Why Do Coffee Shops Fail?

Vietnamese Coffee Exporter

 Many people have a reason to start their own coffee business. This dream is great but without the information required to make it a reality, dreams can become nightmares. Unfortunately, the majority of small businesses fail within the first two years. So why do coffee shops fail? To help you learn from them, I’ll list a few reasons why coffee shops fail.

Unsuitable location

One of the main reasons why coffee shops fail is because of their poor locations. Deciding the location of your cafe is one of the key decisions that ultimately determine whether your business is heading towards success or a disaster is about to unfold.

There could be a number of reasons why a location might be unsuitable for a coffee shop business such as – no parking space, no easy accessibility, not sufficient foot traffic, unreasonably high rents, or poor visibility.

In fact, the location of your cafe plays a major role in establishing what kind of menu, interiors, and themes would or would not work for your business. Do your research properly, spend time exploring the area, meeting people, and gathering information about what they like or dislike in general.

This will help you decide what kind of theme – urban, professional, relaxed & casual, or traditional would work for your cafe. Once you are clear on that, you can go ahead and decide on an appropriate menu and everything else, as well.

Lack of industry knowledge

Many new coffee shop owners jump into the industry thinking they’re going to purchase an industrial-size espresso machine, immediately have customers and earn a ton of money.

However, coffee is a lot like wine in that various beans and blends affect the acidity and taste of the brew. As a coffee shop owner, taking the time to learn about great coffee is an important part of your success.

However, mastering the art of brewing great coffee isn’t enough. You must also learn various aspects of your new business such as marketing and bookkeeping.

Read up as much about the coffee industry as possible. Attend regional events, talk with other shop owners, and be open to learning everything there is to know about brewing, marketing and selling coffee.

Management issues

If you don’t have the right team, the issues you have will trickle down to your coffee shop’s customer service. So be sure to document how you’ll approach hiring in a business plan.

Hiring the right employees who are as concerned about the success of your business as you are can be difficult. Furthermore, training staff members to make drinks and provide excellent service to your customers is usually quite tough if you don’t have experience in management. This can lead to negative reviews and a downturn in business that usually causes coffee shops to fail.

To solve this, make sure you are hiring staff members that are as fanatical about the coffee industry as you are. Offer competitive wages that are just a little bit higher than that of competitors in the area. And it is also important to ensure you’re just good at being a boss, as your employees won’t stick around if they are unhappy working for your business.

Poor coffee shop service

Now, good service and good cakes are no longer good enough. You’ve gotta be wow. And you’ve gotta be awesome. You’ve gotta be Instagramable. You have got to be famous for something, okay? You have got to have something that people know that you’re famous for. What are you famous for? Now fantastic service comes from recruiting the right people. Recruit for attitude and not skill.

Now you can train somebody to make a fabulous cup of coffee, but you cannot teach the hospitality gene. They’ve either got it or they haven’t. So when you’re recruiting, recruit very carefully. They always say, to recruit slowly and hire fast, but look for the hospitality gene. Look if your potential recruits are smiling, eager to learn and not standing there with their arms folded looking bored. The hospitality gene is vital.

Then, when you’ve got the best team, you want to be the magnet for the best team in town. So that when people come in, they see your team as happy and they all want to join you. So it’s ongoing, you will get more and more people wanting to join you. When you’ve got that team, don’t forget to train them, train them and train them.

Pay as much as you can afford and more. And reward your staff, reward your team. It doesn’t have to be with money, it could be with other things. But make them want to come and work for you and make them become more of an extended family and enjoy coming to work.

Bad food/drink

Whether it’s at a fancy restaurant or at a cafe, one thing is true about eating out: Customers go out to eat to get something better than what they can get at home. As a tradeoff, this means they’re spending more money than they would by making coffee in the coffeemaker and getting a microwaved pastry at home.

If your food is bad, they will go elsewhere, and they will be sure to tell their friends, especially if your food gets them sick. With social media and review sites like Yelp, word spreads fast. So be sure your customers have a good experience.

Failure to invest in marketing

The coffee shop industry is a competitive market. If your cafe belongs to a coffee chain, you probably don’t need much marketing. But if it’s an independent venture, not investing in marketing can lead to an inevitable failure.

Dedicate an appropriate amount of resources and budget towards planning and executing a well-structured marketing plan.

Identify your target demographic and explore what kind of advertising and marketing platforms can be used to attract them. If all this sounds a little too confusing or overwhelming, consider hiring a professional marketing agency to handle all your promotions.

It’s really important to build a solid reputation right from the beginning. After that, you can come up with a suitable number of engaging campaigns every few weeks or months to retain the interest of your customers.

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