Hospitality Success Story - Cafe Invest in Renovation or New Location in Australia

A small locally owned café in Brisbane with strong community presence and consistent foot traffic had just completed its fifth year of operation. With sales steadily growing, the owners were deciding whether to invest in a full renovation of the current space for AU$350,000 to increase seating and modernise equipment—or open a second, smaller outlet nearby for AU$600,000 (total setup cost).‍ They engaged CapX Solutions to help them make the best long-term financial decision. The Challenge • The current site had limited space for growth and aging kitchen equipment. • A nearby suburb was under-served and showed potential for a second outlet. • The owners were emotionally attached to the current location but uncertain if expansion offered better long-term returns. • As a small business, they had limited capital and couldn’t afford to get it wrong. What CapX Solutions Did‍ 1. Built a Simple, Actionable DCF Model We created a 5-year discounted cash flow model comparing both options—renovation vs second location. It included: • Capital investment, equipment upgrades, and fit-out costs • Revenue forecasts based on seating capacity and location foot traffic • Wage costs, rent differences, and operational complexity • IRR for both options and break-even analysis ‍2. Delivered IRR-Based Decision Support Package CapX helped the owners understand how each option performed under different sales assumptions and cost structures. We clearly outlined what needed to happen for either option to “win”—and which one provided the best buffer against underperformance. This gave the owners a data-backed lens, not just gut feel.‍ 3. Provided Bank-Ready Financials We formatted the model and key assumptions into a polished, bank-ready document to support a potential small business loan. The financial summary and CapX’s credibility helped the client secure funding approval with confidence. The Result‍ ✅ The café decided to renovate and reinvest in the flagship location, based on a stronger IRR, faster payback, and lower operational complexity. ✅ New seating layout increased capacity by 30% and led to a 22% revenue uplift in the first 6 months post-renovation. ✅ The owners are now using CapX’s financial model to plan for a second location next year—when cash flow is stronger. Services Provided • 🧮 DCF Modelling & IRR Analysis • 📊 Business Case Comparison • 📄 Bank-Ready Financial Summary • 🧠 Small Business CapEx Strategy