There are many reasons why coffee shops, cafes and restaurants fail to reach the 12 month milestone in business but the good news is that with a little foresight and planning you can easily avoid closure.
In this video Jimmy here at Artisti Coffee Roasters highlights what he believes are three common reasons coffee shops fail in the first 12 months of operation. His reasons which cause the most trouble are around PLANNING, STAFFING & MARKETING.
If you're looking to go into business for yourself and would like further information on this topic or anything else coffee related be sure to reach out as we are always happy to help.
Unedited Video Transcript
There's three main reasons why cafes fail and why your cafe is going to fail in the first 12 months if you don't get these things right stick around i'll talk you through them
hey everyone i'm jimmy welcome back to the artisti youtube channel where we
talk you through all things coffee if you haven't subscribed already be sure to hit the subscribe button like this video and hit the bell icon so you don't miss out on any future videos
now my intro was pretty dramatic and the point was that we really don't want to see anyone's businesses fail in the first 12 months or ever really so we're just trying to help we just want to be a great source of information so you can be aware of all the things that you need to focus on when setting up or
while also running your business so i'd say the first reason the cafes
can fail would be poor planning that can be as simple as just running through a basic business plan if you're not a business planning kind of person maybe there's someone in your family or someone that can help you or can hire that help but that's going to be a huge advantage that's going to give you the benefits of budgeting for the cost of staff your stock and just allowing you to have an overview of what the realistic costs of any cafe setup can be if anything most people totally underestimate the cost of a cafe there's a lot involved
depending on doesn't really matter what size there's actually more costs
involved than people expect so that i would say always overestimate your spending going to any scenario that way you've got a bit of a buffer there
and that buffer also really needs to include yourself and your earnings and
what you're expected to earn and what money you've got to rely on why you're not actually making money and you're in a growth period in the first couple of
months your business and that can take a lot longer than people expect so
budget for the unexpected
so the second reason that i see cafes fail and really struggle is always around
staff staff are the probably the hardest part that i see in cafes they can be
they can change constantly you you really do need to factor in the costs of
finding stuff and also training staff there's going to be costs like
uniform how much time is it really costing you to train that staff member
when they've started their job or pre to their job so if you're expecting for someone to walk in the door and serve the premium especially coffee that
you expect and your customers expect you really want to run through and have
them set up as quickly as possible we recently did a video on our onboarding
process for all of our new baristas check that video out that'll be a big
help to you to speed up that process because that can be a very costly time
for you out of pocket but also costly time that your customers might be
affected by that change there is certain baristas that can enter into a cafe and they can bring business with them are you paying for staff based on their experience and paying a little bit more for that particular staff member or
are you having to outlay expenses on training and onboarding that cost
that staff member a lot faster because they are a bit cheaper so you've got to balance between how much it's costing you to onboard train versus just hiring quality staff straight off the bat and whether you have access to those stuff is a big thing too those staff members are coming out of other cafes can you check their references and see what kind of customers they might bring and make sure they've got a good reputation not a bad one that can be detrimental and you don't want to bring that into your business and finally it's got to be your marketing budget your marketing budget always gets left behind it gets left to the last minute or just not thought of at all people often don't even put a budget in for marketing because they don't really understand that space so they just think it's something that they'll get to social media is a great way to share people your vision and to show them what you're doing day to day but you've still got to build that audience i did do a video a while ago that talks you through making sure that you're capitalizing on the different areas of digital marketing that you can you can access but that is organic growth and that is going to take time and if you're trying to build a business quick and you really want to increase your customers and you want to increase your income you want to make sure that you've got at least the free stuff set up and then look at what opportunities you have for press or whether it be paid promotions and marketing spend that can be as simple as a flyer a brochure if you've got staff standing around print a brochure get them to do a mail drop making sure that you've got some promotional material so that people can walk in the door take a menu home or do something that's going to get the word out there faster the more customers you get the more money you can make and the more successful you can be and the less likely it will be that your cafe fails in the next 12 months guys i
hope this video has been heaps of help for you i'm happy to answer any questions you've got to put them in the comments below um if you haven't already be sure to like this video hit the bell icon so you don't miss any
future videos and subscribe because we love our community of coffee makers and business owners we want to be as helpful as possible we'll see you next time cheers bye
