April 17, 2020

Saving your cafe business – What shall we do?

Like many small businesses cafes are going to be hit hard with the Corona Virus pandemic.

Every cafe owner is thinking ‘How long is this going to last and how will my business survive with months of limited customers?’ The unknown is the biggest problem facing everybody, causing great stress for all involved. Following are my top five help tips on how you can keep your cafe business alive. I have also asked some of our industry leaders to give their ideas on staying afloat in tough times.

Sadly, it may be the case of the famous quote “Survival of the fittest”. (Herbert Spencer 1864)

Industry leaders give their ideas on staying afloat in tough times.

Sean Edwards – Managing Director – Cafe Culture International
Sean Edwards - Managing Director
Sean Edwards – Managing Director
Cafe Culture International

Sean Edwards is the owner of Café Culture Magazine and the Managing Director of Golden Bean Roasting Competition. Sean has been a cafe/coffee consultant for the last 25 years and has seen the ups and downs of the industry from a global perspective. Sean works for many global corporations helping them with their route to market planning and trend development of products and services. Sean advises cafe and coffee chains globally and is a leader in cafe education and trend management.

Tip 1 – Talk first to you staff and make a group plan on how as a team these issues can be addressed.

Their health and safety are your responsibility and when one is unsure of their financial future this will have the biggest health effect, as stress leads to a low immune system. This is also a good opportunity to see who wants to stay on the ship and who wants the jump off. Make a solid plan and adjust the business work hours to suit all for the survival of your business. If you aren’t successful, everyone will lose their job.

Tip 2 – Communicate the working system of your cafe to your customer and the measures you are taking to make your business a safe and clean environment, additionally share these actions on your social pages, signage at the front door or service counter.

A simple idea is to have the space smell clean with eucalyptus or tea tree spray which smells better than any chemical cleaner. Tell your customers this is a safe haven to come into. Remove a few tables so patrons can have space to feel safe, better to have bums on fewer seats than no bums at all.

Tip 3 – Become a leader in supporting community by buying local, supporting the bakery, butcher and your loyal provider company that has delivered your milk at 4am in the morning for the last five years.

All these businesses are in the same boat as you so talk with them about how you can all work together. Buying local also often means better quality and fresher – jointly promote the suppliers with your cafe on the specials board – be creative with all your menu items, cutting things out that aren’t necessary.

Tip 4 – Quality not quantity on your menu. Adjust your menu to cut out high cost items and tailor it to suit the availability of products.

Make sure you add healthy options like soups, salads and broths that make people feel like they are looking after themselves. Also look at super foods like acai bowls, turmeric lattes, fresh fruit and protein smoothies.

Tip 5 – Ask for help.

Reach out to friends and relatives to help you do the tough stuff like picking up the kids, running errands, handing out marketing flyers to households. Remember if you go down the whole show shuts down, so conserve your precious energy. The Federal government is offering $17.6B in stimulus through tax relief, wage subsidy for trainees and apprentices and tax right-offs to $150K.

Phillip Di Bella – Founder – Di Bella Coffee

Phillip Di Bella – Founder
Di Bella Coffee

Founder of Di Bella Coffee, which went from start up to a global business. Phillip is now working on his next project that will be a world first in the coffee space!

He continues to own coffee related businesses globally, whilst consulting as a brand and strategy expert to companies like BDO, Wyndham Resorts and businesses within the coffee industry. 

A globally recognised entrepreneur and thought leader in the coffee industry, Phillip has a great passion for people, education and opportunities…his motto is “be part of the change you want to see in the world”.

You can follow Phillip on his Apple Podcast “flashcastbypdb”.

Tip 1 – Negotiate rent. 

See if your landlord will discount or postpone payments. 

Tip 2 – Staff. 

Ask your full-time employees to take holidays and casuals to alternate amongst each other the limited hours available.  This way everyone still has some work going.  Also, offer your casual staff the opportunity to look outside your business for a few hours in the retail space that is in demand like Coles and Woolworths etc. 

Tip 3 – Redesign your Menu. 

Limit your items on the menu so you can run lower stock levels and lower cost of goods. Buy local and support the suppliers that have supported you.

Tip 4 – Smart financial assistance.

Take the time to research and know the government’s current stimulus package and small business assistance strategies like payg concessions and capital equipment write offs etc.

Tip 5 – Embrace care and community. 

Understand that it is care and community collaboration that will get us through this. Everyone is affected or will be in one way or another so care for each other and help where you can.  Have a strong sense and service to community!

Jeffery Dutton – Head of Sales & Marketing – Alchemy Cordial Company

Jeff Dutton
Jeffery Dutton – Head of Sales and Marketing
Alchemy Cordial Company

Global Head of Sales at Marketing for Alchemy Cordials. Jeff was previously the General Manager of Sales for Kerry Foods & Beverages in South East Asia, looking after the needs of coffee franchise supply chains like McDonalds, Starbucks, Dunkin Donuts and many high-end independent cafes globally.

Tip 1 – Change your menu, add healthy foods like salads, food bowls, Green Breakfast, bone broths.
Tip 2 – Look to beverages that have a functional benefit like Turmeric, beetroot, Chai, smoothies.
Tip 3 – Only use takeaway cups rather than ceramics and let the customer apply their own lid.

Let them also add their own sugar and syrup at the condiment bar.

Tip 4 – Reduce seating to allow space between customers for social distancing.

Keep the outside seating area clean and inviting. If you have the parking space to offer drive-up service, use this option.  Your online ordering app could be your new business model. Starbucks in the USA have shut their brick and mortar sites but have kept their drive through business, which is booming.

Kieran Westlake – Advocate Director – Bloomed Capital

Kieran Westlake – President
Australian Specialty Coffee Association
– Advocate Director – Bloomed Capital

Kieran has over 20 years of experience owning, running and financing hospitality businesses across five countries.  He is also the President of the Australian Specialty Coffee Association, the peak industry body for Australia’s Coffee Industry.

Tip 1 – Contact your landlord and find an arrangement that will allow you to continue to occupy and trade from your business premises.
Tip 2 – Contact your creditors.  

Business loans, Equipment Leases or Rentals.  Many financial firms have a dedicated financial hardship team that you can speak to. 

Tip 3 – Fixed Costs.

What can you reduce? Can you refinance your equipment finance contracts?

Tip 4 – Labour Costs.  

Talk to your people, brief them on the situation and what it means for the business and them as individuals.

Tip 5 – Stock Levels. 

Use what you have on hand; don’t order more unless you have to.

Tip 6 – Pre-Paid services.  

This means your loyal, regular customers pre-purchase your goods or services in bulk and for use in the future, typically with a discount applied upfront. Gift cards shoud be instigated straight away, asking loyal customers to keep you in business by pre-purchasing (early Christmas gifts?).

Brenton Barker – Managing Director – Food and Dairy Co

Brenton Barker – Managing Director – Food and Dairy Co

Brenton is one of Sydney’s largest specialty cafe food service providers. He distributes cafe products as refrigerated and shelf stable via a network of 20 trucks conducting daily deliveries. Food and Dairy Co work closely with Sydney’s best cafes helping them with their food and beverage needs along with business advice in cafe route to market.

Tip 1 – Utilise the delivery service of your distributor.

We move around in the early hours of the morning and offer services like stacking your milk fridge in your cafe and helping you with stock control. Less time you are out and about shopping, the safer you will be.

Tip 2 – Talk with your distributor about stock control, only order what you need.

We will often have a good indicator of what is available and products that you need to lock in due to run outs.

Tip 3 – Look at your cafe menu and design it around what food and beverage products are available.

Offer new products like Oat milk to extend your customer reach as your number will be declining. From previous major global crisis, coffee sales tend to increase, this in turn means more milk sales as milk-based coffee beverages are still 90% of sales in a cafe.

Tip 4 – Don’t get uncomfortable about your finances.

Talk to your distributor about payment options and ways you can make money in tough times. We know what product brands that will give you the best revenue opportunities.

Tip 5 – It’s time to practice loyalty.  

Support the network closest to you. We all know things are going to be tough, so we need to think of our work community first.

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