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As with any other business, you must sell more or cut costs to improve a coffee shop's bottom line. Many of a coffee shop's expenses are fixed, including your rent or mortgage, payroll and utility costs. Therefore, it's important to focus on what you can control: customer experience and getting the most profit you can out of that exchange.
Steps
Sell your customers high-priced drinks, such as espresso drinks. Profits on espresso drinks can sometimes be 5 times higher than drip-coffee drinks. Offer your customers a free cappuccino or latte to get them to switch. Aim for a total of about 30 percent in coffee sales and 70 percent in espresso sales.
Put espresso-based drinks at the top of the menu. Since most people never read through the entire menu, placing your most expensive drinks up top may be a simple way to improve your profits.[1]Advertisement
Suggest that your customers get a flavor shot every time they order a drink. This will boost the customer's overall price and your profit. Feature a flavor that coordinates with the season or holiday, such as peppermint flavor at Christmas or pumpkin spice at Thanksgiving.
Add iced tea to your menu. Offer a new flavor every week or suggest flavor shots. Tea is cheap to make, and therefore your potential profit margin is huge.
Give your drinks special, unique names. Be creative and make it fun. A drink named Chunky Monkey will most likely raise some curiosity, which may translate into an increase in sales.
Develop new drinks and new recipes routinely.[2] You could even get your customers involved with a contest to come up with the best-tasting new drink. Then, consider naming the drink after the customer who thought it up and including it on your menu for a limited time.
Offer package deals, such as a scone with a latte for a breakfast special. Packaging items together make them easier to sell.[3]
Start a frequent customer program that rewards loyal customers.[4] Very often, coffee shops hand out punch cards that entitle customers to a free drink after paying for 7 or 10.
Create gift baskets and have them on display to sell year-round.[5]
Schedule regular entertainment.[6] You can host poetry readings or open mic nights to lure new customers in.
Host a coffee sampling and education class. Classes like these entertain your customers, and teach them to enjoy expensive products. Charge a small fee for the class or sell your take-home coffee blends and roasting supplies at the event. Make it an experience that customers will remember so they will visit your shop again.
Raise prices subtly as your suppliers raise their prices on the costs of goods. [7] A dime increase here and there is not likely to make a huge difference to your customer. However, remember to keep your prices competitive.Advertisement
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Tips
- It is often possible to increase your bottom line by switching your current product brands to those that cost less. Look through your menu and see where you might be able to substitute a less expensive product without sacrificing taste or quality.Thanks
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Warnings
- It may be tempting to cut back on advertising to increase your bottom line. That can be a mistake, as your customers may turn to the competitor who is still promoting.Thanks
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References
- ↑ https://www.canva.com/learn/menu-psychology-design/
- ↑ https://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffee-shop/#202e086113c3
- ↑ https://www.forbes.com/sites/hbsworkingknowledge/2013/01/18/product-bundling-is-a-smart-strategy-but-theres-a-catch/#febf5207a516
- ↑ https://www.incremental.com.au/blog/why-your-business-needs-a-loyalty-program/
- ↑ https://theexoticbean.com/blog/coffee-uses/10-things-always-included-coffee-gift-basket/
- ↑ https://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffee-shop/#202e086113c3
- ↑ https://www.priceintelligently.com/blog/bid/184451/how-starbucks-uses-pricing-strategy-for-profit-maximization
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