Running a coffee shop is no easy feat. Between managing inventory, hiring and training staff, and keeping up with the latest trends, there's no shortage of challenges for coffee shop owners. But with inflation on the rise, the difficulties have only increased. With the cost of goods and services increasing, it can be tough to maintain profitability and keep customers happy. In this blog, we'll explore some ideas for coffee shop owners to combat inflation and keep their businesses running smoothly.
Reevaluate Your Menu PricesIt's an obvious one, but before you do anything else, you'll need to look at your menu prices. With the cost of many essentials like milk and eggs skyrocketing, you need to make sure you're not falling behind. However, you need to balance any increases with the risk of pricing yourself out of the market.
Take a look at your costs and see where you can make adjustments. This doesn't always mean buying cheaper, lesser-quality ingredients, either. It's well worth having conversations with your suppliers and seeing whether they can help you in any way: whether that's a discounted rate you didn't know you qualified for, or a range of products that you didn't know were available to you.
You can also look at adjusting portion sizes to balance the cost of goods sold with the price of the menu items. This isn't necessarily a choice that negatively impacts your customers, and leads onto our next point...
Reduce WasteReducing waste is an excellent way to cut costs. Keep a close eye on inventory to make sure you're not over-ordering ingredients that will go bad before you can use them. Consider composting or donating leftover food instead of throwing it away. And if you find yourself throwing away too many paper cups and other disposable items, consider switching to reusable options instead. Keep a waste book, and find out where you're losing the most money. Again, this isn't about doing wrong by your customers – if you find that you're always throwing away the same few things, then it's a safe move to reduce how much you use in the first place.
Optimise Labour CostsLabour is one of the most significant expenses for coffee shop owners. Great staff with a customer-focused mindset and skills to match are invaluable, but there's no shame in looking outside of people skills to save money. In fact, the right choices can make things easier for your staff, as well as your pocket! As well as cross-training staff so they can perform multiple tasks, or adjusting staffing levels, you could look at tools to save yourself time in other ways. Investing in inventory management apps can save time, money and wastage. You could also look at gadgets to improve workflow like the Puqpress or Ubermilk - these can ultimately speed up your service, reduce training times, and get more customers through the door.
Consider Alternative Revenue StreamsKeeping things interesting in your shop is a surefire way to attract more customers: being known for more than just cups of coffee will set you apart from the crowd, and might even make your place a destination for visitors! There are a whole range of ways to diversify your shop's revenue, which you can read more about here.
Implement Loyalty ProgramsImplement a loyalty program that rewards customers for repeat business. Offer incentives such as discounts or free drinks after a certain number of purchases. This not only encourages customer loyalty but also incentivises customers to make more frequent purchases. We use the Embargo loyalty scheme, which offers all of the above, and the chance to keep in touch with your customers via push notifications.
Use an App to Calculate Gross ProfitCalculating gross profit can be a tedious and time-consuming task, but it's essential for monitoring the financial health of your coffee shop. A simple GP calculation app can save valuable time, and leave nothing to chance when introducing new products, or costing existing ones. These apps can help you track your expenses, revenue, and profit margins in real time, allowing you to make informed decisions about your business.
Of course, what also makes things more manageable is having suppliers who have your back. As part of our relationship with each of our Wholesale Partners, we're always available to discuss ways we can support you. Contact us today to get started on your journey with us - click here.