second location and going up against some big established chains.
Hi all. So here is our story, looking for any input which would help lead us to success.
We just opened a second location for our coffee shop concept. Our first shop is going into its eigth year and it has steadily increased year over year and has good solid numbers at this point. I should also say we are roasting coffee in this location so our product is really fresh while at the same time lowering our cogs which is a double win. We finally found a (what we think to be) a good second location. We have been open for 10 days now, yesterday was our official grand opening with our soft opening occuring the week before. We are located in a downtown business district with a residential community just off the business district blocks.
On one corner there is a successful starbucks which has been there for about 5 years, on the other corner is saxby's with us situated right in between and across the street. Both sides get ample foot traffic and we happen to bve on the side of the street where a commuter train line sits.
After going through the first 10 days we are seeing more and more regulars and I am paying close attention to customer reactions when they try our drinks. The reaction has been really really positive once they are here and trying our product so the trend is good I just want to see it happen quicker of course. I am trying to break the daily habit that people are used to with going to the other two shops. One challenge we have is the fact that our business concept is pretty much counter service, so we only have 4-6 indoor seats and do not have a public restroom. in the summer we can put out another 2-4 bistro tables. The other two shops have extensive indoor seating and restrooms.
I would like to hear any thoughts, input on my current situation as I laid it out on how best to deal with this challenge as well as the competion we face. At this point I am extremely confident in the quality of our offerings as well as our focus on customer service it just seems like breaking old habits is my biggest challenge as well as our indoor limitations.
Any and all thoughts are appreciated.
My best,
Nick
Replies to This Discussion
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Permalink Reply by Mike McGinness on
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We what works very well for us is differentiating what we do and offer. We source only the highest quality greens and treat them with respect. We DO NOT compete with Charbucks or any other Chain, we don't strive for that level of milk and sugared crap coffee beverages. We keep a side walk A board updated with current/new SO brewed/espresso offerings etc. We don't advertise "51 Flavors of Espresso" or the like and don't carry ANY commercial syrups to begin with. We don't do any blended anything, hate the noise. We don't even offer whipped cream. Top quality ingredients in everything beginning with the beans , our in house baked pastries, house made dark chocolate sauce and house made all of three syrups and exceptional service is our mantra.
What we do is not for everyone, we don't try to be. And our consistent growth numbers are staggering the past three years when we decided to quit "compromising" and offering things we didn't like just to "compete". I keep the ingredient box flap from Ghirardelli White Chocolate Powder Flavored Mix (one of the best tasting of the fake crap IMO) to show people when they ask for a white chocolate whatever and I tell them we don't offer it because all used at coffeehouses are 100% artificial having zero of what makes white chocolate white chocolate involved. (real white chocolate is a confection made with cocoa butter, sugar, milk and vanilla period.) Virtually everytime they are quit happy with an in house made Madagascar Vanilla syrup or Muscovado latte instead.
Choosing to open counter service primarily versus coffeehouse, you're stuck with having few seats or bagging the location. Done right probably could still work, just differently and at different times IF the quality focused grab and go client base is there. We are facing a similar dilema with only 20 seats at our Downtown location and almost never a place to sit. Been searching for the right bigger location over a year...
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Permalink Reply by Danny Heiss on
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This is really curious to me because I plan to open a second location at some point. And it seems you are following the model that I was choosing. You went to roasting first, and then opened a second location. How is that working out for you and your supply chain? What kind of roaster did you get, and how long do you think it will take to pay it off?
Wen I read Mikes post, what I get is that you should set yourself apart indefinitely, and then follow the path of excellence. Thankfully, we don't have a Starbucks in my town, but we do have another cafe. We are night and day from them. But, I am still trying to diversify even more, and provide more specialty coffees, and far better espresso. I just started doing a non-set espresso focusing on a certain level of quality; a better coffee. Customers picked up on it right off the bat without us saying anything. I'm experimenting with the sales concept of customer appeal. I feel like the human body and mind loves consistency. But consistency doesn't have to be the same thing every time. It has to be the same standard. So, rather then giving them something they can mindlessly appreciate and expect, we an give them far beyond that and show the customer true consistency and growth.
I would get to know the owners of the other cafe's as well. I would try to extend the olive branch of peace, and get to know them. That's just my personality though. I don't like bull crap and petty aggressive competition. I frequently enjoy friendly competition. And if you diversify enough from your competition and raise the bar in quality, you will have another interesting effect on the community you operate in. Other competition and shops close by will see the success, and make n attempt to bring up their quality. You will have inspired them, which in my opinion is worth it more than anything else. You can change a community for the better, and be part of plus side of the economy.
Do you have a second floor? You could provide more seating up there perhaps. Did yu remodel the location prior to opening? With the appropriate design, you should be able to maximize your seating while still providing excellent flow through your cafe. If there's nothing to do about it, make it your strength, and think about a variety of things you could offer a customer that are exciting and quick. You could market heavy to your train people, who are likely all commuters. Think about making a quick specialty beverage that capitalizes on the concept of being quick and practical, yet acceptable to a wider audience than espresso shots. Something perfecto get in under 5 mins, and be able to comfortably pair with standing on the train to work. You could have a "on the way home" special as well, marketed to the commute home. I would love to have your situation! Endless marketing possibilities!
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Permalink Reply by nick placakis on
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Thanks for the input Mike. I respect the fact that you have remained true to your principles in this competative market place today. good for you,
Danny, we actually began roasting before opening our first location beleive it or not. I took a very strange path into coffee, one that I would not necessarily recommend however looking back now after the fact it has seemed to work out so far. We started roasting in a small warehouse and 3 months later a highly sought after resort area location was available which we had our name on a waiting list for. When they called we jumped. I thought it was going to be a homerun from the beginning, very big miscalculation. It took us 2 solid years to gain real traction and be at break even. after that 2 solid years followed before we consolidated and put our roaster in the shop. That moved turned out to be real good as the next 3 years continued to climb our revenues steadily.
We have wanted to source a second location for quite a while however could never find the right spot. I wanted it to be near the first but nothing exceptional was available. My wife started working in a great downtown business district in a small community about 45 min. away. We got to know the flow over a 2 year period and thought this would be a great town for us. When our current spot became avaible I just jumped in.
I have had the same staff at the other shop for 5 years now and they do a great job being an extension of my vision with coffee and customer service so that helps alot. I took a key employee with me to the new location to get it rolling and hopefully in a few months when it gets settled in she can return to the original spot and I can oversee both. I will let you know how that works out later. lol.
I generally don't have patience for slow starts, also because with each day that passes expenses pile up. I see we are on a good track with new customers coming in daily in addition to what have now become regulars so the trend is good, it's just too slow of a process for my personality and I always try to remember the two other big chains are on each side of me so we have to do it right all day everyday with each and every customer. PRESSURE!! Hopefully it works out as planned, I will definately keep you posted and thank you for the input and suggestions I will definately see about implementing some of them especially the commuter crowd specials.
Thanks,
Nick
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Permalink Reply by John P on
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Nick,
Mike has pretty much said it all, but I would just emphasize that they should be afraid of you, not the other way around. Having chains in close proximity quickly illustrates your differentiation to a new and curious customer base. You can always make subtle improvements daily to get even better, the chains cannot; they have a formula they need to follow and are stuck being who they are.
I always think of us as having no competitors. No one does what we do, and if someone ever chooses to, we'll just continue to do it better.
People will come because of your excellent product. Don't worry about seating. The worst problem you will have is you might need to open a third location.
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Hey john thanks for the pep talk i think i needed that lol. In my heart of hearts i beleive that to be true and its how i came into this thinking. But i also thought people would line up to try something new and once they did i would have them hooked. But the truth is they seem really hesitant almost afraid to try but those that have are now regulars. I just need more of them.
Thx john
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I agree. You can't stop a good crowd, and if you are doing something well, you will never have enough seating. That, my friend, is a darned good thing.
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Be patient. Continue to educate by the cup. The numbers will work themselves out.
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Agreed. It takes time to build a reputation and then it can explode. We've seen consistent month to month growth once we put our priorities in order. November 1st will be our 6 year anniversary. Sept 2013 versus Sept 2010 up 215%. And now October as of Saturday the 26th was just shy of already matching Sept tracking a ridiculously sweet 11.5% increase, 11.5% increase in one month?! FWIW business gurus teach greater than 30% annual growth is doing exceptional. But rest assured it was VERY rough going those early years...
John P said:Be patient. Continue to educate by the cup. The numbers will work themselves out.
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Mike that growth rate is excellent. How long did it take to get to your break even point.
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Mike,
And I thought all the success was because of your winning smile!
Nick,
I don't know about Mike, but if you don't pay yourself in the beginning, then it's much easier to hit that break even point. Of course this assumes you've put something away for a rainy day.
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Permalink Reply by Paul K Dunn on
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Nick I have a huge idea for you to try. But You must hit me here info@dunncomarketing.com. You've done an excellent job with your other shop. I believe what I have in mind will be just enough to help people look at your shop vs the competition. Lets mastermind this thing. Congrats on the new location by the way. Paulie K Dunn
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