Location

It is easy to ‘blame’ the location if a coffee shop isn’t profitable. However, there are profitable establishments out in the sticks, at train stations, on busy high streets and in quiet villages…

A prime location could in fact make it more difficult to be profitable because of the higher rent.

When choosing where your coffee shop will be based, you need to really get to know the area, the people and what’s on offer.

Target market

Whilst it can be easy to blame location and a difficulty with ‘passing trade’, I believe that so often it is not location that effects how profitable a coffee shop is…it’s about how the business chooses and appeals to their local target market. If people love a place, they will visit regularly, they will travel to it and they will return to it.

It is easy to think that as a coffee shop you want to appeal to ‘everyone’, but this is impossible. The profitable coffee shops are the ones that know who their target market is and create a coffee drinking experience which really appeals to them.

Product choice and differentiation

If a coffee shop is surrounded by other coffee shops, cafes and eating establishments, you may blame the saturated market. However, a coffee shop can still be profitable even in these circumstances. Differentiation is key.

Ask yourself:

• What can you offer that is a bit different? Not a whole host of everything!
• What are your profitable products? Do you know?
• What limitations can you put in place about what you offer? What defines who you are as a unique business?
• Do you know your numbers, your target audience and your USPs well enough to identify this?

It partly comes down to your business model – are you going for really high quality coffee primarily? Are you offering a well-curated food menu to increase average order value? Is it more about the cake and pastries, than the actual coffee?

Your point of differentiation might be more about a unique ambiance or the intimacy or comfort or the customer experience or special events – something so much more than the coffee beans that set you apart.

Operational efficiency

Efficient operations are crucial for maximizing profits. This is something I am really passionate about helping coffee shop owners to understand. I see so many who work really hard – they are incredible…but they could also be more efficient and save themselves so much time. It’s wonderful when I show them a new way of working. They start to love their coffee shop business all over again AND get more time to enjoy their personal and family life again.

There are a few areas of operational efficiency to consider:

• Well-trained staff who can offer service speed, accuracy, and customer satisfaction.
• Effective inventory management, including regular stock takes and minimizing waste, to reduce costs.
• Investing in technology, such as point-of-sale (POS) systems and mobile ordering, to streamline operations and help you track your systems and processes
• Identifying what your ‘numbers’ are telling you – this is so much more than just incoming and outgoings.

Financial management

Finally, a probably not unsurprisingly coming from an accountant (!), sound financial management is vital for the long-term success of a coffee shop.

Profit is key to this. With careful cost control and a well-thought-out pricing strategy, together, we can identify ways to make a profit much sooner than you think. Yes we will have to assess tax, wages, overheads and more …but trust me there are ways to manage you