Keeping Costs Down

Thursday, November 23, 2006

An important aspect of starting, and running any business, especially a coffee shop is to keep costs down. The idea is to pay as little as possible while getting the most benefit to your product as possible. A lot of the time when people go into the business they over spend on items of decor, thinking that it will help them make that much more money.

While it is probably your dream to make the best coffee shop possible, unless it is just a hobby and not a business, you need to make it in a fashion that will make money. I have seen people spend exuberant amounts of money on modern furniture that while does look great, adds basically nothing to the top or bottom line. I have also seen people spend very little and still get a nice cozy and stylish design out of it. The idea is, if you are in the coffee business, you need to keep your costs down and focus on providing a solid product. Of course, style does attribute an aspect of your product and can sometimes convince people to come back more often.

You will also want to keep operating costs down as much as possible. There should not need to be too much discussion of how to do this as it is pretty self explanatory. Make sure your employees do not have too high of a food waste. Try to keep inventories just right as to not have to throw away (or donate) as much old food. There are a lot of things you can do from an operations perspective to keep the costs down. The biggest problem I see happen is owners spending money on things that might not even be related to the business. Then they wonder how they did not make money, or achieve their goals in profits.