The Seven Deadly Sins Cafe Owners Make & how to avoid them
Have you ever wondered why that cafe you pass every day suddenly closes?
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and slide deck
Claire was invited to talk at this years Hotelympia 2018 at the ExCel Exhibition Centre, London. Watch the full presentation
I’m Claire Bowen, Coffee shop & cafe consultant and best selling author of ‘The Daily Grind - how to open and run a coffee shop that makes money’
Co founder with my business partner & husband, Andrew, of CafeSuccess, the largest free online resource for independent coffee shop owners
I also run The Coffee shop Bootcamp, a two day intensive course for budding successful coffee shop & cafe owners, who want to get a head start when opening their cafe!
So Who remembers from school - the 7 seven deadly sins?…. I assume you’re all familiar with the first one !!!
A successful Cafe needs to be lusted by it’s guests
If you are still wearing Flares then you should think again!
- it’s time to look at the latest Trends
Unless you are ‘Bettys of Harrogate’ you need to move with the times &
Things move really fast in our industry:
They bubble along for years then explode or just pop up from nowhere. - think about these issues:
Gluten free Vegetarian & Vegan options
Turmeric & Matcha latte
. Paleo diet & Functional foods
Coconut, Almond, Oat & Rice milk’s, even albatros milk! ( well I may have made that one up)
Who remembers when a Flat White was exotic? - not any more you can even get one at McDonald’s
You must move with the times to be lusted after
5 years ago you could get away with it, but you can’t now
for example, 1 in 4 people did not eat meat in January, who saw that coming?
5% of people are medically gluten intolerant, but 25% avoid it
These minorities are often the decision maker in a party of guests, if you don’t cater for them - they will steer the group to somewhere that can.
Virtues To be lusted by your guest’s, you need to ditch the flares and move with the times - and stay relevant -
Update your menu regularly, watch the market, get out and about, try new stuff, you never know what will be a winner until you try it.
There is only one thing certain staying still is actually moving backwards.
Lots of cafes suffer from this one, because they think Gluttony it's a good vice
They try be all things to all people
Their range is too big & their menu needs too many ingredients
I had a client recently who wanted to open a coffeeshop selling burgers & / pizza then turning into cocktail bar - although perhaps the holy grail of hospitality,
I can’t think of any concepts that have succeeded in the pursuit of being everything to everyone
You need to be famous for one thing:
So What are you Famous for?
Say McDonalds you think of burgers
Say Pret-a-Manger, you think of sandwiches
Say YoSushi…….. You get it
Today more than ever, the trend is for new concepts to be focussed on doing one thing well
They have clear branding so people understand what they will get when they walk in.
Flat Iron sells flat iron steaks
Patty & Bun sells burgers
Duck & Waffle sells duck & waffles
Be amazing at what you do Be famous for something
Make it easy for your guests to understand what you do
Clear the clutter. Become an institution & The default choice.
Be talked about, be recommended, Be Famous
Greed is Often confused with Gluttony but sometimes Owners aren’t greedy enough as their Prices don’t reflect the value of the product they provide
When you talk to a typical coffee shop or cafe owner they will be very proud of what they do, they are passionate and can talk for hours about what makes them better.
They are fresher, tastier, they bake on site, they use local suppliers, however after all these extras they are afraid to charge more than the costa up the road.
Using another biblical reference - They hide their light under a bushel
Because they don't share their Story
Their Prices are too low
they are afraid to charge what things are worth
they Worry that they will lose customers
they Lack confidence in what they offer
there’s not enough differentiation with the competition,
People love stories, and one thing that every independent business has is a great Story.
From the passion of the founders,
to the time and effort put in developing
the flavours, the recipes, sourcing the perfect ingredients,
and everything they do.
These things may seem normal to us but are extraordinary to our guests and they are desperate to hear about it.
The great things you do in the local community, the local suppliers you support,
These are all things that the chains can’t compete with
so why do so many independents not tell their customers?
The Better the story, the better things will taste
The Better the story the more you can charge
Tell your amazing Story
Be bold with pricing Be Better Be Unique Make products worth more so you can charge more
Lots of businesses fall into this trap, where sloth takes over
This is often confused with laziness
It’s not about being lazy, it’s about being complacent
Most owners work really hard day after day, they get up early, go home late, cover sickness, work on their day off and generally have a poor work life balance
We find many founders of independent cafes have started up because they wanted to be their own boss, be in charge of their own destiny, many have come from much bigger businesses and are fed up with the corporate culture.
Often this distaste with corporate life manifests in a business that is very un-corporate, and lacking even the basic controls every business should have.
This lack of framework results in a lack of consistency, which might delight the customer that is served a massive portion of food, garnished to the hilt, but will equally disappoint them on the next visit when their meal is prepared by another chef.
but your relationship with your customers is about the little things that niggle. And you might even get 3 chances on the
1st mistake = they forgive you, on the
2nd mistake = they’ll think your mad and on
3rd mistake = they’ll leave you - and tell everyone why -
Back in the day this used to be 10 people but with social media it could be 1000’s even millions
A bad experience is the result of a lack of control
you need to manage margins
At worst we see No costing or at best costings not up to date.
And by the way - Why is it that in our industry so many people don’t know how much things cost to make? Is it because the seemingly high margin give’s operators a comfort blanket?
Other issues that cause problems are
Having is no control of Cash flow
with no cash flow forecaster
Often our type of business has 18 Months on credit before hitting a problem, which hides a multitude of sins until the inevitable happens
No controls - leads to margin issues & excessive staff costs
This complacency is compounded with the
Confusion of marketing with Advertising, just because you don't want to spend money on advertising, you should never forget that
Marketing is every touch point, everything the guest sees in your cafe, the little things really do matter.
Getting these little things right without rules is nigh on impossible
Just because you are independent it doesn’t mean you can’t have rules, targets, standards, & a consistent message
Consumers expectations are higher today than ever, They know what good looks like and they won't be back if they don’t get it consistently
We see this a lot, it’s often the beginning of the end for a business, the owner gets frustrated that their effort doesn’t result in the lifestyle they imaginged when they opened.
Wrath is the point where the owner takes out all his problems on everyone else.
They are emotionally or rationally full….at breaking point. This shows itself in lots of shouting and mood swings.
They can’t see the wood from the trees, they start drowning, they lose the respect of their teams and then:
They actually alienate their team & start losing all their good people.
They start spiraling into decline:
They pay Too little
They have high Staff turnover &
They don’t train · they worry about the cost of training but forget the even bigger cost of not training. They spend no time working on the business and all their time working in it,They don’t even spend time:
doing rota’s or
stock taking, or
chasing credits, or
fixing broken machinery
let alone decorating
So They Have bad scheduling & Waste even more money
And we all know that The work expands to fill the available time this results in a disillusioned team that gives rubbish service
Build a great team Recruit for the hospitality gene
Then Train & be flexible in your working patterns
& Delegate as much as you can
You just need to look at some of the outstanding successes in our industry, like Loungers or Pret a manger to see the power of putting your team at the heart of the business
Engage your team, share your vision with your team & you’ll be amazed what happens when you share your passion & vision
pay as much as you can afford & more Have fun A happy team= happy customer’s
Get this right and you will become the magnet for the best place to work in town
Amazing things happen when you build a team
Everyone even the most successful can fall foul of this one.
The Magpie effect, people are attracted to the shiny new object
A New shiny cafe opens
with the bright new entrance
Stealing your guest‘s away
to never come back
Envy is a painful death
There is nothing worse to the owner of a cafe, than watching their customers walk into a competitor. We’ve all seen this happen, and then listen to the owner’s frustration as to why his regular guests have deserted him.
Often the truth is their cafe is - Tired & worn out. Perhaps in the early days they tried to save money by not investing in the right equipment, design and furnishings, that would cope with the wear & tear
They didn’t put any money aside for the inevitable refit They haven't done enough to make their regulars loyal!
A quick question - who in the room wants to have a boyfriend, girlfriend, husband or wife that is regular? ……..Absolutely we all want loyalty above everything else!
They haven’t nurtured their guests to become loyal, there is no reward scheme, in fact they don't even have any contact details,
They don’t have a feedback process and aren't trying out new things
Even the chains fall foul of this one, their focus and cash is ploughed into the new sites, the old sites fade away slowly, become less attractive
and eventually become a millstone around their necks - there are too many to mention - you all know who they are…. Just look at Jamie’s, Byron & Prezzo which have been in the news recently ...the list goes on!
Your guests must be loyal not just regular
To do this you need to Refit or reinvent every 3 to 5 years To stay fresh To stay Shiny
We all know what comes before a fall ………...
The issue here is that, just after they open ,cafe owner’s: become irrationally self-confident in their own abilities and increasingly reluctant to listen to the advice of others. They become progressively more impulsive in their actions.
For example they believe in the ‘Build it and they will come’ school of marketing, relying on word of mouth and passing trade to grow their business
The number of cafes who just have a facebook page and nothing else is astonishing
They also worry about reviews & complaints but don’t do anything about it, by replying to comments or even looking at tripadvisor
Many don’t even have a website so are Not in control of their online reputation
Recently I looked at the web presence of over 1500 cafes and coffee shops in London -
the thing that flabbergasted me was not
the fact that the websites were old or out of date,
Not the fact that they were not mobile friendly
or not even the fact that they had a poor design ,
It was the fact that 66% didn’t have one at all.
They were relying solely on passing trade, they were not visible online to the first generation with a computer in very pocket.
These owners often let pride get in the way of being helped
One person cannot be the expert in everything so they need to delegate!!!
It’s about your guests not you
Take the right advice
you can Build a network - your Suppliers can help with this as well as Non competing businesses
Join an Entrepreneurs group or trade body
Book time to work on the business not in it
Read the E myth - become an entrepreneur again rather than a technician in the business
But above all Listen to feedback
Sins & Virtues
Lust-Be Relevant- get your guests to lust after you
Gluttony -Be Famous for something
Greed -Tell your Story
Sloth - It’s not about being lazy - it’s about setting Targets
Wrath - Don’t be angry - Build an Amazing Team
Envy- Get your competitors to be envious of you by keeping your businesses Refreshed
Pride - But Above all Listen to Feedback
Thank you for listening
You can download this presentation at cafesuccesshub.com/hotelympia
To find out more details about The Coffee Shop Bootcamp go to https:// www.coffeeshopbootcamp.com
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