How To Start A Coffee Shop With No Money

How I opened a cafe with no money: Lerryn's, Peckham

A café in Peckham is part of a new wave of food and coffee retailers that are pursuing smart ways of keeping costs down and extending trading hours with imaginative ideas; founder Lerryn Whitfield squeezed every conceivable cost on opening and snapped up a late-night liquor licence to develop a second source of income.

In March last year, Lerryn Whitfield was tiling walls and laying laminate wood flooring with the help of her sister and some YouTube tutorials. Despite living on a friend's sofa, Whitfield, 25 at the time, had just signed for a retail space in Peckham and was working frantically to convert the former hair salon into a local café.

With little money to fall back on, Whitfield needed to start trading as quickly as possible to pay the rent if there was going to be any chance of survival. By working around the clock and calling in numerous favours, Lerryn's welcomed its first customers in April, exactly a month after Whitfield was handed the keys.

'It all moved really fast from the initial viewing. I worked out how much money I needed and found it in four days — from family, friends, banks, credit cards. I made an offer and was shocked when they said yes. I had the money for the deposit, first months' rent and refurb — that was it. It was a big risk.'

The pressures on time and money forced her to use her limited funds judiciously and imaginatively. The space came as a shell in serious disrepair — disused for over a year, it was filled with junk. Two inches of club posters covered the front windows.

Much of her £5,000 budget was soaked up on building work and materials, even with a friend's builder father helping out for free. Pennies were left for the fit-out, which were spent on chipboard counters and second-hand tables and chairs. Lampshades were made using paper plates and napkins.

Hotplates from Amazon

Whitfield was also contemplating the balance between coffee and food in her café; given its location in a residential area, Whitfield couldn't see how she could generate the footfall to build sufficient sales from coffee alone.

With no kitchen space, and no money to build one, Whitfield set out to create a stripped-back menu based around what she could prepare using very simple appliances placed behind the counter. She bought two hotplates from Amazon for £50 and a £12 toaster on which to base her entire menu: variations on sourdough, eggs, bacon, avocado and halloumi. A small fridge slotted under the makeshift kitchen.

The result is an unpretentious café that attracts a broad mix from the local area, from young creatives to elderly couples. 'I wanted it to be as non-invasive as possible, to be accessible to everyone who walks along Rye Lane,' explains Whitfield.

Alcohol licence

Two months after opening, and with a second rent payment due, enough money was in the bank to cover the costs and keep the café open. Whitfield was even able to rent a flat and start paying her sister, who had spent over two months working for free. A second employee was also taken on.

Conscious that, like so many cafés, potential income from the space was being missed due to its 6pm closing time, any spare funds were spent turning the café into a bar in the evenings. She applied for a £385 liquor licence, extended the counter, and bought in spirits and speakers.

By opening late on Thursday, Friday, Saturday and Sunday nights, trading hours were extended by over 20 hours a week. A series of summer events hosted by guest promoters and DJs through August and September 2014 proved particularly lucrative, and took advantage of the café's large garden.

The combined bar and café now employs nine staff. Whitfield has since launched dinner evenings with guest chefs in a move to give her bar sales a further boost. 'The mark-up prices on alcohol are huge, even bigger than coffee and much more than food,' says Whitfield. 'Coffee is still making the most at the moment, but alcohol is catching up fast.'

The dual function format is one that many upstarts in coffee and food retail have begun to adopt, easing the pressure to repay the rent from each day or night's takings.

Shoreditch Grind (and its sister branches in Soho and Holborn) and the Fernandez and Wells outlets have been among the most progressive in extending their trading hours by switching from coffee shop to after hours bar. It challenges conventions of food retail, but retailers like Whitfield are conscious that survival today requires a nimble and imaginative approach to using the space at their disposal.

Originally published in Courier issue 06 , Winter 2015. More on Courier .