How to Manage a Small Coffee Shop Successfully

Manage a Small Coffee Shop

Get The Most Out of Your Coffee Shop

Manage a Small Coffee Shop Successfully

How Do You Manage a Small Coffee Shop?

Managing a small coffee shop might seem like an easy task. But the successful management of a coffee shop takes thoughtful planning and execution.

Even if you have had previous experience working as a manager or owner of a food business, managing even a small coffee shop could pose a significant challenge.

If you plan to open a coffee shop, it would be best to consider your managerial obligations during your planning and build-out phases.

Use the time to get your coffee shop up and running to focus on what kind of manager you want to be – and how you want to ensure the successful implementation of your business goals.

Managing a coffee shop is focused on:

• Understanding your vision
• Knowing your business goals
• Staying within your budget
• Inventory management
• Creating efficient daily operations
• Smart hiring decisions
• Providing excellent customer service
• Staying on top of paperwork
• Making constant improvements
• Reducing waste
• Improving sales
• Effective promotion of your brand

In today's post, we will review these key areas and give you valuable tips for managing your coffee shop. The same keys areas can also be applied to managing a drive-thru coffee stand business.

Better coffee shop management will help you increase revenue, keep your business on solid ground, and make your job easier.

All the ideas are taken from our vast experience in starting coffee shop businesses and interviewing hundreds of independent coffee shop owners. We hope that these tips can promote your thinking on how to manage your coffee shop better.

How to Manage a Coffee Shop

Understanding Your Coffee Shop's Vision

Developing your coffee shop concept and vision early will help you stay focused as your planning evolves.

Making daily decisions to support your Unique Sales Proposition will help you stay focused on your mission.

Your Unique Sale Proposition (sometimes referred to as a Unique Value Proposition) is that special thing that makes your coffee shop stand out among competitors. Your USP is the draw that makes your coffee shop special.

Every managerial decision you make should filter through your USP. Perhaps your USP is the quality of your bread and baked items. Or it's the games, music, or ambiance you provide your customers while they enjoy their drinks and snacks. Every decision needs to highlight your USP, not dilute it.

Once you develop your USP, you must communicate that with your employees daily. Hang a big sign on the wall, and email them their schedule with mini-reminders on how to reach your USP this week.

• Develop your coffee shop vision
• Determine what makes you special
• Communicate your USP to your employees

Know Your Coffee Shop Business Goals

Every coffee shop startup should focus on a clear set of business goals that are specific to that business.

This may include sales goals, launching new products, expansion of products, services, or locations.

Clearly defined business goals will maximize your efforts, help you save time and money, and help you stay on track when managing your coffee shop.

• Define and communicate your vision and mission
• Understand what your financial goals are
• Create business goals specific to your business
• Develop a time frame to meet your coffee shop business goals

Staying Within Your Coffee Shop Budget

Whether you are building out or already managing a coffee shop, staying within your budget will be especially important throughout every part of your business operations.

Staying within your coffee shop budget means more than keeping tabs on your spending. It means taking care of one of the cornerstones that ensures your viability. This may mean establishing spending benchmarks in a given period (day, week, month, and quarter). Your coffee shop income statements or Profit & Loss statements will be excellent tools to manage your coffee shop spending.

When opening a coffee shop, going over budget is easy. When managing a coffee shop, it's even easier. The first step in staying within your budget is actually creating your coffee budget.

You will want to keep in mind that your budget for setting up and opening your coffee shop will be different than your budget for operating your coffee shop.

• Develop a coffee shop startup budget
• Create a coffee shop operational budget
• Regularly assess benchmarks

Inventory Management

One of the central roles of a coffee shop manager is to keep tabs on your coffee shop inventory.

Among other things, your coffee shop inventory is what makes the sales possible. Managing your inventory correctly is not a passive exercise.

Knowing what comes and what goes out is the cornerstone of coffee shop management. Understanding what items aren't selling is also essential as you decide on which products to order.

The best tool for coffee shop owners to manage their inventory effectively is having a coffee shop POS system. There are many good coffee shop POS systems to choose from, but I recommend Lightspeed POS.

• Create inventory systems that work for you
• Invest in a good coffee shop POS system
• Continually assess what's selling

Efficient Daily Operations

Each coffee shop has its specific needs and requirements to work smoothly. As a coffee shop manager, you will need to figure out the best operational systems that work for your business.

Your daily operations often depend on your menu items, customer preferences, location, equipment needs, and other specific factors that affect your coffee business.

For example, depending on your customer needs, you may want to develop efficient opening and closing systems to ensure that you are ready to meet your morning customer rush. If you are roasting your own coffee beans, you will have to create a roasting schedule that doesn't interfere with serving your customer or local regulations.

• Assess factors specific to your business
• Establish an effective operations system
• Make sure your employees follow established operations

Smart Hiring Decisions

Managing a coffee shop also means bringing people on board that can help achieve your business goals. Usually, this means either creating items on your menu or serving customers.

Managing your coffee shop effectively will depend on who you hire to help you with your coffee business.

Today, serving coffee shouldn't be the only requirement for hiring a barista. Today's retail coffee environment is fiercely competitive. It requires reliable and well-trained baristas who are really good at customer service.  Other essential skills may also be cooking, baking, social media, and inventory management.

Determine what skills you need to have in your baristas and other staff. Start your barista hiring search early. Introduce yourself to other baristas around town, write a blog post about hiring on your coffee shop website and social media, and attend local coffee events.

• Cultivate good employees
• Hire for personality, reliability, and trainability
• Invest in barista training regularly
• Develop clear job requirements and objectives
• Hold regular staff meetings
• Acknowledge good work

Providing Excellent Customer Service

Delivering excellent customer service will set you apart from your competition, maintain your loyal customers, and increase your coffee shop sales.

Excellent customer service starts with listening to what your customers want and need – and responding positively. Employ a system where comments, suggestions, complaints are noted and addressed.

Perhaps your coffee shop customers may want more gluten-free items, Kosher products, or vegetarian options. Or they would like to have Irish Crème syrup or sugar-free syrup flavors for their coffee.

When problems arise, solve each issue quickly and move forward to generate more coffee shop sales.

Excellent customer service can be challenging when you have demanding customers. That's why having well-trained baristas who are confident that you support them will go a long way. When a barista or coffee shop staff member goes out of their way to deliver high-quality customer service, acknowledge it and reward them. Recognizing and rewarding good customer service elevates its value.

• Listen to your customers
• Have all complaints and suggestions logged
• Acknowledge good customer service

Staying on Top of Paperwork

Managing a coffee shop involves pulling espresso shots, serving warm croissants, and doing lots and lots of paperwork.

Whether it's staying on top of your daily deliveries and inventory lists or balancing your checkbook, doing your paperwork takes time. In fact, one of the best ways to keep your coffee shop running smoothly is to ensure that your daily, weekly, monthly, and quarterly paperwork gets done.

While your coffee shop depends on you serving great coffee and boosting sales, it also depends on staying organized with your paperwork, bills, taxes, permit renewals, and other essential things.

Here are my recommendations to staying ahead on your coffee shop management:

• Block out time daily to organize and file paperwork
• Create a system of filing away paperwork
• Choose a coffee shop POS system to help save you time

Making Constant Improvements

If you are not moving forward, you're probably sinking. One way to move forward is to develop a pathway to efficiency, growth, and general improvements for your coffee shop.

Developing a culture of constant improvements, fine-tuning systems, and consistent analysis will improve your coffee shop business over time.

Reinvesting back into your coffee shop should be a priority. Whether you are investing in barista training, new coffee equipment, marketing efforts, or growth strategies, it will take time, money, and effort. Don't short-change or financially starve these improvements.

Just like dialing in your espresso shots every morning, making constant improvements and constant tweaks to every corner of your coffee business should deliver a return. This return can take the form of saved labor hours, inventory orders, increased sales, and revenue, among others.

As a coffee shop owner and manager, you should demand excellence throughout your entire company. While training and rewarding your baristas for finding ways to make things better are essential, you need to encourage open communication and methods for developing feedback.

• Develop a culture of improvement
• Expect excellence
• Promote open communication

Reducing Waste

The efficient management of your coffee shop should include a focus on reducing waste.

Reducing waste by just 10% can save your business thousands of dollars over the course of a year.  Reducing waste on coffee, milk, water, utilities, and food items will likely minimize your losses and improve your profit margins.

Manage your coffee shop ways to make your dollars and your inventory stretch.

Always ask yourself, what can I do to reduce the amount of (fill in the blank) that I need?

Common wasted elements in a coffee shop:

• Labor hours
• Coffee
• Milk
• Food items

Reducing waste at your coffee shop will be one of the fastest ways to improve your profit margins. It should be considered one of the first items on your to-do list.

• Analyze what items are being wasted
• Train your baristas to minimize waste
• Take a look at your scheduling practices to reduce labor hours (if needed)

Improving Your Coffee Shop Sales

One of your biggest goals as a coffee shop manager is to improve your month-over-month and year-over-year coffee shop sales and revenue.

The first step in improving your coffee shop sales is to determine where you are currently at. To do this, you need to look at your current receipts over the last three months. A recent income statement should give you a good snapshot of this.

• Next, determine your coffee shop sales goals:
• Where do you want your sales numbers to be?
• How can you improve your average receipt price?
• How can you improve your coffee shop sales per day?

As a coffee shop manager, you will need to develop clear sales strategies. This may include:

• Updating coffee shop menu
• Changing your coffee shop pricing
• Reinvesting in your marketing and promotions

Effective Promotion of Your Coffee Brand

Your coffee shop brand is essential to the ultimate value of your business.  As a coffee shop manager, you will also need to manage your coffee branding carefully.

Every decision you make can have an impact on your brand. Common coffee branding decisions include coffee shop promotions, supporting local community programs or groups, advertising, hiring decisions, representation in social media, and more.

Common investments in time and money can include:

• Social media
• Working with local clubs, teams, and organizations
• Merchandise sales
• Logo design and signage

Tips to Manage a Small Coffee Shop

Know Your Customers

A customer-centric approach will help steer you in the right direction in all of your efforts. Learn what your local customers want and provide them with the products to fill in their needs.

You might research your target market needs in advance when you are writing your coffee shop business plan.

There might be a niche that's not filled in this locale – this is where you step right in. If you have launched your business already, it's recommended that you regularly ask your customers what they want or expect. You can also study your POS system data to see any changes in the demand.

Your customer's expectations may evolve. If you begin to consistently have a line of customers as soon as you open your doors, consider opening an hour earlier. If you have customers staying until the last minute, consider staying open a little longer.

• Listen to your customers
• Allow ways to get feedback
• Make small, purposeful changes based on feedback

Accept the Evolution of Your Coffee Shop Menu

Offering your customers superior products every single time – from excellent coffee and milk to bakery and food – is a sure way to earn their respect and create repeat customers.

However, as stated earlier, things can change over time. Your ideal customer may turn out to be different than you plan. Be sensitive to customer suggestions and tweak your menu to fit the needs of your customers.

You might get more suggestions for sugar-free items, kosher products, or more savory breakfast offerings. You might be asked to serve wine and alcohol at your coffee shop. Take each opportunity to adapt your menu to fine-tune your pricing to ensure the profit margins are where they need to provide a profitable coffee business.

• Research your target customer needs
• Adapt your menu to the changing demands
• Collect feedback on new menu items

Reduce Your Customers' Pain Points

Managing a coffee shop essentially means working with your customers' needs and addressing their pain points.

Figure out ways your coffee shop can:

• Offer more convenience
• Be more inclusive and welcoming
• Offer affordable menu options

For example, if your morning customers are students on their way to catch a bus, offer easy-to-carry sandwiches and portable lunch options they can take with them.

If your customers are nearby office workers who only have a few minutes to grab a coffee and a lunch to go, offer ready-made salads and healthy lunches.

Learn as much as you can about your customers and anticipate their needs. Sometimes, to manage your coffee shop into profitability, you need to know your customers better than they know themselves.

• Anticipate your customers' needs
• Know why your customers are buying from you
• Understand where your customers are going

Lean on Technology

It takes a lot of mental bandwidth to run a coffee shop. Fortunately, you don't have to do it all in your head. Lean on technology to manage your coffee shop.

Technology can scale your ability to manage your shop as well as other locations. Utilize a good coffee shop POS system to give you the broad spectrum of data you need to know. Install security cameras with audio capabilities to always see what's happening at any given moment. Security cameras will give your baristas and staff members the sense of accountability they need. It will also prevent or reduce incidents of theft.

Consider automating certain things like inventory orders, clocking in employees with your POS system, or using automatic lighting and locks.

• Find ways to utilize technology in coffee shop management
• Aim at automating operations at your coffee shop
• Choose a robust POS system
• Install security cameras

Create Systems for Everything

To create greater efficiencies and consistency, develop a system for everything. This would include plans for opening and closing up your coffee shop, cleaning and maintaining coffee equipment, throwing out the trash, and addressing inventory.

Additionally, make sure each employee knows how to reach you in case of an emergency. If you are unavailable, determine the “chain of command” to deal with specific emergencies or questions that must be addressed sooner than later. It will also be a great idea to include these systems in your coffee shop employee handbook.

Standard coffee shop systems to develop:

• Opening duties
• Closing duties
• General cleaning and deep cleaning duties
• Cooking and preparing food or coffee
• Taking in inventory
• Gratuity
• Emergency communication

Take Pride in Your Work

As a coffee shop owner or coffee shop manager, you are the quarterback on the field.

Whether you are physically present or not, your employees will look to you for leadership. Employees will emulate or follow what they see in you. Therefore, it is critical that you understand that you create the culture of your coffee business.

Take pride in your work. Compartmentalize your attention. When you are at work, focus on your work. Put your home-life concerns away for the time you enter your business.

By taking pride and demonstrating that you care about every aspect of your coffee business, you will teach your employees to do the same. If you take the time to clean your equipment, your employees will see how necessary your coffee equipment is. If you serve only the best espresso shots, your baristas will understand that it's also essential to serving the best coffee.

However, if you cut corners, show up late or deliver mediocre service to your customers, your employees will do the same.

It's hard to stay enthusiastic about your coffee shop business 24/7. It's easy to get burned out as a coffee shop owner. Therefore, make sure that you are taking care of yourself and allowing time to address your needs.

• Use your leadership skills to manage your coffee shop
• Avoid burnout by delegating duties
• Balance your professional and personal life

Get Help When You Need It

Managing a small coffee shop is challenging on a number of different fronts. When you need help, seek it. This may mean hiring an additional staff member, barista, chef, baker, or manager. This may also be hiring a bookkeeper, accountant, or coffee educator.

A good coffee shop manager needs to recognize when they need help managing their coffee business and getting it.

How to Manage a Small Coffee Shop

We've discussed how some factors to consider when you manage a small coffee shop. Remember that each element you address can improve your ability to reach your preset coffee shop goals. We will list them below:

Managing a coffee shop is focused on the following key areas:

• Understanding your vision
• Knowing your business goals
• Staying within your budget
• Inventory management
• Creating efficient daily operations
• Smart hiring decisions
• Providing excellent customer service
• Staying on top of paperwork
• Making constant improvements
• Reducing waste
• Improving sales
• Effective promotion of your brand
• Update your coffee shop employee handbook

Related Coffee Shop Management Questions:

Do I need some experience to manage a coffee shop?

Coffee shop owners and managers come from all backgrounds. However, the type of experience you have had previously may be very helpful in managing a coffee shop.

Indeed, having experience in a management position may help you run a coffee shop more effectively, but it may not be necessary. You may have experience being a barista or working in the food service industry and be excellent at managing a coffee shop.

The best way to prepare for the experience of managing a coffee shop is to do purposeful research and understand what needs to get done to operate your coffee shop smoothly.

Should I hire a coffee shop manager?

Hiring a coffee shop manager for your new coffee shop depends on a few important answers to the following questions:

• How “hands-on” do you plan to be with the day-to-day operations?
• How busy will your business be? (A more extensive, much more active coffee shop operation may require additional managerial support.)
• How many staff members and operations do you plan on having?
• Will you have a roasting operation, baking business, and full kitchen that will require oversight and greater coordination?

Indeed, other relevant questions may lead you to hire a coffee shop manager that isn't listed. Your employees need someone to help guide them throughout the day. A hierarchy can increase confidence and efficient decision-making that will only benefit your coffee business. This hierarchy must be dictated and formed by you. Therefore, you either need to be the manager, or you will need to hire a manager who can lead your coffee business to meet your goals.

Can I manage multiple coffee shop locations?

Managing multiple coffee shop locations is possible. As you know, many independent coffee shop businesses have more than one location. They often run successfully if they are managed well.

I would recommend that you do a few important things if you have multiple coffee shop locations:

• Invest in your barista training
• Create consistent systems throughout your business
• Have a coffee shop POS system that can operate multiple locations.

Is it easier to manage a small coffee shop or a drive-thru coffee shop?

Operating a small coffee shop is comparable to managing a drive-thru coffee shop. Many of the same managerial factors discussed will also apply to your drive-thru coffee shop business.

A drive-thru coffee shop requires good business stewardship, just as a small coffee shop does.

For more information on starting a drive-thru coffee shop, read our related post, How to Start a Drive-Thru Coffee Stand Successfully.

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