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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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 !!!

LUST

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.

GLUTTONY                

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

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

SLOTH

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

WRATH

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

  •     Communicate well
  •    & 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

ENVY

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     

PRIDE

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!!!

Solution

  •       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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