I apologise in advance if you are running a coffee shop. But I think they are a bad business model on their own.
Let me explain.
For starters, there is no shortage of coffee shops. New ones open all the time, others close. Only Restaurants have a higher close rate. I don’t have any data to back this up, this is purely anecdotal evidence. But let’s look at some of the problems coffee shops have, and what this means for you, even if you don’t run a coffee shop.
Competition is high.
Average order value is quite low and customers like to hang around, reducing your revenue per time spent in your shop. I am guilty of this, where I go to work for a couple hours and drink maybe 2 long blacks. On the other hand, if you get really busy, there is only so many coffee you can pump out in a reasonable time. If it takes too long, customer aren’t happy and won’t come back. If you hurry up, and quality goes down they complain and won’t come back. If you hire more staff you need to significantly increase walk in customers to make it worthwhile.
Overall, I don’t think coffee shops are a good game to be in. Unless, they are an add-on to an existing business, which then increases your revenue per customer, or brings in more customers.
If you want to go into the coffee business, I would want to sell the cups to them. Roasting beans would have been a good model about 10 years ago.
Again, I can’t back this up, but I imagine, whoever is selling the little plastic fish filled with soy sauce to Sushi places is making a killing.
Anyways, I get to peak into businesses all the time, and get to see the economics of many of them. And I help a lot of them to make more money, simply by optimising their offers and ad campaigns. If you want to have a chat about your business and how to generate more profit schedule a call. https://cloudclicks.com.au/discovery
