STRaTEGY – work smarter not harder to gain a Profitable coffee shop
Fundamentally, I believe there are three key ingredients to having a profitable coffee shop, cafe or small hospitality business:
Step 1 – Get clarity
Step 2 – Implement the right systems
Step 3 – Develop your strategy
This is what my Profitable Coffee Shop Programme is all about. However, I can appreciate that these steps can feel intangible. So, in this blog post, I want to explore a little more about what ‘developing a strategy’ will actually mean for you, why it’s important and three initial steps to think about.
Being strategic to help you work smarter not harder
Let's make your dreams come true
You had a dream of owning a coffee shop or café. You’ve poured your heart and soul into it, but it’s not long before the dream starts to feel like a grind. You’re working long hours, feeling overwhelmed, and the profit margin is thinner than a slice of biscotti.
Sound familiar? This is a common story for many business owners in the hospitality sector today. However, it’s not always just a consequence of the economy, it’s almost always a symptom of one thing: a lack of strategy.
As a financial mentor and accountant, I’ve seen it time and time again. Without a clear plan, you end up “in” the business every single day, but never working “on” it.
That’s why I developed my Profitable Coffee Shop Programme. Now, let me tell you more about step 3 – developing a strategy.
The Big Picture: Why You Need a Strategy
Imagine driving a car without ever checking the fuel level, the tyres, or even a map. You might be an incredible driver, but you have no idea if you’re headed in the right direction or if you have enough gas to get there. That’s what running a business without a strategy feels like. …it’s like attempting to bake a cake without ever checking a recipe!
When you don’t have a plan, your days are spent in firefighting mode, putting out yesterday’s small blazes while today’s bigger problems and opportunities go untouched. A solid strategy gives you a clear road map of what to do each day, week, and month, so every action has a purpose.
A well-defined strategy can help you:
- Make decisions quickly: When you know your goals, decisions become simple. Does this action move me closer to my goal? Yes or no.
- Ensure every product is profitable: You need to know that what you’re selling is actually making you money, not costing you.
- Pay yourself a fair wage: Your motivation and commitment will suffer if you’re not getting paid for your hard work. You should be building a business that supports your life, not the other way around.
Find time to work ‘on’ your business
One of the biggest pain points I hear from business owners is the feeling that there’s no time to step away from the daily grind. You’re so busy serving customers and managing staff that the thought of working “on” the business feels impossible.
I get it. But consider this: even just 15 minutes a day can make a huge difference. You can spend that time checking your sales data. When you have your systems in place reviewing your profit margins, or thinking through a new marketing idea is quick and simple. You’d be surprised at how much you can achieve in a month with just a small, consistent effort, based on the clear vision you now have for your business (see more about this in my Clarity blog.)
The key is to schedule this time away from the coffee shop floor.
The distractions in your café are too great, and you’ll inevitably be pulled back into the daily operations. Block out time on your calendar, whether it’s early in the morning before you open, or for a few hours on a day the shop is closed. This dedicated time is non-negotiable.
Three Steps to Developing Your Profitable Coffee Shop Strategy
Once you’ve carved out the time, you can begin to build your strategy.
1. Create a Clear Business Plan – Your Road Map (or recipe for success!)
This is the foundation of everything. Your business plan should include:
- Financial forecasts and statements: Understand your cash flow, what you’re spending money on, and where your revenue is coming from.
- Your team: A strategy for staffing, on-boarding, training, and retaining employees.
- Your “One Thing” and marketing strategy: What makes your café unique? Figure out your key differentiator and build your marketing around it and the customers you want to attract
2. Optimise Your Pricing Strategy
You can’t grow a business that isn’t profitable. You must ensure that every single item on your menu is priced for profit.
- Menu optimisation: Are you selling too many things? Sometimes a smaller, more focused menu is more profitable and easier to manage.
- Pricing analysis: Do you know the true cost of a cup of coffee, including ingredients, labor, and overhead? Many business owners underestimate this.
- Pricing updates: Costs change. Overheads increase. Switching suppliers isn’t always easy. All of these things aren’t in your control but increasing prices (or decreasing in some circumstances) is.
3. Pay Yourself First
This is the final milestone, but it’s crucial. If you’re constantly living from paycheck to paycheck, you’ll lose motivation and eventually burn out.
- Living to thriving: Shift your mindset from just getting by to actively building wealth.
- Process of paying yourself: Set up a system to pay yourself a fair wage or salary on a consistent basis. This might mean setting up a separate business account and a personal account. Do speak to me about a Profit First approach.
Having clarity, systems, and a strategy means your business can make a profit while you are calm, relaxed, and able to spend time with family and friends or simply do the things you love. And that is what we call success.
Ready to start building your own strategy? What’s one small step you can take this week to work “on” your business? …and if you need support, you know where to find me.
While this blog aims to provide helpful information, it’s important to remember that every business and person is unique. So, before making any decisions, we highly recommend seeking professional advice. We want to ensure that you have all the support you need to make the best choices for your situation!
