B&D DLX850B COFFEE MAKER BLACK 12CUP BREW BASKET

Black and Decker DLX-850B 12-Cup Coffeemaker

With rising prices, and talk of the "credit crunch" wherever you go, what advice can I give coffee shop owners with regard to maintaining your profit margins without losing customers?

1. First, it is essential that you pass on the price rises to your customers. Your suppliers are passing on their higher costs to you; if they tried to absorb the increases and keep their prices to you stable, they would go bankrupt. So, you have no alternative but to pass on the increased costs to your customers. You should bear in mind that your customers are already aware of the rising cost of food, and any increases you make to your beverages or snacks will come as no surprise to them. Remember, also, that whilst restaurants may suffer as customers give nights out a miss, a quick visit to the local coffee shop will not seem so expensive in comparison.
2. Treat the current economic environment as a challenge, a chance to beat your competition by focussing on great customer service and introducing promotions, such as one coffee for the price of two for a limited time, or by introducing new items.
3. Try and reduce wastage. This could simply be by reducing electricity bills - ensure lights are switched off in staff areas when rooms are not in use, such as stock rooms. Review settings for your air conditioning. See if you can reduce the hours worked by your staff - there may be certain times of the day or week when you do not need so many employees on the shop floor.
4. Looking at your suppliers, you may need to bargain a little more, and perhaps pay earlier in order to achieve further discounts. Perhaps switch your orders to lower priced goods with good margins.
5. You could also bring in a few cheaper lines that can be picked up at the till. For any unhappy customers, offer a 10% discount voucher to be used on their next visit. Offer discount vouchers for purchases over a certain level, say 15. You might also consider reducing slightly your top selling items in order to increase volume of sales.
6. To recover the costs on items where suppliers have increased prices, you will need to increase the amount you charge in your shop. Don't do this all at once, introduce the higher prices on a couple of items each week. This way you should be able to maintain your margins without losing customers.
7. Ensure your premises, and your staff, are immaculate and reflect the type of service your customers cannot find anywhere else.

And remember, most coffee shop frequenters are looking for a comfortable environment and friendly staff. If you can provide that, they will be willing to pay a little extra for their coffee.

Tracey Beaney

Tracey Beaney has collaborated with former Coffee Shop Owner Don Clarke on a step by step guide to setting up a coffee shop. It has been reviewed favourably by Cafe Culture magazine, a UK trade magazine for the cafe industry. It is being translated into Turkish by a publishing company based in Istanbul, and is currently being edited for the US market. To read the review see http://www.howtosetupacoffeeshop.co.uk/review.htm

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