Must-Read for Coffee Shop Owners! 8 Main Reasons for Coffee Business Failure

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In recent years, the coffee atmosphere in China has become increasingly popular. Many coffee enthusiasts dream of opening their own coffee shop, but few people can actually run a coffee shop successfully.

Whenever they fail, people always attribute the reasons to "bad luck," "born at the wrong time," or "choosing the wrong location." However, more often than not, it's because they have no concept of running a business at all, but impulsively opened a shop just because they had some small savings/a bit of money.

The editor of this article has compiled common reasons for coffee shop business failures in recent years. Everyone must think carefully and avoid these pitfalls!!

"Before opening the shop, there's no clear positioning for the coffee shop"

Do you want to open an influencer shop? A community shop? Or just a shop selling specialty coffee? Only by determining the target customers first, then determining the product positioning, can you determine the store's location.

Specialty shops pursue the quality of coffee beans, the quality of coffee output, and the value of the barista itself; community shops pursue tasty and stable products, high cost-performance prices, and the barista's human touch and attentive service; influencer shops pursue the shop's decoration and unique style, as well as the store's visibility and convenient transportation.

If you don't have a clear goal for why you're opening a coffee shop and what you're opening it for, you can't set up a suitable menu, nor can you determine the location of the shop.

"Rushing to open the shop, randomly choosing the location"

This situation commits a major taboo for business failure! Many people delay for a very long time when choosing a location, perhaps because some shops didn't work out for various reasons, or perhaps because they didn't understand their coffee shop's positioning at the beginning and searched for shops without a target.

Finally, due to exhausted patience, they randomly chose a street-front location, but impulsively rented it without investigating and understanding the customer base around that area.

Actually, opening any shop requires prior market and industry research. When there really isn't a suitable shop, you can delay opening the shop! Really don't be impulsive! And you can't rush!

"Finding a very unreliable partner"

Partnering in business really can't be successful just because you share the same ideals. After all, inequalities in money and effort are most likely to cause conflicts.

Therefore, when looking for a partner, it's not enough to determine if your values are the same; both parties must also face reality and reach a mental consensus. After all, running a coffee shop requires enduring poverty and loneliness. If one party cannot accept this reality, disagreements will quickly arise.

If you have the same values and mental consensus, you also need to determine each person's "rights, responsibilities, and benefits." Even the best of friends, even couples, must sign contracts with clear division of labor, specifying who will take charge of the overall situation, who will handle the subdivided tasks, and clarifying each other's shareholding and profit distribution.

"Too much equipment investment"

Don't think you can't open a coffee shop without an EK or La Marzocco - it's not only expensive coffee machines that can make good coffee. Whether a product tastes good depends on the quality of the coffee beans and the barista's skills. Therefore, when it comes to coffee equipment, choose what's right, not what's expensive.

The price of one La Marzocco/EK could decorate a beautiful coffee shop. If a cup of coffee is priced at 25-30, how many cups of coffee do you need to sell to recoup the equipment cost...

"Insufficient operating funds"

Yes, many coffee shops cannot continue operating due to insufficient operating funds. Many people at the beginning of their entrepreneurship pour all their limited funds into the opening, such as rent, interior and exterior decoration costs, equipment and tableware purchase costs, advertising and promotion costs, and material procurement costs, without considering operating funds.

Opening a shop is easy, but operating it is difficult. After the coffee shop opens, the essential monthly expenses are rent and labor (even if you operate alone, you must factor in your own time cost). At this time, if there's no corresponding turnover, it's easy to fall into the path of losing money continuously... So before opening a shop, learn more about how to adjust the ratio of expenses and income, and when necessary, learn to adjust the coffee shop's positioning in a timely manner, or even cut your losses in time.

"Blindly pursuing product uniqueness while ignoring public demand"

Many coffee shops today are very persistent about the uniqueness of their store's products. Either they blindly pursue specialty coffee, only choosing what's considered good in the coffee circle; or they blindly pursue special drinks, not providing regular products, only offering products unique to the store, which although distinctive, are very niche.

The definition of specialty coffee is that from selecting raw coffee beans to presenting them to consumers, every step in the entire process needs to maintain the highest quality. Besides the coffee beans themselves meeting quality standards, the roaster and brewer must have sufficient understanding of the coffee beans themselves to extract reasonable flavors through appropriate methods, showcasing the characteristic flavors of the coffee-producing region.

Although specialty products are very attractive and can attract many consumers to "check in" in the short term, these customers won't have repeat purchase rates. Regarding this matter, some people were stubbornly convinced that some specialty products were good sellers in their shop, but didn't consider that because the shop had no other options, customers, among a pile of specialty products, chose the one that seemed more reliable and normal, thus creating the phenomenon of concentrated selection of a particular product.

I'll say it again even if it's wordy: what allows a coffee shop to operate long-term is that the products are tasty, stable, and high-cost-performance! Consumers will have a curious mindset toward specialty products, but that doesn't mean they will make repeat purchases long-term. Therefore, while pursuing refinement and uniqueness, you must also consider the real needs of the general consumer.

"No fixed business hours"

"When you have your own shop, there's no need to be strict with yourself about being on time every day!" "When you have your own shop, you can rest whenever you want"... When you have these thoughts, it's not recommended that you open a shop.

Without even a fixed business hour, resting whenever you want, when customers finally make the trip, only to find the shop closed, how can the coffee shop build a reputation? How can the owner convince customers to become their long-term clients?

"Too much personality, no service"

Don't think of service as "bowing and scraping" or behavior that lets customers "give an inch and take a mile." After all, one of the hardest things in the world is getting someone to willingly pay for your service. Everyone has to consider whether the cost they pay is worth it.

No matter what your personality is, the basic principle of serving customers is enthusiasm and generosity, truly making customers completely convinced. I believe that in any industry, service is what determines whether a shop, a company, or a brand can survive long-term.

Image source: Internet

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