coffee business strategies

An article written for startup restauranteurs that I read this morning seems also very relevant to independent coffee shops:

Every year, in every country in the world, countless entrepreneurs open restaurants. It can be a family-run affair, a small group of friends, or a rugged individualist with a concept thought to be compelling to the dining public. It may be based on a great recipe for buffalo wings or a winning personality combined with a love of entertaining guests. A few may be successful but most are not. Even with all of the advances in technology, the restaurant business remains one of the most difficult, yet fundamentally simple, businesses to operate.

Sound applicable to our industry? Yeah, I thought so too. You can read the full article, here:

Why Restaurants Fail - by Richard Williams

One additional comment: although the article focuses heavily on capitalization as the main culprit behind failure, I find that Mr. Williams’ comments in his final two paragraphs require further emphasis. The article assumes that with adequate capitalization and correct market planning it will be operated effectively. Not necessarily.

Management’s inexperience and subsequent failure to effectively operate a business is equally likely, if not more likely to cause a new business to fail — even with all of the capital in the world and a concept that is accurately positioned in the market, execution of that concept is arguably more important than the other two combined.

Product quality and value, menu strategy, staffing, customer service and the background financial decisions that will cause a new coffee shop (or restaurant) to sink or swim all depend on the business acumen of the owner; these decisions will define the experience for its patrons and ultimately the bottom line profitability of the business.