How long does it take to be profitable?

cwsoo's picture

Our little drive-through just celebrated its 1st anniversity in our Wyoming town. We have been told we have the best coffee in town, and both my sister and myself try to give the best service possible (we are the only baristas). The location is easily acessable, and on a busy street. Yet for all that, we are only making 2/3 of what it will take to break even, although we are up from the spring.
Is there still hope that we will make it? What kind of advertising, if any might help? Any ideas you could give us would be appreciated.

marketing ideas, cups, etc

oakridge's picture

Hi, Just getting started. Want to know any input on cups? White cups, and order labeled logos???
Anyone have a good contact for cups if you get them mailed to you? Its like pulling teeth to try to get the local food service co to get prices to you or anything.

And idea we are doing for maketing is we order wooden tokens with our name, and it has .50 off any drink of your choice, 1000 of them cost a little over $100, and they can be reused, so before we open we are going to go in local business, dr offices, banks, real estate etc... and give tokens, and menu flyer.

Any other helpful ideas for getting going, grand opening. We are the only espresso drive thru in town for now, and we are looking to open right after valentines day, I hoped to be ready on val day, to sell
pre paid punchcards.

I liked the picture frame idea, Thank you, and I will use that. Kimberly
Oh can anyone give me any kind of hypothetical figures of # of customes, or $$ per day??? I know it will vary depending where located, but I have high realistic hopes...

profitability

Bob McNair's picture

I have been in the doghouse now for about 16 months, (Doghouse Espresso,that is) and have had my share of frustrations over the lack of cash flow to and through my own pocket. The business isn't showing a profit yet but I started paying myself an hourly wage just like my part time employees and it has certainly helped give me a self esteem boost. I am now close to the break even point and can see some light at the end of the tunnel. We have had 3 other coffee shops open since we have and we have seen a dive in sales for a few weeks every time, yet our customers came back to us due to our superior quality and service.

The key is to keep with it, keep regular hours without fail, have the absolute highest quality product possible and treat every customer with respect while maintaining a cheerful attitude to keep them coming back. Keep up with the industry by subscribing to Fresh Cup and CoffeeTalk and a host of other great rags out there. Go to Coffeefest at least once to pick up some fresh ideas and to keep your enthusiasm going. We all need a boost once in awhile. Education and attitude is everything. Keep after it!

We all know that location is

MtnViewCoffee's picture

We all know that location is critical, as well as having a great product. However, there is another issue that is dragging me down and making me seriously think about selling, population. I am in town of 3000+ but only for the summer months, the rest of the year, the population goes down to about 900+. I am in a position where I have taken 2 days off per week and am thinking of only being open until noon on the days that I am open. I have a 20 mile commute to work and gas is killing me. Every business in town saw a 20-25% drop in numbers this past summer due to gas prices. (Our town is a tourist town, mostly fishing, camping and hunting) Honestly, with the low business, I feel worthless just sitting up there like my time could be better spent at home doing things for my family. I have a small double drive up that I have worked alone for almost 2 years and I can barely keep the doors open. Advertising has gotten me no where. I have pre-paid cards but I hate the lack of cash flow when folks use them. I used to have traditional "Buy So Many, Get One Free" punch cards but they were killing me; I had the same problem as someone else mentioned, they would always buy the cheapest drinks as their regulars and want the most expensive drinks for their free one. I cut that off at the pass last spring by changing my cards to "Buy 5, Get $1.50 off the Next One". Its working, they get a discount and I still get some cash flow on every cup.

How long does it take to be profitable?

Brewer04's picture

Glad to see the clubs bigger then I thought. I have a Coffee Shop, Quick Lube and a Car Wash I'm in my fifth year and yet to break even but I have had some other problems to deal with. I've been told to expect 3 to 5 yrs before profit break even in 2 to 3 I had a Dunkin Donuts move 2 miles down the road. Also I'm in a rural town so depend on my drive thru a lot and with gas prices and such it can be tough. I plan on sticking though. My ex partner took a walk and I had to over come that which has been interesting. I stay involved with local events and have a prepaid/loyalty cards that run through my POS but are unique to my store. But just stay with it and good luck. I agree with the quality is the key to our small independent shops.

Pay Yourself a Salary

Chill's picture

Most people I talk to say at least two years. I think the most important thing you can do is make sure in those monthly expenses there is a salary there for you! It not only helps bridge the gap between your business and your day to day life - it helps your self esteme!

Marketing that is out of the ordinary

surfside's picture

We opened our business in May 2007. It had been a location that was not ran properly by the past owners. They either didn't open at all or if they did they would close by 2PM daily! We had to change the look of the place as well as the name so everyone would realize we were not the same owners. It was worth the money we spent painting, signs, advertising etc...

We have been breaking even as of August 2007. We have 2 part time employees who we hand picked to work for us, they are both cheerful, friendly and make great drinks. We work them in total about 75 hours per month, we work the rest of the time until we grow bigger and can afford more payroll.

My daughter runs the stand and she is co-owner. My son and I work weekends to give her time off and my husband is our Mr fix it when time allows.

Market yourself to death. I market offline to drive traffic online so our customers can get to know us better. You can visit our site to see how we do it. www.SurfsideEspresso.com

We have a buy 10 get the 11th free stamp card and on the back you see our website address and the chance to go online and win a free months worth of 16 oz coffees. One winner per month. We also have our web address on all radio and print advertising and also our sign.

In our stand we have a 15" Digital Picture frame that I uploaded our pics of pastries, drinks, specials, etc...on. That has been great as the pic refreshes every 4 seconds with a new advertisement. It allows our customers to see what else we have along with the prices.

I am a marketer by trade so for now I won't overwhelm you!! :) Jude

"Coffee makes life Beautiful....

Making a profit

CoffeeLady's picture

We have just finished our 3rd year of being open. Our business has nearly tripled over those years. Our biggest problem is having to hire outside staff. We are big enough that I cannot run it alone but struggle at times with the paying of staff. We started offering cold lunches and that has helped a lot. We also give out punch cards. After they buy nine drinks they receive a free one. You need to limit what they can get with that. Some of our customers would buy brewed coffee for the nine they paid for and then want a large latte or frappe as their free one. So we started to let people know that whatever their regular purchase was is what they get as their free one. That has helped. Our drive-thru generates about 90 percent of our business. Advertising is really important but don't overdue it. Pick your audience and buy advertising to suit. We get a lot of high school kids so we always advertise in the school newspaper featuring students in our ads. That has worked really well. Hang in there and think outside the box.

Breakeven efforts

cafekado's picture

I would suggest membership with www.restaurantowner.com for it's breath of access to ALL sorts of things that can make a difference in your success.....I found being very consistant using their "prime numbers" spreadsheet modified to reflect my operation helped me moniter my COGS and labor cost to advantage, lowering my breakeven projections some, and they have a lot of such tools, including info both in articles and tools...it is of modest monthly cost, and a huge resource about almost any problem I encountered. But as stated by other responders, remember this is not a short-term thing, but a long term endeavor full of education....underfunding, and inabiltity to 1)make needful modifications to meet market demands, and 2)in our case, too much real estated to support with the existing concept, meant I had to conceed and vacate....I sure miss the customers, the routines of the day, and just the sheer opportunity to try....perservere....it does take time. Study up on marketing....beware discounting yourself to death, but think value added, i.e. that cookie on the side....also, what motivates your present customers? Ask them casually, do a formal survey and capture contact info, offer a drawing for a prize....loyalty cards did more for me than prepaid cards keeping people in routinely, but prepaid cards can help cash flow.

How long?

Hoodsport's picture

Great question. The coffee supplier we use said 3-4 years. We are on our third summer and second full year. I hope to begin breaking even within the next year. The first year was all about learning, the second year was balancing inventory and expenses. This next year will be about advertising, sales and building local partnerships. I dont have any great suggestion but I do believe time is key. You just need to keep at it and not give up if possible. They will come. Oh and try giving away something like a cookie with the drink. Most times we make more on the coffee than the lost on the cookies and it brings people back. People like free things :)

profitable

caligriind's picture

it takes most businesses a few years to hit that break even point. what you need to start looking at is how you are advertising, and what other ways you can advertise in your community. I have only been open 9 months, i have a double drive thru in clearwater florida, im not breaking even yet, but am very driven and have tried several new things. The biggest thing that helps for me is standing out by the road in a coffee suit or with a nice sign of some sort. Also i do free days occasionally, on those days i see excess of 200 customers, then i see about 5 new regulars from that. i think that the free day is the best, and only way really to get people in. i am located right across the street from a starbucks, and my products blow theirs out of the water, but how is anyone going to know that unless i give them a reason to try me out.... hence the free day, but u gotta have somebody standing by the road when u do it. keep after it, for atleast 2 years.