Replies to This Discussion

Permalink Reply by The Beat Cafe on July 15, 2009 at 5:40am

Jessie, Where is your shop? Do you have foot traffic? What is the population in the 5 mile radius? And are you on a comuter street?
Many variables come into play. My 4 shop experience tells me that no matter what your overhead you need to see min. of 150 people a day, with an average spend of $4. When you get to that you should be rocking or should I say Frothing!!!!
about 2 years to become to the point that you can have more time to yourself.
I hope this helps. please reply your answers

Permalink Reply by David Davenport on July 15, 2009 at 6:03am

Jessie, I have helped a lot of coffee shops get open and it seems that if they are going to make it at all it is usually a full year before they start to see real numbers. Don't underestimate the power of word of mouth. It may take a while but is the best form of advertising. The cash flow during this first year or the lack of it is the biggest reason most new shops go out of business. Of course there are a lot of mitigating details that I do not know, ie. location, etc. If you are at 75% of your monthly expenses in sales now after only three months or so it sounds like you have a chance to make a run of it. Hang in there and if you want to discuss this in more detail send me a note. Good luck.

Permalink Reply by chuck celentano on July 15, 2009 at 8:02am

Hi Guys,
We opened on March 12th and right now we can pay all of our bills and buy all of our product on a c.o.d. basis. I just have not had a paycheck since we opened the doors. From what you said above we should be on track to turn a profit. Our major problem is the previous owners were never open on time, they would close early and their hospitality skills were sorely lacking. So it has been an uphill battle to get people in the door,but it is working. . .slowly but surely!

Chuck

Permalink Reply by Marilyn on July 15, 2009 at 8:27am

Mike is accurate. You need to know your expenses. Your costs for things to determine a right price to sell. I have a shop for 15 months and its after one year, I am seeing reward. It'll probably take me another year I guess to break even.
Location is very important and also your service and also the quality of products.
All these factor into how well your cafe will operate.

Marilyn
www.tancoffee.com

Permalink Reply by Marilyn on July 15, 2009 at 8:42am

Hi Chuck, you need to pay yourself or you'll run out of steam. Unless you have other source of income, it'll eventually make you stress out.
Knowing the mistakes of previous owner is great, can you put a sandwich board outside the cafe introducing yourself? And get your customers to put word of mouth for you. That's the best form of marketing you can get.
All the Best!

marilyn
www.tancoffee.com

chuck celentano said:

Hi Guys,
We opened on March 12th and right now we can pay all of our bills and buy all of our product on a c.o.d. basis. I just have not had a paycheck since we opened the doors. From what you said above we should be on track to turn a profit. Our major problem is the previous owners were never open on time, they would close early and their hospitality skills were sorely lacking. So it has been an uphill battle to get people in the door,but it is working. . .slowly but surely!

Chuck

Permalink Reply by Jessie Burke on July 15, 2009 at 7:01pm

Hi Everyone -

We're averaging $530/day right now gross. Based on my projections, we need to make about $690/day gross to make a marginal profit in a month. Mike, to answer your questions, we have a great location that is about to have a major streetscape project done (August - December) upgrading the entire street, and a new library is going in two doors down. Now, however, the foot traffic is all to come to our shop. Very soon, however, there should be a lot more because we will have an anchor in the library (note: i opened the shop in May because the library was due to open in June, however, they have been delayed 6 months, so I'm feeling the burn a little). We are on a commuter street, but mostly with car traffic. We are right near a lightrail stop, but not many residents use that stop for work. And the population within our neighborhood/5-mile radius is approximately 5,000 people, transitioning from an elderly community to many young families. We are a designated historic district.

I don't work every shift - I work 3 shifts a week and I manage the rest of the shop the rest of the time. We stay open later than other shops in the area (until 9pm - 10 on weekends). I've renegotiated all of our prices for everything (even down to the milk prices), and labor, or course, is our highest expense.

Thoughts?

Jessie

Permalink Reply by Marilyn on July 15, 2009 at 7:35pm

You may need to increase your personal shifts to cut down on Staffing. Good news is, this allow you to get to know the community well and promote your own business.
Having you (owner) at the cafe will allow your customers to know you well. Unless you have very well trained staff who is able to promote your business.

Is there a local paper where you can put a small advertisement announcing your opening? And have appropriate products to target the families that come in.

Looks like your expenses are low if you are able to make a small profit if you gross $690/day.

Keep up the good work!

Marilyn
www.tancoffee.com

Jessie Burke said:

Hi Everyone -
We're averaging $530/day right now gross. Based on my projections, we need to make about $690/day gross to make a marginal profit in a month. Mike, to answer your questions, we have a great location that is about to have a major streetscape project done (August - December) upgrading the entire street, and a new library is going in two doors down. Now, however, the foot traffic is all to come to our shop. Very soon, however, there should be a lot more because we will have an anchor in the library (note: i opened the shop in May because the library was due to open in June, however, they have been delayed 6 months, so I'm feeling the burn a little). We are on a commuter street, but mostly with car traffic. We are right near a lightrail stop, but not many residents use that stop for work. And the population within our neighborhood/5-mile radius is approximately 5,000 people, transitioning from an elderly community to many young families. We are a designated historic district.
I don't work every shift - I work 3 shifts a week and I manage the rest of the shop the rest of the time. We stay open later than other shops in the area (until 9pm - 10 on weekends). I've renegotiated all of our prices for everything (even down to the milk prices), and labor, or course, is our highest expense.

Thoughts?

Jessie

Permalink Reply by Jessie Burke on July 15, 2009 at 10:01pm

HI Marilyn,

I actually live in the neighborhood, and am usually at the shop regardless of if I'm working behind the bar, so I've gotten to know a lot of folks. I've decided to take mid-shifts because our mornings are filled with regulars, whereas the afternoons tend to be newcomers, and I felt it was important that I got to know them.

Regarding an advertisement, we've actually gotten a ton of press - the cover of Food Day in Oregon's state paper (the Oregonian), featured in our local alternative newspaper's annual Finder Magazine, a mention about our shop and neighborhood redevelopment in Portland Monthly Magazine, one of the only small business coupons in our local electric companies coupon book mailed to 70,000 customers, and monthly articles about us in our neighborhood paper. We put a small ad in another alternative newspaper's North Side Guide. People have mentioned that we have gotten so much press for such a new business, which is what makes me wonder if it is just a matter of waiting for those to bear enough fruit to turn the corner...

and what do people notice about summertime foot traffic versus fall/winter/spring? Is it always less predictable and fluctuating because school is out and people on vacation?

Jessie

Marilyn said:

You may need to increase your personal shifts to cut down on Staffing. Good news is, this allow you to get to know the community well and promote your own business.
Having you (owner) at the cafe will allow your customers to know you well. Unless you have very well trained staff who is able to promote your business.

Is there a local paper where you can put a small advertisement announcing your opening? And have appropriate products to target the families that come in.

Looks like your expenses are low if you are able to make a small profit if you gross $690/day.

Keep up the good work!

Marilyn
www.tancoffee.com

Jessie Burke said:

Hi Everyone -
We're averaging $530/day right now gross. Based on my projections, we need to make about $690/day gross to make a marginal profit in a month. Mike, to answer your questions, we have a great location that is about to have a major streetscape project done (August - December) upgrading the entire street, and a new library is going in two doors down. Now, however, the foot traffic is all to come to our shop. Very soon, however, there should be a lot more because we will have an anchor in the library (note: i opened the shop in May because the library was due to open in June, however, they have been delayed 6 months, so I'm feeling the burn a little). We are on a commuter street, but mostly with car traffic. We are right near a lightrail stop, but not many residents use that stop for work. And the population within our neighborhood/5-mile radius is approximately 5,000 people, transitioning from an elderly community to many young families. We are a designated historic district.
I don't work every shift - I work 3 shifts a week and I manage the rest of the shop the rest of the time. We stay open later than other shops in the area (until 9pm - 10 on weekends). I've renegotiated all of our prices for everything (even down to the milk prices), and labor, or course, is our highest expense.

Thoughts?

Jessie

Permalink Reply by Charles Lampard on August 2, 2009 at 7:16am

Chuck,
Charles here from Olympia, Wa. We are in simular situations. I also "bought" an espresso cafe that was mis-managed, had poor customer service, inconsistant hours etc, etc. I took over June of this year. I am already seeing an improvement and importantly hearing from previous customers that my customer service, beverage presentation, and the overall feel of the store has improved many fold. I knew I was walking into an distressed operation, but also knew that their business was not mine.
I too am generating sufficant monies to pay all operating expenses, including the re-branding of the space which I did over a weekend while being open. This is my second location and as I did with the first I "get by" on my tips during the transition period. I did so to generate interest. Many old as well as new customers peeked in and talked with us over a latte...some complementary some bought.
I guess what I am saying here is patience is the key here. I am seeing GREAT word of mouth advertising at work for me. Since this is what I want to do I am willing to put in the sweat and continue to work toward my goal. I also "aquired" a walk-up kiosk three years ago that was also distressed--mismanaged--that after the first 18 months began to be profitable. Patience is the key. Self-assurance and belief in ourselves, not to ignore a good business plan, a marketable location, and quality espresso is the key to success.

chuck celentano said:

Hi Guys,
We opened on March 12th and right now we can pay all of our bills and buy all of our product on a c.o.d. basis. I just have not had a paycheck since we opened the doors. From what you said above we should be on track to turn a profit. Our major problem is the previous owners were never open on time, they would close early and their hospitality skills were sorely lacking. So it has been an uphill battle to get people in the door,but it is working. . .slowly but surely!

Chuck

Permalink Reply by Donna King on August 2, 2009 at 10:43am

Hi Jessie - my business turns one year old next week - wow did it ever fly by. We're in a small town, zero foot traffic - all cars - in rural Washington state.

We are just starting to break even, and I'm hoping to profit soon. Luckily I have capital saved up, as I haven't yet been able to pay myself. Sometimes that part of it gets to me, and I have to keep thinking positive!

I do a lot of advertising and the best thing has been to hand out gift cards - we gave a $5 gift card to all the employees of the school district - the biggest employer in town. We regularly give out $3.50 gift cards to volunteers at local events - a way to say "thank you" and to invite the nicest people in the community into the shop. It works really well. I'm about to hand out 50 of them to the local animal rescue society, to give to their top 50 volunteers.

Also I regularly give out $10 and $20 gift cards when approached by locals to use as raffle prizes or silent auction prizes at fundraisers.

I'm starting to think in terms of weekly sales now, rather than daily.

Best of luck to you! Wish me luck too!
Donna