Is It Time to Level Up Your Coffee Shop?
Coffee shop ownership can be an exciting yet arduous journey. And sometimes, you might find yourself itching for growth or needing fresh inspiration. If you’re noticing any of the following “symptoms” of your coffee shop, it might be time to take your coffee shop to the next level:
- Plateau in profits or growth. Maybe your coffee shop thrived in the beginning, brought in countless new customers, earned promising margins, and benefited from marketing strategies at the time. But it can be tough to keep success moving upward at a steady pace. Customers move, inflation rises, and marketing methods evolve. You might notice that your coffee shop’s growth has become stagnant in recent months or years.
- Aiming to expand. On the other hand, maybe your single location is thriving, and you’re ready for the next step in your coffee shop brand! Multi location coffee shops can benefit from prices and operations at scale. You just want to be ready to scale strategically, not haphazardly.
- Feeling burned out. Unfortunately, burnout among coffee shop owners is common—it’s a taxing job that requires a lot of energy and investment for many years. It might be time to take a look at what’s on your plate and how it could be streamlined or delegated.
Strategies for Cafe Owners: Take Your Coffee Shop to the Next Level
Whatever the current state of your coffee shop is, it’s never a bad time to level up. Read on for a few of our well-researched and proven-to-be-true strategies. This article covers seven ways to elevate your coffee shop:
- Identify Inefficiencies
- Manage Your Costs of Goods Sold
- Manage Your Labor Costs
- Streamline Your Operations System
- Improve Your Customer Experience
- Add a Revenue Stream
- Improve Your Marketing Strategy
P.S. We’ve written comprehensive articles about each strategy written below. Click the links in each for a deeper dive.
Identify Inefficiencies
Inefficiencies can be a silent killer of coffee shop profits. And it takes effort from the whole team—owner, managers, and baristas—to spot and fix them. Here are three common causes of inefficiencies in your coffee shop operations:
- Undeveloped systems and processes: The better employees understand exactly what their tasks are and how to do them correctly, the fewer things will go undone (or too slowly). Efficient coffee shops have clear processes for everything–from drink making to cleaning to ordering inventory. First, make sure you’ve created an operation system (more on this later). Then, consider ongoing training or staff meetings to keep everyone on the same page.
- Lack of training: Barista training is imperative to make your coffee shop a well-oiled machine. Inconsistent drinks or slow customer service will turn away new customers and might tarnish your reputation over time. You could come in as a “guest” to your coffee shop and experience it from the customer’s side. Are baristas serving with the level of excellence you need?
- Disorganized inventory: Messy storage and inventory processes lead to waste, lost ingredients, and over/under ordering. To level up your coffee shop, set aside time to organize your inventory, set pars, label everything, and create a system that each employee can follow.
Manage Your Costs of Good Sold
If your expenses have gone off the rails, one of the most effective ways to get things in order is to manage your cost of goods sold (COGS). Investing in a more advanced point of sale system makes it much simpler to track each item that comes in, how much is used, when it’s time to replenish, and when costs change. Your menu prices also matter. When was the last time you made sure your menu prices were in line with your costs, and inflation? This is where so many coffee shops lose profit. What the costs were 2 months ago are not likely what they are now. You need keep on top of your costs in real time so you can adjust your menu pricing accordingly, find new suppliers, or negotiate better pricing from your suppliers. Otherwise you may find yourself wondering why you aren’t making any profit. Also be sure to take the temperature on the price threshold people are willing to pay for your products. You may be able to push you prices higher than you are currently charging since people are becoming more accustomed to businesses needing to charge a little more due to inflation.
Manage Your Labor Costs
Your coffee shop’s labor costs may end up being the highest line item on your monthly budget. So it’s critical to manage them well while still paying competitive wages and having enough boots on the ground. Ensure that staff members are clocking in and out according to their schedule. And allocate labor according to sales—so that you can have more baristas during busy times and less when it is slower. Having several part-time baristas can be a great strategy for adding additional coverage during peak times.
Streamline Your Operations System
If you’re looking to scale your business, it’s critical to have a streamlined, dialed-in operations system in place. You can create operational standards documents to share with your future managers and team members. This might include a deployment map for every role, a cleaning checklist, and budgeting guidelines. With parameters in place, your next location can hit the ground running.
Improve Your Customer Experience
After several years of operating, serving coffee can start to feel pretty transactional. Take the order, receive payment, make the drink. But customers can feel the hollowness of the transaction, and might end up leaving your cafe for a more friendly, warm experience somewhere else. Don’t let this happen! You can create a non-transactional customer experience by doing a few things:
- Identifying or revisiting your unique business concept. What’s the X factor that makes your coffee shop special (beyond good coffee)?
- Fine-tune the experience with the menu, cups and design, and customer flow—even for a drive thru.
- Consider a hybrid model, where customers can benefit from more than one service at your coffee shop. See below for more information.
- Create a sense of belonging with a loyalty program, events, and social media engagement.
- Find ways to go above and beyond with your customer service. This might look like remembering customer names or the occasional order on the house.
Add a Revenue Stream
To stay competitive in an increasingly challenging market, coffee shops are looking to hybrid models. A hybrid model is when you offer something in addition to coffee—whether it’s beer, bikes, or a barber shop. Anything could work, as long as it’s profitable and makes sense for your target market. This is effective because it increases the number of transactions and the value of each transaction.
Galindo’s is a coffee shop, barber shop, and aesthetics business.
Improve Your Marketing Strategy
Finally, marketing can be the #1 variable factor for small business, because trends and communication are always changing. 20 years ago, it was standard to use print materials like billboards, newspaper ads, and flyers. Now, it’s no secret that the digital world is king. But today’s social media is even different from five years ago. Video is a top form of content, and TikTok (love it or hate it) is a place for the most innovative businesses. Your coffee shop doesn’t have to be on every channel, but pick the ones that work for you and make sure they’re up to speed in your marketing plan!
Take Your Coffee Shop to the Next Level at Texas Coffee School
We offer a number of classes designed for coffee shop owners and employees at all levels. Entrepreneurs just starting out could benefit from our 3-Day Coffee Business Master Class, which teaches you the roadmap to opening your own coffee shop. Our 2-Day Barista Training Class helps baristas fine tune their skills and offer excellent customer service. And the Coffee Shop Manager Training Course is great for managers who have coffee expertise but need a crash course in management and operations.
We hope to see you in our classroom soon!
