Coffee is among the most popular beverage in the world. It has high antioxidant levels and beneficial nutrients and healthy to consume. That being the case, starting a coffee shop could be a great opportunity to impact your community, build a profitable enterprise and most importantly, change your life completely. It goes without saying that many people are going for high-quality espresso drinks and a well-run coffee shop can give you good returns all year round. However, every year, dozens of coffee shops are opened and around the same number close down. But have you ever asked yourself why they fail yet the demand for coffee is on the rise? Well, if you’re planning to start a coffee business soon, here are seven reasons why most of them fail and learning from others can save you money and help you avoid mistakes for a successful business.
- Failure to do a thorough research
Starting any business needs basic research and coffee shops are no exception. However, some coffee shop owners fail to do research on how to position their shops for success. If you know how to brew coffee and love drinking it doesn’t mean you can successfully run a coffee shop; you must be willing to learn how to operate a coffee shop, how to handle the challenges, and how to make it successful. The research can be time-consuming but it’s worth the outcomes you get in the long run. Your research should entail;
- Looking at the cost around your business
- Reading books and other related materials dealing with retail coffee business
- To do a research on the cost elements you require
- Learn more about coffee such as origin and roasting profiles
- Read resources on how to open a business entity
Sadly, many people overlook this important element of research and assume that the business will automatically succeed, but end up being disappointed and close it thereafter.
- Lack of willingness and attitude to learn and grow
Many new coffee shop owners have a misconception that starting a coffee business is easy. However, to start and develop a coffee shop requires real time and investment and you should be willing to learn as it’s the only way to succeed as a coffee shop owner. Customers have different needs and if you fail to learn what they want, your business cannot grow. Also, failing to learn about marketing and promotion endangers the prospect of your coffee shop.
- Spending too much on the wrong equipment
When planning to start a café, one thing that crosses your mind is the new and shiny coffee equipment to buy. Well, it’s not a bad idea to buy something impressive and expensive for your business but you shouldn’t overspend on equipment you don’t need. Before spending too much on equipment, determine your menu, the space it will occupy, and your budget. Sadly, many new coffee shop owners buy expensive equipment blindly leaving them on debts and no money to run the business.
- Inconsistent standards
Consistency is the key to attracting customers in your café and retaining them. With consistency, your customers become regular. However, most coffee shop owners are inconsistent; they open and close their business on irregular times and the quality of the coffee they sell is inconsistent too. If you want your coffee shop to succeed, be consistent and remember that your customers will allow you to make three mistakes before they say goodbye to your shop. Therefore, your drinks should be 100% perfect failure to which your customers will leave you and look for somewhere they can get consistent coffee that meets their needs.
- Poor services
Your customers are the most important people in your business and therefore, they expect great services from you in order to come back next time. Outstanding services are as a result of recruiting the best team, training them well, and rewarding them for their good work. Instead of looking for skills during recruitment, look for attitude and as a rule of thumb, pay your staff competitively and you won’t lose them easily. When you recruit staff from time to time, you spend a lot of time in retraining them and your customers will not like it when they find new staffs every time they come to your shop. This is because, customers tend to build a concrete friendship with the staffs and when they don’t find them in your shop, they feel heartbroken and never return.
- Poor relationships with suppliers
When running a coffee shop, it’s important to understand that you are dependent on your suppliers for what you sell. Therefore, you must build a cordial relationship with your suppliers as it’s the path towards a successful business. When the relationship between the two of you breaks for instance when you fail to pay them on time, or when you talk to them rudely, they will stop delivering what you need and you’ll have nothing to sell.
- Poor management
For a coffee business to succeed, it requires good management skills right from the start. Poor management affects your business negatively and you need good management skills to execute the following areas;
- Managing employees
- Inventory management
- Management of vendor relations
- Management of payroll and everything related to HR
- Managing budget
Managing your business successfully is no walk in the park as it can be tedious and time-consuming. Many new coffee shop owners don’t want to use their time in managing their business and end up disappointed when their close down.
It goes without saying that coffee is among the most consumed beverage in the world. Coffee drinkers are looking for a coffee shop out there they can call home. Due to the above-mentioned reasons, most coffee businesses fail and the owners end up closing down with huge debts to pay. However, if planning to start a coffee shop in the future, don’t feel discouraged; you can learn these reasons and avoid them when you start yours and be ready for great returns.