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Funding Strategies for Cafes

Funding Strategies for Cafes

Three strategies for approaching the financial aspects of running a church café

We've all seen those late night commercials that inform us that for the price of a cup of coffee per day we could do something significant to change the world. I agree with these people that it only takes a small amount to make a big difference, but I don't think you have to give up coffee to change the world. In fact, I believe we can use the wonderful experience of drinking coffee and having great conversations to change the world. So why not have your coffee and drink it too?

If pastors were granted three wishes, I believe most of them would wish for more people, more money, and larger facilities. These seem to be the most common issues for pastors and church leaders. I believe an intentionally designed third place can be a solution to all three wishes. Consider the potential of how a café can become a viable resource for the church that will not only help it connect with and retain people, but also leverage the use of facilities and resources in such a way that it impacts the church, the community, and changes the world.

There are three common financial models that churches use for a café project.

  1. Investment with a negative cash flow
  2. Investment with an attempt to simply break even
  3. Investment with a positive cash flow

Notice I never mentioned expense. If you view a café as an expense, then don't do it. You will never be satisfied. Cafes have amazing potential and when intentionally designed, should produce a return on investment that is internal, external, and eternal.

Investment with a Negative Cash Flow
All churches should create café environments that will connect people and develop leaders. I always get asked, "How much is this going to cost me?" Seems like I've read that question in a book somewhere .. thinking . oh yes, it was the bible. If we only focused on the cost and not the return on investment, I think many of us would be in a different place. There are ministry areas in the church in which we make investments, knowing that we may not be able to track the financial return. Some churches choose not to charge a price for coffee or specialty drinks and in doing so have decided to make an investment that will show a negative cash flow.

An example of a church that is okay with a negative cash flow is one that might give away all the drinks at no cost. "How could a church do this and be a good steward?", you might ask. This church has recognized that there are other ways to see a return on investment than just financial. This church is counting on the connection power of a cup of coffee and conversation translating into relationships that are built, people making that church their spiritual home, and eventually becoming financial contributors to the ministry of the church. This model is most common in churches that decide to only provide coffee and tea, rather than a full menu of specialty coffee drinks such as lattes, chai, smoothies, etc. This is a positive approach for many smaller churches or church plants.

Investment to Break Even
I see many churches that want to have a café environment because they see the stickiness factor that one can provide, but they are both concerned about the cost, while also not wanting to charge for the coffee. I understand the balance that churches are trying to find in this model and I see it work for many. Maybe what pastors are trying to say is, "We are not concerned with making a profit, but we'd like for this not to cost us anything." I find that it's easier to make money and figure out good things to do with it, than to work hard at trying not to make money while charging a price for something. Many churches use the positive cash flow to fund ministries, local projects, church plants, missions, and more. But the simple connecting power of a properly designed environment will create amazing returns in relationships, resulting in a healthier church.

I'm seeing more and more of these attempted. This church has set up a café menu with pricing that is considerably lower than what you might see in a local café, but enough to cover the costs in order to reach the goal of breaking even' financially. I often see hybrid models of café menus in this scenario. By hybrid menu I mean, black coffee is free and prepared specialty drinks have a cost. Churches that choose this hybrid menu model may also choose to charge for black coffee when they are open during non-church service times.

Investment with a Positive Cash Flow
I remember a pastor I worked for in California that said, "Michael, we're non-profit and good at it." Now of course I laughed, but what do we laugh at the most? The truth, not lies. I understand the whole non-profit thing, but that doesn't mean we can't create a successful and sustainable ministry that results in a positive cash flow which can in turn leverage to impact and change the world around us.

This is my favorite of all the financial approaches when setting up a cafe in a church. Let me start by saying that while I know that some are still apprehensive with the idea of selling of coffee inside the church, I believe that a majority of people are okay with purchasing a coffee, latte, or smoothie in a church. The problem might be that church doesn't have the best reputation for brewing great coffee and is often labeled as cheap when it comes to food and beverage. For those who believe that 5 lbs of coffee for two dollars is good enoughyou should probably just stop reading now. We are in a time, and surrounded by a culture, that appreciates quality products and exceptional customer service. The church has the ability, and frankly, the responsibility to do things with excellence and that goes for the coffee they prepare and the way they deliver it.

With this model, churches can create an environment where people naturally connect, develop leaders as they find their gifts and use them in service, and use the positive cash flow to fund amazing ministry opportunities that may be local or even global. This model has the greatest opportunity to leverage the popularity of coffee, the power of relationships, and the potential of positive cash flow.

Plan Your Investment Strategy
It's important that you decide before you start which investment strategy you are going to serve in your café. If you just start building, buying, and brewing without having a plan for the return on investment, then you are setting yourself up for failure and disappointment. Each church is unique in their approach to this. I recommend finding the one that best fits your church's vision, feasibility, and DNA.

A note to existing cafes: imagine you had chance to start over again. Which model would you choose? Don't think about the one you might be using right now, unless you are happy with it. Any café planned properly and delivering quality drinks and exceptional customer service should have the opportunity to choose the model and not let the model choose it.

I've never seen a tool more powerful at connecting people than that of an intentional third place designed and implemented by people who have the ultimate competitive advantage. We must design and deliver with excellence. As I finish my third cup of the morning, there's no way I'm going to advocate the removal of coffee from your life. I am, however, asking that you recognize coffee as a tool to connect people, develop leaders, and fund ministry opportunities.

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