9.11.2020

Four Ways to Reduce Coffee Shop Monthly Expenses

Written by Austin Chegini

daniel norris cNSoS3nvcnU unsplash

Four Ways to Reduce Coffee Shop Monthly Expenses

Many small coffee shops only make a 2.5% profit, and most expenses go toward overhead costs. Reducing your coffee shop monthly expenses can help expand this slim profit margin.

There are roughly 35,600 coffee shops in the United States, and the market is growing by nearly 4% per year. While more shops are popping up across the country, the Coffee Shop Owners Survey found that 50% – 74% of independent coffee shops will go out of business within five years of opening.

Why did these shops close? Being unprepared for business ownership was the top reason. The industry is complex, and owners need to know how to manage staff, market their business, and balance their budget. 

Your coffee shop monthly expenses will play a significant role in staying profitable. Without a watchful eye, your inventory costs can skyrocket, and your credit card processing fees may cut into your profit.

How to keep your expenses low

We thought of four creative ways to reduce your expenses and make your restaurant more competitive. While you may not be able to implement all of these options, nearly all coffee shops can introduce at least one of these changes. 

Boost natural lighting

Coffee shops open early and close late, so the lights and machines are always on. Minimizing how much power your shop uses can heavily decrease your coffee shop monthly expenses. The machines have to stay on to keep the coffee flowing, but you should try to keep the light switches turned off. 

Allowing more natural light to enter your cafe will reduce your expenses. Danpal Light Architecture states that daylighting — the practice of using natural light — can reduce 75% of the energy used for lighting buildings and reduce cooling costs. In addition to the financial benefit, using natural light is an eco-friendly solution that will help the environment and draw in conscientious guests. 

Even more interesting, sunlight is correlated with many health benefits. It’s linked to serotonin production and may cause people to feel happier and energetic. 

Do away with unsold inventory

Some coffee shops sell food, coffee beans, and kitchen supplies. One interesting take on this is the Tchibo model. The Germany coffee chain offers new non-coffee products each week, such as electronics, clothing, and furniture. 

While offering these items can boost your coffee shop’s bottom line, unsold inventory can become a nightmare. Dead inventory sits on your shelves and does not get sold. If you’re not tracking your sales accurately, you might re-order more of these items and end up with a surplus of unwanted goods.

A surplus of dead stock can result in:

  • Less room in your inventory
  • Capital tie-up
  • Risk of theft since workers know the goods won’t be missed

Your coffee shop can eliminate unwanted inventory by taking inventory and cross-checking sales records. The Epos Now system lets you do this in a matter of minutes. Because all data is saved on the cloud, you can access your reports and manage your coffee shop from anywhere in the world.

Add a cash discount/credit card surcharge

Many small businesses struggle to stay profitable because of high credit card processing fees. Some shops have credit card minimum purchase amounts, but these do not always prevent losses. Not taking plastic payments is not an option either, since credit and debit cards are used in over half of all purchases. 

International Bancard offers an innovative solution to the problem. The payment processing company started InBalance to offer businesses an opportunity to reduce credit card processing fees. Some stores can even get close to eliminating the cost of accepting credit cards altogether. 

Offering a cash discount like this can reduce your coffee shop monthly expenses greatly.

Put an end to shrinkage

Businesses often lose money without even realizing it. One of the biggest causes of this loss is shrinkage. Investopedia defines shrinkage as, “the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative error, vendor fraud, damage, and cashier error.”

If your cafe’s cashiers handle large amounts of cash, they can possibly skim a little off the top here and there. Likewise, a messy, unorganized stockroom is primed for theft since no one will notice a few items that go missing. 

With Epos Now, all workers are assigned a user role and must log in before using the till. If an anomaly occurs, you can see who was working at that time and pursue the matter. You always have an accurate inventory with the system. Not only will you know how many boxes are left in the stockroom, but you can also track how much coffee is available behind the counter. Our system can even track down to the remaining grams of beans left in an open bag beside your grinder!

Get started today

Epos Now and International Bancard have partnered to provide businesses with the tools they need to stay profitable and grow. Now, you can get the best in cloud pos software and payment processing. 

Make sure your coffee shop is not part of the group that close within five years of opening. Call us today to see how we can help you.