Help needed - Failing coffee shop

[ValleysGuy1975]

Hi all,

Just bought a coffee stall in an indoor market in South Wales for £4,000 and it is failing.

Where do I start - previous owners use instant coffee cause the espresso machine doesn't work properly, we end up throwing 3/4 of a cake away cause no-one buys it, the paninis don't sell and my competition right next door sells its tea and coffee for 60/70p a mug !

Feeling I just want to walk away but can't cause of the investment and cause I now don't have a job

My dilemma is do I spend another £2k+ on new espresso machine and grinder to introduce ground coffee back onto the menu ? People are saying that it might not sell as it is a market setting and also a Costa in town.

Also need to try and think of a higher value item to sell alongside to try and increase sales. Can't be something like sweets as there already a sweet stall.

Don't want to give up but getting really stressed and can't keep subbing it from savings.

Thanks

 

[Jeff FV]

Mods note: I have deleted two similar threads from the OP in other forums so that all replies can be directed to this one thread

 

[Clinton]

Just bought a coffee stall in an indoor market in South Wales for £4,000 and it is failing.

Whose advice did you seek before buying the shop? Or did you assume you were experienced enough and smart enough to assess the opportunity and risks without external help?

Your choices are to cut your losses and walk away....or keep pouring more money into a project that you may or may not be the best person to turn around and make profitable.

My advice: Admit to yourself that you made a stupid mistake, cut your losses and go get a job.

 

[myfairworld]

Sorry you find yourself in such a difficult position. Take any advice from me with a pinch of salt, I ran a shop for 20+ years but I've never tried to run a coffee stall, these comments are purely my personal reaction.

I think nowadays people do expect proper coffee whether it's a market setting or not. I'd think the only way you can compete with the 'cheap' neighbours and be able to charge a proper price is to serve 'proper' coffee and advertise that fact like mad. Any possibility the machine could be serviced/repaired? Could you buy a functional second hand machine? I don't know enough about these machines but can you pass on the grinder and use roast ground coffee to cut down on the cost of machine replacement? If you replace the coffee machine try to sell the old one on Gumtree, state clearly what the problems with it are, you may find someone handy buys it to work on as a project if you price it sensibly.

I don't think the 'there's a Costa in town' argument is valid at all, people expect to be able to buy a good mug of coffee wherever they are. I used to trade next to a small cafe which got a lot of customers from white van drivers/lorry drivers, people on their way to work, it served standard white bread sandwiches, fry-ups, instant coffee, etc. A bakery with cafe opened about 50 yards away which offered proper coffee, more adventurous sandwiches with decent bread, my neighbour had to close after a few months as all the white van trade flocked to the other place to get a decent cup of coffee and more interesting sandwiches with a choice of decent breads.

Panini, panini, panini, how that word bores me. You can get them everywhere and few of them are worth eating. What would your customers actually like to be able to get to eat? Could you try asking them or doing a survey of those who pass your stall? You need a unique selling point, your stall offering something others don't. Would something in a spicy flatbread appeal for example? Do people really want a samosa rather than a panini? Would they like a toasted tea cake or a crumpet? Can you get publicity for your new more exotic offerings or your return to traditional favourites offerings?

Are you selling the sort of cake people actually want? Have you asked them? Also if you only sell a certain amount of cake why is the whole cake out on display? Most cake freezes beautifully in slices, muffins, cupcakes, can be frozen. Freeze cake in slices when you buy it in, take just a few slices in each day, customer gets more choice (you can have several different cakes frozen away and offer a variety of slices each day) you have less waste. One small cafe owner I know does exactly this, so the cakes on offer are always really fresh and moist and there's a choice.

Sorry if these comments seem too simple to be useful but I know from experience that when your business is in trouble sometimes you sort of freeze mentally and may overlook small things which could help.

Finally, I have to ask, how the heck did you end up trading so near to another coffee stall? Did it open up after yours? Or if it was there first what made you feel you could compete with it? Maybe you had ideas you've forgotten. Maybe you need to not try to compete with it but go upmarket and offer something different which will appeal to a different section of marketgoers.

 

[Mitch3473]

Get a proper coffee machine, serve hot chocolates and vary the menu, mediteranean tapas, oriental samosas, something different but popular using fresh produce. And charge the right price for a good product.

 

[Rymer Associates]

Is the shop next door new or way it always there?

 

[Alan]

If you are going to compete you will really need to sell real coffee. But don't buy a new machine. When the in house cafe machine broke and came to me asking for £4,000 for a new machine I found them a £400 reconditioned machine on ebay, what was even better the guy supplying itwas a good and reasonably priced coffee machine service engineer so we used him whenever we needed something sorting . I just checked ebay and there are reconditioned commercial machines available.

 

[Alan]

p.s. in my local town a coffee shop setup 3 doors away from Costa and the shop is always full. Why, they make decent coffee and have a 'cool' unique style to their brand / approach. ( and they freeze their cake slices, which are very nice )

 

[MikeJ]

Panini, panini, panini, how that word bores me.

You're telling me. Panini is plural. Panino is singular.

Paninis should never be typed.

I walked out of one place because there were "Panini's" on the menu.

 

[hortonas_tjh]

Just bought a coffee stall in an indoor market in South Wales for £4,000 and it is failing.

Where in South Wales are you (if you don't mind me asking)?

 

[Alyson Dyer]

The sandwich place where I often buy my lunch (west Wales btw) has lots of fillings including ham, turkey beef tuna and other things like coronation/ mustard/ Bbq/ tikka/ chicken potato/ rice salad tomato, onion, lettuce, beetroot, carrot, sweet corn, beans, I could go on and a choice of freshly cooked baguettes or wraps or sandwiches.
Made up in front of you, completely fresh, they have proper coffee and a choice of chilled drinks.
They do a roaring trade (did I say they do cakes/flapjack etc?) cos everyone gets to choose exactly what they wNt.
They now also do buffets for business lunches, funerals etc.
Could you emulate this model?

 

[deniser]

Does the coffee machine not come free with the coffee?

This kind of thing https://www.exchangecoffee.co.uk/wholesale/how_to_earn_a_free_machine

The smell of fresh coffee wafting through the market should do wonders for its sales.

 

[The Byre]

I am sitting here at my desk, drinking coffee that we roasted and ground ourselves and you are selling instant coffee and wondering why the business is failing???!!!

The sandwich I had for breakfast was made from bread baked in our oven this morning and I am prepared to bet that your panini are ready-made nonsense that you just heat up on a griddle.

Imagine the delicious smell of roasting small batches of coffee beans and grinding them, right there at your stall! Imagine selling sandwiches with freshly baked bread and real butter!

The dreadful gunk you are selling was OK around 1950 on Scunthorpe High Street, but even there, an Italian restaurant opened up in the early 60s and changed all that with freshly roasted coffees and good food. After the War, London coffee houses sold real freshly ground coffee and around 1960, coffee houses that roasted their own beans opened up in all major cities in the UK.

Is it still 1945 in South Wales - or is it just you?

 

[soundengineeruk]

I'm not a business adviser, but too me from your first post it does appear that you have brought something that will very difficult to turn around.

Hash reality is an Indoor market coffee stall vs Costa Coffee Shop, sorry Costa will more than likely win hands down all day. So, buying a £2k coffee machine will not change that you are indoor market coffee stall.

If you are determined to invest more time & financial then research, research, and research to see if there is any gaps to where your stall can thrive.

However, prepare yourself that you might have to call it a day and learn from the experience.

 

[Ian J]

I'm not a business adviser, but too me from your first post it does appear that you have brought something that will very difficult to turn around.

Hash reality is an Indoor market coffee stall vs Costa Coffee Shop, sorry Costa will more than likely win hands down all day.

I'm not so sure on either count. The OP should be looking at what is likely to sell in that particular marketplace and stocking that and it should be pretty easy to compete against Costa on price alone

 

[webgeek]

Why not lease the machine for 50 quid a month from someone like http://www.coffeekraze.co.uk/packageoffers

You're going to need to be faster, cheaper or better than the ones next door - pick which one you are, and be that. If you can be 2 of the 3, you'll own them in months.

Get another draw - whether it's unique beans, tasty treats, free wifi, Royal Mail drop-off facilities, etc, etc, etc...

Then paper every car and office within a mile with a free cuppa offer. Get people in, impress and smile

 

[webgeek]

The OP should be looking at what is likely to sell in that particular marketplace and stocking that

Exactly! Trying to sell 4 quid cups of coffee in an industrial state where everyone expects to get one for 70p isn't likely to succeed.

If it was an industrial park, instead, think of a soup and sandwich deal and a bunch of premade sandwiches that workies can pick up and head off with, cheaply, quickly and dependably.

If it was an affluent upscale snobshop, then think about international, unusual items with more time spent naming them than creating them.

 

[Chris Ashdown]

Come to the market and what the people want, could you get a large hotplate and do bacon rolls improve your coffee even if just a filter coffee machine rather than a fancy italian one, but italian machine would be a good bet just hired or yours repaired, do people want cake in a market where they are standing up, look around at what others are selling and find a gap, a small microwave with built in oven you can sell pieces of hot Pizza just buy half a dozen at a supermarket cut into slices and wrap up the others in the fridge, hot dogs and so on

A couple of newspapers on thecounter so they have something to read

 

[Gecko001]

Can you compete with the guy selling the cheaper coffee and tea and still make a profit? If you can maybe you should give it a try. You have to assume that he is making a profit as he has been there for so long. What is he doing that you are not doing.

People walking past your stall will just see an unbranded coffee which is dearer than the unbranded coffee that your competitor is selling and probably will not take a chance on you.

Stalls are not the same as sit-in cafes. With stalls, people are not looking for comfortable surroundings to spend 30 minutes in as they watch the world go by. They want a product and they want it at the right price.

 

[deniser]

Iced tea and home made lemonade in summer?

 

[Chris Ashdown]

Next will be a suggestion of cucumber sandwiches with the crusts cut off and wafer thin served on bone china

 

[Gecko001]

I go to car boot sales and markets regularly and I occasionally see stalls with what look like expensive coffee machines where just coffee is served. However, I must say, they are there once or maybe twice and that is it - they never come again. When I first saw them, I thought why haven't anybody thought of that before as I thought it was a good idea, but obviously the model does not work or else I would see coffee stalls there all the time. I have not seen any coffee stalls for well over a year now.

I think possibly there is just not enough turnover. The traditional burger and sandwich vans seem to do well though.

 

[Paul Norman]

For sure, selling instant coffee is not going to work. The market has moved on from that now, if you want to charge a decent amount.

You are going to need a proper machine, which is going to require investment, as you have mentioned.

Even then, unless the sales are enormous, you are in for a long wait to get your investment back.

Without seeing historical figures, my honest recommendation would be to chalk it up to experience.

 

[webgeek]

Iced tea and home made lemonade in summer?

Iced tea in Britain? It's rarer than hens teeth due to lack of demand. If it was warm and sunny, I'd say Sun Tea (where you put the bags in a large glass container in the sun and let it sun brew), but no one would drink it besides me.

Maybe things are different down south, but finding ice in Scotland is difficult. But iced tea?

 

[GeoMal]

.. around 1950 on Scunthorpe High Street, but even there, an Italian restaurant opened up in the early 60s and changed all that with freshly roasted coffees and good food. After the War, London coffee houses sold real freshly ground coffee and around 1960, coffee houses that roasted their own beans opened up in all major cities in the UK.

Is it still 1945 in South Wales - or is it just you?

Actually, the Welsh Valleys were in the vanguard of good coffee in the UK, due to the influx of Italian immigrants from the late 1800s to early 1900s. Many set up cafes during the 20s. You could get a good espresso in most small towns in the Welsh Valleys during the 50s, and even a cappuccino, though they might have described it as a milky coffee to the locals.

 

[garyk]

You seriously cannot survive selling instant coffee, I don't know of any that sell it now, or if they do its not their main business, i.e. small cafe serving food that does coffee and tea.

If it was me you have to go for quality above all else, invest in that machine and use decent beans. Couple that with nice homemade cake, sell it by the slice and add other fancy stuff like flapjacks, shortbread etc. Go high end, o and good luck!

 

[Chris Ashdown]

On a market stall go high end, are you sure

 

[James1974]

Do people complain about the quality of your coffee or the range of products you offer? If so then you may be able to improve them. If you see everyone walking past with a Costa cup then it may be better to cut your losses. Certainly if your neighbour is selling coffee for such a cheap price it most likely indicates that there isn't a market there for you, simply not enough profitable business.

Move onto the next venture in time and you will more than make up that money you lost on this venture. Certainly it looks like extra investment may be wasted if Costa is that close to you.

 

[Newchodge]

You seriously cannot survive selling instant coffee, I don't know of any that sell it now, or if they do its not their main business, i.e. small cafe serving food that does coffee and tea.

If it was me you have to go for quality above all else, invest in that machine and use decent beans. Couple that with nice homemade cake, sell it by the slice and add other fancy stuff like flapjacks, shortbread etc. Go high end, o and good luck!

Where abouts are you, @garyk ? Round here, in the northeast, there are loads of sandwich/burger vans, which are similar to market stalls in many ways, which sell hot dishwater that they call coffee. It is hot and wet and cheap and the only convenient thing available, so it sells. Not much customer satisfaction, but plenty of repeat customers. (With apologies to northeast sandwich/burger vans that sell decent coffee. Drop me a message and I'll call round and apologise personally.)

 

[Mitch3473]

Cant think of a better place to sell good coffee and cakes etc etc than next to a Costa...all those potential customers. Wendys burgers do a similar thing in the States by opening close to a McDonalds. Their marketing spend is a fraction of McDonalds.

 

[garyk]

Where abouts are you, @garyk ? Round here, in the northeast, there are loads of sandwich/burger vans, which are similar to market stalls in many ways, which sell hot dishwater that they call coffee. It is hot and wet and cheap and the only convenient thing available, so it sells. Not much customer satisfaction, but plenty of repeat customers. (With apologies to northeast sandwich/burger vans that sell decent coffee. Drop me a message and I'll call round and apologise personally.)

Im in Bedfordshire, down south yes burger vans sell coffee but that was my point, they sell burgers first and coffee second. If your *prime* business is coffee and tea then it better be good!

 

[STDFR33]

Greasy burgers and cheap tea / coffee go hand in hand.

Fresh sandwiches and tasty cakes deserve to be complimented with a good quality drink.

 

[deniser]

Iced tea in Britain? It's rarer than hens teeth due to lack of demand. If it was warm and sunny, I'd say Sun Tea (where you put the bags in a large glass container in the sun and let it sun brew), but no one would drink it besides me.

Maybe things are different down south, but finding ice in Scotland is difficult. But iced tea?

Very common in markets and street stalls in London in summer.....!

 

[webgeek]

Im in Bedfordshire, down south yes burger vans sell coffee but that was my point, they sell burgers first and coffee second. If your *prime* business is coffee and tea then it better be good!

Or, you better add burgers and triple your sales volume!

 

[David Reinhardt]

A few ideas...

• Real coffee properly made. I'd rather not drink coffee than drink instant.
• A little bit of branding. Just keep it different and interesting. You're not in Shoreditch but you do want people to remember you. I'd imagine that "focus on local" should be in the brand, it'll be easier to differentiate yourself from Costa that way.
• Build loyal clientele around the market. Once you're setup with a new machine do a local flyer drop.
• Consider renting a machine or asking bean providers if they can supply a machine, even if only on a temporary basis.
• If you're doing hot chocolate, then make it a rich milky one. Water + powder is disgusting and no-one will come back.
• Look for local baked goods people who are looking to promote their products. Maybe even home bakers. They'll be more supportive if they're also focused on building their business alongside you.
• See if there is a local bike club. Cyclists love to start/end rides with a fresh coffee. If you can find the start/end time of the club ride, maybe you can become their supplier.
• If you can hire someone for an hour a day (local school kid / student?) maybe setup a local delivery. If I knew someone was bringing me my "proper coffee" between 11h00 and 12h00 every day, I'd be willing to pay an extra 50p for that. If they want £15 for the hour and you sell 30 cups, it's a winner. And you've got the custom before it even has a chance to get to Costa.

Good luck!
David

 

[Helen Wood]

The samosa idea is brilliant. Everyone loves a spicy samosa on a cold day.

 

[webgeek]

The samosa idea is brilliant. Everyone loves a spicy samosa on a cold day.

It's true. I'm now drooling at the thought of one - but still have another hour til lunch, doh.

 

[hortonas_tjh]

The samosa idea is brilliant. Everyone loves a spicy samosa on a cold day.

If you do samosas you'll certainly have one customer here!! ;-)

 

[webgeek]

Yeah every burger van around here offers exactly the same menu.

One shop in a diner offers macaroni and cheese with chips - and that unique offering gets good business - I know from hearing the orders in the queue ahead of me.

No one around here has samosas - bring some to Glasgow!!!

 

[Gecko001]

Cant think of a better place to sell good coffee and cakes etc etc than next to a Costa...all those potential customers. Wendys burgers do a similar thing in the States by opening close to a McDonalds. Their marketing spend is a fraction of McDonalds.

Some sense in a sea of nonsense. The nonsense is that you have to go up market and find a niche that nobody else has. It may work for a few businesses but it is a model that does not always work. With regards to coffee shops, judging by the number of them which open up and close within a year, I would say it rarely works.

The OP has a successful business nearby and sees it as a threat. It can be an opportunity where there is regular custom going to that business at the minute and thus potential customers.