Interview with a Coffee Shop Owner: COVID-19
Interview with Biny from Mi Mundo Coffee
I'm so grateful for the opportunity to talk with one coffee shop owner about how he adapted his coffee shop to COVID-19 restrictions. I consulted with Biny early on to help him think through some of the ideas or changes to his business model. This interview took place in late November 2020.
How did you adapt?
First of all, I started running the shop by myself. When I could, I rehired one of my baristas but even then I couldn’t give him all the hours he really needed. As a business owner, this was really difficult for me. It is hard to find labor, but I also don’t want to lay someone off and have to rehire again when the time comes. I had built a staff and everything and I wasn’t able to hold on to them. The employee I was able to rehire was the one who’d been working in coffee the longest and had the most responsibility in my shop.
Another aspect of how we adapted was not just going by the rules the city and state had, but making the best decisions for customers and the business. Of course, it’s not great to be at limited capacity or hardly able to serve customers, but no business wants to be shut down for two weeks because someone there caught the virus. I wanted to keep the business open but also make sure no one got infected.
One thing that really helped us is we went to curbside. I had to change the business model to serve customers on the curb instead of in the shop. This meant all business was takeaway instead of dine-in. I had to learn how to take orders and make orders outside. Thankfully, we had a parking space right in front of the doors, so customers could see we’re out there serving coffee. Since I had worked farmer’s markets before opening the coffee shop, I already had a cart set up for mobile coffee. The main part about this was how to bring the inside outside.
Other places created a window where the door was or created temporary infrastructure to get setup right away. But that seemed like ‘bubble gum and duct tape’ to me. I wanted something that didn’t look quickly thrown together. Something that was consistent with our brand.
When did you realize this would last more than a few weeks?
About five weeks in, we realized we needed to trace the customer journey for a more permanent solution. Anticipating summer rains, point of sale, lining up, pay, and drink delivery.
What was hardest for you?
Running the shop by myself. Also, knowing how much labor will cost if I hired more staff. I couldn’t justify it without knowing how our sales would look going into the future. It really forced me to pay attention to the costly details. I spent some time planning how to reduce costs and labor. But also, I didn’t want to the lose staff I still had. It was a tough balance.
It was also hard to have customers come in and wait because there’s no other other staff. When I was running it by myself, I had to take orders and fulfill them by myself and it made the whole process kind of long for each transaction. I couldn’t invest in making things optimal, and unfortunately customers suffered. Reduces flexibility comes with reducing costs, so it’s just a price we all had to pay.
How did sales look?
We were a new brand, but sales dropped by 50% from February to March. We had a slight increase month by month.
One thing I want to mention is that we roast our own coffee. An increase in coffee bean sales helped supplement loss in drinks. Coffee bean sales doubled. We knew that many of our customers were possibly strapped for cash so they make coffee at home instead of buying it out at a coffee shop. Increasing bag sales in store and make upsells while customers were getting the coffee beans really helped mitigate our losses.
We decided not to have online ordering. Even though this reduced revenue, it helped keep our margins up. Without much wiggle room in how to reduce expenses any more, it made more sense to keep net profits than try to increase revenues. I knew we couldn’t pursue growth like normal, we had to make profitable sales so we could make rent.
How did you handle operating expenses?
Operating expenses boil down mainly to labor. Cost of goods sold still stayed the same. Utilities have decreased because the lobby floor isn’t open. This resulted in 30-40% reduced utilities. No AC and no plugging in devices really saved us some money there. Since we pay additionally for a recycling program, we had less recycling costs, too.
What are your next steps?
Main big change: I’m working with Square to reduce CC processing fees. Online ordering is our next step. We’re at a point now where I feel comfortable taking and fulfilling online orders. However, I don’t want us to have to rely on Uber Eats or another service. I’d rather take control of the customer experience than leave it up to someone else. COVID isn’t going away for a long time, so we have to get used to it. I also want to get the inside reopened and make it a community again. Though, set up for that will have to be different. Also, I want to open the roasting room again and have coffee classes. Being in the downtown strip, we need to build the community. We hold some of that responsibility and I want to make sure we’re doing our part.