Why do coffee shops fail?

Why do coffee shops fail?

Problem tree of a cafeteria

This is not taken into account by several entrepreneurs. Remember that you can’t make a bad location good. Don’t just say “a coffee shop would look good here”. You must do research based on many factors such as demographics regardless of whether you will have a coffee franchise or not. A good idea would be to find out if there are other coffee shops in the area and find out what their business is like. Also find out if people in that area need more than one coffee shop.

Quality in terms of goods and services. Don’t choose a product because it is cheap. Maybe it is cheap for a reason: low quality. You don’t want to start your business with cheap products or else people will think you have nothing new to offer. You must differ from the rest of the coffee shops in the area. We recommend you to read: Pricing strategies for coffee shops.

You want your goods and services to be of high quality. But how are you going to manage that? You should check your staff often to make sure they know their orders, give good service, and know how to operate a coffee shop. If they perform well, it reflects on the entire cafeteria.

Problems when opening a coffee shop

Before opening a coffee shop, understand why they are so popular.  First, coffee shops are great places to socialize and meet with friends, or to spend time reading or surfing the web.Coffee shops are also a popular place for informal business meetings or for students wanting to catch up on school work.  Walk into any popular coffee shop and you’re likely to see anything from a remote worker, a full company team having a meeting, or students getting out of a rut.

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Commercial locations in high traffic areas are great locations for coffee shops, they have higher visibility.Rents are often lower than in shopping centers and you can set your own business hours instead of having them dictated to you.

Unless you are locating in a mall or other site with a lot of foot traffic, you will need to think carefully about accessibility and parking.  If a customer has to make a difficult turn on a busy street to get to your establishment or has trouble finding available parking, he or she is likely to change his or her mind and choose another café.  Choose with patience and with attention to detail so that your location is convenient and highly visible.

What problem a coffee shop solves

Almost without exception the most successful restaurants I see today are the ones that pay as much attention to the quality of their customer service as they do to the financial situation of their business.

I can’t even imagine what it’s like to embark on a venture, spending savings, taking out loans, hiring staff, renting premises, making million-dollar purchases and getting a lot of people’s hopes up, not even knowing where to start managing the business.

Customer segmentation helps you to avoid the failure of your restaurant because you group your customers by different common characteristics and only by doing this you can more easily understand their needs in order to create products and services to satisfy them.

If you are aware that good customer service is lacking in most restaurants, we are also aware that many waiters just hand the menus to your customers and then leave the table without saying a word.

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Problem statement for a cafeteria

When we talk about “failure” we all understand that we are talking about frustration. To fail is to deprive someone of what he or she expected to get, or to fail in an attempt. In other words, in business, to fail is to lose money.

Like everything in life, there are things we do (actions) or fail to do (omissions) and things that happen to us (such as external factors produced or aggravated by general crises, which we failed to foresee). And everything has its cause, effects and conditions. Let’s see what they may be in the case of bars.

Bars fail when they lose money instead of earning it. That is their business objective. And they don’t make money because they don’t sell enough to pay their costs and generate a profit margin. The question then is why doesn’t a bar sell enough to be a successful business, i.e., why doesn’t it have customers, and when it does, why does it lose money?

On the other hand, poor strategic planning -marketing included- implies not considering the change factor: bars become obsolete and, like everything else, they are not immutable. And in this, an adequate short, medium and long term strategy allows the bar to adapt to the times and avoid things happening without knowing it. Like the arrival of an economic crisis.

Why do coffee shops fail?
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