• 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.