Mohammad Khan Yusufzai is Masters in Management, specializing in Economics, Finance and Marketing, with corporate & lectureship exp.
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People love coffee, a lot. You can expect to find a coffee shop at every corner in every neighborhood. From huge coffee business franchises such as Starbucks having a formidable marketing budget and manpower to the local independent coffee shops serving uniquely-tasting coffee, the demand for coffee in America is always high.
This fame of coffee is what draws a lot of people to open their coffee shops. But entering the café market unprepared is the sure way to lose money.
Here are the major challenges that every coffee shop owner faces today and what you can do to overcome them:
Coffee Shop Business has a Very Tough Competition.
Coffee shop customers are usually very loyal. They have their favorite coffee from a particular shop. They like to stick to it and not compromise on that. This makes it difficult to poach any new customer from your competitors.
This is overwhelming and intimidating for new coffee shop startups. Especially for small independent business owners.
However, with thorough research and proper strategy, you can take advantage of this huge and steady demand amidst such tough competition.
To stand out from the crowd you need to differentiate your coffee shop. Every other coffee shop offers more or less similar things.
You can stand out by giving noticeably better services. There is a wide list of things that you can choose from. IT can be great customer service, elaborate menu, recreational activities such as board games, free Wi-Fi, etc.
Whatever you chose is the USP (unique selling point) of your coffee shop. People will remember this USP and hopefully, this is what will bring in repeat sales to your café.
Deciding Menu for Your Café
A menu is the core of your coffee shop. It has a fundamental role in attracting customers. It makes them stay and return, thus delivering profits to your business.
Deciding on a menu is a delicate balance. A narrow menu leaves the customer with a limited choice. They will bore out of it very quickly.
Whereas a thick book in place of a simple menu is going to leave your customer overwhelmed, (and your cooking staff frustrated).
Follow this simple four-step process to choose what items you can offer in the coffee shop
- Availability of supplies/ raw materials: items on your menu should be easy to find. Unless you want to spend most of your time arranging and maintaining your stock.
- Affordability: Higher the cost of inputs, lower will be your profit margins
- Customer Input: Easiest and perhaps most important step. Ask your customers directly by giving them a list of possible menu options.
- Café Theme: The theme or concept of your coffee shop is the experience you want your customer to feel.
Impeccable Customer Service.
You want to be known as the best coffee shop serving great coffee. Not alright coffee. Not okay coffee, but great coffee.
Customer service is a deciding factor in the café business. It can either make or break your café.
The biggest café network in America, Starbucks, has its concept revolve around personalized and great customer service.
There is no substitute for customer service. You can serve the greatest coffee in your town. You might have the best menu among your competitors. But if your customer service is poor, you will soon lose your customer base.
Customer service is the biggest parameter deciding customer loyalty and retention.
You need to make sure that every customer experience is consistent and free of any unnecessary hurdles.
Give timely training to your staff on how to relate with customers, resolve issues and work co-operatively in efficient teamwork.
Managing Your Coffee Shop Employees.
Employees or human capital is the most important resource in any business. Yet it is the trickiest to manage.
No doubt, a well-trained and dedicated team becomes the greatest asset of any business.
Your employees must know what your business is all about. They must have clarity over what your coffee shop aims to achieve. So that everyone can work towards achieving the same goal.
Communicate the responsibility of each employee. Establish proper reporting relations so that there is no confusion among the employees.
You can also introduce giving the list of tasks and checklist to check the work progress. Through this, you can ensure productivity even when you are not around.
Employee training is another thing whose importance cannot be underestimated. Training helps your employee to prepare beforehand for any contingencies. This also makes them feel appreciated and valued in your business.
Poor Inventory Management
Coffee shops usually have this problem. They often run out of stock of their supplies. This creates a lot of inconsistency in serving customers.
If your café continues to disappoint customers in this way, your business may soon lose its credibility and market to your competitors.
The opposite end of the spectrum are cafes that have a lot of unused supplies in their stock. They regularly throw away spoiled food and products that have reached their expiration date. This, again, is another way to incur huge losses for your business.
Proper inventory management is crucial to running any business. Make sure you are aware of how much supplies you need. Have a sensible time buffer between every order so that you don’t run out in the middle of service.
This is just a general list of challenges that coffee owners face. Sometimes problems are specific to the locality. That being said, café is still one of the most sought-after businesses today. Following the tips mentioned above will help you sustainably grow your business.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2022 Mohammad Khan Yusufzai