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How to Expand, or Not Expand, Your Coffee Shop

Guest post by Jack Groot

This building is ugly

Let me expand on that. Both buildings are ugly, the original and the addition (can you guess which is which?). But, I am not here to discuss my lack of art appreciation or your disagreement with me. I want to talk a bit about your business and what to do, or not do, when it is time to expand.

Many years ago

JP’s opened in 1993. By the time we had been in business a few years we had many day parts when we could use more seating. Of course a busy time for many coffee shops, JP’s being no exception, is the morning stretch. Somewhere between open and about 11AM finds most good coffeeshops wishing they had more room. But, our location had another great thing going for it. Being located in a vibrant and beautiful downtown location, with a small liberal arts college a block away and a decent tourist crowd for at least the summer months. This had the additional effect of finding us desperate at other times of the day, needing to have more available seats to accommodate customers.

Opportunity can be dangerous

In 1999 the space next to us became available (the other half of the 4,000 sq. ft. building I occupy). Although I i wanted, needed space to expand, just adding another 2,000 to our coffee bar didn’t make sense. I knew enough to know that the additional expenses of a build out plus the on-going expenses could be too much for our business the way it existed. So we created another business to occupy much of the space and nabbed a piece of the space for JP’s. Of the additional 2000, we added approximately 300 sq. ft. to our coffee bar in the customer area. We also added some back of the house space, but that is really irrelevant to this discussion, except for the financial drain that it adds.

As we had only recently remodeled our entire store (1998), there was no need to update the existing space. At that time I used the services of a local designer named Missy, who had done a fabulous job helping us recreating our store the year previous. I called her again to get help with our new business, as well as help with our new seating area in JP’s.

Keep the same theme

When I started talking to Missy about what we should do with the new space and how should we decorate she told me it was important that we keep the same theme. In JP’s the walls are a nice bluish-green and we had been blessed with oak panel trim around the top perimeter of the walls which we had re-stained a dark cherry. So, we needed to do more of the same. Bring the same wall color in and find a way to match the woodwork. She wanted people to walk in a feel like the store had continuity, like the space belonged. So we cloned the rest of the store and added our seats.

Fast forward about 6 or so years and the other business is no longer there and I needed, again, to figure out what to do with the additional space. We had already decided by this time that our business could handle the additional space, and we had plans to use it we felt would make it profitable (that’s another post). So, I called Missy again and asked her to come down for a chat. When I showed her the space and told her what I wanted to do she had some great ideas. But the first thing out of her mouth was probably the most important, the binding idea, that formed the foundation of our remodel. She said, “Whatever we do, it can’t look like someone added a trailer to the back of the business and opened it up for people to sit.” I asked her what she meant and here is her explanation:

When people come to a business for a while and the business wants to expand it must make sense. Customers need affirmation; they need to be convinced this change makes sense. That it is all part of the master plan and that whenever anyone looks at the new space it says, “I’ve always been here”. The last thing we want it the trailer slapped on the back end”.

Risks of adding space

Adding space is not just additional seating. It cost money to build out, to equip and to maintain space. At JP’s our large size requires more labor to clean, more mop soap to use, more electricity to light and more gas to heat. Closing a 2,000 sq. ft. store at night takes much less labor than closing a 4,000 space, just ask my staff. All of that will come from the existing gross profit number and reduce the net profit, unless the space increases gross revenues. And that won’t happen if the bar is not configured in such a way as to allow for more sales. In other words, if your bar can’t move any faster and you add space, you’ve just shot yourself in the foot and actually reduced profits.

How many of us haven’t seen a business, especially a restaurant, that was very successful and then added a bunch of space and failed. I know I have. There was agreat little Italian joint where I used to live that was tiny. It sat about 25 or 30 people. The owner, who was packed all the time and extremely profitable, moved to a new location to accommodate the crowds. He lost the atmosphere and in a year or so was out of business.

There are certainly multiple reasons a big change in space brings a high degree of risk or failure. But certainly hearing comments like, “It just doesn’t feel the same”  or “Ever since they added the new space I don’t like the feeling anymore” shows how we evaluate by our feelings. And these “feelings” cannot be overlooked. Feelings are important to a successful business, and critical to coffeeshop success. People do judge us by our coffee and our service, but it is so much more. I’ve read, and would agree in part, that successful businesses have a bit of serendipity. And I think that our feelings have a lot to do with whether or not we like a business and patronize it.

Grow slow, make it count

When you are ready to add space to your store make sure you do your due diligence. You’ll want to make sure you:

  1. Keep the same theme – people like you place for a reason. Give them more of what you are and keep changes to a minimum.
  2. Don’t change too much at one time – If you do, you risk alienating your existing customer base.
  3. Add revenue generation, not just seating – unless your current lack of space demonstrably limits your revenue.
  4. Count the cost – make sure you can afford to add the space, even if it doesn’t add revenue.
  5. Keep it clean –  make sure you keep the new space, and the rest of the store, clean. No sense adding space only to sacrifice in other areas.

Adding space can be a wonderful thing for your business if it is done right. But, thinking through the details is just as important, even more important, than when you first opened. You took a risk getting open and becoming successful. Now’s not the time to risk that success with another risk.

Jack Groot is a coffee shop owner, educator and consultant who currently runs JP’s Coffee and Espresso Bar in Holland, Mich., The Midwest Barista School and OnTrack Coffee Consulting

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