May Newsletter
Harvest Roasting
By Don Eckles, President
Rome wasn’t built in a day. I’m reminded of that saying as a result of a conversation I had with
the owner of a coffee shop in the Denver area. I was asking him how his business is, and he replied that business was up, but it’s still not to the level it needs to be. He told me that he has done all the things I’ve suggested, but he’s still not there. After some further discussion, it turns out that his business sales volume is significantly higher than it was 2 months ago, but it still has quite a ways to go.
That reminded me of a time, years ago, when I opened a coffee store in Bellevue, Nebraska. I had tried a new concept, which at the time was unheard of. It was a drive thru kiosk, with a drive-up window and no inside seating. The first day we did $98.00 in sales. Day 2, it was $103.00. Day 3…$108.00. At the time (and remember, this was YEARS ago) we needed $340.00 a day to break even.
Another time, a couple of years later, I opened another drive-thru kiosk with 2 drive-up windows (obviously, the first one eventually worked out). By 9:00 a.m. the first day, our sales were $9.52. Honestly, I got out the calculator and tried to figure out how long it would take for me to “go broke” at that rate.
Both of those stores are still open, but, it took some time.
I think it is important to understand that, you will not get dramatic results if you don’t take dramatic action. And sometimes, dramatic action is not needed…just some small tweaks. The kind of action you should take depends entirely on the results you need to achieve.
For example, if your business is running along and doing fairly well, or maybe you’re close to breaking even, but not quite there, you probably just need to fix a few things, and market your store regularly. But, if you have a new store, or one that has never taken off, you will need to make some serious marketing efforts.
We all know that the specialty coffee business is attracting lots of customers. If they come in once and like what they get, you probably have a better than even chance to keep that person as a long-term customer. And that brings us back to marketing. If you market your store regularly (maybe weekly) but on a small scale…over time, you will build a solid customer base. Adding just 3 or 4 new “regular” customers a week will result in 156-208 new regular customers after 1 year. If your per cap is $4.00 per ring, that means a sales increase of $624.00 - $832.00 per week. And that’s just adding 3-4 customers per week. What if you double that, or triple it? Refer back to our January newsletter for some great, small scale, marketing ideas.
My friend in Denver has a different issue. He has a new store, which has started off slower than everyone expected, and is building steadily (but, slowly). His situation calls for a focused marketing effort. A “shotgun approach” will work eventually, but will not be nearly as effective in the short-term. And by shotgun approach, I mean trying a little bit of everything. I love the free drink promotion, which I also addressed in the January newsletter. Not just an offer of free drinks…but, targeted marketing, directed to every household within a certain radius of the store. In larger cities, I do up to 2 miles. In smaller communities, I do the whole town.
It is definitely more expensive to do it that way, but, if the promotion costs $2,500.00, and your sales increase by $50.00 to $100.00 per day long term, the benefits far out weigh the cost. See below…
If you increase daily sales by just $50.00 per day (which is very do-able), that means a monthly increase of approximately $1,500.00. If your cost of goods is running 30% of sales, your monthly profit would be $1,050.00, or $12,600.00 per year. If your sales increase by $100.00 per day (also, very do-able), your profit is over $25K per year. Those are great returns on a $2,500.00 investment. Send out more mailers, get a bigger result. If your drinks are better than your competitor’s drinks, and if your customer service is as good or better, you will see nice short and long-term gains from a promotion like this. My original point is, whatever you do…keep after it. Rome wasn’t’ built in a day.
If you would like to review any of our archived newsletters, they are free, and available on our web-site, which is harvestroasting.com.
Last month, I told you that we are actively trying to reduce cost of goods another 4%. While that is VERY difficult to do, we are over half way there. At our open house, we will be showing some of the new products which are putting us on the road to that goal.
Can you come to Omaha for our open house on June 6th? We will try to make it very worthwhile for you. To date, we have manufacturer reps. from several of our largest and best suppliers, including Mont Blanc Gourmet, Monin, Creative Juices, Kristen’s Cookies, and, The Tea Smith.
We plan to offer the following:
- Espresso drink making and preparation
- Coffee education and tasting
- Smoothies
- An open forum for exchange of ideas among business owners and mangers
- A question and answer session
We will provide a small lunch and an “after-show” barbeque at no charge. There will be plenty of time to visit with others in the business, to share ideas, and get to know each other.
Our goal is for you to become a customer and friend of Harvest Roasting. We hope to accomplish that by helping you become as successful as you can be in this business. We believe that starts with quality products. We want to help you take those quality products and turn them into the best drinks available. I assure you that we will not pressure you in any way.
We want to serve the coffee industry by providing the things you need to thrive.
That’s why we started sending out these newsletters every few weeks. We know how difficult it is to get good advice for free. Everyone seems to have “an angle”. Our angle is simple…we hope that you come to see us as something more than a supplier of products. We want to be your business partner, as well.
That’s why we purchase, roast and package only specialty and premium grade Arabica coffee beans, and, that’s why we sell them for around $6.00 per pound. Do you know that some people have actually “not” purchased our beans because they are concerned that we couldn’t possibly be selling high grade beans for such a low price. If you have questions about that, please contact Craig Holt at Atlas Coffee Importers and ask him about Harvest Roasting. Craig’s number is 800-701-5211.
That’s why we carry only the best products on the market. If we believe that Mont Blanc makes the best caramel or white chocolate sauce in the world, why would we sell others? If we believe that Monin offers the worlds best flavoring syrups, why would we convince someone to buy something else? Using the best products to make your drinks will never disappoint you. The question is…can you buy the best products for about the same price as the lower quality products? Because of our volume…the answer is “yes”!
That’s why we sell most of what you need to operate your business. You can get it all in one place. And, if you purchase 75 lbs. of our fresh roasted coffee beans, we’ll ship your entire order freight free. We have it all… the world’s finest grade coffees and teas, cups and lids, paper products, syrups and sauces, smoothie mixes and supplements, and assorted other items.
Now, because we want you to come to our open house, and because we need you to let us know that you are coming (for food estimates); we’re offering a pre-show special. If you let us know that you will be attending, by the end of the day on May 20th, we will give you 50% off every order you place in June…and, we’ll ship all of those orders freight free. Please contact Barb Miller at 402-670-9755 to confirm your attendance. If you can’t pre-register, or, you’re not sure that you can come, just yet…don’t let that stop you from attending. We will give all attendees 25% off all of their June orders. Hopefully, we’ll see you on June 6th.
Sincerely,
Don Eckles
Harvest Roasting