How to make money from opening a coffee shop? how to find a profitable point to open a coffee shop?

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From a business logic point of view, opening a coffee shop is actually not a good business.

Why?

If a coffee shop wants to make money, it needs to solve a problem: green efficiency > rent.

What does it mean?

Ping effect is the income generated by the store per square meter.

Expressed by a formula, that is:

Ping efficiency = total revenue of shops / total area of individual stores

We usually use turf efficiency to measure the operational efficiency of stores.

The higher the turf efficiency, the higher the operating efficiency of the store and the better its profitability.

For offline stores, rent is one of the main costs.

Therefore, a store needs to make a profit, it is necessary to make it per square meter of flat efficiency > rent.

The same is true for coffee shops.

In different lots, the rent is basically fixed.

If there is a large flow of people in a good area, the rent is correspondingly high, and the rent you pay is the same as that of the clothing store, restaurant and cosmetics store next to you.

However, by comparison, your turf efficiency is usually not high.

Why?

Can you imagine what scene people usually drink coffee in?

For example, in the morning, you will buy coffee on your way to work and take it to the office to drink.

Or, after lunch, you will buy a cup of coffee and take it back to the office.

Or, in the afternoon, you will make an appointment with a friend to sit and drink in the coffee shop and chat, sometimes all afternoon.

In general, these scenarios are the most common.

So, when is the coffee shop the most efficient?

Usually, it is in the morning and afternoon, especially in the afternoon.

If you think about it, the rental cost of a coffee shop is fixed, but customers can sit all afternoon if they buy a cup of coffee for about 30 yuan.

Therefore, its turf efficiency is usually not very high.

Compared with other clothing stores, restaurants and cosmetics stores, it will be much more difficult for coffee shops to achieve green efficiency > rent.

But even so, the business of opening a coffee shop is still a red sea.

There are many coffee brands that have achieved great success.

Why can anyone be so successful when it is obviously not a good business?

It must be because he solved the problem of Pingxiao > rent in a special way.

For example, Starbucks.

Many people who run coffee shops want to learn from Starbucks, but in the end, they don't make it.

Why?

Why do you lose money when you open a coffee shop while Starbucks makes a profit by opening a coffee shop?

What exactly did Starbucks do right?

Many people say that the most commendable thing about Starbucks is that it has created the third space.

What is the third space?

Your home is the first space, the company is the second space, and Starbucks is the third space.

Starbucks is a good place to go when you don't need to stay in the company and you don't want to stay at home.

It can become a stronghold for you to communicate with your friends, or you can enjoy leisure space alone.

Many people say that the third space is the key to Starbucks' success.

However, please think about it carefully, aren't other coffee shops the third space?

All coffee shops are actually the third space, which is not unique to Starbucks.

So why did some coffee shops fail and Starbucks succeed?

The third space is not the real reason for Starbucks' success.

So where is Starbucks' special solution?

In fact, what makes Starbucks successful is not the third space, but the price of the third space.

What does it mean?

Let's first look at a set of data.

The cost structure of an ordinary coffee shop is something like this:

Raw material cost: 30%

Rent cost: 25%

Labor cost: 25% per cent 30 per cent

Operating / depreciation / attrition cost: 15%

For a cup of coffee that costs 30 yuan, the cost of raw materials accounts for about 30%.

In other words, when you buy coffee for 30 yuan, only 9 yuan is paid for the coffee itself.

There was a program that criticized Starbucks, saying that Starbucks was more expensive in China than Seattle, and that Starbucks' coffee raw materials cost only 5 yuan. It is said that Starbucks is too black-hearted, crazy to make money in China, and so on.

A lot of the media think so.

What they may not think about, however, is that the cost of coffee shops includes not only raw materials.

What else does the cost of the coffee shop include?

The second very important cost is the rental cost.

Rent accounts for about 25% of the cost of the coffee shop.

The price of rent varies depending on the area where the store is located, but on average, the rent accounts for about 25%.

This is the cost that must be paid, and its proportion varies according to the quality of your business.

The worse the business, the higher the proportion of rent.

The third important cost is labor cost.

Labor costs account for about 25-30%.

How many employees does a Starbucks have?

There are about four or five employees you can see in the store, plus what you can't see, a Starbucks has about 10 employees.

Labor costs are also very high.

The fourth important cost is the cost of operation, depreciation, attrition and so on.

These costs account for about 15%.

OK, now that we understand these four costs, let's make an account.

If you deduct all these costs, what is the remaining profit of that coffee shop?

All the costs add up:

30% 25% + (25-30)% + 15% = 95-100%

The rest of the profit is only 0-5%, almost zero.

The costs are rigid costs, and the price of coffee can not go up, so the rest of the profit is almost zero.

So how does Starbucks make a profit?

As we said just now, many coffee shops can be made because he has solved the problem of flat effect > rent in a special way.

Basically, there are only two solutions to this problem, one is to improve the efficiency of the turf, and the other is to reduce the rent.

Which one does Starbucks use?

The core solution of Starbucks is to reduce rents.

Why?

Let's look at a set of data:

The rent of an ordinary coffee shop accounts for about 25% of the income, which is about 12-15 yuan per day / square meter on average.

However, in the same location, if you open Starbucks, the rent is only 3.5 yuan / day / square meter.

Why is that?

Why can Starbucks rent so cheaply?

This is an exaggeration!

Because, he's a Starbucks.

When a new shopping mall opens, it always hopes to attract some famous brands to attract traffic. Like Uniqlo, like Starbucks.

Therefore, the rent paid by shopping malls to these brands is very cheap.

They enjoyed the premium of the brand.

Starbucks rents only about 10% of its income, which is much cheaper than an ordinary coffee shop (25%).

Excluding investment income, Starbucks' profit margin in 2018 was 15.9%.

How much rent does Starbucks save?

By reducing it from 25% to 10%, it saves about 15% of the rent.

The profit is 15.9% and the rent saved is 15%.

This means that Starbucks' profit is almost equal to the rent it saves.

Therefore, he does not make money from the third space, but from the price of the third space.

He just has a way to get a cheaper rent than others, which is his logic of making real money.

To sum up, Starbucks' solution is to use brand premium to reduce rent.

If you don't understand this, you will think that I can be a Starbucks, and I can make coffee as good as it.

However, this is not the most important thing, the most important thing is that his rent is cheaper than yours.