OK, so I am sitting in a coffee shop, thinking about the shop I plan to open soon. I start to think about the very successful shops out there -- you know who they are. I started to wonder about what makes them so successful? What do they do that is different from the so-so shops and the shops that are not very successful. Is there a common denominator? Is it location? Quality of coffee? Barista skills? Financial Management? Sure all of that plays into a shop being successful, but is there one thing that really gives them the 'wow' factor?
Schomer insists (and I'm sure to a large extent he is correct) that the key is a passionate, involved owner. When you have that, they will understand where money needs to be spent. On areas such as, but by no means limited to, spending money on training and staff development, purchasing the best raw products possible (coffee, milk, etc.), not scimping on so-so equipment but getting the best of the best. Those are all behind-the-bar expenses that make the product as good as it can possibly be.
But that's only one aspect. Every meticulous detail of the cafe, every corner the customer can look into, must be treated with an equal amount of importance. That makes up the ambiance.
In short, best staff, best equipment, best ingredients, best ambiance. In that order. It's annoying, but going the extra mile in each of those areas makes the difference between world-class and half-assed.
Just my 2 cents.
Either being different or being better or being cheaper (or any combination of those things).
Better can be any category: equipment, service, coffee, cleaning schedule, lighting scheme, smell, parking, hours, dress code... you name it.
Different can also be any category, but it takes more imagination. Only making syrups in house, not offering syrups at all, roasting on site, music, food, no food, signature beverages, latte art, compost everything, etc etc etc. I feel this is the most important category. If your shop looks and feels like every other one then you are up against every other one. If your shop is the only one like it around, then you're only competing against yourself (to an extent).
Cheaper is hard and generally a poor option. Someone else out there is also going to have a line on a cheaper, crappier coffee and chances are they're going to be more successful if they've been doing it longer.
I think the best shops out there let their coffee do the talking, back it up with killer service, don't obsess about being everything for everybody (Starbucks owns that market) but instead are great at a narrow spectrum of what makes them unique. Combine this with a focus on making your shop a destination rather than a focus on finding the most convenient location (although you don't want to be so far out of the way that you're impossible to find or get to) and letting curiosity and glowing reviews/word of mouth fuel your marketing. Engage the community with fun events and engage the industry trailblazers that have gone before you every chance you get.
Great customer service, great quality & consistency. You have to consider what the market in you area desires and give it to them far beyond their expectations. We are in small town and getting ready to open. I know that we can't be an artsy farsty, or hippie place. We have been in the test kitchen marketing our products to the locals and we know that the quality is better than they expected, now we have to make sure we are consistent, and that when they come in it is a true experience.
You can have better, cheaper and/or different, but if your location is terrible, none of those will matter. And if you don't have a vision, where won't matter either.
Start with why, then the where.
In this order
2) Accessibility (can you get to it easily a great location with good viability is worthless if its impossible to get to)
3) Consistent Quality
4) Customer Service
Ok so 3 an 4 may be interchangeable.
Very broadly, I think it comes down to the owner's:
Vision - how well their concept fits them and meets the customers' needs/expectations.
Perception - ability to understand the target customers' needs and wants, and the degree to which their own efforts meet them.
Execution - ability to make smart decisions and work to bring their plans to fruition.
Luck - external events beyond the owner's control can help their efforts, hinder them, or crush them completely.
You can really tell when an owner has all of the above working for them, and when they don't. Hard to be successful in the long-term without them.
I stand behind making your shop a destination, not a convenient choice, but it depends on who your market is.
There are 2 coffee shops right off of the interstate here that have changed hands/owners 4 times in the past 2 years. They are at the base of a building with hundreds of employees, across the street from the only gas station in the downtown area (which is astounding considering the size of the downtown area), and you can drop off of the highway and be back onto it within a couple minutes, including your stop to the shop for a quick cup. Yet these shops are continuously for sale... why is that? Because they have nothing other than location to offer. Their coffee is mediocre, designed to be covered up by the 20+ syrup flavors they have proudly on display, the service is generic, not bad, but generic and the drinks they offer can be had at Starbucks for less.
Yet four miles away in an industrial complex on a street miles away from the interstate, surrounded by auto mechanics, open field and unoccupied warehouse space is our thriving roasting location. It thrives because it's a destination for people who give a crap about what their coffee tastes like. No, you can't get a hazelnut latte or a "caramel macchiato," but you can be handed a bag of coffee to take home that you watched drop out of the roaster. It's that "different" aspect that brings people in from all over, despite the relatively inconvenient location.
I know for a fact that at our downtown location we have dozens of customers that walk past other coffee shops to come to ours. As a matter of fact, the aforementioned unsuccessful shop is driven past probably near a hundred times a day by our regulars who choose our shop over theirs. Our second busiest month in 2011 was during a time that construction had streets closed off for a two block radius around our store, meaning no parking or driving access. People parked two blocks away and walked to the shop.
I understand that location is important, but I think the "location, location, location" mantra isn't applicable in every situation and environment. You can thrive in a poor location, you just have to focus and deliver.
Two ways to look at it.
If you were to be all encompassing, then I would boil it down to two things.
If you are looking at the upper echelon (in terms of quality focused coffee shops), then I would break it down to these points.
1) Quality. (consistency of)
2) Customer Service. (consistency of)
Depending on the specifics to each business, #2 and #3 are interchangeable.
Understanding how Location factors in is a great business decision. The more you understand how location is applicable to your specific business, the better your business will thrive. Higher traffic (foot & car) count does not always make a location better. Location is about specifics.
There really is no "one thing" that makes the most successful shops so. But you have hit on the key components: location, quality, skills, financial management. Though John P hits on another important factor: consistency. You really need to have all of these in order to have a good shot at success and even then "luck" is a big factor.
When I think of the most financially successful shops in our niche, Intelligentsia LA comes most to mind. Excellent locations, great quality, good talent and excellent financial management combined with a consistent experience really gives them the edge - and we're talking individual shops that generate over $1mil in gross revenue per year.
You guys are awesome! Thanks for your great advice and words of wisdom! I'm filling my notebook with this stuff!