Loving the spirited ‘café quality’ discussion prompted by Penny Flanagan and Sam Mannering this last week on stuff.co.nz.
Flanagan calls for New Zealand café’s to generally ‘do so much better’ critiquing diverse elements of her experience from wobbly tables to the, ‘order at the counter and take a number on a stick’ service model. These sorts of articles always provoke a spirited response, usually in agreement, from hundreds of active customer detractors.
Fair enough, a truly excellent café experience is rare and even then, inconsistent.
Nevertheless, Mannering quite rightly pleads understanding. The margins in hospitality are extremely challenging, and there is a place for educating the public that the café norm is a modest owner ‘salary’ and a negligible profit margin.
While Mannering doesn’t mention it, there is an even stronger case for educating the average café worker on the precarious nature of balancing the monthly café profit and loss statement – that understanding, however, is also rare.
There is no doubt that Mannering himself, as a business veteran, trained foodie and all-round charismatic personality, is trying as hard as he can; nevertheless, he admits that the industry sustains itself on owner/operators that clearly don’t know what they are doing – ‘idiots’ he calls them.
It’s true that the complexity of the café business model can slice and dice dreams, but that is not an inevitability and it certainly isn’t the fault of the millionaire customer who storms out because the industry dares to charge $4.50 for a coffee.
Here’s what is really going on – most café owners have not even begun to do the best they can.
That sounds like bad news, but it really isn’t – because the entire Kiwi café scene can easily improve and have their passion for their business reignited at the same time. Imagine if they all lifted their profit-game by even five percent?
That’s the sort of café scene that is exciting for everyone.
Most café owners do not exercise even the most basic requirements of running a business, and that lack of effectiveness always impacts customer experience.
While many achieve basic legal and health and safety requirements reasonably easily, they do not use effective cost-of-goods management, they do not effectively manage wages or inspire their team to understand and manage all aspects of the business, they do not effectively use business intelligence to drive their top-line and they don’t consistently measure customer experience and loyalty. Forget about ‘hard’ stuff like utilising their extensive ‘data-bases’ to drive future business.
Few café owners are working on their business at all – they are treading – their head barely above the juices of their product.
And here is the root of the problem. Many café owners think their product is their product – when it isn’t at all. While product excellence is critically important it is not what ultimately drives their profit.
That millionaire who storms out because of the $4.50 coffee – wouldn’t, if their experience had been outstanding; if the level of hospitality they had received had made them feel important and valued as a person rather than a faceless transaction. Then that millionaire tells all their mates, and all those mates tell their mates – none of whom must be millionaires to enjoy a great coffee and an engaged hospitality business.
The sort of hospitality experience that drives a healthy profit margin can only be achieved if the business is run well and the team are encouraged to make others feel good in the context of financial awareness and business acumen.
Too often in hospitality, we believe our product is food and beverage and we litter our websites with images of culinary excellence. We forget that our product is really the smiling face who has enjoyed the totality of our business experience … which means our primary product is the business itself; the totality of the business values, systems and people.
The hospitality industry is a tough gig, but we can all do better – even those of us who are doing alright, and even those of us who are talented with food.
There are several cafes that are doing well, some with quite high profit margins. You will know who they are because you pay $5 for a coffee, but you don’t care because, the coffee is great, the team clearly love their work, and they make you feel important – every time.
Owner – The Hospitality Company