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Tips to Improve Financial Efficiency in Your Coffee Shop

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Does your café have excellent coffee? Great baristas? Is it a welcoming space where people like to meet? Managing a successful coffee shop means keeping track of a lot of different elements. And there’s always room for improvement.

By evaluating some key areas of your café, you can improve your financial efficiency and potentially increase profits. Read on for some tips.

Lee este artículo en español Cómo Mejorar la Eficiencia Económica de tu Tienda de Café

Working from a café. Credit: Fernando Pocasangre

Treat Your Café as a Business

Perhaps it seems obvious, but don’t forget that your coffee shop is a business and the intention is to make a profit. This doesn’t mean you need to cut costs at every opportunity, but do make decisions with an eye on the bottom line. Estela Cotes is a co-owner of Café do Moço, a roastery and café in Curitiba, Brazil. She says, “I have noticed people opening coffee shops only because they love coffee, and that’s it. Sadly, these are the shops that close down in a short time. You have to look at a coffee shop as you would at any other business.”

This means being prepared with a business plan and putting aside some of your personal preferences in favour of what makes sense for the business. Perhaps you love one particular coffee cocktail or a specialty tea, but if it isn’t selling, it shouldn’t be on the menu.

Keep accurate and organised records, which you can then use to better understand your business and plan ahead. For example, set up spreadsheets to help you see the cost and profit margin for every product you offer. Make sure to include overheads and the cost of labour in your records and don’t assume you know what your most popular products are. Detailed records can provide you with useful data and indicate where there’s room to improve.

Learn more in How to Plan For a Financially Successful Coffee Shop

A barista pours latte art. Credit: Kristaps Selga

Stay Focussed

Don’t use your coffee shop as an excuse to indulge your hobbies. Keep your focus on what you do well and know when to use outside experts.

“I’ve noticed that after one year of working, many coffee shop owners want to roast their own coffee,” Estela says. “But it’s not so easy. [My business partner] Léo took two years to learn the craft of roasting coffee before he started café do Moço. It is way more than buying a machine and some green coffee. If you do it without knowing how to do it properly, the coffee will end up tasting bad.”

Alexandra Glass is the client development and sales manager of Eight Ounce Coffee, a specialty coffee equipment supplier in Calgary, Canada. She says, “I often see that new café owners spread themselves too thin and try to do everything that they think is hot or trendy, losing focus and clarity to what they are doing. 

“Pick a focus and do that really well. Ultimately, execute the things that will keep customers coming back: excellent products and friendly service.”

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A barista brews coffee using a syphon. Credit: Neil Soque

Make The Right Investments

When setting up your café or making improvements, do your research and choose equipment and tools that will make your day-to-day operations run smoothly and efficiently. Don’t automatically choose the cheapest option – if a tool is poorly made, it may cost you more in the long term in repairs and replacements. But don’t be tempted to always get the fanciest model either.

Alexandra says, “Having equipment that allows the barista to properly and repeatedly make a coffee is important, but having the top of the line or the most expensive equipment is not. I’ve seen many people spend heaps of money on what they think is the best equipment when they are just starting out and it can put them in a tight spot financially right away. 

“I always suggest starting slow, building as you go, and creating a reliable coffee program through good training and consistency. This can be done without the most expensive equipment. People will come back for the beverage, not for the equipment you made it on.”

She recommends a few areas where it makes sense to spend a little more. “Invest in well-made ceramics that will last. Invest in buying good, fresh, seasonal coffee. Invest in training your employees. Invest in taking the time to create a culture of integrity, respect, and collaboration. Invest in these things, and the rest will fall into place,” she says.

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A customer enjoys a filter coffee at Mute café, in Riga, Latvia. Credit: Kristaps Selga

Hire The Right People & Invest in Their Training

One of the easiest ways to lose money in a coffee shop is to employ the wrong people. This doesn’t mean you should only take on experienced baristas – newcomers can be some of the most passionate employees. But make sure you understand what motivates your staff members and that they’re committed to the role before you sign a contract. Then, dedicate time and resources to training them properly and keeping them engaged.

A barista who doesn’t recognise the value of measurements or who is careless about temperatures can create a lot of waste. You may be going through more milk and coffee than you need to because you didn’t set up a formal training programme or haven’t provided professional development opportunities. Likewise, a staff member who is bored or frustrated may be distracting to other employees and provide less than ideal customer service. These factors can all influence your bottom line.

Make sure you have a training plan and clearly outline how to make each item on your menu with measurements and serving sizes. Provide detailed set-up and closing procedures that address what to do with waste and products that are close to expiration. And keep good communication with all your team members so that no-one feels overlooked or grows unhappy in their role.

Learn more in How to Design an Effective Barista Training Programme

A barista pours latte art. Credit: Fernando Pocasangre

Regularly Evaluate Your Efficiency

Your coffee shop may be well-established and runs smoothly without too much input from you. Perhaps you have a capable manager and a team of great baristas. But don’t get complacent. Schedule regular evaluations to see where you could improve. Perhaps this can start with a monthly team meeting for input from staff members. Maybe a quarterly check-in with key employees works better for you. However you do it, make sure to regularly get feedback and look at the data provided by your sales records and profit and loss statements.

This is an opportunity to consider where you can make changes for the better. For example, whether you could improve your scheduling, remove poorly selling items from the menu, or change the quantity of your daily milk delivery. By having regular reviews, you won’t let any inefficiencies go on too long and will avoid them becoming an expensive oversight.

The bar of a coffee shop. Credit: Neil Soque

Running a financially successful coffee shop is hard work and requires a lot of dedication. It’s not enough to simply love coffee – you should be prepared to maintain spreadsheets, understand profit and loss statements, and handle the dry parts of running a business.

But if you keep an eye on running a financially efficient operation, you will see the rewards. A well-organised café should result in happy staff members, satisfied customers, and a healthy bottom line. So make yourself a coffee and take a good look at your data.

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Written by Raimonds Zadvornovs.

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