Research is good
I opened a charming neighborhood coffee shop. Then it destroyed my life.
By Michael Idov
Posted Thursday, Dec. 29, 2005, at 4:15 PM ET
The failure of a small cafe is not a question of competence. It is a sad given.........................
A place that seats 25 will have to employ at least two people for every shift: someone to work the front and someone for the kitchen (assuming you find a guy who will both uncomplainingly wash dishes and reliably whip up pretty crepes; if you've found that guy, you're already in better shape than most NYC restaurateurs. You're also, most likely, already in trouble with immigration services). Budgeting $15 for the payroll for every hour your charming cafe is open (let's say 10 hours a day) relieves you of $4,500 a month. That gives you another $4,500 a month for rent and $6,300 to stock up on product. It also means that to come up with the total needed $18K of revenue per month, you will need to sell that product at an average of a 300 percent markup.
Coffee was a different story—thanks to the trail blazed by Starbucks, the world of coffee retail is now a rogue's playground of jaw-dropping markups. An espresso that required about 18 cents worth of beans (and we used very good beans) was sold for $2.50 with nary an eyebrow raised on either side of the counter. A dab of milk froth or a splash of hot water transformed the drink into a macchiato or an Americano, respectively, and raised the price to $3. The house brew too cold to be sold for $1 a cup was chilled further and reborn at $2.50 a cup as iced coffee, a drink whose appeal I do not even pretend to grasp.
But how much of it could we sell? Discarding food as a self-canceling expense at best, the coffee needed to account for all of our profit. We needed to sell roughly $500 of it a day. This kind of money is only achievable through solid foot traffic, but, of course, our cafe was too cozy and charming to pop in for a cup to go. The average coffee-to-stay customer nursed his mocha (i.e., his $5 ticket) for upward of 30 minutes. Don't get me started on people with laptops.
............ Two highly educated professionals with artistic aspirations have just put themselves—or, as we saw it, each other—on $8-per-hour jobs slinging coffee.
Looking back, we (incredibly) should have heeded the advice of bad-boy chef Anthony Bourdain, who wrote our epitaph in Kitchen Confidential: "The most dangerous species of owner ... is the one who gets into the business for love."
This comment came along with the article:
$7.50/HR - How Generous! A failed coffee shop in New York illustrates your point about the working class. This guy had two workers at $7.50/hr (no benefits, did he even pay SS?) and he's moaning because he can't find someone to make crepes at that price. It's not suprise he failed, that's what happens when you live in a dream world.
First, restaurants have a 60 percent failure rate. There's a new place across the street from me which is going to join them. I spent $8 for my last mediocre meal from them tonight. Everything is either bitter or burnt, the menu too extensive and the owner absentee, unless he's a Latino in a uniform. It's probably some lawyer who thinks he or she is a fucking cullinary genius. It's a shame, because the remodel job was sweet.
But let me tell you how clueless the owner is: there's a new, big deli opening up within a month up the block, there are two delis and a Blimpies on the same block, I eat in what we call the pizza place (even though I don't like their pizza) a couple of times a week or so. Why? They are competent in fixing what I want, even if it's off-beat at times.
But this place, not only has the highest prices in the block by far, but is surrounded by a nursing home, large hospital and two schools, yet doesn't serve breakfast.
Which wouldn't be so bad if their food didn't suck. Not horribly, but just enough to make you to stop giving it chances.
Now, this guy in the article didn't do his research. You know you need foot traffic, you do this before you rent space. You work the number out first.
But I also love the sense of entitlement that while he expected "immigrants" to work for $7.50 with no bennies, less than they pay in Wal-Mart, he was "with his education" outraged to make $8 an hour. Like he was naturally better than his employees.
posted by Steve @ 10:17:00 PM