Do you know that a ‪#‎CoffeeHouse‬ ‪#‎business‬ has a growth rate of 7% with 85% as its ‪#‎GrossMargin‬. Read to know more...

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Worldwide,peopledrinkover 500 billioncupsof coffee everyyear. Peoplelove todrinkcoffee.Soa
coffee shopbusinessisa good choice tosetup. Coffee shopsare the fastestgrowingniche inthe
restaurantbusiness.Theyhave a7% annual growth rate. Coffeehousescome inavarietyof formsbut,
traditionally,theyare small establishmentssellingpreparedcoffee,teaandotherhotbeverages.More
recently,manycoffeehousescompete withotherrestaurantsinthe limited-service categorybyserving
bakedgoods,sandwiches,saladsandothersnackitems.
Restaurantsare a toughbusiness,butcareful planningandprudentexecutioncanleadtosuccess. A
cafeteriarestaurantisa self-service restaurantwhere customersorderatthe service counterand take
the foodto theirseats. The gross margin for a coffee shop is85%. Operatingincome fora coffee shop
can average 2.5% of netsales. UnitedStatesisthe LEADINGCONSUMER of coffee inthe worldwith 146
billioncupsof coffee peryear. The coffeehouse industryinthe UnitedStateswasforecastedto
generate more than 31 billionU.S.dollars inrevenue in2015. AndJapan ranksnumber3 inthe world
for coffee consumption. Plusinasurveyitis alsoestimatedthat Café Bars make an average salesof 230
cups a day.
Operations
The operational planfora cafeteriadealswithstartupissues,basicoperations,short-termandlongterm
strategyand maintainingfinancialsustainability. The operational basicsinclude licenses,menusand
technologyinvestments.Restaurantstypicallyrequire operatinglicensesfromlocal authoritiesandare
subjecttoregularhealthandsafetyinspections.The menuisthe cafeteria'sproductbrochure.Basic
technologyinvestmentsinclude apoint-of-salesystemandsoftware accountingpackagesfor
bookkeeping. Majorityof coffeeshopownersofferfranchisesasa meansof growingtheirbusiness. A
coffeehouse isalwaysaccompaniedbyfree Wi-Fi,spacioussittingarrangement, andvariousotherin-
house entertainments.
Strategy
Cafeteriasface competitionfromfast-foodrestaurants,supermarketready-to-eatmealsandhigh-end
restaurants.Managementmustunderstand the needsof itsclientele andseektodistinguishitself from
the competition.A keycomponentof arestaurant'shumanresourcesstrategyistokeepturnoverlow.
Thishelpslowerrecruitmentandtrainingcostsandimprovesbothcustomerservice andthe qualityof
the food.
Letshave a lookat some of the strategywhichcan be incorporated:
Use of LoyaltyCards
Make sure it isa qualitycard that will lastthe wearandtear and lookgoodina customer’swallet.
Nothingbetterthanseeinganewcustomer’sface lightupwhenyougive themabuysevengetthe

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eighthone free loyaltycard,buttickoff six of themso that on theirverynextpurchase theygeta free
one.It isthe cheapestcustomeracquisitionever.
Multiple listsof itemsinthe menu
A coffee shopwill nevermake enoughmoneytopaythe billsfromcoffee salesalone.Coffee maybe the
prime motivatorforcustomerscomingtothe business,buttheymustleave withmultiple salesif you
are goingto be successful.Asatarget,coffee shouldbe nomore than40% of yourweeklysalesandtwo
itemsalespercustomertransactionmeansyouare gettingitaboutright.So make sure the traditional
coffee accompaniments(muffins,cookies,cakes)are close byat the pointof sale and the coffee shop
offerscoldfood,colddrinks,andhotfoodto ensure the bestchance of multiplesales.
Counterservice
Counterservice isthe cheapestmostefficientandeffective service systemforacoffee shop,anditis
nowfullyacceptedby customers,thankstothe global successof McDonalds.Counterservice ishassle
free forboth youand yourcustomer,andit significantlyreducesyourwagesbill.Sogetthe customers
to orderand pay upfront,give themanumberona standwiththeirdrinks,anddeliverthe foodor
betterstill give themabuzzerthatcallsthemup to the counterwhenthe foodisready.Counterservice
meansthat youcan handle the peakdemandsthatoccur in coffee shopsatbreakfastandlunch,andit is
a lot lessstressful oneveryone,ensuringthe friendlybantercanremainanimportantpart of your offer.
EspressoCoffee
As we have alreadydiscussedthatworldwide,peopledrinkover500 billioncupsof coffee everyyear.
Andout of that number, 14 billion are Italianespressocoffees.Sokeepingthe espressocoffee inthe
store will increase the sales.

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Leadingcoffeehouse chainsworldwide:
1) Starbucks
Starbucks Coffee isanAmericanglobal coffee companyand coffeehousechain basedin Seattle,
Washington.By far America'scoffee giant, itisthe thirdlargestrestaurantchain inthe U.S. It owns
5,500 internationalcoffeeshoplocations. In2014, starbucksearnedrevenue of $16.45 billion.In
2013, Starbuckswasthe biggestcoffee housechainworldwidebasedonnumberof storeswith
19,767 stores worldwide.Starbuckslocationsserve hotandcoldbeverages,whole-beancoffee,
microgroundinstantcoffee,full-leafteas, pastries,andsnacks.
2) Tim Hortons
Tim HortonsInc. (knowninternationallyas TimHortonsCafe and Bake Shop) isa Canadian multinational
fastcasual restaurantknownforits coffee anddoughnuts.The worldwide revenuein 2014 was$3.16
billionwith4, 740 stores (2013) worldwide. ItisalsoCanada's largestquickservice restaurantchain;as
of September2014, it has 3,665 restaurantsinCanada,869 in the UnitedStates,and56 in the Persian
Gulf region. OnAugust26, 2014, Burger Kingagreedtopurchase Tim Hortonsfor US$11.4 billion;the
chainbecame a subsidiaryof the Oakville-basedholdingcompany RestaurantBrandsInternationalon
December15, 2014, whichismajority-ownedbyBrazilianinvestmentfirm 3GCapital

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3) PaneraBread
PaneraBread isa chain of bakery-café fastcasual restaurantsinthe UnitedStates andCanada.Its
headquartersare in SunsetHills,Missouri,asuburbof St.Louis,and operatesas SaintLouis Bread
Company inthe St. Louismetropolitanarea.Offeringsincludesoups,salads,pasta,sandwiches,and
bakeryitems. The revenue of panerabreadin2014 was $2.53 billionwith1,777 stores (2013)
worldwide. In2006 and 2007, Panerawas the largestproviderof free Wi-Fi inthe UnitedStates.
4) Costa Coffee
Costa Coffee isaBritish multinational coffeehouse companyheadquarteredin Dunstable,England,anda
whollyownedsubsidiaryof Whitbread.Itisthe secondlargestcoffeehouse chaininthe worldbehind
Starbucks and the largestinthe UnitedKingdom.
5) Caffe Nero
Caffè Nero (Italianforblackcoffee)orCaffè NeroGroup Ltd isa Europeanstyle coffee housebrandwith
itsheadquartersinLondon. Currently,the companyrunsmore than700 coffee housesworldwide andis
establishedinsevencountries,includingthe UK,Ireland,Poland,Cyprus, Turkey,the UAEand the
UnitedStates.
Indian coffeehouse chainindustry
Café Coffee Day:
ThisIndiancoffee chainisbeatingStarbucksatitsown game.Café Coffee Day,ownedbythe holding

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company Coffee DayEnterprisesLtd,isalreadythe marketleaderwhenitcomestocoffee inIndia. ithas
more than 1,500 cafesin200 citiesandtownsacrossthe country,including191 inBangalore and185 in
Delhi.
Barista Lavazza
Barista Lavazza is one of the biggestcoffee restaurantchainsinIndiawhichofferbestcoffee andtea
withall kindof International flavors. FormerlyknownasBarista, itwastakenoverby Lavazza in2007.
Baristais the firstcoffee retailerinIndiatostart a loyaltyprogramme,Bean-o-holic,toattractand retain
customers.
Otherwell-knownbrandsinthe coffeehouse chaininclude CostaCoffee, Dunkin’Brands, Krispy Kreme
Doughnuts,CoffeeBean &Tea Leaf etc. In 2013, Dunkin’Donutswasthe secondlargestcoffeehouse
chainbasedon the numberof storesworldwide with10,858 stores.
Keywords:
Coffee,coffeehouse,store,coffeebean&tealeaf,Starbucks,PaneraBread,TimHortons,espressocafe,
espresso, America,Japan,coffee consumption,coffeehouse revenue.
Ref:
http://smallbusiness.chron.com/operational-plan-cafeteria-restaurant-13053.html
http://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffee-shop/
http://www.businessinsider.com/facts-about-the-coffee-industry-2011-11?op=1#ixzz3c5TLpdLV
http://brandongaille.com/25-coffee-shop-industry-statistics-and-trends/
http://www.statista.com/topics/1670/coffeehouse-chain-market/
http://www.statista.com/statistics/270091/coffee-house-chains-ranked-by-revenue/
http://www.statista.com/statistics/272900/coffee-house-chains-ranked-by-number-of-stores-
worldwide/
http://www.coffee-statistics.com/coffee_statistics_ebook.html

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"TimHortons to add 500 Canadianoutlets,300 in U.S. by2018". The Globe and Mail
http://www.timhortons.com/ca/en/about/the-story-of-tim-hortons.php
"Corporate Profile".TimHortons.RetrievedMarch8, 2015.
http://qz.com/416670/this-indian-coffee-chain-is-beating-starbucks-at-its-own-game/