Getting Profitable: Lesson 5
Your Business Fundamentals “Reality-Check”
So far in this series of articles on profitability, we’ve discussed how to control your cost of goods and how to reduce your other expenses. Unfortunately, for many coffee businesses, savings alone will not result in profitability. If this is your situation, then building sales will be the only solution left to you. We will discuss cost-effective methods for building sales over the next several articles, but before you embark on a sales-building mission, you’ll need to “reality-check” your business fundamentals. After all, it won’t make sense to entice people to visit your business if your drinks, customer service, and store ambience are less than optimal.
While achieving profitability in the coffee business will require controlling numerous variables, only three are important to your customers. They are:
1. The quality of the products you serve, 2. The quality of your customer service, and, 3. The appeal of your store ambience. These are the only factors you have control over that can influence customers to return in the future. Remember, you’ll only have one chance to make a good first impression, so you’ll want to make sure that the customers your marketing efforts attract have a great experience and want to come back!
First, and most important: understand that people primarily visit your business to purchase a beverage and some food. This is foundation of your business. The items you serve must look good and taste good 100% of the time!
Serving superior products begins with sourcing the very best ingredients. As the old saying goes, “you can’t make a silk purse out of a sow’s ear.” Likewise, you can’t make superior coffee drinks using inferior coffees, syrups, and sauces. If you haven’t already, you should contact multiple suppliers of coffees, syrups, sauces, blended drink powders, smoothie purees, and ask them to send you some free samples to taste. If you discover products that are better than what you’re currently using, then switch!
Equally important are the drink-making techniques used by you and your employees. 90% of the quality of an espresso beverage can be directly attributed to how it’s prepared. A shot extracted 5 seconds too fast, and milk heated 10° too hot, can be the difference between a delicious and unpalatable beverage. While more and more coffee business owners understand and apply proper drink-making techniques, many still do not. If you have any question as to whether or not you are preparing espresso beverages properly, check out the free 17-minute video, “Sample: Beverage Info” at www.CoffeeBusinessSchool.com
The next area of fundamentals that you need to assess is customer service. People are buying their coffee from you and your employees – human beings – not a vending machine! You and your employees’ daily interactions with customers is a major factor in capturing and retaining them. If they like you and your employees, if the experience of coming to your store leaves them feeling good, you’ll convert consumers into regular, loyal customers. Do you know your customers by name? Do you know anything about their lives? Do you treat them like they are guests visiting your home? Caring about your customers and developing relationships creates a bond that competitors are unlikely to take away from you.
Good customer service is also about well executed mechanics; recommending items you think the customer might enjoy, keeping tables, floors, and bathrooms clean, stocking the condiment bar regularly, etc.
Finally, there is your store ambience. How does your store look to someone who is coming in for the first time? Is it clean and uncluttered? How about the areas behind the counter that your customers can see? Does the paint on your walls need to be touched up in places? Are there cobwebs in the corners? Are carpets or chair cushions soiled or in need of repair? Do point-of-sales marketing materials look new and crisp? Do your windows need cleaning? How does the area outside of your store look? Is there trash on your sidewalk, or weeds in your flowerbeds?
Sometimes it can be difficult to see all the things that might be in need of attention, simply because you spend so many hours in your store. In reality, you can become “store blind.” To gain a better understanding of what you might be missing, and what customers might be noticing, enlist the help of a trusted friend to do a detailed on-site evaluation. Give them a pad of paper and a pencil, and ask them to walk around your store, inside and out, and write down anything and everything they see that can be improved upon. Be sure to have them go over their notes with you when they have completed their inspection. DO NOT become defensive if you disagree with them, or you feel hurt by some of the things they say. Remember, you asked them to do this, and if they are seeing things that they perceive as “negatives,” then it’s likely that some of your customers are having the same feelings.
Being on top of your business fundamentals at all times is imperative! When you feel comfortable that you are at the top of your game in regards to your business fundamentals, then and only then will you be ready to begin your marketing efforts!
Ed Arvidson is a 25-year veteran consultant to the Specialty Coffee industry, and President of E&C Consulting. Elements of this article are from his new book, “How to Get Profitable in the Coffee Business.” www.coffeebizhelp.com