Seven Steps to Success in the Specialty Coffee Industry
- by Greg Ubert
Discover Seven Steps to Success, the legendary coffee shop roadmap written by Crimson Cup Founder Greg Ubert. Now in its second edition, this common-sense guide teaches everything you need to know about running a coffee shop while maximizing your profitability and peace of mind.
Plus, learn the golden key to successful coffee shop ownership: The Ratio for Ultimate Profitability.
Get a sneak peek of the book…
Seven Steps to Success… The Road Less Traveled
As a small business owner, I truly dislike seeing small businesses fail, especially when it doesn’t have to happen. All the enthusiasm with which one starts a business is gone. All the dreams of operating a business have become drudgery. It’s very sad to witness. Plus, at Crimson Cup®, we need businesses to thrive in order for us to thrive. However, the future may not be as bright for some independent coffee houses as others. Why is that? The market currently consists of a near monopoly in specialty coffee. The green corporate giant has nearly 11,000 stores in the United States with the next largest “competitor” owning about 400 stores. Not exactly what you’d call competition. That’s why the time to act is now! Independent coffee houses are losing the battle, and unnecessarily in most cases.
Why is this? Well, like most other poor decisions, either the information provided to make the decision is faulty or someone directly chooses to make a poor decision. I really do not have much empathy for someone who has all the correct information and still decides to make a poor decision. Therefore, let’s concentrate on some prominent misinformation in the marketplace that causes great confusion to those looking to be successful in specialty coffee.
“We need to compete against the corporate green giant by serving flavored coffee.”
As you will read, those who believe that they can compete against an 11,000-store chain by focusing on flavored coffee are destined to fail. Even with a great location, they will not come close to maximizing their business.
More importantly, market demographics show that younger and older generations are being turned on to specialty coffee; not flavored coffee, but espresso-based drinks in coffee houses. Why is this important to you as a business owner? You can make more money and start to maximize your business by selling espresso-based drinks, and this is what the market—your customer—really wants!
“Espresso-based drinks take too long to make.”
This misconception needs to be thwarted immediately. As you’ve read, Armando can make 20 espresso-based drinks in five minutes. It can be done. Unfortunately, we hear this excuse most commonly from existing coffee houses with a poor store layout and improperly trained staff.
“I have to make sandwiches and soups in order to survive.” [or]
“I must have more food options for my customers because they told me so.”
Does this mean that we recommend a “no food policy” or not reviewing your menu items on occasion? Absolutely not. When we add food items like oatmeal at Crimson Cup Coffee House, our first consideration is “The Dance”. We always ask ourselves, how will adding this product affect “The Dance”? In other words, we want to ensure that efficiency and customer satisfaction are maintained. We simply do not want a customer waiting five minutes for a caffè latte with one person in front of them ordering a made-to-order sandwich. Furthermore, there is no panacea of ingredients that will suddenly make your coffee house successful. As I’ve already said, it’s hard to argue with statistics and hard to argue with success. Do the major specialty coffee chains serve flavored coffee? Do you think that they or we want to turn away business? The answer to each question, of course, is a big “NO!”
Therefore, why do people think they have to sell flavored coffee and make food on-site? I know that other suppliers promote this type of business model. I also know that most have not run a store of their own and/or have little experience in the coffee business. We believe in our mission of teaching independent coffee houses to be successful, and we want their customers to be happy. More is not always better. By focusing the business on its core objective, business owners cannot only survive but thrive. I recently had a potential new coffee house client tell us that other roasters were recommending she sell flavored coffee and that it was imperative to serve an extensive food menu. They told her she couldn’t survive without either. She wanted to know why we weren’t of this same opinion? This is a good question, and I’m glad she asked it.
The simple answer is that we want her to be around in five years. We want her to be able to participate in the community, which she stated was one of her reasons for getting into business. We didn’t tell her what she wanted to hear, because we are more than a product supplier. We are a participant and a mentor to her business. She is now a very happy coffee house owner, getting the community involvement she desires.
Wouldn’t it have been easier for us to keep quiet and just ship the fantastic, fresh-roasted Crimson Cup® coffee she said was the best she’d ever tried? Well, yes, it would have. But in doing so, we would have done her a grave disservice, because we know from experience what happens to those who elect to do it their way or listen to the vocal minority. They eventually lose passion for the business. They start thinking if only they sold more products, they would make more money. Participating in the community is pretty hard if you constantly have to worry about how you are going to pay yourself.
I’ve found that Crimson Cup® is unique in its approach of taking the road less traveled because of our passion for seeing independent coffee houses succeed. Why would we teach something that would hurt your business? It’s really common sense. When you succeed, we succeed.
All of these elements are equally important in the specialty coffee business. It’s a combination of these elements that make customers return again and again for a great espresso-based drink. And repeat business is critical in this industry. The next time that you visit a coffee house, look around and make note of:
- The store’s location
- The store layout
- The flow of the business transaction
- Product preparation and presentation
- The customer service
- Staff knowledge and ability.
I can’t tell you how many times a client has asked me, “Why can’t I just do one or two of these steps?” Again, you can’t cut corners. Each step has a purpose, and there’s a reason why they must be conducted in the order in which they are laid out.
Here’s the bottom line: If you want to dance a flawless tango, you have to follow the choreography.
If you’d like to pick one of our consultant’s brains or to learn about Crimson Cup’s coffee shop franchise alternative program, call us at 888-800-9224