Table of contents:
- 1. Marginality of 20% is already a success
- 2. This business requires you to live in it
- 3. People are a complex asset
- 4. Highly competitive market for a startup
- 5. The standard of living in Russia
2023 Author: Malcolm Clapton | [email protected]. Last modified: 2023-05-22 06:26
Ease of management and super profit is a myth.
The mass coffee business in Russia has been around for more than one year, thousands of people have already managed to open and close their establishments, and the myth of easy money for coffee still does not become obsolete. The coffee shop is even included in various lists of available business ideas, which supposedly can be done without quitting your job. But 964 advertisements for their sale are a subtle hint that things are a little more complicated.
When I opened a coffee shop, I was also sure that I could combine this business with my main job. He also believed in the ease of coffee money, in the super-profitability of this business and even in the existence of Italian coffee.
Secret: There is no Italian coffee. There is Brazilian, Ethiopian, Colombian and even Chinese, but in Italy coffee just doesn't grow. The phrase “Italian coffee” is marketing based on an established myth. Like the Irish Whiskey inscription on the 250 rubles bottle.
But this is not a confession of a person who burned himself on milk foam: my coffee shop has been operating for more than three years and has even turned into a small network. But now I know five reasons why coffee is not the best business idea.
1. Marginality of 20% is already a success
If I were selling you a coffee shop franchise, I could draw a nicer number. Naturally, not a word was lying!
Let's take a look at the ruble composition of a cup of coffee using the example of the best-selling drink in any coffee shop in Russia - a large cappuccino. Its price Prices are indicated for a provincial city with a population of one million, for Moscow, multiply by two - 150 rubles. The cost price of coffee beans in it is about 20 rubles. Profit - 650%! You can finish reading and rush to print business cards signed by the Coffee shop owner … But then we add 18 rubles for milk and 7 rubles for a glass. Still not bad: cost - 45 rubles, profit - 230%.
But now let's calculate the percentage of sales for the barista if you need a motivated employee. Percentage on the bonus card to the client, if you need a faithful guest. Let's add the barista's hourly wages. Rent. Utilities. Cleaning. Taxes. Banking fees. And another 30 items of expenses that will squeeze your profits. Of course, you can make money. But, like any catering, a coffee shop is not a super-marginal business.
Any coffee shop will need to buy an automation system and, accordingly, choose from the 5 main ones that are presented on the Russian market. I recommend using this for this task, in the basic package for 499 rubles. there is also a widget per month that calculates the margin of each dish.
2. This business requires you to live in it
A coffee shop is a small, round-the-clock emergency that will eat up your energy and strength with an appetite greater than that of a tourist at a buffet.
There will be no rest. Equipment breaks down. Suppliers bring low-quality raw materials. Baristas fall ill, oversleep, or go into a binge. Utility workers turn off electricity, water and logic.
In addition to all this, there is work with the assortment, marketing activity, work with suppliers, service companies, quality control and service - routine management.
A coffee shop requires a lot of operational involvement. Even with streamlined processes, it will not be possible to buy grain for a month and leave for Bali. That is, it will turn out, of course, we are all free people, but upon your return you will have to submit the 965th advertisement for the sale of the coffee house in order to return the debts. Alas, this is life.
3. People are a complex asset
And the coffee shop is people. This slogan is even used by some establishments. Indeed, in addition to streamlined processes in a coffee shop, people are critically important. Be prepared for countless conversations, conflicts, and grease in this humanoid cogwheel mechanism.
On the one hand, speaking of people, I mean the barista. A good barista in a coffee shop is worth its weight in gold: the salary is small, the prestige of the profession is low, the work is nervous and requires certain skills. Few people consider such a job as a life-long affair. And that means turnover. Somewhere more, where conditions are better - a little less, but nevertheless. And where there is a turnover, there is inexperience and low quality of personnel, the search for new employees and, as a result, nerves, nerves, nerves. At some point you will think: "I wish I had an online store …".
On the other hand, they are guests. Wonderful and irritable, funny and sullen, pleasant and brawler. Your baristas, about whom it is written above, should find contact with each of them.
So a coffee shop is a business that, more than many, depends on the human factor. If this does not suit you, bypass it.
4. Highly competitive market for a startup
If you say loudly "Cappuccino, please" at any busy intersection, then you will be asked from at least three sides: "Big or small?" The market is almost completely saturated, and if you do not have a clear market (team experience, strong brand) or non-market (ownership, unlimited money cushion) advantages, then you have nothing to do on it. Either experience in the coffee business or a shareware rental spot in a good location. With other arguments, entry is ordered.
If you cannot clearly answer why your coffee shop will be chosen without mumbling anything about the soulfulness of your business, it will be a failure.
5. The standard of living in Russia
Coffee is not a must-have product. If you want to save money, then a person will cut this item of expenses almost in the first place. Proof: a search on Lifehacker for the words “coffee” and “save” yields a dozen articles where the authors mercilessly deprive an economical person of the right to a glass of coffee. What can I say if on the revenue graph you can see the days of payment of salaries.
Coffee as a holiday is wonderful, but for the sustainable development of the coffee business, every day should be a habit and, most importantly, an opportunity for the majority of the population. So far, this is not the case in Russia.
There was a time when the coffee market grew so rapidly that any coffee bean thrown onto the streets of the city grew into a completely viable bush. The effect worked The effect of a low base low base and growing incomes of the population. This time has passed, but a beautiful story about an easy way to make money remains, and it excites the minds. This business is by no means simple. But if I haven't convinced you, welcome to coffee, colleagues!