By Mahalia Layzell, coffee roaster, 20+ years' experience. Updated October 2026.

I was very young when I opened our first café, the Wild Mulberry. I made plenty of mistakes. Two of them cost me the most.

We undercharged for our food. And we never put enough aside to pay ourselves superannuation. Our staff got theirs, as they should. We didn't.

Since then, we've supplied hundreds of cafés across Australia. I've watched some open with huge energy and close quietly a year later. I've watched others become institutions that define their towns. Most of the cafés I've seen close didn't fail because of bad coffee. They closed because the owner burnt out, didn't train their staff, or never properly costed their menu.

Here's what I'd tell anyone opening a café today.

Before you sign anything

Location: fit matters more than foot traffic

High foot traffic helps, but it isn't the whole story. Some of the most successful cafés we supply are in regional towns or tucked-away streets. They succeed because they've built a reputation strong enough that people seek them out. Look at demographics, competition, parking, and whether the space fits your concept.

The lease

The lease is often the most expensive mistake a new owner makes. Before you sign, negotiate:

  • A rent-free period to cover your fit-out, so you're not paying rent before you can trade
  • The term and renewal options, so you can stay long enough to recover your fit-out costs
  • The "make good" clause, which can require you to strip out your fit-out at your own cost when you leave
  • Rent reviews, so you know how and when the rent can rise

Have a lawyer review the lease before you sign. It's money well spent.

A cash buffer, and a plan for the quiet season

Many cafés run out of money before they run out of customers. Set aside three to six months of running costs before you open. It takes time to build a regular trade, and things always cost more than planned.

In a seasonal town, plan for winter from day one. Bank part of your summer takings to carry you through the quiet months, and set your staffing and opening hours around a realistic year, not your best week.

Before you open

Plan your workflow

Walk through a full day in your head, from unlocking the door to the last coffee out. Where does each person stand? Where does the milk live? How far does the barista walk to reach the cups?

The most common fit-out mistakes I see:

  • Not enough room behind the coffee machine
  • Too little refrigeration within reach of the barista
  • Poor bench space and awkward workflow
  • No allowance for growth. What works at 50 coffees a day falls apart at 300.

It's far cheaper to fix on paper than after the builders have gone.

Staff for your floor size

New owners almost always underestimate how many staff they need. A bigger floor means more tables to clear, more orders to take and more distance to cover. Plan your roster around your busiest hour, not your average one.

Equipment: buy, lease or roaster-supplied?

  • Buying costs the most upfront, but you own it and you're free to choose any supplier.
  • Leasing spreads the cost, but you'll usually pay more over the full term.
  • Roaster-supplied machines save money upfront, but they nearly always come with an exclusivity contract and minimum volumes. Read the fine print, and know what it costs to leave.

Whichever you choose, buy for your peak, not your average. Make sure you have enough group heads and steam capacity for your busiest hour.

Water quality

Most café owners overlook water, yet coffee is mostly water: around 90% of an espresso and about 98% of a filter coffee. Poor water means poor coffee, and hard water scales up your machine. Invest in proper filtration and change the filters on schedule. Our maintenance guide has the details.

Compliance

Before you serve your first customer:

  • Register your food business with your local council.
  • Appoint a certified Food Safety Supervisor. Under national Food Safety Standard 3.2.2A, in force since December 2023, most cafés must have one, and all food handlers need food safety training.
  • Check your permits: outdoor dining, signage and, if you plan to serve alcohol, a liquor licence.

Your local council is the best first call. Requirements vary between states and councils.

Insurance

At a minimum, look at public liability, business contents and equipment breakdown cover. Your lease will often specify the public liability cover you must hold. A breakdown policy can be the difference between a bad day and a bad month when the espresso machine dies.

Cost your menu line by line

Every item on your menu needs to be costed, ingredient by ingredient. Then shop around and secure the best price for the best product from your suppliers. Cheapest isn't always best, but neither is overpaying.

And don't undercharge. Value your skills. If your food is good, charge for it. Learn from my Wild Mulberry mistake.

For coffee, our guide to pricing your café's coffee menu walks through the numbers.

Control your digital narrative

Hospitality people live in the present and the physical. That's what makes them good at it. But they often forget that new customers find them online first.

In a tourist town especially, most visitors find you through Google Maps, reviews and Instagram before they ever walk past your door. Control the narrative:

  • Keep your Google Business Profile accurate: hours, photos and menu
  • Respond to reviews, the good and the bad
  • Post regularly, showing your food, your coffee and your people

If your online opening hours are wrong, you've lost the customer before they've arrived.

Run a soft opening

Before your official launch, open quietly for a few days to friends, family and locals. Your team gets to iron out the workflow, the kitchen finds its rhythm, and you fix the problems before your first real customers see them.

Once you're open

Consistency is everything

Consistency runs through every part of a successful café:

  • Your opening hours. Don't compromise on them. If the sign says 7am, be open at 7am, every day. Nothing loses regulars faster than a locked door when they expected an open one.
  • Your team. Customers should know who'll be on the till, in the kitchen and on the coffee machine.
  • Your recipes. Every recipe must be followed with exact discipline, every time. That's how a regular gets the same meal on a Tuesday as on a Saturday.

Be disciplined, be supportive of your team, and make sure your customers know they're number one. Be transparent with them too. If prices rise or the menu changes, tell them why.

The coffee machine is a profit centre

You wouldn't put your barista in the kitchen cooking medium-rare steaks. So why put an untrained junior on the coffee machine, when it produces so much of your profit?

Not everyone can make coffee. It's a skill, and it needs training. Our posts on the real cost of staff turnover and our Barista Training Manual go deeper.

Pay yourself, and look after yourself

Burnout closes more cafés than bad coffee does. Owners work every shift, skip holidays and pay everyone but themselves.

  • Build your own wage and super into your costings from day one. Your staff's super is required by law, but nobody makes sure you pay your own.
  • Train your team well enough that you can step away.
  • Take time off before you need it.

Know your numbers

From what we've seen supplying cafés for over 20 years, these are realistic benchmarks:

  • Cost of goods (coffee, milk, food, cups): aim for 32–36% of revenue. Consistently over 38% eats your margin fast.
  • Wages: 30–34% of revenue. Many struggling cafés sit at 37–42%.
  • Rent: under 10% of revenue if possible, and 12% at most.
  • Other running costs (utilities, marketing, maintenance, insurance): usually 15–20%.

That leaves a net profit of around 5–10% in a well-run café, which is solid for this industry. Review the numbers every month. If numbers aren't your strength, find someone for whom they are.

Choose your coffee partner carefully

Your roaster isn't just a supplier. They're a long-term partner in your quality and your reputation. Our buyer's guide to choosing a wholesale supplier covers what to look for.

If you're setting up a café and want a roaster who'll be onsite to dial you in and train your team, set up a wholesale account, or email us at mahalia@mahaliacoffee.com.au.

This article is general information, not legal or financial advice. Check your obligations with your local council, your lawyer and your accountant.