Coffee Industry | Eight Questions You Need to Think About When Opening a Coffee Shop

Opening a coffee shop is the dream of many people. There are always one or two friends around us who want to open one, and even you yourself have had such an idea, and maybe you are in the process of planning it, or have already started to act.

[Preface] Opening a coffee shop is the dream of many people. There are always one or two friends around us who want to open one, and even you yourself have had such an idea, and maybe you are in the process of planning it, or have already started to act.

After long-term observation and investigation of nearly 100 coffee shops, I have roughly come to the following conclusion: the failure rate of entrepreneurial coffee shops is seriously high. If I must describe it with a ratio, it is between 70% and 85%. In other words, if you open a coffee shop, if this is your first coffee shop (it can be called an entrepreneurial coffee shop), then within 2 years (2 years is my standard for evaluating failure), the probability of this shop going bankrupt is between 70% and 85%. You may say that I am arbitrary, but listen to my detailed explanation.

1. Market conditions

Someone has investigated 90 coffee shops. The so-called investigation means that you can contact the operators, or if you cannot contact the regular operators, you can get the desired investigation and analysis through sufficient visits. Of the 90 shops I mentioned, about 20 were opened by friends, or introduced to me by friends, that is, opened by friends of friends, most of which are entrepreneurial coffee shops. There are 30 coffee shops that I saw listed on the Internet (58.com, Ganji.com), of which 70% are entrepreneurial coffee shops. The remaining 40 or so are the ones I actively patronize. Generally, every time I go to a city, I find the coffee shops with characteristics that I want to go to on Dianping.com.

Of course, there are many successful coffee shops among these 90 coffee shops. However, success or failure is sometimes superficial to outsiders. Sometimes it depends on experience and analysis. For example, a coffee shop opened by my friend is always full. If ordinary people think it is successful, it is successful on the surface. However, after sitting in this shop for an afternoon, I came to the conclusion that this shop must be losing money. Later, my friend reluctantly admitted it. Why is it losing money if it is full of customers?

The failure rate I'm talking about is not the success rate of these 90 stores. First, the definition of success or failure varies. (Some people open stores for reasons other than making money.) Second, the stores I've been able to investigate are those that are still in operation. I've no longer had the opportunity to see those that have failed.

Of course, there is no very standardized and strict analysis, nor is there a very professional and extensive statistics. I think there is no harm in this, because using a specific probability can alert many people who have the idea of ​​opening a store and make them think twice. In short, in recent times, I have learned about about 40 entrepreneurial coffee shops. Most of these shops are in a state of poor operation, and nearly 26 are clearly in a state of loss. The rest are in a state of mediocre operation. Less than 3 can clearly make a profit within half a year of opening. These are my friends, friends of friends, and boss friends I met during visits. They were also passionate at the beginning, with the dream of creating their own coffee kingdom, and even determined to compete with Starbucks for the world. But the reality is cruel. After hard work, there is no return. The money invested cannot be cashed out if there is no buyer to take over. At the end of each month, there is a deficit at the end of the settlement. This kind of pain can be imagined.

2. Risks of opening a store

If you go to Macau, and you put the budget you invested in the coffee shop on the Macau gambling table, your chance of winning is 48%. If a gambling table says that your chance of winning is only 30%, are you willing to gamble? I have seen too many friends like this. They invested without estimating the probability of winning, but they put themselves in a game with much higher risks than the casino. Some friends also wanted to invest a little money to play, but they didn't know that they would play big.

Usually the money you actually invest is more than 1.5 times your budget, and that doesn't include the time and sweat you spent on starting your business, which is also an investment. It only takes you one day to go to Macau to play a game. The time you spend on this coffee shop game may be a year. What was your annual salary in your previous job?

I believe that people who love gambling will not open a coffee shop. But why do so many people still think of opening a coffee shop when they think of starting a business? Too many people overestimate some things and underestimate other problems. For example, if you overestimate your own ability (for example, if you are the boss of a successful advertising company, you think that opening a coffee shop is an easy job, which is a big mistake.

Another example is overestimating the market potential of the location of the coffee shop, thinking that if there are no coffee shops in a certain area, people will definitely come if you open one. This is also wrong. Site selection is a key factor, which everyone knows, but many people do not have the ability to select a site. The ability here refers to your experience and knowledge of analysis.

Some friends overestimate the actual effectiveness of chain franchising, thinking that joining a chain coffee shop will greatly increase the possibility of success. Wrong!!! Most of the coffee chain franchises in China now have the purpose of making money. Usually these companies claim to have a successful business management model and have created their own core technology. Now let's think about it, is it necessary for a successfully operated coffee shop to spend a lot of energy on franchise promotion? We who do marketing should understand this truth. The more chain companies have a successful business management model, the more cautious they should be in the strategy of joining this expansion model. Think about it again, if you join a coffee chain, you need to pay a certain franchise fee, and you also need to pay a price for coffee shop raw materials that is higher than the market average price. These will undoubtedly increase your opening and operating costs. If your store is still profitable under the pressure of these costs, then this chain would have blossomed everywhere. This market is actually not short of capital, but a truly profitable business model. Once you really have such a model, you really don't need others to join, let alone do publicity to encourage others to join, capital will come to you.

If you search for coffee shop franchise on the Internet, you will see many official websites of coffee chains. Click on them and you will see that the official websites of these coffee shop companies are full of franchise content. This is worthy of your deep thinking. The official website of a successful coffee chain company should have its own ideas, personality and appeal. If it only serves as a promotional tool for franchising, it is enough to show that the manager of this store is thinking about how to make money all day long. How can it make a good cup of coffee?

A friend of mine recently opened a coffee shop. He showed me his business plan, and I saw that half of it was about how to develop franchise business in the future, such as franchise conditions, etc. I thought it was a bit ridiculous, so I said bluntly, brother, don't forget your roots, the most important thing is the cup of coffee, your success or failure depends on your products and services themselves, not how you attract others to join in the future.

I just talked about overestimation, so what is underestimated? Generally, the most obvious thing is of course underestimation of risk. This has been mentioned just now. Investment always has risks. Everyone knows this truth. The problem is that we often underestimate something. I find that many entrepreneurs have not thought about it seriously and underestimate its importance. Let me first talk about the example of the boss of the advertising company mentioned just now. This friend opened a coffee shop across industries and chose a location in a creative industrial park. The decoration style fully utilized his advantages in creative design (please note that I am talking about creative design here, not space design). The furnishings in the store are all creative things, the furniture is designed furniture, and the wall paintings are artistic level. As a result, do you know what I thought when I sat in this store? I won’t come again. If I don’t know this friend, as a person who likes to drink coffee, I can’t find more reasons to come again. I also put myself in the mentality of white-collar workers working in the industrial park and literary youth visiting the industrial park, and I can’t find a reason to come again. Why? And what is the connection between this example and the underestimated risk just now? Let me talk about another example first. I happened to see a coffee shop business transfer announcement on 58.com. The announcement said that the shop was located on a road outside one of the exits of the industrial park I just mentioned, close to the exit of the industrial park, adjacent to a large high-end residential area, and it was the only coffee shop on the road. The shop rent was only 4,500 yuan (about 50 yuan per square meter, my friend's shop went to 300 yuan per square meter). It sounded quite attractive, so I hurried over to find out. The road where the shop was located was actually a widened road of the "urban village". Since there has been a plan to further widen the road, most of the shops on both sides are temporary buildings, and most of them are low-end restaurants. The decoration of this shop is simple, and the fatal thing is that the shop next to it is an aluminum alloy shop that constantly creates noise and dust - so that's it. When sitting in this shop, I was imagining the mentality of the entrepreneur of this shop when choosing the location. The rent is very low, but it can be close to a large residential area and one of the best creative industrial parks in the city. At noon, it is visited by white-collar workers working in this industrial park, and at night and on Saturdays and Sundays, it is mainly customers from the community.

My friend's shop My friend told me that he is losing money now, although he doesn't think it's serious, he said at least some of his customers, friends and so on have a place to hang out (one of the reasons why many people open coffee shops is this). From the perspective of business, (due to high rent and decoration costs), it is a serious loss. As for the transferred shop, although the boss said that the reason was the discord between shareholders, the low fees and the lack of customers have exposed the loss situation. What is the reason?

Both of these stores underestimated one thing: the consumer experience a coffee shop should have.

3 thoughts: How to provide consumer experience

The consumer experience is the feeling journey that a consumer has when consuming your products and services.

This shop of my friend is located in a park where many art and creative exhibitions are held. The environment and atmosphere are very suitable for coffee shops. The problem lies in the internal space, which does not create a comfortable (cozy), relaxing (rewind), and leisure (chillout) feeling. The design of the furniture is good and very inspiring, but I can't find a comfortable stool to sit on, nor can I find a suitable distance for friends to communicate (separated by a large and weirdly designed coffee table). In order to brighten the carefully collected paintings on the wall, the lights are very bright, making people feel like a gallery, rather than the softness that a coffee shop should have. In the sales area, there are many creative toys, except for mugs, there is nothing related to coffee; the whole shop lacks a theme. Is it a creative craft workshop, a gallery, or a coffee shop? Or it is everything, and in the end, nothing. The marketing term is unclear positioning and lack of main selling point (USP). The owner underestimated the experience that a consumer wants to have in a coffee shop. He or she wants a space where he or she can communicate with others comfortably. It is better if this space is inspiring, but this inspiration must be subtle, not deliberately promoted (I will talk about the subtle and inspiring atmosphere in detail in the following article). Of course, the coffee in your hand must be delicious and professional. This is the most basic thing, because coffee is to be drunk into the stomach. Sometimes, he or she may not know how to drink coffee, but your service, your coffee presentation, and your store image will affect my judgment (I will explain this in detail in the following article). Finally, the price must be appropriate. I have an estimate of the value of my experience. The difference between the actual price and this estimate will affect the number of times I patronize. My friend's shop is self-consciously decorated in a high-end manner, so the price is high. Literary youth cannot afford it, while office workers will choose other coffee shops in the park that are relatively cheap and have a relatively relaxed atmosphere. It should be said that my friend put a lot of thought into opening this shop, and even the chandelier is full of design flavor. However, this type of coffee shop often makes you want to go once, but there is no reason to go again. Simply put, many similar creative coffee shops give you the feeling that the operators have ulterior motives after entering, or use them for greeting acquaintances, or for display. Anyway, it is not a place where you can comfortably enjoy a cup of coffee at a reasonable price.

This other store has a set meal for 25 yuan at noon, which can fill you up and come with a cup of coffee, but this is still not as competitive as a tea restaurant with a terrace in the park (which charges a little more). The owner underestimated the requirements of a white-collar worker engaged in a creative career in the park for the lunch experience. He/she may prefer to drink a cup of instant coffee in a tea restaurant with an external environment and atmosphere, rather than drink a cup of freshly ground coffee in a coffee shop with no external or internal environment and atmosphere. On the surface, the price of this store is cheap, but residents of the community are more willing to patronize restaurants or coffee shops in the park at night because the whole environment is already very comfortable, relaxing and leisurely. The rent of 4,500 yuan seems cheap, but the poor environment (next to the aluminum alloy store) has ruined the consumption experience of this store. Although there are enough residents in the community driving and traffic to the park on the whole street, due to the visibility and parking problems of the store, these vehicles just pass by in a hurry. As for the flow of people, I can't imagine that a resident of this community would come to this place to relax with a cup of coffee. "When I'm not in the coffee shop, I'm on the way to the coffee shop." Coffee shop owners should not only consider your coffee shop, but also how your customers feel on the way to your coffee shop.

Speaking of the feeling on the road, I will give an example of how good it feels to walk on the way to a coffee shop, to illustrate that paying attention to consumer experience requires paying attention to every detail, even just the direction of your gaze. There is a coffee shop in a park. Since the park became free of admission, the flow of people in the park is comparable to that of a street market (the park is surrounded by densely populated residential areas). This shop is next to one of the exits of the park, and there is also a parking lot with enough parking spaces. The customers who patronize it are people who drive here, and there are also people who come to the park for fun and walks. But the shop owner told me that their business is very average. It has always been dominated by people who drive here, because parking here is indeed convenient, and the road outside is a main road with a lot of traffic. But unfortunately, the specific location of the store is in the park, and unless people driving are on purpose, it is generally difficult to notice the sign at the exit of the park. There is a path in the park, but the shortest straight-line distance is dozens of meters, and it is a small steep slope. From the path to the store, you need to take a winding mountain path, pass some carefully designed garden pools and rockery, and finally reach this cafe. The cafe covers an area of ​​more than 200 square meters, with floor-to-ceiling glass on the outside and curtains to block the sunlight during the day.

This is a rare and perfect location in the city. With so many people, sitting down to have a cup of coffee and afternoon tea is so pleasant (there are also many couples who come to the park to date in the evening). I asked the store owner about the specific business situation. He said that he has 3 branches in the city, but this one has never made money. In the past two years since its opening, he has spent a lot of advertising expenses, used many promotional methods, and even started group buying. I told the boss, I have an idea for you. You can intercept the advertising fees allocated to this store and make an outdoor advertisement specifically for this store. The boss said that he has already done some things, such as erecting a sign at the entrance of the park, setting up many lamp posts and light boxes on the path near the store in the park, and paying a lot of advertising fees to the park. I said that my idea does not need to generate any monthly rental for advertising fees. He only needs to discuss with the park management and the store will pay for the construction of a straight slope on the hillside. This slope does not need too much decoration, and the direction of the straight line does not need to be the entrance of the store. It only needs to be the corner of the store closest to the road, and then in this corner, a few white outdoor tables and chairs and parasols are placed on the lawn outside the floor-to-ceiling glass. The boss immediately refuted my opinion. He said that the straight slope should make consumers feel that they are going up step by step, which is a bit strenuous, and the park may not agree. It will also limit the establishment of business areas outside the glass wall. There will be many problems in the business area outside, such as weather mosquitoes, and inconvenience for waiters to walk. My boss friend has been in the Western restaurant and coffee industry for 10 years. At first, he believed that he had done everything he could for this store. His other two stores in the city have good profits and are named XX chain coffee lounges. It turned out that he did not understand the significance of placing a few dining chairs outside the store for passers-by to see. A few white dining chairs placed on the green lawn can be interpreted as a visual symbol, representing comfort, relaxation and leisure. This is the best outdoor advertising. It would be a pity if a coffee shop in the park did not use such an advertising channel. The low curtains in the distance that passers-by saw through the woods before were a kind of barrier. They couldn't understand or guess what was inside, so they didn't have the urge to patronize. A straight mountain path is a necessary combination, which not only provides the shortest and most convenient direct route, but also provides a visual direction. Passers-by can see through it at a glance, from the path to the white dining chairs, which is like a kind of invitation, or even temptation. The original path winding up at the intersection, although the sign stands at the intersection, the storefront cannot be seen from the sign, which politely rejects passers-by who come to stroll and play. Moreover, the name of the coffee lounge also stops people from walking, and the lounge is definitely not related to the mentality of passers-by who come to the park. I said to the boss: You can continue to sell alcohol in the future. People who come to drink coffee or drinks may sometimes come to drink at night. But first you must give them a reason to come, at least let them take the step towards the ladder. After some discussion, he finally agreed to my plan, and there was not much investment. It would be okay for my friend to try it. As a result, things went unexpectedly smoothly. The park management office quickly agreed to the construction of the steps. After all, it was only a few dozen meters of weedy slope, and the steps were designed very simply, without too many fancy things. Putting out a few stools would not affect the view. The shop owner also changed the name of the shop, which actually removed the word "lounge", and launched set meals and promotions related to coffee drinks. He also added a water sign at the exit of the newly built steps on the park road. Small measures, with a total investment of less than 50,000, have made this shop unprecedented in the afternoon tea consumption period. The business of walkers and tourists began to build, and then gradually increased, and also brought prosperity to the dinner and evening drinks business. My friend has always been a senior who taught me a lot of things. He is also a successful operator in the coffee industry. He was very surprised. Why did he use so many methods and strategies in publicity and marketing, but they all failed to work, but a simple path and a few tables solved the problem? My point of view to him is: if a coffee shop is a brand, this path and a few tables are actually a manifestation of the essence of the brand. The same is true of the above-mentioned "not forgetting one's roots". The essence of a "coffee shop" as a brand can be understood as a feeling of comfort, relaxation and leisure. It can also be analyzed from the perspective of consumer experience. Too many operators think that they have achieved this by having glass, sofas and air conditioners. That's too simple. When I visit a coffee shop, I often feel surprised. I wonder why so many operators don't take care of so many details? These details often only require small changes, a little labor, and not too much cost to improve the customer's consumption experience. What surprised me even more was that many coffee shop operators of a certain scale spent huge investments on advertising and tried every means to attract new customers, but did not focus on how to design a memorable consumer experience that people would come back for more. The example above is very vivid. There is already an almost dreamlike environment and enough traffic. If people still don’t come, there must be something disconnected in the consumer experience. This example shows that a potential guest who comes to the park for a walk is related to this coffee shop from a consumer psychological perspective, but in terms of the visual orientation and attraction of the walking traffic, this store is disconnected. What’s worse, the sign of the lounge makes the traffic seem irrelevant.

Indeed, there are many coffee entrepreneurs who have not even realized the essence of a coffee shop but have opened a place where people want to sit down, enjoy a cup of coffee, and spend an afternoon or an evening. The basic here refers to what should be done within a controllable range to achieve a satisfactory consumer experience. A consumer's consumption in a coffee shop basically covers the five senses. What he eats, drinks, sees, hears, smells, and even touches must be taken care of. Of course, who doesn't understand this principle? If you don't even understand this, then you are doomed. What I want to say is that these are all very obscure and subtle, and they are tasteful, subtle, and subjective. It means that some things are not obvious. You think this light is too bright, he may think it is too dim, I may think it is too dim during the daytime business hours, and too bright at night. You think this bookshelf full of CDs is too rustic, he thinks it is personalized and fashionable. What about me? I said I think it is a bit rustic, but my words don't count, it's better to ask ordinary consumers (solve it with surveys). There are also some things that are obvious, but some people just don't pay attention. A good coffee shop manager should be sensitive, discerning, and even demanding.

One time I went to a friend's shop. It was noon time and I smelled a smell of oil smoke. I hurriedly asked why. My friend said that their employees were cooking lunch in the kitchen, and the kitchen's exhaust system was not very good. I was speechless. I often suggest that coffee shops should often bake cookies during the peak business hours, and it is best to turn off the kitchen exhaust during this time, because the baking aroma of cookies is most suitable for coffee shops. Of course, the smell of roasted coffee is also okay for coffee shops that roast their own coffee, but after all, it is a bit strong, and it is difficult to control the intensity of the smoke. The smell of oil smoke in a general kitchen is fatal to a coffee shop (in fact, smelling oil smoke in a Chinese restaurant is also fatal). If my friend is not sensitive to this, then it really ignores the basic experience that a consumer should have in a coffee shop. Smell has become a basic lesson in store management in many industries. The marketing department of a first-class retail company will study what smell attracts passers-by to enter the store and what smell makes consumers want to buy.

4. How to market

Only by using marketing can you find a successful business model for your coffee shop

① I have cited many cases above, and there are many more. I hope to use my experience in marketing to give those who have the idea of ​​opening a store, or those who want to start a business to open a store, or even those who are veterans in running coffee shops, more considerations and more deep thoughts.

Another motivation for writing this article is that I feel more and more that entrepreneurs who lack some seemingly simple marketing knowledge (which is actually very simple) are undoubtedly equivalent to throwing their hard-earned investment capital into a gambling table with only a 30% chance of winning. However, many catering operators can actually be more successful if they just put aside some prejudices and inertial thinking. From the essence, their potential has not been brought into play. It turns out that management can be very easy, and they can open branches, operate chains, and go public. In short, the use of marketing can greatly reduce the risk of entrepreneurship and provide the possibility of finding a successful business model.

To illustrate the importance of marketing knowledge in coffee shop operation, I will first give an example of a small shop, and then give an example of a large shop with an investment of over one million. Before I visited the small shop, I had heard that it was opened by the owner of a coffee trading company in Shanghai. After arriving at the shop, I saw that the layout inside was obviously a marketing center for the coffee business owner, where they concentrated on promoting and selling the coffee beans they operated. I tried a cup of quite good coffee, and the taste was very suitable for my taste. I asked the boss about the variety of this bean, and the boss said that this was not a single product, but a blend of their own, and they roasted it themselves, keeping it fresh within 7 days. I saw the packaging of their own brand on the shelf, and expressed my intention to buy it. Unexpectedly, the boss told me that these packages were just packaging samples, because they had to decide the roasting time based on the order, so they could only be pre-ordered and shipped 2-3 days later. I admire the persistence of the store owner. Generally speaking, impulse buying behavior, of course, hopes to have it immediately, consume it immediately, and seeing is believing. Before I fell in love with coffee, I was a deep tea lover of Chinese tea. I have never bought tea leaves online. I cannot pay for them without smelling them in my palm. However, the seemingly troublesome and incomprehensible persistence of this shopkeeper convinced me of his professionalism and his pursuit of quality. I have drunk too many high-priced coffees that were ruined by staleness. The shopkeeper was willing to roast them for me in such a small batch and also provided free express delivery. I was more willing to pay for them. Although the price was a little expensive, I still felt it was worth it. I thought I could enjoy this coffee that suits my taste after returning home from a business trip in a few days. The shopkeeper also introduced some other single products they sell and suggested that I should not buy too much at a time. It would be best if I could finish them within half a month. After the boss said this, I admired his business acumen even more. He first let me choose home delivery. Once I accepted this purchase process and further accepted and liked this coffee (self-blended, self-roasted, only in this store), I would buy it for a long time. Although I was in two different places and thousands of miles away, I could still be his loyal customer.

In marketing knowledge, there is a concept that needs to be understood, which is the lifetime value of a loyal customer. If I really become a loyal customer of this store, I will buy once every half a month, 100 yuan each time. How much is it in a year? 2,400 yuan. 12,000 yuan in 5 years. Assuming the gross profit is 50%, you can make 6,000 yuan from this customer in 5 years. So, it is important to attract new customers, but only stores with enough retention customers have the opportunity to make a profit. Even if there is a way to make you spend 5,999 yuan to get this loyal customer, you will still make a profit from this customer.

So what marketing methods did you spend the 5999 yuan on? The following may not cost you a penny, but will make you have such loyal customers.

Yes, the story is not over yet. Because I needed to send the package by express, I wrote down my home address and my wife's mobile phone number. Because my wife is at home more often, she became the designated recipient of my package. I casually asked my boss if I needed to write down my email address. To my surprise, my boss said no, and replied that he would just call me if he had a phone number. Oh my God! He thought that my future transactions with him would be as simple as me calling to place an order and then sending the package by express after payment. He probably meant that he thought he already had my mobile phone number, or his business card, so there would be no problem for us to communicate with each other.

Just now I admired the boss's insistence on coffee quality and his unique management skills, but now I secretly feel sorry that he did not use some simple marketing communication methods to turn a new customer into a customer who can earn 6,000 in 5 years.

② In marketing, there is a marketing promotion method called direct marketing. This method seeks to establish information exchanges directly with consumers, and mail (in the past it was ordinary mail, and now it is email), due to its low price and one-to-one, has become one of the main channels for this information exchange. Of course, from a broad perspective, we can also say that this coffee trader is also directly facing consumers when opening a coffee shop. If it is a sales behavior, we can say that this is direct sales, and if it is a marketing behavior, we can also call it direct marketing. The general coffee industry thinks that what can be done in the store is nothing more than promotional posters and other pop materials, and also tasting (there will be a section about tasting later), price promotion and so on. They ignore the gold mine they can accumulate for their business. This gold mine accumulates to a certain extent. If a business is to be sold, this accumulation will serve as the basis for the valuation of the intangible assets of your business. There is no need to open the door to this gold mine. You accumulate it continuously. You need to do a little more, and sometimes you also need some skills; this gold mine refers to the customer database. The database sounds complicated and a little bit, but it is actually simple to do. The database of a coffee shop's customer base does not need to be too complicated. After all, we are not a big company. We just need to grasp the key points, which is that we will be able to send information to our customers conveniently in the future without incurring any costs.

First of all, let’s talk about why we need to send information. For example, the boss thought that I liked his coffee and would continue to buy it in the future. Has he ever thought that if he could send me an email in the future to sell me more of their products, promotional information, information about products, special offers, etc., it would be like I am not in the coffee shop, but I still receive the sales promotion from this shop. There is a virtual coffee shop in the cloud. And this shop does not need rent, water and electricity, and it can be operated. People need social connections. I think everyone who loves coffee will not refuse to establish a connection with this company that makes good coffee. Sometimes the so-called social network is so simple. A regular email can establish a kind of communication, rather than just a business card in the business card folder of both parties. This effective connection with customers will be rewarded in the future in terms of the per-customer consumption of these customers. The possibility of my repurchase will increase because I am constantly reminded that this store in Shanghai has coffee with the taste I like, and there are new products that I want to try. I may not want to miss some special offers. I may also want to reply and tell the boss how I feel after drinking it at home, and attach some of my opinions. For some interesting email content, I may forward it to more friends. Email is convenient and free. However, the content needs to be thought about. In addition, how to manage customer lists and emails requires some software support. In addition, you need to consider how to avoid customer spam filtering, and think about how to effectively and continuously obtain the emails of your existing customers. I will not go into details here. In short, when you have a large customer base, their email addresses will be a gold mine that you can continue to develop.

Another example is the first store of a startup company with a total equity of over 10 million yuan and an investment of over 10 million yuan. They spent nearly a year researching and developing coffee and other beverages, baked products and business models, and during this year they continued to search for store locations, and finally chose to open the store on the top floor of a newly opened shopping mall.

What is the result? The result is the store I mentioned earlier that is often full but always losing money.

This is a very interesting case. This company has enough financial resources, manpower, and time to prepare. Their financial resources allow a group of excellent talents to sit together every day to conduct research and development and planning. They work hard for a whole year, are ambitious, and have high aspirations. After a year of hard work, the first company invested over a million.

When I was assigned to sit in this store, it was in the afternoon. The reason why I said "assignment" was because there was already a line at the store entrance. Even when the company manager came, he squeezed in with me in a temporary position. It can be said to be a hot scene, but in my opinion, it is still a business situation with major problems, and it is a problem with a fundamental aspect that should be taken into account in the marketing system.

This question is about the spending per guest and the seat turnover. It is that simple. Whether you are a marketer of fast-moving consumer goods or a coffee shop, you must care about the spending per guest and the frequency of consumption (for coffee shops, it is the seat turnover) of your products.

Profitable catering businesses must pursue two goals, one is gross profit margin, and the other is RevPAT. Regarding gross profit margin, there is an industry standard, which will be discussed later. RevPAT is the ultimate goal. Without it, no matter how good the gross profit is, it is in vain. For coffee shops, RevPAT is calculated by the consumption per customer and the turnover rate per seat. In addition, if I want to value a coffee shop, there is another important indicator that must be considered, which is the turnover per unit area.

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : I believe that the single-customer consumption of this store is similar to Starbucks, and it is even higher. However, first of all, Starbucks will never open a store of more than 300 square meters in such a shopping mall (there is one in the lobby on the first floor of the shopping mall, with an area of ​​about 80 square meters). Secondly, Starbucks has the business of taking away (Takeaway) and the income from the in-store products. My friend's store cannot do it for the time being (not that I didn't think about it, but the nature of the product and store settings have been decided to do it). Also, Starbucks has better bargaining power with the mall in terms of rent. Starbucks orders on the counter and pick it up. Another thing, in my opinion, is that Starbucks has enough turnover per unit area. Everyone should observe carefully that Starbucks in shopping malls are usually designed with small and crowded dining tables, with one or two sofas for soliciting, just like the white dining tables on the green ground mentioned above. You often have to wait for a seat, and hold coffee in your hand. When you have a seat, you won’t sit comfortably, so that you will stay relatively short. Starbucks, on a bustling section, usually provide paper cups first, and porcelain cups only when you request it. There is no need to mention the intention (I will have a special article on Starbucks in the future).

Many coffee shop entrepreneurs try to consider having a comfortable and personalized environment for consumers when designing a store. This is true. Didn’t we mention that we should pursue the best consumer experience? The previous article mentioned is that we should pay attention to consumer experience and achieve a satisfactory consumer experience within a controllable range. The key to the controllability here is the controllable cost. Providing a comfortable environment, a good image, and a full service consumption experience, of course, attracting customers, but these have cost costs, and these costs will ultimately prevent you from collecting.

5 Thoughts: How to Make a Profit

Coffee shop creatives, don’t play with personality. Coffee shops sound romantic and inspiring, but they are also real places to do business. Just think about it, if you are not profitable, how can you stick to this romance and how can you express your personality for a long time?

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Having written this, some people may ask, why does this store not provide better meals? Of course, my friend also thought of this, but they did not really have to do meals that suit their store themes, and at the same time they could attract enough consumption. They are also afraid that certain foods that the public likes, such as the ones that usually offer in coffee shops, will affect the overall store atmosphere. Their original vision was to build a chain of coffee shops like Starbucks. Aren’t Starbucks just sandwiches and salads? They also have some light foods! The question that can be summarized now is that their vision is to run a successful chain like Starbucks. They think they already have a unique, differentiated and core competitive product portfolio, and they also want to create a popular consumer experience that is loved by the Chinese according to local conditions (they think Starbucks is far from doing this). However, they ignore the winning formulas contained in the business model accumulated and precipitated by companies like Starbucks.

I agree that in such a large place, in order to increase the turnover per square meter, the problem is how to provide popular food, and at the same time, it does not lose the consumption experience that a unique coffee shop should have. This problem is actually a headache for many coffee shop owners.

I also agree that products need innovation, not necessarily limited to coffee products, seeking to meet potential needs in the mainland Chinese market, and provide more novel consumption models and consumption experiences.

I agree more with the concept of creative + hype = cultural climate. Thinking patterns such as once prevalent in Chinese society today, but I often remind those entrepreneurs who think about their concepts and are favored by venture capitalists. The most important question is whether you are profitable now or the possibility of you being profitable in the future. The so-called evaluation of VCs on you must be based on two aspects: one is the profit model of your business now, and the other is the profit model of your business in the future.

Store owner: What are the better management of this model in the market?

Qiye Tea, which has 45 branches in Japan (2011), landed in Shanghai in 2010 and has already had 5 branches this year (2012). This chain of matcha restaurants quickly established in Japan, known as Japan's largest, has been committed to the Southeast Asian market in the past two or three years, and Shanghai, China, has become their test site.

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 30 yuan per bowl of ramen and 25 yuan per cup of matcha latte, it can be inferred that the average single-customer consumption is about 50 yuan. The key lies in the space design of the entire store (selected in many space design books) and the background support of matcha culture, which makes the 50 yuan cost guaranteed quality and a distinctive and unique consumption experience.

6 Thoughts: How to win?

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Has your coffee shop found that winning formula?

Perhaps many people think that these large chains have such formulas. Small shops lack the financial strength of these large companies, and there is not much choice, and everything they can do is already done. This is the idea of ​​many small shop owners. I don’t agree. In my opinion, there are many small coffee shops that have been doomed to fail at the beginning of their opening due to lack of experience and marketing knowledge. I often advise these small bosses that there are actually many things they can do. Of course, for commercial entities such as independent shops and boutique coffee shops, location and rental costs are the first considerations, and they are prerequisites. I have seen too many examples, and the location was chosen wrong from the beginning, but I have also experienced some cases. In fact, the shop is already a good place, but because of the business model, the consumption potential of the place has not been fully utilized. Let me give you a case below.

There is a store in the university town, and the location is pretty good. The rent is not high in the early stage, but it has been in a loss since its opening. This store has a mezzanine, the floor is not high and has no windows, and is set up as a kitchen and warehouse. The first floor only has a very small cashier cabinet. I asked the boss why he didn't consider setting up a seat on the mezzanine. The boss said that the height of the mezzanine would look very depressing after setting up a seat. He also set the bathroom on the mezzanine, and the bar function is set in the mezzanine, so that the most business space can be spared for the first floor. Why does it sound like a smart idea? If there is no kitchen, this store will not be able to provide meals (Didn't the above say that having meals can increase the consumption per customer?), if the bar is located downstairs, it will occupy the street-facing shops that are not large, and the mezzanine is all used as a kitchen that only makes meals. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : As for meals, in addition to the cold food that can be handled by the bar, you can cooperate with nearby fast food to provide hot food, which can also eliminate the cost of the kitchen.

We open a coffee shop without meeting everyone's needs. To provide a specific environment for certain specific groups, it is the success of many successful coffee shops I have seen. We need to subdivide the people who come to the store to consume, which includes gender, consumption psychology, purchasing power, purchasing motivation, etc. According to the above example, some of the loyal customers who come to this store to consume should be (or can be) students with low purchasing power. The consumption psychology needs to be romantic and private space atmosphere, and the motivation is to sit for one night when you drink something, rather than having a meal.

Of course, couples who only consume one or two cups of things for one night are not necessarily the single-customer consumption and slew rate that every coffee shop owner is willing to see. But for this coffee shop located in the university town, the couple's consumption was later confirmed to occupy enough profitable turnover. After the renovation, the store often fills the mezzanine, which also drives the consumption of the first floor. When I visited the store recently, the owner of the store told me that he simply canceled his cooperation with fast food restaurants and only provided simple meals such as pasta and sandwich, because he felt that the beverage business alone was profitable enough. He needed to further create the atmosphere and launch some snacks that can be completed in the bar area to further improve the evening drink business. He said that his coffee is not necessarily the best in the university town, and the food is not necessarily the best, but the atmosphere must be his most touching. Yes, we need to compromise on something, give up something, change something, and then insist on something, and do the best in some places.

This store has experienced two entrepreneurial ventures. The first was the opening of this store, and the second was the renovation of this store. I actually admire the owner of this store because the second renovation is equivalent to renovating it. But the boss later told me that he had no choice. He had tried to hire very professional baristas and chefs, tried many promotions such as group purchases and set special offers, and even tried promotions such as fine coffee, but they failed to attract popularity. Only by completely changing his business model can he have the opportunity to create a profit formula suitable for this store.

7 Thoughts: What is the standard?

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : I originally wanted to say that the portion of coffee was too small, but I stopped talking, afraid that the boss would say it was also a standard portion. When I saw the price, coffee and spaghetti were not cheap, and the total consumption was about 60 yuan. I thought that white-collar workers who came here to spend lunch at noon might not be able to afford it. Later, I learned that if they consumed a plate of spaghetti, coffee would be given. But this would also be close to 40 yuan for consumption, and they were not full. No wonder I saw only two or three guests, and they were all just consuming beverages. As for the taste of coffee, it was even more unkind. I later asked the boss to show me the beans they used now, and it was obviously not even fresh. I noticed some details, and there were several plates of potted plants at the door, and the mud was filled with coffee grounds and it was moldy. The wall paintings in the store are the ones that only cost about 200 yuan when you look at the Taobao wall. The screen in the store is equipped with a large fish tank, but there is only a white golden dragon fish alone. The several plates of spider plants on the top of the fish tank have many yellow leaves. The overall style feels like the grassroots and down-to-earth type. When the boss saw that I was willing to discuss the business, he told me that the main focus of the current wine business is the evening wine business. Moreover, the rent of this store is very low, which has not lost money since its opening, but he did not make much money. I praised him for his cleverness and found a small shop to invest at a low cost and accumulate experience. He said that he also invested a lot, with the top fee exceeding 150,000, and since the opening, he has made many attempts. For example, the meal part was launched recently, and the coffee part has also tried some expensive boutiques, but he felt that there were not many people who know how to appreciate it. Therefore, he now thinks that drinking wine in the evening is an opportunity.

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8 Thoughts: What is the standard?

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If a professional coffee businessman is absolutely not allowed to have moldy soil at the entrance of his coffee shop, nor will a business show signs of moldy. I secretly regret that this coffee shop owner who has been running for a year said that he has learned a lot of lessons, gained a lot of experience, and understood some standards; but he has not yet been able to have the standard thinking and management level of a coffee business. What's even more regretful is that the location of this store is actually excellent, and the nearby high-rise office buildings and white-collar apartments are high-density markets that can be explored deeply. The rent level is surprisingly low, but its performance is now below the standard, and far below the standard.

The boss finally wanted me to value this business. I said that this first requires him to provide some data. In fact, I wanted to refuse because I was thinking that if a coffee shop was opened next to him, the same cost investment only required to meet the standard management level, and coupled with the marketing methods that can continuously accumulate goodwill, this store can easily allow me to visit the business that I can't even maintain a balanced and stable capital.

During the conversation, discussion and even debate with these operators, I hope I can have the opportunity to express my views to these entrepreneurs who are running a coffee shop, but in many cases, there is no time, or the time for the conversation is not up, or there is no expression to hear.

Summary: Every customer who comes to the store to consume is equivalent to entrusting us coffee shop operators to entrusting us to take care of the wonderful time they should enjoy in the coffee shop. They know that your coffee shop may not be the best, but it must be at a specific time and a specific place. This suit includes the way they come, the impression they come, the products and services they enjoy, and the final price they pay.

Pursuing and finding these fits!