My coffeehouse nightmare
slate.com
slate.com
Great atmosphere encourages people to linger on that $5 ticket for hours, which is a black hole for money, but if your atmosphere sucks you'll never get the buzz and reputation to keep the long lines of to-go in the mornings that you need to survive.
Great coffee is hard to find, and requires competent baristas, which are a hard to find/train outside of big cities.
I'm a huge coffee shop nut, but from a business perspective it seems crazy. As an interesting aside, another slate article noted once that indie coffee shops that have a starbucks open nearby actually do _better_ afterwards on average.
I have about five coffee shops I frequent in my small town. The best location in town is in the station, and it is physically impossible for them to avoid selling $1k every weekday morning. The best coffee was at my favorite Sunday hangout and they were about as easy to get to as Customer Service at Google. Three coffee shops have thought they could make that location work.
:)
Thank you for that.
I love that analogy. =)
(And I've tried to get to Google Customer Support before on a couple of occasions too.)
This is a problem that restaurants and other places solved a long time ago. I don't get why coffee shops never seem to do this: train your staff to make the rounds when they're not busy. Stop by any table with an empty cup, pick it up quietly, smile, gently ask the customer if they'd like anything else. (Don't nag or harangue the customer or ask the same one more than once an hour.)
Coffee shops have a problem with customers coming in and making themselves at home because they aren't being run like a business: there's very little staff-customer interaction. People come in, order (maybe), find a corner, and park there on the wifi for two hours. Shops respond to this by making customers come up to the counter to get a wep key, but that's the wrong way to do it. Instead, invite people in, invite them to stay, and ask them once in a while if you can bring them anything.
And as an added bonus, your staff will make a little extra in tips, too.
You have to figure that there will be some customers that want to be able to come in and basically rent space (plus, usually, a restroom and wifi) from the business for a couple of hours for the price of a cup of coffee. Although there's nothing really wrong with a customer wanting that, it's not a good deal for the business and they have no motivation to support it.
That's why the interaction from the wait staff should be really low-key. If the customer really isn't OK with being offered something once an hour or so, then that's just not a good customer for the shop. (My local co-working space charges $20 per day for anyone looking for a place to work; I use that as a yardstick for what's reasonable at a coffee shop. If I'm going to be there for more than a couple of hours, then I'm treating it as a co-working space and I owe them $20 of revenue.)
Most other people find it fair and convenient to get another cup of coffee or other treat delivered to them, and regard it as good service.
I suppose that if the shop thinks there are a large enough number of people in their area that are just looking for a place to work, and are willing to pay for it, but just don't want to be bothered at all, then they could offer something like a "day pass" -- $10 for camping out for more than a couple of hours without being interrupted by the staff, plus a discount on their coffee or other products.
But I'm not sure that would have enough takers to be worth it.
* Your co-working space doesn't need to factor in the cost of baristas and managers into the value of a table/hour.
* Your co-working space isn't set up in a super-expensive retail property, so the inherent value of a table/hour their is lower.
You've been underpaying your coffee shop.
I'm just starting with what a particular thing would cost me elsewhere, and offering to pay that to someone else.
Also, I'm trying to avoid going into specifics because they won't help us understand why coffee shops should work on their customer interaction, but I can assure you that our local co-working space has much higher monthly expenses than any of our coffee shops.
On the first floor of my building is a coffee shop. It pays more than 3x per rentable square foot than we do. Retail space is priced differently from office space. Attractive retail space is far more expensive than good office space.
No, I don't think phones and Internet makes it a toss-up. I think you're way off.
Also, FWIW, I've seen enough co-working spaces come and go that I find it hard to believe that they are running a massively profitable business relative to coffeeshops (& retail in general).
(1) Pays for commercial retail space, which is (in many cases) more than 3x more expensive than commercial office space (which is far more plentiful).
(2) Pays for multiple people's fully loaded headcount cost to staff the shop.
I didn't point out, but should have, that the shop also:
(3) Pays the wholesale price for the coffee (which is cheap but not free) and food (which is extremely expensive) and so has worse margins than the coworking space.
As for headcount, coworking spaces need to employ office managers. A single barista can serve hundreds of customers in a day. Per customer, a coworking space might actually need more employees.
This also assumes that if you gently asked a "customer" if they wanted another cup of coffee that they would buy. Customers interpret this signal in restaurants because there are social cues and a meal progression. When you get done with dessert, there's an expectation that you're going to clear out and free up your 4-top for someone else.
Clearly, some people have developed different expectations about coffee shop tables.
That's part of the point. If the coffee shop is so busy that the staff can't sweep the relatively small space, then they have no need to bother anyone to buy more. The bulk of my experience though, in both large cities and small towns, is that the staff spends plenty of time just hanging out.
> Customers interpret this signal in restaurants because there are social cues...
And those social cues are only social cues because restaurants train their wait staff to visit with the customers on a regular basis. The coffee shops are the only ones that don't seem to know this about the industry; if they started doing it, customers would learn the cues PDQ. (My pet theory for this is that coffee shops aren't run by restaurateurs; they're run by hobbyists, people like the article's author.)
In years and years of being cafe-obsessed, I've never seen shop fail that went the extra mile with their drinks, whether by roasting their own beans, training their baristas to competitive levels, or simply buying good beans, milk, and machines.
I read this article some time ago, and didn't see the obsession with coffee shine through. Without that passion, a cafe will be replaced by the next hip or quaint establishment that pops up to cater to idling customers.
I've unfortunately seen shops fail that went the extra mile, but it's always been a matter of location and marketing.
This is the strategy that the Apple Stores, Starbucks and lots of other organisations attempt to create. If this is successfully achieved, the actual quality of the cup of coffee would be less important.
I think the majority of us, as consumers, like to think that we are completely rational and would frequent a coffee shop based upon the quality of the coffee. However the environment/branding of the shop, locality and the type of customers who are present - is in my opinion - more likely to increase sales once a minimum standard of coffee is achieved.
Of course it must be possible to make a lot of money with a coffeehouse; Starbucks frinstance does just great, and plenty of non-chain places must be making a lot of money too.
Many of the problems he had just sound like he didn't have enough time to optimize his business model... if he was throwing half his croissants away then maybe he should have been buying fewer croissants? And do you really need a guy in the kitchen getting paid to whip up the occasional crepe when coffee is where you're gonna make the big bucks?
My wife Lily and I could work there, full-time, save on the payroll, and gerrymander the rest of the budget to allow for lower sales. Guess what, dear dreamers? The psychological gap between working in a cafe because it's fun and romantic and doing the exact same thing because you have to is enormous
In other words, he had the luxury of choice. And he chose not to.
I can't possibly imagine eating and drinking enough to justify my presence in a cafe for an entire day.
Each table needs to earn $n each hour to keep the place in business. If you enjoy your neighbourhood café, you should do your part to add to that revenue as much as possible while you enjoy their services.
His biggest complaint/cost/profit issue is the price of milk and how much is used in a latte.
I think it depends on how busy it is. If the place is dead, they'd probably be grateful for you to sit there and make it look more happening for someone who comes in. But during busy time, clogging up table space for three hours on one coffee is probably aggravating.
When I go to a non-chain, if I want to sit for longer than is normal, I just ask them. "I was thinking of having a coffee and hanging out on my laptop for a few hours - is that okay with you?" 90% of shops will say yes if they're not busy, or tell you when the time that that they get busy is. 10% will give a hesitant yes or non-answer, and I'll either only stay a short time or head out from there. Like everything, it depends on the particular situation.
If it gets busy and its been a decent amount of time (30-45m-ish) since my last purchase, I'll just head out.
The exception to this rule is the coffee place in my college's library; there's plenty of seating in the rest of the building. If I'm on a couch there, I tend to stay there until I'm done with whatever I'm working on.
Do you leave your laptop at the table? Pack the expensive stuff up and and take it with you? Find a pal and ask them to watch your stuff while you go pee?
I worked for another corporate coffee company and we never gave any customers a hard time for staying for hours or holding meetings. It was the same philosophy we had for re-doing drink orders no matter what the complaint. Sure, some small fraction take advantage, but for every illegitimate complaint you ferret out by putting up resistance you will irritate at least one paying customer, and that's a customer you lose forever.
The economics might work out differently for an independent coffee shop, but I doubt it. I find it far more likely that many coffee shops are opened by people who aren't that great at business or customer service in the first place and just think starting a coffee shop would be cool.
In sum, spend as much as you like on the products you want, and don't worry about it. If the shop decides you're a drain on the business, it's up to them to ask you to leave, and lose you as a customer forever. That's their calculus to decide, not yours.
Your comment brought one idea, I know there are white/brown noise samples, and nature sounds that make the atmosphere more ambient. Does anyone know sound samples taken in coffee shops?
On this topic, there's sometimes a really annoying hum where I live. White noise solves it. In summer, I use a box fan. In winter, I used to use this:
cat /dev/urandom > /dev/dsp
But the best thing is to take a brisk walk in the fresh air, and notice nature. How fortunate to be prompted to do this beneficial thing! (a convenient rationalization that is also absolute truth.)
A local celebrity chef started a new restaurant with another talented chef partner. Six months later, the partner left to run a cafe, since the work and stress involved in making paninis and light meals for people was far less than a gourmet restaurant, and the payoff better.
Cafés in North America often run to chocolate muffins and energy bars, but the whole Australian café provision of light warm meals is fairly alien there (see the success of Pret in NYC as a business with a very different value proposition to most other chains). I would imagine that the additional profitability from this cultural difference might be one of the reasons of the success of cafés where you are; that and the fact that the inner core of Melbourne has 2m+ residents and is fairly walkable which leads to a different kind of use of these kinds of spaces.
For a couple.
On the Lower East Side.
The problem was not people with laptops.
It was a business without a pro forma.
That is a powerful quote.
Starting a business is a huge deal and consumes huge amounts of your time. If the sums don't add up - that is, you're not going to be profitable unless you work as slave-labour in your own business - maybe you shouldn't do it. I think this is a trap that many educated people fall into that don't have direct business (or time billing) experience.
This is applicable to tech as well - if you build a product, sell it super cheap (say, software @ $20 per year), and it takes around 1 hour per year in technical support per user (per year), you need to consider that when pricing. It may not be worth it. Or you may just have your pricing or business model wrong.
There, I fixed that for him.