Why open a coffee shop?
Post tag: restaurant design, restaurant marketing, restaurant project plan | Leave a comment
With more than 400 billion cups of drinks consumed every year, coffee is the world’s most popular beverage. You can get coffee anywhere you go: restaurants, bars, nightclub, department stores, boutiques, gift shops, hair salons, auto shops, cafeteria, and even hardware stores. It’s a universal drink that appeals to the majority of the population, and inexpensive to prepare. With the right business plan and marketing strategy, coffee shops can become profitable businesses that are relatively easy to operate.
The difference between coffee shops and other places that sell coffee:
Today, coffeehouses are popular meeting places for business and other social activities. They give people a place where they feel like they belong where they see the familiar faces regularly. It’s often called the “third-place phenomenon”, where people like to hang out other than their home and work place. People may not go to their favorite restaurant on a daily basis, but they may visit a coffeehouse every day. Nowadays, coffee is replacing alcohol as the social beverage of choice, with people meeting for coffee instead of cocktails. People can now meet for coffee at any time of the day, rather than just “cocktail hours”. Some coffeehouses even serve quick lunches and health snacks for the afternoon.
About 450 years ago, the first coffeehouses opened in Constantinople and soon became very popular in the rest of Europe. Later in the second half of the 20th century, Americans too accepted the coffeehouse as a place for social or cultural gatherings. Today, more than 50 % of the U.S adult population drinks coffee on a daily basis, which represents more than 150 million drinkers. Of those, 30 million are willing to spend more than $3 on gourmet coffee beverages, such as specialty coffee, mocha, latte, cappuccino, espresso-based beverages, and frozen and iced coffee beverages.
High Profit Margin
Successful coffeehouses have heavy foot traffic and high-volume sales. The majority will serve up to 500 customers per day, despite having limits on floor space and seating capacity. In fact, profit margins for coffee and espresso drinks are extremely high, because you’re dealing with product that is more than 95 % water. While each customer spends $3-$5 on average, 500 customers will bring in around $2000 plus of sales a day. With far less over head expenses than restaurants, coffee shops are indeed profitable businesses.
Competition
While large chains such as Starbucks and Peets may seem to be saturating the market, industry experts insist there’s a place for everyone in the business. In fact, independent retailers probably have the advantage to become more flexible with their menu, pricing and products than larger corporations. Many retailers don’t see the giant chains as a threat but rather as a marketing engine that can help educate the public about specialty coffee. Each individual shop then competes on its own. If you are thinking about opening your own coffee shop, you might want to know what the other shops are doing. Smaller shops may not be able to compete in terms of marketing dollars spent, but they can compete with top-quality products, people, and presentation. Wes Café in Alameda for instance, is an example of a successful coffee shop that became the popular breakfast, lunch, and coffee gathering place in the neighborhood.
Post tag: restaurant design, restaurant marketing, restaurant project plan
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