Creating A Successful "Profit Center" Coffee
House Operation
Consulting Proposal written by Richard Gabrio for AGS Consulting
Services in 1994
INTRODUCTION: In cities all over the country, small cafes or "coffee
houses" are sprouting up everywhere. There are four key reasons for
this: (1) Current economic conditions have created incentives for increasing
numbers of people to go into business for themselves, (2) entrepreneurs
are attracted to the idea of creating their own unique, casual, yet "quality
oriented" environments, (3) espresso type coffee drinks deliver a "quality"
experience and enjoy a substantial profit mark-up, and (4) small cafe/coffee
house start-up costs are comparatively low compared to opening a restaurant
with full kitchen facilities.
As more and more people enter the coffee house business, they will increasingly
face competition. This is why it is as crucial to learn what makes a coffee
house operation successful as it is to understand the mistakes and pitfalls
which spell certain failure. Aside from adequate capitalization, the two
most important factors contributing to the success of a coffee house operation
are knowledge and professionalism of the staff combined with consistent
high-quality fare. Conversely, business failure arises primarily from lack
of professionalism (knowledge of the business) whch leads to the inability
to creatively meet competition.
Though there are differences between "stand alone" and add-on
"profit center" type operations, the essentials of running a successful
coffee house operation are the same. The objective, in this case, is to
provide the knowledge and procedures necessary to create a successful "cafe"
operation inside a major bookstore chain, and tailor an efficient service
program to build a loyal customer base. The following proposal outlines
how AGS can assist in achieving this goal.
OBJECTIVE: AGS will provide an intensive training program for management
and all key personnel which will insure a successful coffee house profit
center operation contributing to overall bookstore profits. The term of
this program will be one month (see "Terms" section, below).
THE CONSULTANT: Gary Granas. Mr. Granas has over 15 years management
experience in the food and beverage industry, including coffee house management
(see "Consultant Background" section, below).
TOPICS COVERED: Training and discussion sessions will cover all topics
below for both management and staff:
MANAGEMENT: Orientation meeting
with Managers will include an overview of successful coffee house operations
from the management perspective and seek input from Managers about their
particular concerns. Management topics covered in subsequent sessions will
include:
1. Food and beverage vendor
selection and various product selection.
2. Kitchen equipment selection
and handling.
3. Pricing, portion control,
and menu design.
4. Accessories planning (which
accessories for customer use).
5. Health and fire regulations
and cleaning procedures.
6. Hiring, firing, promoting,
and compensating staff.
7. Manager "crisis planning"
(preparing for employee walkouts, "No Shows,"
rushes, supply shortages, equipment breakdowns, customer related accidents,
robberies, etc.).
8. Getting "creative":
Marketing and other ideas for bringing in business, cross-promoting
cafe and bookstore, special event planning, and special considerations
for competing successfully in Santa Barbara.
STAFF: Orientation meeting
with Staff will focus on coffee house operations from the "customer
service" perspective and seek input from them about their particular
concerns. Topics covered in subsequent sessions will include:
1. Food handling procedures
(storage, shelf life, recycling, waste disposal,
etc.).
2. Equipment operation and
cleaning procedures.
3. Cash handling procedures
and techniques.
4. Scheduling, shift planning,
employee checklists, etc.
5. Customer relations responsibilities
(including maintenance of "friendly"
attitude, employee appearance and dress, and other "extras" which
enhance customer appreciation).
6. Communication with management
(on all issues including "crisis" planning).
TERMS: Barnes and Noble and AG Consulting Services (AGS) to agree as
follows: AGS will provide a one-month (4 week) consultation and training
program for all key personnel. The on-site training will be provided up
to 4 hours per day, five days per week. At the program's conclusion, all
ideas, guidelines, recommendations, and any other informational materials
developed by AGS will be submitted to Barnes and Noble in writing, and/or
on diskette (using Microsoft Word for the Macintosh). AGS charges a $7,000.00
flat fee, payable in two installments: $3,500.00 after the consulting agreement
is signed, and the balance of $3,500.00 payable on the last day of the program.
CONSULTANT BACKGROUND: Mr. Gary Granas (principal owner of AGS) has
over 15 years of management experience in the food and beverage industry.
From helping to create and manufacture a successful natural food beverage
distributed throughout California and Hawaii during the late 70's into the
late 80's, Mr. Granas moved to managing the well known "INAKA"
health food restaurant in Los Angeles. After working for some time establishing
the success of this restaurant, Mr. Granas opened the world's first "CINEMA
CAFE," in Los Angeles (a combination coffee and movie-revival house),
gaining valuable experience in the management of a distinctive and popular
coffee house operation. With the birth of his first child in 1991, Mr. Granas
decided to move from Los Angeles to a calmer environment. A current resident
of Santa Barbara, Mr. Granas introduces classic and other films at the "Earthling
Bookshop" and is working on his first book "FROM INCEPTION TO
PROFITABILITY: HOW TO OPEN AND MAINTAIN A SUCCESSFUL COFFEEHOUSE."