Article by Jonathan White, White Coffee
With coffee bars opening seemingly on every block, it could be very tempting to “jump into the water” and open a cafe. Before taking that leap, step back. Take a deep breath.
Like so many things in the world, opening a cafe is not as easy as it may seem. For every successful venture you see, many more do not succeed. And multiple unit brands are increasing their market share every day- not only the well-known national chains, but strong local and regional brands.
As with any starting venture, certain basic business principles apply. A well-thought out business plan (operationally, financially and strategically) to clearly express where you are going. Adequate cash to both fund the initial start-up costs and inevitable cash flow peaks and valleys (to fund needed inventory). A location that easily drives traffic to your doorstep- at the right time of day (the perfect concept in the wrong location will invariably fail). An attractive, well-lit, comfortable setting. Pricing that is competitive but neither too high or too low.
Assuming all the above is executed well, there are three fundamental questions to ask when opening a cafe:
1. What makes my (potential) café truly unique? If it’s just another version of all your competitors, don’t bother with your time and money. Are your products innovative, truly different from what’s available in the general marketplace? Are they actually of superior quality, with objective specific facts? Are they distinctively and cleanly marketed in the store? Can customers who are not intimately familiar with the product quickly perceive what are the product’s main attributes and differences from similar products? Many times, retailers believe they can offer a “copycat” product that is just capitalizing on a trend. But just because a product is “hot” (for example, cold brew- pardon the pun) doesn’t mean that it will automatically achieve success unless all of the other “boxes” above have been checked off.
2. If the product is not dramatically different, will the experience in my place be uniquely memorable and different from any other competitive location? Is the service level beyond normal attentiveness and personalized? Does the visit make your customers feel special and that, for the time they are in your café, that they matter more than anything else? Would your customers be so “wowed” by their visit that they would want to share with their friends on social media or by “word of mouth” that “if you want (this specific coffee product), you have to go to (this specific place)-
3. Once you’ve developed a unique place with a truly unique experience, how will the world find out about it? Traditional advertising has been turned on its head, and on-line advertising can be costly and not always properly targeted. What press can you get? What free events can you participate in (industry conferences, local fairs)? Can you become a “subject matter expert” through a blog? How do you partner with your community for your cafe to become a part of the area? How do you promote your product, both inside and outside your location? There are many experts – both product suppliers and marketing firms – that can be of assistance.
Independent cafes have seen their numbers rise, both in New York and throughout the country. That trend is likely to continue, as folks want to support locally based businesses. But consumers will not “shop local” unless they know that the local alternative exists, and if the local product is special and different from the well known brand, both in product and environment. It takes a lot of extra effort, but it can be done.
Jonathan White is the Executive Vice President at White Coffee Corporation in Long Island City, NY. Learn more about how Jonathan and his team can help you at their website.