Hows Business?

[Wine_of_the_Bean]

To all you cafe owners/industry professionals...

Are increased petrol prices, interest rates, etc. starting to make their presence felt in your business?

[GrindOnDemand]

Re: Hows Business?

Definitely Nunu ... as a mobile operation churning through 120 litres of fuel each week, soaring prices are eating at my bottom line. >

It puts me in a dilemma - do I raise my prices to cover increasing operational costs, or by doing so do I risk alienating customers already facing increased costs themselves across the board. :-?

Tony

[Wine_of_the_Bean]

Re: Hows Business?

Depending on volume, a 5c increase might not be seen as significant.

Are you starting to see a thinning of customers G.O.D?

[yeeza]

Re: Hows Business?

120Ls a week?! Wow! Time to get out the bricks and prop up the van mate and take up camp... I think that a 10c increase wouldnt phase most people. If youre doing the right things coffee wise, which sounds like you are, then 10c is worth paying for the priv. surely.

[marcstolk]

Re: Hows Business?

I agree YeeZa

[NewToEspresso]

Re: Hows Business?

The mobile coffee van that comes to my office raised his price from $3.50 to $4.00 a few months ago quoting increased petrol prices as the cause of the increase. A few of my colleagues was put off by the price hike and decided to buy a coffee machine instead. Despite my suggestions as to what to buy and what to avoid, one colleague bought himself a steam machine (Breville Bar Italia). He took a good chunk of time making coffee (and bad coffee at that) and after a couple of weeks, gave the idea away. Not sure if hes gone back to buying coffee from the van but the coffee van still attracts a queue. I suspect seeing that first number change from 3 to 4 may have put some people off, if hed increased to $3.70 or $3.80 I dont think he would have put too many off.

[cuppacoffee]

Re: Hows Business?

Retail business is slowly picking up, though I could certainly do with supplying a few cafes so that I could fire up Dudley on a more regular basis, and even pay myself a wage.

I only live about 10 minutes from the roastery and that helps keep fuel bills down, and gives me more productive time.

Can always find ways of spending money - my accountant doesnt think thats a good idea.

I consider myself lucky though - I smile at the thought of going to work.

[GrindOnDemand]

Re: Hows Business?

Are you starting to see a thinning of customers G.O.D?

Not so much a decrease in customers, but more a decrease in the amount spent per customer over the past year - down about 10%.

[scoota_gal]

Re: Hows Business?

I would have thought that wed have seen a few more people baulk at prices of certain things in our bakery but people keep returning for food and drink! Sure, theyll have a bit of a winge if the price has changed, which in reality, they havent changed much at all from our end. Rather, the prices we pay continue to increase. :

So, weve looked for alternatives to who can supply milk for example. Were currently getting cheaper milk through one of our catering suppliers as opposed to the local milko. Sad, but thats how it is. If Dairy Farmers cant give us a comparitive price to what they sell to the supermarkets, then we will shop elsewhere.

Though, it continues to amaze me at the regulars who come in, purchase lunch, coffee etc day after day. I honestly dont know how they can afford to do it! It is expensive to eat out, as it even can be at our bakery...and were probably still cheaper than a feed at McDonalds!

Also, when I point out to parents that the pop top large Moove milk drink theyre buying their kids, which is also 100ml less than the carton, is four dollars and twenty cents, none of them ever put the drink back. Now, I dont bother telling them that its an expensive way to drink flavoured milk...I know what Id be doing if my kid wanted a flavoured milk!

[Wine_of_the_Bean]

Re: Hows Business?

Theres no real change in coffee sales. Its the extra spend I see going down. The trend is people bringing their own lunches to work.

Times like these are daunting for a fledgling business like myself. I can only hope this storm doesnt last forever.

[Ray_C]

Re: Hows Business?

I wish my fuel usage was only 120 litres a week! Although I can boast that I have been cutting costs by blending waste cooking oil with diesel for the past several years which has probably helped keep me afloat on numerous occasions. If anyone is running a diesel let me encourage you it is well worth the effort not to mention the experience you will gain as well, depending on the actual oil you get will determine the ratio you can blend it at. For example I am currently paying $170 a ltr for diesel and nothing for my wvo (waste vegetable oil) and am running it at 80% oil to 20% diesel if you calculate it out I am paying 34c a ltr overall mind you it isnt always that good I have been getting some very low viscosity oil lately which requires very little thinning down to pass through the fuel filters which is the bottle neck so to speak and a good one at that. The idea is starting off adding 10% at a time until you meet some resistance as in slight loss of power or hesitation when accelerating note the type of oil ie. sunflower, cottonseed, etc.... you get a feel for it after a while and an understanding at what youre looking at, anyway its all food for thought, I thought Id throw it up here for anyone whos interested, Im happy to share what I know as well as pointers I have learned over the years primarily filtering techniques for dirty wvo and which oils to avoid.

Ray.

[Ray_C]

Re: Hows Business?

It is a tough economic climate at the moment mate, I can assure you that you are not the only one seriously feeling it, my suggestion is to find ways of cutting your overheads and keeping running costs down rather than increasing prices, you must realise that your customers are spending less because they are also feeling the pinch and increasing your prices will cause them to purchase even less which will have an even greater impact upon your business. sourcing alternative suppliers can also be very beneficial if you do your homework right. My previous post talks about vehicle / fuel alternatives which is very cost effective, cheap to set up and well worth the effort, I hope this helps in some way.........

Ray.

[Senator]

Re: Hows Business?

Try running a video shop....

We have noticed a significant drop off in rentals (based in Christchurch NZ) in the last few months. Its partially been climate based (mild to hot temperatures between August & April), but also a lot to do with no spare $ for those "luxury" items. Sure there is competition from pay TV, sports events, pirating etc, but this has always been the case. It now seems that where once people would have pay TV AND rent the latest new releases, there is now only enough $ in their budget for 1 of them (particularly where our shop is based, which is a low - med socio economic area).

It was this drop off in our income which then caused me to look at other options for the daily coffee fix. Where we were spending upwards of $10 a day or so at the local muffin break, we now have a machine at home and 1 at work. The 1 at home, I get wonderful coffees from on a regular basis (EM6910), the one at work is not to the same standard, not even close (13 - 14 year old Melitta Cappuccino machine that I take ground coffee in a sealed container each day), but it is still satisfactory, and I now spend virtually nil.

We too have been looking at all our costs in the shop, and now regularly scan the supermarket pamphlets for the most cost effective ways of picking up our add on items like coke, lollies, popcorn etc. Where once I was satisfied with the convenience of the wholesalers, ordering in bulk, now it comes down to pure $$ and cents. If I can buy a 1.5l coke from the supermarket at $1.39 (incl GST) each, or buy them from coke at $1.89 + GST, its not much of an argument really. Sure it might only be 50c here and there, but that 50c is better off in my pocket than theirs.

There is an old saying in business

Watch the pennies, and the $ take care of themselves....