Espresso Blog

How's Your Coffee Shop ROI?

by Julie Beals on July 31, 2019

There is no one set of rules for success in the foodservice business. Most of it comes down to hard work or extensive experience—and a little bit of luck.

But there are things you can do to increase your odds of success and your coffee shop ROI while maintaining financial stability. Heck, when these tactics are done right, you could feasibly open more locations at some point.

Serve good coffee. Forgive this obvious point, but espresso is one of those rare products where consistent quality really matters. T-shirts? Napkins? Not so much. So buy the best espresso machine you can, install it with a water purification system, use a conical grinder, build a relationship with a great roaster, and make sure every cup is made by a trained barista who truly cares what they're serving your customers. While you can maintain some loyalty or walk-by traffic with decent coffee, the better it tastes the more people will go out of their way to get it. Same goes for smoothies, gelato, etc. If these are your specialty, make them irresistible.

Don’t act like you’re in the coffee business. Say what? That's right. While the coffee has to be good, you're really in the people business. Your four walls are a respite from the daily grind, a place where relationships are built, and where work gets done. Make sure your vibe, and your employees's customer service skills, fill these needs.

Offer loyalty cards. They really do work. They communicate that you want people to come back, not that you expect them to. Use this trick to increase their value: stamp a few extra boxes so that on a customers next purchase they get a free one. Easiest customer acquisition ever.

Merchandise your margins. Price your items line by line according to customer expectations and what the market will bear, not according to accounting-determined markups. For some well known items you will need to be at market price (coffee) or even below it (a can of soda), and this loss should be made up with high margins on other items that are exclusive to your shop, or in the "I-don't-care-what-it-costs" category in the minds of customers (pastries, etc.).

Pre-make as much food as possible. Try to keep your customizable menu items to coffee. Individually made food items are a high-cost endeavor because you can’t get the economies of scale that you do with coffee, and they limit your turnover in peak periods where you should be pumping out the sales quickly, not making custom orders.

Hire good people. See our article on hiring right, so you can do it less, and a follow-up article on reducing turnover.

Advertise. If you don’t have a built-in, steady supply of regular traffic, your number one job is to bring people through your doors. Don’t say, “I can’t afford it,” “No one goes out of their way to come here,” or “We’ll be fine if we get a catering gig.” Put out some affordable ads and learn to use free Web tools (Facebook, Instagram, Twitter, Yelp, etc.) to your advantage.

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