How to Buy a Coffee Shop: Count Your Customers First
Let's imagine that you just signed your lease. You just ordered your coffee equipment. And you've hired your first two baristas. Do you know how many customers will you expect on any given business day? What are your expected weekly sales numbers going to look like at your new business?
If you're not sure, you're joining many retail businesses that opt to not to figure out the needed estimates well before they spend a small fortune to get their business up and running.
If you are buying an existing coffee shop or whether you are scoping out a potential spot for your coffee business, you will need to consider a variety of factors that will determine the ultimate success of your business.
Many people will buy a coffee based on powerful emotional factors, the romance of owning a cute space, dreams of making lots of money, and thoughts of being a business leader. Unfortunately, while all these are good factors, but many leave out one important factors: math.
The fact is the amount of customers- or potential customers your coffee business will have in a given day matters to your sales. But how do you know how many customers you will have? We recommend that in addition to reviewing existing sales reports (if you intend to buy an existing coffee business), as well as the time-honored retail tradition of counting customers.
One of those important pieces of the puzzle is counting customers. That's right “Counting Customers” For our purposes here, counting customers means, just that. You physically count how many customers a business has. If you are looking at a site or location that does not have a coffee shop, consider neighboring businesses to count customers at.
Okay, so let's delve into this a little further. Many of you may be already familiar with the concept and practice. If you are looking into buying a coffee shop from someone, you should count customers. Additionally, you will also want to ask for your their sales records or their sales receipts. You may ask for their profit and loss statements, as well. However, if you are opening up a new café or coffee shop in that specific location, you should consider counting customers at the coffee establishment closest to you or at a similar type of business (such as a breakfast restaurant, etc.)
Counting Customers isn’t rocket science, but if done right it can help establish your menu, determine your barista needs, and help you establish your time line and break-even point.
Counting customers is essentially counting how many customer a business has. That’s it. However, you should count customers from the time they are open, to the time they close. And you should do it at least three different times and on different days.
I recommend counting customers on Monday, Thursday, and Saturday. If you can’t spend three days – it’s worth it to pay someone $10 bucks and hour, plus expenses to count customers the entire day!
Divide your number counting into three parts: Open to 11am, 11am to 3pm, and 3pm to Close.
Your count might look something like this:
|Day 1||Day 2||Day 3|
|Open to 11am|
|Open to 11am|
|Open to 11am|
Counting on different days will help provide you with averages. Additionally, it will give you a better idea of what you can expect throughout the week. There is obviously a slight variance that naturally occurs day-to-day. Statistically, the more days you have the more the averages start to reflect your actual numbers.
So, what can you do with this information?
You can determine your how many baristas you’ll need and when throughout the week. Additionally, you know just how many orders to send to your vendors. Additionally, you can also get an “eye-ball” picture of what people are ordering. This will give you an idea of what the receipts look like.
Question: Why should I do this when I am looking at the receipts or reports from the existing owner?
Answer: Counting customers will help to verify the numbers you are given (if you are given any) and help you answer some qualitative questions too, such as what are customers ordering when they walk in? What are they asking for? What kind of service are they receiving? How would you do things differently to maximize their efforts?
After you get the numbers, analyze them. Do they mesh well against the numbers you are receiving from the current owner? If you aren't buying an existing business or you are not getting any real help from the existing owner, how do the numbers look from a reasonable perspective? Do they affirm or contrast against your initial gut feelings about the location? Assuming that you thinking about buying an existing business, if you were to get a fraction of the numbers you counted would your customers be enough for you to have a viable business?
Consider all the factors here: including existing brand awareness, marketing, customer service, product offering, etc. What are the meanings behind the actual numbers? Is the current owner doing a poor job at offering good service or great coffee? How do your answers match against the actual numbers? What is the data telling you? Hard data helps remove the emotional factors that lead to hardship. Sometimes it's easy to fall in love with a location or an idea, but if the numbers are supporting your ideas, than you should think twice before buying that specific location.
Wondering the best way to start a coffee shop?
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