guests and stretch your staff unnecessarily thin. Just remember, every highly-specialized drinks comes with its own supply and training costs. When you eventually do pull it from the menu, you’ll receive inevitable complaints from guests that loved that particular beverage. Save yourself the trouble and put together a great menu, and stick to it. That doesn’t mean you shouldn’t introduce a special once in a while.
Here’s a helpful way to think about the criteria for a great cafe menu:
Considering how these factors apply to your unique brand in your Toronto cafe will set you up for success when it comes your menu.
Once the menu is set, think about how you’re serving up your coffee (Third Wave Style perhaps?) and what that means for your menu on a regular basis. You’ll want to play with the ways in which you:
Keep your coffee selection current
Leverage seasonality in your drink offerings
Link coffee selections to drink specials
Monitor your progress (keep tabs on what’s selling and what’s not, and why)
Keeping the menu high-quality yet flexible to your guest’s preferences, buying habits, and the seasons will make a huge difference when it comes to your cafe’s bottom line.
5. Cultivate a Strong Community
Like any place where people gather to eat and drink, your cafe is (or will be) a community.
Cafes often put a heavy focus on building meaningful relationships with their guests to keep them coming back because the market is saturated. And remember, for many of your guests, it’s their very first stop of the day. Going into the cafe business with clear eyes about they type of community you want to cultivate is important to the success of your brand.
A few tips on how to build a strong community within your cafe:
Get familiar with your customers names and orders (see above re: customer loyalty programs)
Develop an enjoyable “third space” where people feel comfortable working, talking, and generally relaxing for significant periods of time
Don’t restrict perks like wifi or charging points along the walls
Have a calendar or bulletin board for community events and flyers
Sponsor local charities (offer one night each month to dedicate a portion of the profits)
Run fun barista classes for guests looking to learn more about the beans they’re consuming and how their drink is made. Fahrenheit Coffee is a great example of a shop that does this well!
These little flourishes will make a big difference and keep your guests coming because of how your cafe makes them feel. With time, you’ll create a diverse community sharing in its collective love for your coffee and the space you’ve created.
That’s the dream of every cafe owner in Toronto.
You can do it. Take a sip and keep at it!