How to Open a Coffee Shop in the Post-Pandemic Era? 2023 Coffee Shop Business Guide & Trends

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The Coffee Shop Crisis: Why Young People Are Still Opening Cafes Despite High Failure Rates

"Lost 500,000 yuan in ten months of business"

"23 years old with 300,000 yuan in debt, coffee shop countdown to closure: 30 days"

"18 days after opening, losses exceeded 10,000 yuan"

I don't know when it started, but the cost of opening a coffee shop has become so enormous. Although the closure rate of coffee shops today is very high, this has not stopped young people from wanting to open coffee shops. Why are today's young people so enthusiastic about opening coffee shops?

According to a 2022 survey, the unemployment rate for young people aged 16-24 in China rose to 19.9%, reaching a new high. The reasons are affected by unexpected factors, employment pressure has increased, and many college graduates cannot find suitable jobs after graduation. There are quite a few young people full of grievances.

Nikkei Chinese website once interviewed and understood some young people who opened coffee shops in China, with the following comments: With the increase in various living costs and the widening income gap, ordinary young people without special assets and educational backgrounds are increasingly feeling distressed and hoping to do something themselves. Thus, coffee, which can be started with just a coffee machine and does not require huge amounts of business capital, has become a shortcut to realizing dreams.

Although shops have opened, many coffee shops have had to close in the short term because they cannot differentiate themselves from large chain stores and cannot achieve profitability. The current situation of the coffee boom in China—successful individuals are as rare as phoenix feathers and unicorn horns, while failures are countless.

The reason for most failures is more about being too impetuous, as well as choosing not to "turn a blind eye" to past failure cases and their reasons. Not investigating and understanding the market and consumer needs; not having suitable and stable products, not having reasonable pricing; excessive initial investment in opening the shop, resulting in insufficient operating funds in the later stage... these are all reasons why coffee shops cannot continue operating and suffer losses.

For people in the post-pandemic era, coffee is no longer positioned as "light luxury" or "petty bourgeoisie." As coffee gradually becomes a daily routine, when running an independent coffee shop, everyone needs to understand these keywords: "Service," "Clear Positioning," "Cost-Performance Ratio," "Efficiency," and "Innovation."

Service

In the World Barista Championships of the past two years, we can see that many contestants' themes revolve around service. As the coffee industry has continued to advance in recent years, the loss of coffee service seems to have become an unavoidable thing. However, this itself is a very contradictory matter: without service in the service industry, why should consumers choose you?

From in-store consumption to home brewing, coffee consumers' consumption patterns have undergone significant reforms. People still choose to go to independent cafes to experience the professionalism of baristas and the service process that cannot be felt at home.

For something to have more development, it must form a market. Among so many chain and independent coffee shops that can survive, "service" must be the most important thing.

Everyone doesn't need to care about how other coffee shops are doing or how other coffee shops price their products. First, improve the service of your own coffee shop, make your products good and stable, and you will naturally gain consumer trust and repeat purchases.

Clear Positioning

Before deciding on the location of a coffee shop, you must have a clear positioning. Simply put, we need to think about what the motivation for opening a coffee shop is. How to concretize your own ideas. If you don't think about positioning and just impulsively open a shop, it's very risky.

Before opening a coffee shop, we need to think about the following questions in order: Why open a shop? What do you want to sell to customers? When to open the shop? What kind of customers do you want to come to the shop (main customer groups)? Who will operate this coffee shop? Where to open the shop? What style? How much funding do you have to open the shop?

Only with clear positioning can you find more suitable locations and develop a stable menu that fits the shop's positioning. When thinking about the menu, you need to comprehensively consider regionality, customer class, surrounding store characteristics, and the needs of nearby customers.

Cost-Performance Ratio

The cost-performance ratio here does not mean that everyone should "compete" with the pricing of chain coffee shops, which is a very unreasonable thing. The biggest reason is that everyone's operating costs are different, and at the same time, chain stores have investor support, which ordinary independent coffee shops simply cannot compare with.

So when opening an independent coffee shop, remember not to compare with chain coffee shops. The more you compare, the more disappointed you become, and the less confidence you have in operating your own coffee shop.

People choose independent coffee shops and are willing to spend more money to drink a cup of coffee, which means they hope to gain more experiences that chain coffee shops cannot provide within this price difference.

The cost-performance ratio is more about whether the stability of the product is worth the price, whether the quality of the product is worth the price, and whether the service obtained during the consumption process is worth the price.

Efficiency

The efficiency here refers to the efficient operation of the coffee shop. There are many cases of failed coffee shops because only one person does everything in the shop, resulting in long production times for every task and every order. If only one person is operating, the store cannot be too large, and the menu cannot be too complex.

Whether operating individually or in partnership, you must improve standardized operating procedures, design the workflow of the bar counter and the placement of equipment, and increase the efficiency of order fulfillment. At the same time, pay attention to product quality and serve every customer who places an order well.

Innovation

For newly opened coffee shops, classic products are needed to retain customers, and innovative products are needed to attract customers. Stable quality, continuous innovation, and reasonable price positioning are prerequisites for the sustainable operation of cafes.

In the idea of product innovation, not only must you pay attention to the appearance of the product, but also to whether the taste of the product is acceptable to the general public. You cannot abandon the flavor matching between materials just for the sake of innovation.

At the same time, you must control the research and development of new products. After conceiving what kind of customers you want to sell to and estimating the taste and style of the product, then purchase materials for targeted development. Remember, at most two new products should be conceived each time. Too many can easily cause material waste and ultimately increase material costs.

Image source: Internet

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