How's Business ?

[wmark]

Don't know how the rest of you are fairing but our volumes are off this year. Our customers are telling us that traffic is down. I mean, I have heard poor weather this year, late Easter, Japanese tsunami ripple effects and everything else.

Someone did mention that in a world of high gas prices and high food prices, the retail sector is sure to get hit. I mean all you have to do is look at same store sales for someone like Walmart. If their sales are down, then watch out.

 

[PeterCoffee]

My stores sell mostly beans. customers are buying 1/2lb every 4 days instead of a lb every week.
hey by the way what did you think off stumptown selling out to a venture capital firm?

 

[wmark]

Well, I guess it depends on what your objective is. I kind of want a job when I am 75. At that point I hope a days work to be mainly tasting the coffee and reading the newspaper.

You never know what you will do when someone throws enough money at you.

 

[wmark]

I think I am becoming schizophrenic thinking about the opening of a coffee shop(s) as, if you believe what you read, there is a shit storm coming. What ?....with gas and food prices up, who is going out for a coffee.

Anyhow, if I could cut labour costs it could survive losing a little money for a while BUT, I might be stuck in the stone ages thinking that we need young and pretty in addition to selling good coffee (and booze). You put young, pretty and on the ball together and it costs.

 

[John P]

We are doing well.

We've purposely and strategically cut our hours about every eighteen months (on average) and in turn our revenues have increased and our overall overhead has decreased. It all comes down to how you are building your business in terms of positioning, internal marketing, dynamic innovation, etc.

Last year we were 8a-8p Mon-Sat... until July and we changed to 8a-6p. Now comparing 2010 to 2011 through the first week of June, we are several thousand less tickets and several thousand more dollars.

At first glance one might think that increased prices may account for the difference... but not so, this is a greater number of customers, spending more per ticket in 600 less hours of operation.

Now you can't do this overnight, but this strategy has always proven effective if you have the following elements in place.

1) Known and proven market leader in terms of quality - In order to effectively call yourself a specialty shop (if you do), you actually need to be special. Higher quality product, limited product (seasonal, fresh made, etc.) You need to continuously innovate and lead rather than follow. You should price yourself higher than everyone else in the market, yet still be seen as a value. In real terms, you just can't say you're the best in your market, you need to BE the best in your market. Customers will know if you are what you are communicating, and it will damage you severely if you are not.

2) Understands internal marketing - Ambiance, choice of menu items, choice of music, choice of ceramic, pricing, etc. all need to effectively communicate who you are and in the end, the product needs to confirm it. For a small business such as ours, internal (and WOM) are far more effective than external marketing. Use it well!

3) Understands and implements positioning - Be the leader in your category. If not... create a new category by virtue of dynamic innovation and lead that.

4) Word of Mouth promotes and elevates due to the above three. - This is rather self explanatory, but by creating a substantial value proposition for the customer, you will create an environment which fosters great WOM marketing. It's about setting high expectations and creating an experience that exceeds those expectations.

By limiting hours it creates more demand. If you are available all hours to all people, then you are communicating that you're really not that special. Your customers should want to go out of their way to come to your shop, or they should feel a sense of urgency to come before you close.

Always set your closing hours when you are still busy... leave 'em wanting more.

In the end, it's less electricity being consumed, less wear and tear on your body, less labor cost, etc.

Understand how to create the best set of customers by creating a business that only your ideal customers will come to. This is a win-win for everyone.

 

[wmark]

We have done some work and segmented in:

1)Morning office/work traffic including mid morning, lunch and mid afternoon breaks
2)Casual/student traffic
3)Evening traffic/special events as we add the liquor license

Currently we are surveying population in the area for the first two segments and specifically within a 3 block radius. We initially expect 10 hours of operation daily (7 - 5).


....but good advice, thanks.

Marketing ? that is the other guy's problem (the partner).

 

[alisa]

How's business? I've been talking to a lot of illustrators lately, and everywhere it's the same story.

 

[wmark]

I've been reading economic stuff that makes you want to slit your wrists. A few more drinks and that feeling should pass.

Anyhow, now that the "C" has bounced off of $2.30, everyone and their uncle are refilling inventory........and waiting to see where it goes from here.

If one were to believe the material read, then the major intermediate move is down. Who knows about the short term and in the long term we are all dead.

If one were to believe the material read, Starbucks is going to take a shit kicking in China, let alone the U.S.

 

[JJohnson0731]

The coffee business is always going to be popular. I think it is kind of interesting that coffee is the second most purchased commodity in the world behind oil. To me that really puts into perspective how much coffee is consumed around the world every single day. I feel like the coffee industry is one of those industries that is not altered too much with economic changes. People are still going to drink their daily cup of coffee regardless of the economy.

I myself have recently gotten into the coffee industry and I am really loving it. It is great to be a part of something you enjoy and support so much while also being able to help others. Plus additional income is always great for someone like me paying my way through college in this tough economy.

In the near future I believe Dunkin Donuts is going to start to go public issuing stock. I am interested to see what this will do for the coffee industry. I know that Dunkin Donuts has really been looking to improve each store as well as expand overseas so this could be their way of gaining back some of the momentum that Starbucks has had in the past few years. Can't wait to see what his will do for Starbucks and their stock as well as their what response they will have if any.

 

[wmark]

Starbucks has made forays into foreign markets only to pull back (i.e. Australia). To me, Dunkin' Donuts is a product more suited to the Chinese taste than Starbucks.

Lest we forget, past history does suggest that coffee demand is elastic, that is, when it becomes expensive, we will find a substitute.

 

[Tiponia]

I am sure that this would be a good business to put on in to it... Because... Coffee is liked and recognised world over and every second encounter is in love with coffee.. Rather they are addicted.. So I am sure... coffee is a good business.
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[Yarbooa]

Hey, well, I don't have my own coffee place, but yes, from a customer point of view I can tell that economy is going through some financial difficulties, meaning we have less money, meaning although coffee is my love, I cannot afford so much of it as I used to. Unfortunately.

 

[JJohnson0731]

Yeah that is true, the economy is pretty difficult nowadays. I feel as though coffee is a lot more recession proof than a lot of other products though. People still look for that boost in the morning. I really enjoy this discussion as I feel that many people have great ideas. I love talking to people that are interested in the coffee business and are looking to get into the business. I would like to continue to do so.

 

[saliviyajonathan1]

Hello all,
I enjoyed your post and all are very good and have different knowledge. I want to add my one point that is every business is great and its growth and popularity depends up to you that how you are handling your business. However, coffee is very popular among all people so it is good business and just want to say best of luck to you!!!

 

[Monteverde]

completely again big companies!!!