Tuesday, May 23, 2006

The Coffee Shop Biz

The real pressures behind the charming coffeehouse on the corner:

Coffee was a different story—thanks to the trail blazed by Starbucks, the world of coffee retail is now a rogue's playground of jaw-dropping markups. An espresso that required about 18 cents worth of beans (and we used very good beans) was sold for $2.50 with nary an eyebrow raised on either side of the counter. A dab of milk froth or a splash of hot water transformed the drink into a macchiato or an Americano, respectively, and raised the price to $3. The house brew too cold to be sold for $1 a cup was chilled further and reborn at $2.50 a cup as iced coffee, a drink whose appeal I do not even pretend to grasp.


But how much of it could we sell? Discarding food as a self-canceling expense at best, the coffee needed to account for all of our profit. We needed to sell roughly $500 of it a day. This kind of money is only achievable through solid foot traffic, but, of course, our cafe was too cozy and charming to pop in for a cup to go. The average coffee-to-stay customer nursed his mocha (i.e., his $5 ticket) for upward of 30 minutes. Don't get me started on people with laptops.

Read it all here.

[HT:
Business Opportunities Weblog ]

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