Mentoring a Lower Hudson Valley NY coffee shop to financial stability

  • A coffee shop in Rockland County, NY has not been profitable.
  • It has a very good location with excellent pedestrian traffic – especially on the weekends.
  • Sales remained constant during COVID-19.
  • Baked goods are made in-house and are EXCELLENT.
  • Sales volume can handle the rent.
  • In reviewing the un-profitable status, the PRIME COSTS of Labor and Product were too high.
  • Ticket averages were low – i.e. not selling enough of house made baked goods.
  • The owner and Harris put together an agenda for a management meeting to address these issues.
  • Number one on the agenda was to call for a weekly management meeting the same day of the week at the same time every week – no exceptions.
  • At the first meeting, we addressed why the cafe was losing money.
  • The Prime Costs were too high
  • #1 pricing – by analyzing the costs of the coffee and pastry – and researching competitor pricing – it was determined that prices were too low.
  • Retail “dogs’ not produced in house with high costs did not help ticket average or promote more business. And they were cutting into purchases of more profitable house made products.
  • Scheduling personnel needed to be tightened up – especially anticipating busy and slow days.

Why were sales low?

  • Merchandising in store was just wrong.
  • Confusion of available product.
  • Front window did not “sell” to all the pedestrians walking by
  • Confusion of where and how to order.
  • The shop was promoting self enough

The Result

  • By immediately addressing these issues in a thoughtful, well-planned, and reasonable manner sales increased immediately, profit margins on products increased.
  • Even with increasing employee wages, labor costs went down.
  • 3 months later, the coffee shop was generating a significant profit for the owner/operator with more sales growth on the way
  • The business is being run more effectively on a daily basis.