When I ask prospective coffee shop owners why they want to open a cafe, they often tell me, “I thought it would be fun, I've always liked coffee.” And my response usually is, “It certainly is fun spending your life savings and then spending 80 to 90 hours each week trying to earn enough to make payroll.”

If you’re considering opening a coffee shop or cafe, consider the following questions:

Do you have a great business plan?
Do you have about $150,000 for the initial build out?
Do you have an additional $50,000 in the bank for payroll and other unexpected expenses?

I recently visited a small café in a country town – that feeds from a business across the road, a business that does "it" very well. I have nothing but praise for the business across the road.

This is what I found when I visited the café:

• Umbrellas in the courtyard. Folded and closed. It was a warm day – they should have been up for the comfort of their patrons.
• Layout was strange. No signage directing you to Order Here or take a seat.
• Tables not being cleaned, as staff walked past.
• No music despite an ipod being set up and sitting there. Apparently no one could press play.
• Staff didn’t reset tables – including chairs – once customers left. This left one table with no chairs, and another two tables joined together with excess chairs.
• An owner who obviously had no hospitality experience, wandering around like a lost soul. Occasionally behind the counter, walking blindly through the café, spending lengthy time in the kitchen (hiding, I’m betting).
• Café smelled of stale oil. Insufficient strength fan in kitchen.
• Staff trying to do everything rather than having one stationed as barista, one as order taker, one as waitress. And then there was the owner, of course…
• The menu was bread heavy and full of deep fried fare.

I took a deep breath, ordered a bottle of sparkling water and watched the continual stream of customers coming in trying to decipher the rules of the place as my two friends waited and waited for their orders. Rocket Science. *sigh*

Every year the majority of new products fail. Some say the figure is as high as 95%. The reason is simple: Most customers don't have the time or energy to weigh the advantages and disadvantages of the products in their shopping carts, so they use a shortcut to make their decision. That shortcut is your product’s appearance and packaging.

Packaging design has become huge in the past few years as businesses are realising that great packaging equals increased sales. Think about it: When you’re choosing a bottle of wine, aren’t you drawn to the bottles with cool labels? Your packaging is often a consumer’s first point of contact with your product and a spiffy package may make someone try a new product line they’ve never heard of. Your package design is one of the most important elements in your product offer. It is design that has to function, ie it has to protect what’s inside, it has to allow for easy storage and distribution, give information to the customer about what it is and draw attention to itself on a shelf full of competing products.

No matter how good a product is, poor packaging can keep it from selling. 

Many people ask me what I see as the biggest problem area in retailing today and I normally have little hesitation in answering – RANGING. I believe that “if the dogs don’t like the dog food they won’t eat it!” And that really is what ranging is about – providing a range with sufficient width and depth that suits the target market.
The biggest problem in ranging? Lack of adequate range planning, which more often than not leads to width and depth problems, amongst the most notable being:

• Too much width in terms of classifications – literally trying to be “all things to all people”. This invariably destroys depth.
• Too much width in terms of the price parameters – trying to cover all income factors. Again, this destroys depth and often points up the fact that little thought has been given to market segmentation.
• Lack of depth in terms of quantity of best sellers resulting in out of stocks of basic core lines and those lines the retailer can ill afford to run out of.
• Lack of depth in terms of the choice offered within classifications – “if you don’t like that particular item – bad luck!”
• In some cases too much depth (depending whether we determine brands are a width or depth factor which often gets back to how we classify) by stocking too many brands without providing a point of difference in terms of features, price points, quality or whatever. In other words – unnecessary duplication of range.
• Failing to range with co-ordination in mind. Being able to merchandise co-ordinates is the obvious way to build the average number of items sold per person, and to me there is little excuse for unco-ordinated broken ranges. You see it happening a lot in apparel and furniture. So buying with co-ordination in mind is critical to effective range planning.
• Advertised lines that bear no relationship to the normal range and have no sell up when a low margin is necessary to draw store traffic.
• Crucifying “sell up” lines by slashing prices unnecessarily, indicating lack of thought in selecting promotional lines.
• Before I get off ranging, I always stress to retailers to get the depth factors right first before expanding the width. Obviously the objective is a balanced range with both width and depth but, invariably, I see retailers that are experiencing ranging problems addressing width factors first and then trying to achieve depth – often failing in the process.

One point, however, is that depth, of course, means different things to different styles of retailers. The little upmarket exclusive boutique would not want depth in terms of quantity so that exclusivity is preserved – and this would form part of their business philosophy and image. The major discounter, however, must have depth in terms of quantity otherwise they destroy their credibility.

I was driving through to regional Victoria yesterday listening to SEN radio’s “Harf Time” where they credited Grant Thomas with the saying ‘movement creates opportunity’. So I spent the next two hours thinking about movement creating opportunity.
A number of years ago I decided that I was going to become “an opportunist”. My thinking was that at certain points in life opportunities just seem to appear and each time they do we have a choice to respond. Most people decline, usually through fear of failure I suspect.

It seems as though we are constantly faced with the issue of trying to find new customers. Most of us are obsessed with making sure our advertising, displays, and pricing all “scream out” to attract new business. This focus on pursuing new customers is certainly necessary but, at the same time, it can wind up hurting us. I believe our focus really should be on the 20 percent of our clients who currently are our best customers.

Focusing on the best current customers should be seen as an on-going opportunity. To better understand the rationale behind this theory and to face the challenge of building customer loyalty, let’s look at five customer types.

Loyal Customers: They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales.

Discount Customers: They shop our stores frequently, but make their decisions based on the size of our markdowns.

Impulse Customers: They don’t have buying a particular item at the top of their “To Do” list, but come into the store on a whim. They will purchase what seems good at the time.

Need-Based Customers: They have a specific intention to buy a particular type of item.

Wandering Customers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community.

Every good buyer makes an occasional bad buy.  Buyers must use judgement based on experience and be prepared to take risks.  Nevertheless, many bad buys result from lack of discipline or analysis to complement or test that judgement.

Therefore buyers need to continuously seek information to better assess buying opportunities and work closely with their selling partners in the stores.

Inevitably buyers also need to delete products from the range. Display space is always at a premium and there is a continuous stream of new products.

To avoid over ranging and lowering stockturns, through excessive stock, buyers have to continuously monitor stock for poor performers that can be deleted.

The following guidelines offer points to be considered by buyers in approaching this issue.

An exciting, eclectic selection of merchandise is one of the key components to a successful gift or specialty shop. Customers have the option of spending their dollars in many different places, and to a great extent the same goods are available in most shops. 

The specialty shop distinguishes itself by presenting shoppers with products carefully chosen and enticingly displayed. Customers want you to edit the options for them and present those you think are the very best, or the best value at a good price.

Specialty shops constantly need to look for products unique in their market. As soon as an item turns up in a discount store, the time has come to for the small retailer to drop it. Whenever possible, the specialty shop buyer should look for items not available to mass marketers. This helps eliminate price competition, which is a game that’s hard to win when you don’t have the buying clout of a big chain.

Any retail store promotion means taking a chance that it’ll be well-received by your shoppers but with a wheel of chance, you’re really spinning it.

Obtain or make a simple cardboard wheel of chance like on “Wheel of Fortune” or carnival games. On each pie piece sliver, place a colourful cardboard heart made to look like a candy conversation heart.

Design a different prize on each heart such as “10% off one item” or “Free bracelet with any purchase.”

• Once a service has been rendered offer a discount magnet for repeat business 
• Place your company promotional message on the magnet along with details
• Place your facebook and social media details on the card
• Promote a competition or ongoing prize draw
• Place a code on the magnet so when clients contact you for service they get a discount
• Run an incentive program or repeat business bonus to encourage customers to keep the custom magnet
• Create invitations to functions such a fund raisers, product launches or special events