Opening a Café in Germany: What you need to know

Opening a Café in Germany: Permits & Requirements

Permits for your café

If you plan to offer alcoholic beverages alongside your coffee specialties, you’ll need a premises licence 💬Gaststättenkonzession, or more commonly 💬Schanklizenz.

Typically, the following documents are required for a premises licence in Germany:

• Lease agreement for your business premises
• Clearance certificate issued by the tax office 💬Unbedenklichkeitsbescheinigung
• Extract from the central trade register via your local trade office
• Health certificate issued by your municipal regulatory office
• Current police clearance certificate from your municipal administration
• Proof of training in food hygiene according to § 4 (1) No. 4 GastG (IHK)

Initial training in the infection protection law

When you’re self-employed, it’s important to follow food safety regulations. You’ll need to show evidence of training under the infection protection act. Your local health authority will provide this.

Remember, you’ll need to refresh your team’s training every two years. Keep records of these follow-up sessions as proof.

Training for food safety compliance

When opening your café, you and your staff must undergo training per the EU Food Hygiene Regulation. Your local chamber of industry and commerce offer these courses for food businesses.

Setting up your cafe with health regulations in mind

Your café needs to meet hygiene standards. Health inspectors regularly inspect spaces that prepare food and serve drinks.

Check your area is compliant with requirements for refrigeration, storage, ventilation, and sinks. Make sure your premises will pass official inspections to avoid unexpected costs or obstacles to your business.

Professional Requirements: Starting a Café without formal training?

Starting a café doesn’t demand specific vocational training.

However, before entering the business, it is wise to gain experience in the hospitality industry. Hands-on experience is a great learning environment, helping you understand typical work setups, time management, and customer relations.

The hospitality industry is tricky

Well before you open your doors, gather information and seek expert guidance, particularly for your business plan, financing, and tax liabilities.

A solid business plan is essential for success. Making a profit in this industry is difficult at the best of times. You can’t just wing it! So, an expert consultant can be worth it. A good one can give you invaluable advice and support to help you turn a decent profit later down the track.

In terms of financing, experience in the hospitality sector can boost your chances of getting funding for your café.

Café know-how

What do you know about typical food and drinks? Are you knowledgeable about coffee or tea? Is your cake only enjoyed by your friends, who praise it out of politeness, or is there more to it than that? Be honest with yourself and seek outside expertise if necessary.

 

Who are your customer groups?

• Who should visit your café? And why? At what times?
• Does the café appeal to a particular age group?
• Do you serve a delicious speciality that cannot be found anywhere else?
• Is your café an ice cream parlour?

Work on your concept before you set up and open. Be specific when defining your target group. The project could fail if you open first and go in the wrong direction.

 

Business plan for your café: What costs can you expect?

The financial planning is an integral part of your business plan, just like your business concept. It records the planned and estimated costs incurred during the starting up and initial stages.

Consider the following costs, among others.

• Setting up costs with authorities and offices
• Equipment costs for your kitchen, bar and dining area
• Initial costs: coffee machines, furniture, crockery, glassware, decoration, etc.
• Possible conversion costs (e.g. if you are taking over an existing café)
• Purchase of merchandise
• Website and advertising
• Possible consultancy costs (accountant, etc.)

Typical running costs are:

• Rent for your premises and other operating costs
• Miscellaneous insurance (e.g. business, professional indemnity, social security, health and pension insurance)
• Taxes
• Wages of your employed service staff
• Purchase of goods
• Marketing
• Capital to secure your livelihood

 

Financing: Who can help fund your café?

Getting funding from banks and investors will be easier if you have a certain amount of equity. You should also seek advice on possible subsidies, especially if you are a start-up. Your financing should rest on several pillars.

Most founders are initially dependent on debt capital. A good business idea and a professional business plan will significantly increase your chances of obtaining loans and grants. In addition to banks and private credit institutions, there are other sources of capital:

• Federal Employment Agency provides new business grants.
• EU Startup Services—The EU offers funding for startups and new businesses of all kinds. The EU Startup Services website provides an overview of the programmes.
• KfW—The German state-owned investment and development bank, KfW, offers loans for new businesses, such as the ERP startup loan StartGeld or Universal.

 

How much do I have to charge for coffee?

If you are inexperienced in making a calculation, ask for help. Think well beyond the start-up phase and the opening. Suppose you are inexperienced in the catering industry. In that case, it is easy to be overwhelmed when calculating prices and costs. The following factors are essential when calculating prices:

• Cost of goods
• Overheads
• Personnel costs
• Profit
• Value-added tax

These parameters also influence the final price in detail:

• Purchase price
• Quality standards
• Merchandise care
• Losses during cleaning and food preparation
• Recipe for meals
• Portion size for food and drinks
• Market and competitive situation

Ensure you get expert help with the calculation, especially at the beginning, so you are not overwhelmed.

 

Setting up a café: how to legally structure your business

Before opening your café, you’ll need to decide which legal form fits your plans. Many founders in the hospitality sector choose limited liability companies such as a GmbH or a UG. Smaller cafés are often run as a sole proprietorship 💬Einzelunternehmen.

Each legal form also comes with different tax and liability implications, so it’s worth comparing them before you decide. Read more about the most common legal forms.

Checklist: Where do I have to register my café?

Commercial register entry for your café

As a public register, the commercial register 💬Handelsregister documents entries about the registered merchants in the area of a competent register court. GmbHs and UGs require an entry in the commercial register.

Trade registration for café founders

Regardless of your legal form, you must register with local the trade office.

After registering with the trade office, the tax office will automatically contact you for tax registration via ELSTER. As soon as the tax office has checked your documents, you’ll receive your tax number and be authorised to issue invoices.

Membership with the Chamber of Industry and Commerce

Like the tax office, the trade office will inform the local Chamber of Industry and Commerce 💬IHK of your new business and contact you. Membership of the IHK is mandatory when registering a business.

Employer liability insurance association for the food and catering industry

Employer liability insurance associations provide statutory accident insurance for companies and their employees. For the food and catering industry, please register independently with the employer liability insurance association 💬Berufsgenossenschaft. You must register with your relevant association even as a small business owner without staff. If you have any questions, contact the Deutsche Gesetzliche Unfallversicherung on 0800 60 50 40 4.

Federal association for the hospitality industry

Voluntary membership in a relevant federal association is a good idea. The Deutsche Hotel- und Gaststättenverband e.V. is an umbrella organisation for all types of hospitality businesses.

At the regional level, there are often sector-specific associations or trade organisations whose membership could interest you. Associations offer an exchange of knowledge and experience and represent the industry to in economic and political matters.

 

Product range of your café

Your new business stands and falls within your product range. These should have special features. Clearly emphasise your unique selling point. These questions can help you:

• Is your coffee from a special roast or produced using a unique process?
• What other drinks do you offer?
• Do you want to offer snacks and wholesome meals on your menu?
• Does your coffee come from fair trade?
• Additional services: Do you offer specialties such as barista courses?
• Can your guests take the drinks with them as coffee to go?

Take plenty of time to design and consult experts.

 

Location of your café

What are the three most essential prerequisites for the success of a new restaurant business? Many people think location, location, location! Ideally, your shop should be on a busy street, visible to walk-in customers. Of course, competition is also an essential factor in a good location. Take your time to do thorough research.

Fundamental questions are, for example:

• How large is your catchment area of potential customers?
• How many other cafés, ice cream parlours or restaurants are in your catchment area?
• Where have your competitors set up shop?
• What products do your competitors offer?
• Which target groups will this appeal to?

The hospitality industry is a competitive market where you must position yourself cleverly. Use the information gathered to formulate a unique strategy for your location and market niche. Market research institutes can compile individual analyses for a professional location analysis.

 

How to market your new café

How do you draw customers’ attention to your new café? If you are planning your advertising activities before you open your business, you should prioritise two main things: a professional website and a mix of traditional advertising (banners, flyers, newspaper ad) and social media marketing for your new opening. In addition, list your business location on Google Maps and Yellow Pages free of charge.

Your café should have digital real estate

A bright, appealing website should present your products and emphasise your niche. The homepage should include special offers, opening hours, and contact details. The website is your perfect opportunity to make an enticing first impression.

If you also opt for professional search engine optimisation, you can grab the attention of customers who are looking for a café in their area. Also, integrate social media into your starting-up process.

Targeted advertising for new café openings

Traditional advertising, such as flyers, adverts and posters, round off your initial marketing measures. Promote the opening particularly vigorously. Special opening discounts, live music or small gifts for first-time customers are welcome promotions.

 

Café facilities & decor

Furnishments are vital in the catering industry because you want your customers to feel comfortable. To make your café inviting, tailor the interior to your target group.

Once the building meets the health and safety code, you can plan everything else. Many suppliers offer complete furnishings for catering establishments. If you want to customise your furnishings, flea markets, eBay, and other platforms for second-hand furniture are good ways to discover your own style.