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  • Yeah.

  • Hi, everyone.

  • How are we doing today?

  • Thank you very much for joining me here so we will get stuck into some questions at the start of all of this kind of House rules, I will do my best to answer everybody's questions.

  • Last time there were just way, way too many questions and I couldn't get to everyone.

  • And I'm sorry about that.

  • Shot out Thio.

  • Michael, Who's helping me today?

  • Try and run through all questions you give me cause I lose track in the chap really easily.

  • It's kind of intense.

  • Eso What kind of grab?

  • A few as we go on and yeah, uh, onwards we shall go.

  • So I have some questions here.

  • Uh, digs questions.

  • Hey, how many customers a day?

  • Does a cafe need to be sustainable?

  • Um, that is a good question.

  • That that is a really tricky question.

  • There's no right answer here because it really depends on your your financial model and kind of your rent.

  • Now, we said it was a business one today, right?

  • So I guess let's get stuck into some some some kind of hard core business.

  • See?

  • Stuff?

  • Way.

  • All.

  • Okay.

  • If I just go straight into this Something you need enough consumers that your rent is really like 10% less of your net revenue.

  • All right, so if you have a rent or kind of, ah, rent rates or rent whatever you pay a 50,000 year, then you need at least half a 1,000,000 off of net revenue coming in for a year.

  • Now you can divide that down by how many days a week you open.

  • What's your average ticket?

  • What's average transaction gonna be?

  • And that's gonna tell you how many customers you need through the door.

  • But you won't get the same people in every day.

  • I still subscribe to Kevin Kelly's idea that you need 1000 true fans, right?

  • And that's what you're an artist, whether you're a musician, whether your whatever, like if you have 1000 people who think you're great and we'll come and support whatever you do, you'll be fine.

  • They won't come every day like very rarely does a couple shop have some halvah regulars that come every single day.

  • They might come 34 times a week, but it's not gonna be every single day.

  • So in terms of how many of how many customers you need me at least 1000.

  • How's that?

  • Like you need, I think realistically need 1000 people who see themselves as being, you know, regulars at your cafe.

  • All right.

  • Jonathan Gifford asks the question, which is something no one really talks about is how to get funding for a coffee shop.

  • We're getting into some questions straight away, huh?

  • Um, okay.

  • How to get funding from copy shop.

  • Okay.

  • It depends on what you want to do with the copy shop.

  • Now.

  • Traditionally, coffee shops were, um, pretty pretty low on the returning scale, right?

  • Like like coffee shops don't produce enormous amounts of money.

  • So, you know, that narrows down the number of places willing to lend you money or invest money in you.

  • So, typically for years and years and years, banks, banks with the places to get funding for businesses like coffee shops because they didn't really worry about low returns, they had that fixed interest rates.

  • They were gonna be fine.

  • Whatever.

  • You know, post financial crisis banks don't really lend any more.

  • Banks aren't super interested in that.

  • They are deeply unhelpful.

  • So it's meant that people have had to look for alternative sources.

  • Now, there are obviously different types of investors out there that you could go on approach.

  • But if you're going to approach someone, then you need to have a pretty good answer off.

  • When am I gonna get my money back?

  • And how much more money will you give me in that same time frame?

  • You see, in the sort of more aggressive VC cycles that an investor would want to put money in and see a substantial return within 3 to 5 years on a substantial return might be anywhere from 3 to 20 to 100 times the money that they put in at the start.

  • Now, with a coffee shop, 100 extra turn is unlikely.

  • I don't You know, that's just that's just not really, um, But, um, you know, you can certainly approach people if you have a pretty good idea of how you're gonna make money and pay them back.

  • It may be that you intend to grow your coffee shop to be a small number of businesses that you might then sell on to someone else who wants to grow their chain of cafes.

  • I don't really know depending where in the world you are.

  • There are other ways on means to raise money in the U.

  • K.

  • There's a number of tax efficient schemes out there, like E i s and S C.

  • I s designed to really convinced it will help you to convince friends and family to invest in businesses.

  • And they get a little tax break in return for investing a small amount in a business like this.

  • But by and large, it's pretty difficult, But it gets a lot easier when you have a lot more financial clarity around.

  • You know, if I'm right, if I'm taking someone's money, how am I gonna give that back?

  • Plus more plus how much more right?

  • And that the more you can give back, then the less of your company you would have to offer up in return, right?

  • If you can give me if you can invest a £1,000,000 with me on, I can tell it into 10 million.

  • I feel pretty good about giving you a very small percentage of my company.

  • If I'm going to give you back a 1,000,000 100.1, you probably gonna end up with a lot more of my company because my return is pretty poor.

  • This is an oversimplification, but I don't want to get stuck to longer.

  • One particular, uh, question, Johnny Hawkins asks.

  • I have capital to invest.

  • Should I do it with coffee?

  • Um, sure would know.

  • Yes, it really depends on the opportunity.

  • It depends on your level of risk that you're interested in your risk reward kind of ratios.

  • Presuming if you, if you're serious about investing, probably have a good idea of your investment risk profile.

  • Coffee, I would see, is being, unfortunately, relatively high risk, relatively low return, um, in comparison to tech companies that are able to just massively grow with fixed costs and therefore go from being incredibly unprofitable to being incredibly profitable.

  • Coffee shops don't really work that way.

  • You know, all of the costs.

  • Kind of scale up s Oh, it's.

  • It's a lot harder to invest and expect a very high return.

  • If you're interested in coffee and you wanna support business, will be become involved in business is in an area passion about for sure invest in coffee.

  • Okay, uh, Tim's.

  • I asks, where do you see the balance between customer satisfaction and quality of your own business.

  • At what point you have to determine one particular customer is a single case.

  • Okay, if I if I'm reading this right, and please clarify if I'm not.

  • It's the sort of the the line between, um what point do I do?

  • What I want to do, right?

  • Serve the coffee I'm super passionate about.

  • And then at what point should I do something that just pleases people?

  • Right.

  • And where do I sit on that kind of scale?

  • Is that Tim?

  • If you're out there, Is that about what?

  • What you're you're thinking?

  • Assuming that is the case, Um, I think that if you want to do what you're passionate about for a business, then you have to understand that the potential of that business also depends on where you sit on that sliding scale.

  • Now, I think lots of people like really great coffee.

  • I don't think it's, you know, only a smaller people really, really desperately care about it.

  • But you know, the broader your definition of good the wind in the audience for that.

  • So, yeah, if you desperately want to serve, you know, pour overs with no milk, no sugar like super ts.

  • You know, exactly something you're very, very, very passionate about.

  • That's totally viable on the condition that you think you can reach on, engage with and retain enough people that feel the same way as you.

  • Um, is that an answer on my kind of, um, I in the right kind of area if we're getting too hard?

  • If I If I If I If I need to make this a little less serious, then you just tell me, uh, that, um I mean, t finish Tim's question.

  • You still need to be proud of what you do.

  • You still need to be excited about what you do, because customers com'on tell that your staff can tell your staff need to be excited about what they do, because again, it's something that people really respond well to.

  • So if you're if you're compromising for money, I think your customers comptel your staff Comptel and you have the vibe of a compromised business.

  • But I think you know there's no need to be.

  • There's no need to be exclusive.

  • I'm pro inclusivity.

  • I want I want to bring us many people in.

  • That's how we flourish and sustain us and industry long term.

  • All right, Andrew, you ask, How do you think differentiations Last value proposition, especially cafes, are going to change as good coffee quality becomes more common thing is a good question.

  • This is an interesting question to do with kind of the state over the market right now.

  • Um so especially copy is definitely much more available.

  • And I think that we now have a pretty good understanding that a great cup of coffee alone is not enough to one.

  • Bring a new person through the door the first time.

  • And to retain that person to turn them into a long term customer.

  • The proposition has to beam or than just one particular product or one category of products.

  • E cups of coffee service, I think, is gonna be a key part of it.

  • We're seeing already people realize that it's really, really, really hard.

  • Thio build a business off cups of coffee because they're very low cash valley transactions that every labor intensive and so it's It's a difficult business to scale, and so, increasingly you're seeing people reject the very pure coffee model, and you're seeing food come more and more and more.

  • You're seeing Bruce start to appear.

  • Alcohol is part of many people's kind of menu design.

  • So, you know, I think it's great.

  • Coffee is gonna become one off many pieces that things of in good businesses that people worry about.

  • Um, I think, you know, the world is still gonna be full of terrible coffee, and that's gonna be very available.

  • And if you look at the price of the sea market now, you know, low commodity coffee is still unconscionably disgracefully cheap on DSO.

  • I think we have to be very conscious that, you know, we're asking a lot Maur off people in terms of spend per cup.

  • Then they absolutely have to spend to get a caffeine fix.

  • So delighting them with more than the coffee with service, with the environment with design, with every single aspect of the business that they interact with, I think is key.

  • Um, Christmas.

  • Krishna asks, What do you personally think is the lowest budget to set up a good cafe?

  • I can't answer that with, without knowing where in the world you want to set it up and what your aspirations for that are in terms of its revenue and its profitability, however much you think you need double it.

  • Worst case scenario.

  • You won't have to work 100 hour weeks for less than minimum wage at the start of the business, and you compare yourself a reasonable wage and not hate yourself and not hate your business, as many owners do in the 1st 18 months of opening fine, large people are deeply undercapitalized.

  • At the start of the business life, I hold my hand up with someone who has done this.

  • And so you end up with this sort of, you know, buying into the entrepreneurial lie that you're supposed to work 100 plus hour weeks.

  • And that's the good thing, where in fact, you burn yourself out, you turn yourself against the thing that you were passionate about, and so starting with more money means that one you can staff appropriately and to you can.

  • You can earn a living salary.

  • And I think those there's a really, really key in the early days of the business, um uh, to swim tau g sapo tro.

  • And if I get people's names wrong, I'm really sorry, uh, manual espresso machine or high, expensive espresso machine.

  • He kind of asking, Do you want to cheapen manual or the fancy latest singing, all dancing super expensive thing?

  • It's a good question, um, without coming back to ancient oh, models and stuff.

  • I'm pro technology because I think that right now espresso is difficult because it's extremely labor intensive and it's extremely difficult.

  • And, um, cafe owners really have to spend a great deal of the money that comes in on people to make the drinks right.

  • Like a staff costs as a percentage of revenue in specialty coffee shops are currently very, very, very high.

  • I would say in most developed markets they would sit between 30 and 45% of net revenue, which is an enormous amount of money.

  • And that's because it takes a lot of people to make a lot of espresso drinks.

  • So I'm interested in technology that can reduce the burden on the cafe owner on DDE, make a individual member of stuff more productive, which means that one individual person could also probably earn more money as a result of being more productive s.

  • Oh, that's my kind of answer to that, Um, what if you're in a city where people used to traditional, badly prepared coffee and espresso and even after tasting it, say that they do not like third way of specialty coffee, yet not dead.

  • It's good question.

  • Um, kill them with kindness.

  • First.

  • I think this, you know, you can't tell people that what you have is better, because when you say my coffee is better, it implies that what they drink it like is off poor quality and therefore they have bad taste, and no one responds well to being told they have bad taste.

  • So the kind of nicer way into it is to make them feel welcome, make them enjoy coming and being inside a business and then being excited about what you like about this coffee.

  • Not to say that it's better than what they like, but that once they trust you a little bit because they like the space, they feel that everything you do is good value.

  • Then you know they're more open to experiences that are outside of their comfort zones, right?

  • Just coming in and what becomes kind of ah kind of high conflict, in a way, interaction, which is I've got this great thing.

  • You don't like my great things.

  • You like terrible things.

  • People respond badly to that.

  • And that's certainly how it went early days in places like London.

  • And why, especially coffee Got a reputation as being very pretentious, very unfriendly.

  • Definitely a problem there.

  • So, you know, make friends with them first.

  • And then once you're friends, you know, share a little bit.

  • About what?

  • You're excited with them and see if they like it and ask why and what they like, what they don't like and respond to what they like and give them more of that.

  • That's kind of how I think about this.

  • Okay, Uh, Callas Born s asks.

  • What about other coffee?

  • Business is like a subscription of third wave coffee.

  • Is it worth it?

  • Imagine the initial investment is lower than opening a cafe.

  • So you talked about building a subscription business?

  • A kind of, you know, like, uh, I'm traveling Mr Box.

  • That kind of stuff.

  • Um, this is a difficult model.

  • If this is what you're asking, I'll say that the following things are fake.

  • Say, um, the margins are pretty poor then, while your overhead should be relatively low, ultimately, roasters are interested in a direct contact with the consumer, and you don't desperately provide a service to a roaster.

  • Your frustration because you get in the way of their relationship with the end customer.

  • If the customer has a relationship with you, then for that roasted for one month.

  • Sure, they get a relationship, but it's a different rest of the next month, different rest of the next month.

  • For that reason, Ah, lot of great roasters have been very hesitant to get involved in those kind of subscription businesses.

  • They would rather have a subscription customer just for a themselves.

  • Now, if this is different to what you're asking, I apologize.

  • I think there are tons of other businesses in coffee outside of cafes and coffee roasting businesses that are worth exploring.

  • You know, there's, you know, there's tons and tons of different service is tempted of the different opportunities that are poorly met in the coffee industry.

  • Some require a lot of capital to start up with.

  • Some require a lot less, but I would start with what you're interested in solving a problem.

  • What's genuinely interesting to you really understand that problem and then go and solve it.

  • The problem with a lot of subscription service is is what's the problem that they solve.

  • I'll leave that to people to answer the truth in many cases is that, by and large, most subscription programs, soft convenience they solve.

  • I just need to remember to order coffee.

  • Andi.

  • That's probably not the sexiest, almost exciting problem.

  • But that's truthfully, one of the bigger problems very few people have the problem of.

  • Gosh, I wish I could just explore coffee every month in a really fun way.

  • That's a smaller segment there.

  • I'm not saying it doesn't exist.

  • I'm just saying, Think about the problem being sold by business.

  • Okay, Uh, brand a hug.

  • Close.

  • Uh, would you support a new international coffee agreement to decrease market fluctuations?

  • That is, that is a good question.

  • Um, while I'm pro decreasing market fluctuations, it wasn't like it was the healthiest situation with the international coffee agreement before it dissolved.

  • And secondly, I still think that the base model off trade is disgusting and wrong and broken.

  • And, you know, I'm decreasing the interested in finding ways to prop it up.

  • I'd rather it broke completely, and we found a different way.

  • That was just less abusive.

  • Um, I know that's a sort of half answer.

  • If you subscribe to the channel in a about a month, there'll be something Maur along those lines.

  • Okay.

  • Wayne asked.

  • How do I approach pressing for drinks much and retail bags.

  • Very good questions.

  • We're getting into it.

  • Um, okay.

  • Um, so I tend to work costing czar based purely on cost of goods.

  • That is everything that goes into the end product and that alone.

  • I don't cost labor into into products that way.

  • Because labor is a fixed cost on.

  • It doesn't scale.

  • Exactly.

  • With the number of products you sell A in our breast, it can make 10 drinks, 20 drinks, 40 drinks.

  • I can't realistically cost labor into any product, so I cost only exact cost of goods.

  • Really?

  • Um, pricing is about a couple of different things.

  • One, it's about hitting, um, hitting target markets.

  • Um, sorry.

  • Hitting, hitting target numbers.

  • Um, which would be, you know, overall, I would say most cafes need a gross profit margin around seventies 70.

  • Something right?

  • Early seventies would be solid.

  • So understanding a product mix is obviously gonna factor into that.

  • You're not going to make that much money in a retail product.

  • You know, you make so much money on the bag of coffee, which you should make at least that kind of a margin on a drink, I think drinks into the gross margin.

  • Need to have a much higher gross margin.

  • Upper seventies, early eighties.

  • Because there's such a high labor cost attached to them.

  • Um, does that Does that answer the question, sir?

  • Um, okay.

  • Many questions, many questions, Uh, the issue of ownership expecting full time and key employees to sacrifice as much as they do.

  • I've been offered 100% commission.

  • I was told I should expect to sacrifice to work there.

  • Eric, Um, I'm not.

  • I mean, I have a massive issue with tipping, which is unrelated but related.

  • And I just feel like people should be paid a sustainable wage.

  • And if a business doesn't have a healthy financial model to allow it to do that than it needs to find it, it needs to adjust its model, You know what I mean?

  • Like, I, um I don't think that sort of an approach is okay.

  • I'll go with that.

  • Um, yeah, I think, um, unless the reward is spectacular.

  • You should not be taking on any sort of risk.

  • I don't think that's fair or appropriate.

  • If the reward is stratospheric, like if if, if 100% commission could mean enormous amounts of money and that was reasonably likely, that's a sort of different story.

  • The risk reward ratio is a little bit more in line, but But I would argue or suspected it's probably not here.

  • Um, okay, what do you see as the biggest problems facing someone trying to open a coffee business in today's climate?

  • Do I see any new poems?

  • Were advantages coming down the road in the next five years or so?

  • Okay, this is a good question.

  • Um, the biggest problem right now is that there are too many copy shops in most markets.

  • Now, earlier on, we talked about needing, let's say, 1000 true fans, right?

  • Like needing.

  • Um, you know, a good number of people every time a new coffee shop opens.

  • New coffee drinkers don't just magically appear as if from nowhere they have to either be taken or created.

  • And right now, very few copy shops are focused on kind of creating new special coffee drinkers, and they're typically more focused on sort of trying to steal away.

  • You know, customers from another existing business, and it's much more traditionally competitive.

  • Essentially, instead of trying to grow that the pie that we're slicing up, we're just slicing it ever thinner.

  • That's the biggest issue, which is just finding a sustainable audience, um, on undeniably the hardest thing right now.

  • It's probably mean.

  • In London, for example, it has never, ever, ever been a more challenging environment to open a copy shop ever in history, there's there have been more competition.

  • Rents have never been higher.

  • We have absurd economic and financial uncertainty in our future.

  • Let's not go into that too much.

  • You can guess where I stand on that issue.

  • And you know this how huge competition for trained and capable staff members, which means staff costs are very high right now.

  • So it's a very high risk environment.

  • Andi, it's not really a winner takes all one, either.

  • Yes, you know, we'll see a bunch of cafes close the next 3 to 5 years, I think, and after that cycle off contraction, it's probably a better time to open a coffee shop again.

  • But that's it.

  • It doesn't mean you can't open to be successful.

  • But you need to have a very clear idea exactly who's gonna come through your door and why they're gonna come through your door and why they're gonna change their life.

  • Why they're gonna change the way that they walk to work every day, which stopped.

  • They get off the underground off, like which bus they take.

  • All of those decisions may factor into why they visit a particular coffee shop and you're asking them to change their life.

  • Have you really definitely thought through exactly what your proposition is to them about why they should do that?

  • And a delicious cup of coffee as a warning is not enough.

  • Right?

  • There has to be more than that.

  • We've done great coffee, and it works for some people, but not enough people.

  • It's a piece, but it's not the whole Okay, um, this tons of great questions here.

  • I'm sorry if I'm talking too fast.

  • Um, William asks how James excuse about the reasons why square mile focused only on a roastery.

  • Well, most terrestrial I know.

  • Open up at least a cafe for people to try that, beings.

  • Thanks.

  • Okay.

  • Um, Wim 10 years ago, 11 years ago, 10 years ago, square mile almost open a cafe.

  • But the global financial crisis happened, and we sort of walked away from opening a cafe.

  • We took a little commercial unit under a railway line and we started to roast coffee.

  • And I think we had better clarity about what it meant to be a wholesale roaster at that time, and we decided we would try and be the best.

  • If we open a cafe, we try and be our own ideal supplier.

  • I guess that was that.

  • This over thinking at the time Onda a CZ.

  • We opened very quickly.

  • I worked out that I was maybe a little bit knowledgeable about coffee.

  • But I knew nothing about business.

  • And so I went deep on trying to understand more about the business of business.

  • Really?

  • And after several years, I felt that, um, you know, we knew we knew wholesale.

  • We understood wholesale, and we wanted to be better at it.

  • And we wanted to invest more in it.

  • And for us to open a cafe required money.

  • We didn't have our money that we wanted to spend on coffee or people or on on what we were doing.

  • So that's why there was never really a square mile coffee roasters cafe before.

  • Um, yeah, you know, a time.

  • I think we're also very inspired by the model of counterculture who done a very cool thing in the U.

  • S.

  • They're training labs and sort of spaces in different cities are very cool.

  • I like that a lot.

  • And now square mile is involved in a cafe.

  • Were involved with proof rock.

  • But that's another story for another day.

  • Um, okay, Andre.

  • Hey, James.

  • What?

  • Your thoughts about the changes were seeing two men, especially coffee, more accessible via single packed drip bags.

  • Capsules instant.

  • Uh, which format in your opinion would win?

  • You're well, it was always gonna be just a matter of time before people worked out that the high convenience formats sucked because they had low quality product in them and began to question what would happen if you put higher quality product into them.

  • Now, um, get into it here.

  • I'm not sure which format will when I'm not sure they'll be one distinct winner.

  • And within all of those formats, I don't think there'll be any one dominant player you know you've got, Um, there's no, there's no ah defense against other players.

  • So, you know, right now there's loads of different companies who will start to do instant coffee, right?

  • And that means, let's say square Mom has to do it.

  • So we get to Mr Coffee done, and people really love it.

  • And so what will happen is, you know there's a manufacturer out there with capacity, and there's lots of other roasters who see an opportunity in the market now.

  • And so what will happen is lots of other people will have their coffee made into instant coffee, and they'll certainly be tons and tons of different specialty instant coffee available the market.

  • That's what I anticipate to see the next two or three years.

  • But no one has a distinct technological advantage over anyone else, and so no one will be a market leader.

  • Espresso dominates because they owned a patent for 25 years.

  • That gave them a huge, protectable defensible technology that they could grow with that no one else could touch.

  • And it's only after those 25 years wherein they are by far the market leader by an enormous quantity that small players will now come in and start to compete.

  • They've got an enormous head start.

  • A 25 year had start a multibillion, uh, Swiss frank head start.

  • So, um, I think all the single deserve high communion stuff is interesting and probably good, but I don't think we're gonna see one win or one particular company win.

  • Um, any tips for a roasted getting your beans into cafes?

  • Um, understand the needs of a cafe and and solve their problems.

  • Duffy Act that answers that.

  • Um so I'm just, uh okay here in Indonesia and most captains don't trust their own coffee.

  • They buy from the other restaurants dead.

  • What do you think about this?

  • Which is more profitable?

  • Risky?

  • I think your English is just fine.

  • So there's no need to apologize about that.

  • You know, cafes have a decision to make do do we buy roasted coffee to reverse that ourselves and his argument to be made for both.

  • You know, buying roasted coffee is much easier.

  • You can outsource problems and other issues to another company.

  • They are fixing a problem for you roasting in house on paper.

  • maybe cheaper.

  • But I think, actually, depending on how you allocate human cost to that project as a whole as well as any potential capital to start it, I think you need a reasonably high volume to Russia and coffee, and it be notably more profitable than buying from a good specialty roaster.

  • It's a little bit like doing doing your accounts.

  • It is cheaper to do all your accounting in house, but it is a giant headache, and it's not much fun.

  • And so I am a very big fan of accountant who I pay to do things that I could do.

  • But I really just don't want to.

  • Uh, so, you know, I think, um, it depends on on why you want to roast.

  • I think in a market with ever increasing numbers of spread to roasters already, they're roasting your own coffee is not the market advantage.

  • Perhaps it was in the past.

  • I'm not sure I see that necessarily in the marketplace.

  • Correct me if I'm wrong in the chat in the comments there, Um, but yeah, you know, I don't think it's a bad thing.

  • I think it's nice that, you know, if you roast for yourself and you screw up a batch that's on you.

  • If a roast of supplies you're back, that's not quite right.

  • You get to send that back and get something else.

  • You really mean like there's a level of protection in not being totally vertically integrated.

  • If you feel that you could do a better job in them.

  • Yeah, maybe think about it.

  • But it's not everything.

  • Quite a simple as you might hope.

  • Okay.

  • Ah, Question on block.

  • Jane, what's your opinion on these block Jane Tech startups aiming to solve issues with copy supply chain is a silver bullet.

  • Are they're going about it the wrong way.

  • Block came.

  • Um hey, I'm pro.

  • I'm pro increased transparency and obviously the idea of a decentralized database and ledger of transactions is the kind of gold standard of transparency.

  • I think that sadly, there is an extremely low demand for this level of transparency in the coffee industry.

  • I think other industries probably may need may benefit further from from having real transparency off the supply chain that way, and coffee should be a perfect fit, but I think it will be pretty slow to adopt these kind of things because there's essentially still a very low consumer demand for this level of transparency.

  • You might argue that means there's a very high level of trust in the marketplace, or you can be cynical and say This is a very low level of care.

  • Either way, I think I think Blockchain is a technology has great potential.

  • Um, you know, I think a lot about Cryptocurrency is is is nonsense, which is inevitably kind of tied up in connected.

  • But But, you know, decentralized databases, I think are interesting.

  • But I think God to be slow, they'll just be slow to be adopted in coffee.

  • Shut him out, asks James.

  • Do you think automation I roasting brewing reduces market value and specialty coffee?

  • Given the end product end quality, the product remains the same.

  • Or perhaps better.

  • This is a really good question.

  • This is really interesting question, and I don't actually think we know the answer.

  • Three idea that if it's made by a robot, is inherently less valuable than if made by a person.

  • To what extent do we value craft on?

  • If we do the lead craft, does that have a place in the process of getting up in the morning on buying a cup of coffee.

  • I don't think we know.

  • I think the automation certainly provides opportunities, and we can choose to take those opportunities to spend more time on doing stuff.

  • That's maybe more interesting than been prepping a basket of ground coffee to put into a coffee machine to extract.

  • You know, I'm I'm not against having a bit more time for either customer interaction or just more efficient, effective work flows to doom or to offer MME.

  • Or to be more productive and more valuable, a team member inside a business like that.

  • I also think that automation convey very happily take away some of the very physical, very unpleasant aspect off coffee making.

  • I think tamping is a great example of that.

  • But a lot of making coffee is fun, and lots of it actually is not.

  • Lots of lots of roasting coffee is not enormous amounts of fun.

  • I think roasting will be a bit slower for a few different reasons, primarily because I think we've got we've got a long way to go into collecting accurate taste data to feed something like a neural net, that kind of machine learning kind of set up, but I think this is a great question.

  • I don't know the answer, but I think we're even get closer to it into the closer to an answer.

  • In the next few years, Tracy asks James any idea how to compete with a Franchising Cafe e Starbucks?

  • They can provide a great environment by huge capital investment.

  • Okay, Tracy, I think the way to compete is to look at what they do well on dhe.

  • Look at the ways that you can do something that they can't do well.

  • So historically quality has been one way right.

  • Like to offer a better tasting product has been one way that the independence have competed with larger French of business, big corporate entities.

  • I don't think it's the beyond and all of our competitive advantage, but I think it's important to look at a Starbucks and say, Where does this fall down?

  • Right where where is this?

  • Not good.

  • Where can I do better?

  • And that's where you're gonna start to build your business model, right?

  • You conduce.

  • You better tasting coffee more traceable.

  • More honest, you can probably be a bit more not personal, necessarily but but more built around your community, right?

  • That the franchise model is it kind of cookie cutter model where everything is kind of the same.

  • And there's advantage to that.

  • It's right familiar.

  • But it's not necessarily crafted around your local community who I think that you need to understand and respond to.

  • Um I'm sorry.

  • My answer is getting shorter.

  • I'm just I'm just looking at this enormous stack of questions, eh?

  • So I'm gonna try and get through as many as I can in the next 20 minutes.

  • 20 minutes.

  • This is This is these are very intense things thes live streams.

  • I don't know.

  • I don't know how I deal with this.

  • Okay.

  • Kevin asks which one is better for business.

  • Just a good value.

  • Coffee or specially competition standard Coffee, uh, goes back to something I said earlier, which is, you know, you and your team must be excited about what you serve because your customers will respond to that.

  • Um, undeniably.

  • You know what I mean?

  • You have to be proud and excited by what you said.

  • So if you if you're knowingly compromising your customers can tell, um, it doesn't have to be binary.

  • In every market, you can do a little bit of both.

  • There could be a spectrum.

  • It doesn't have to just be one thing.

  • Um, you know, And which one do you think you can build a long term relationship with customers with, Right.

  • Which one are you gonna hook them into?

  • Just you being the place that supplies in that thing.

  • That's the disadvantage of more commoditized coffee, which is It's kind of available everywhere at any price.

  • In theory, the advantage of specialty is that we do something special, something that is not available anywhere at any price and eyes a little bit harder to get.

  • So, you know, I've answered both there, but you know which way, Arlene, I'm obviously all about the good tasting stuff, James looking to get my first burst of job.

  • Any tips?

  • Um, um, yes.

  • Um, yes, right, Right.

  • A good cover letter for each business and mean it.

  • Like research.

  • That cafe have been to it before.

  • If you wanna work there, if you apply for a job there, really know where you're going and make sure that in your cover letter it's clear that you understand the mission of that business, the vibe of that business and that you have clearly been there and understood that you definitely want to work there.

  • Businesses get a lot off applications that feel very like, um, like, four letters like you sent this application to 20 cafes today and you didn't make the owner feel special.

  • And I'm sorry, that is the way it is.

  • But but making the owner feel special?

  • Making the first in hiring feel special is a great way to get your foot in the door for that first interview that you will turn up to no earlier.

  • No earlier than five minutes before.

  • Don't turn up half an hour before Don't tell up 10 minutes before five minutes before Max.

  • I dd two minutes before And don't be late, But just a little early, Um, you know, reading Mary Cocky White's book Coffee Life in Japan.

  • She talks about how, you know, Cafe flourished in Japan as places to wait before an appointment to allowing you to two.

  • So you go to the cafe, you get there half an hour before your appointment, and you wait there until right before your appointment, and then you go to your appointment exactly on time, right?

  • So there's no awkwardness.

  • Early arrivals, awkward later Rivals are awkward in a different way.

  • Be on time and then tell them what you want to work there.

  • Tell him why you wanna work in coffee.

  • People are desperate for people who want to work hard, who want to learn, but who understand that that that a job is an exchange of service is for money right on Dhe.

  • While education is part and parcel of this, your job is not to learn.

  • Your job is to delight guests.

  • So if you go to a job interview at Cafe and say, I really want to come here because I want to learn, well, that's that's That's like saying I really want to come here because I want to earn lots of money I want to be given.

  • It's It's the flow is this way and so going, saying I wanna I wanna give great service on serving reason coffee.

  • I want to develop as I do that get better and better that I go.

  • That's a very different answer to I want to come here just to learn.

  • So, you know, I think a lot of owners have probably been through the experience of people who desperately want to learn and who then learn and leave.

  • And for an owner, that's a terrible investment.

  • And that's a painful investment on their election to to make that again.

  • Okay, Uh, James, what do you think about coffee?

  • Business is in really small towns, like in Siberia.

  • This is a good question.

  • Um ah.

  • Is it ju geographic geographies?

  • Uh, cafe me.

  • Anyway, Ideally, you know that the cost of operating in small towns is much lower, right?

  • Like your renters, lower your overhead to lower your your Your kind of cost of doing business is lower to compensate for the lower amount of humans that might live in that area.

  • I think those kind of businesses need to be a slightly broader church, right?

  • You can't be the super hard core thing, because that may be just aren't enough humans that I care about that thing enough.

  • You can do that thing and you can build a business around that.

  • But you can also be a wider church and be a bit more open in terms of what you offer and what brings people in and really again build a business around a community, understand who's there.

  • What are their needs?

  • What do they want from a space?

  • And you can still make it yours and have it be yours.

  • But I think it needs to be molded around the people that make up your community.

  • They become, you know, stakeholders in your business over time.

  • And so I think it's important to consider them early days.

  • Okay, Um, so there's a couple questions that are related.

  • Which is, uh, who did you learn business from?

  • Was all trial and error.

  • Any mentions of books we should be looking at from Eli Nat ons yet are dead.

  • Asks what record?

  • What resource is would you recommend for someone wanting to learn more about business both on a macro scale markets and a micro scale cash flow, etcetera.

  • So, um, okay, I definitely read a lot of business books.

  • I definitely I have, like, a shameful shelf in my house off because they're not.

  • You don't feel good about buying them that they will slightly.

  • There's some good ones out there.

  • The e myth.

  • I think Mimi three revisited, I think is absolutely essential.

  • Book for the coffee industry to read.

  • Give it away.

  • But if you are passionate about coffee and you you are Bruce, do you think about their own cafe Reid?

  • The M E three visited, please absolutely read it.

  • Um, so I read.

  • I read like, um, I went through all the stuff.

  • There's like like like a couple of websites that do like these the books.

  • This is where you learn through a Harvard MBA, but in book form, and it's like 50 books that you would read, and I read a bunch of those.

  • I will, at some point put together a kind of business reading list.

  • I've read all this, you know, the sort of stuff that now it makes you feel gross.

  • Like Peter Thiel's book was 0 to 1.

  • He's gross, but you know, that's a good idea is in there.

  • I was kind of bummed out when I started because it felt like everything every block talking about business was talking about tech, and no one really talked about bricks and mortar.

  • And I still feel that's kind of true today.

  • It's really hard to really to read a lot about building a great bricks and mortar business jumping is a terrible shame.

  • And, you know, they're going out of fashion that are staggering rate.

  • But broadly speaking, you know, like, uh, yeah, just read as much as you possibly can.

  • I was very lucky, which is my stepfather is, um, the classic old school boomer generation entrepreneur like, you know, started his first business 17 selling fruit and veg out of a van in the sort of remote countryside in the northwest of England.

  • And he built up a little business empire, and he's entirely self toy.

  • Has no qualifications.

  • He dropped out of school early, Um, and he learned it the hard way through 30 or 40 years.

  • A graft on dhe.

  • He was great as someone who pushed me to, you know, read my management accounts and, you know, make produce management account, understand my p n L.

  • Read a balance sheet.

  • And so now I spend a lot of time thinking about those kind of things and thinking about financial models.

  • It helps me read other people's businesses on greed.

  • They're kind of P and l's and that kind of stuff loads of obviously publicly traded companies.

  • That stuff's all online going look at Go look at Starbucks.

  • His p n l Go and look at what they spend on people.

  • Go on.

  • Look what they spend on locations and all that kind of stuff.

  • This is a pretty good resource of information in the public domain around existing financial models, off coffee businesses, you know, and very mine.

  • You know, Starbucks, this is a great lesson for me.

  • Loads of businesses in the early days in London would be like, I'm gonna be like Starbucks, and I'm gonna be, like, going to be better than Starbucks.

  • But like 10 20 more expensive, just like a little bit more expensive.

  • Just so people who would buy a Starbucks would buy from me.

  • And you're insane because Starbucks is costs are gonna be half of yours half, maybe lower, right?

  • Like Starbucks congee.

  • Oh, cheap.

  • Because Starbucks, his entire model couple, you know, certainly laced age capitalism, But they could make a ton of money and they don't have to charge a lot of money.

  • And they're still doing 20% ebitda, right?

  • Like there's still a very, very, very healthy business most of the time.

  • But yes, join organizations like the s e A.

  • Talk to other business owners, right?

  • Like a great resource is other humans.

  • If you're willing to share some truth about yourself, then people are willing to share back by a large, and you get to have some very open, honest conversations.

  • But running a business is extremely lonely.

  • No one will tell you how much money to make.

  • No one told will tell you, if you made enough or if she should make a little bit more like, accountants will sort of be vaguely helpful.

  • But no one will be like, Oh, you run this coffee shop.

  • This is how much money you should make, and you could argue that's a philosophical question.

  • But then there's also the realistically what actually possible in a market in A in a shop like this, just a secondary thing.

  • So I will try and put together a post soon either on YouTube or my blogger on both with like a top 10 or 20 business books that I have enjoyed.

  • Okay, uh, Andrew asks, Do you worry that the foreign names of coffee drinks, cappuccino America on a macchiato are intimidating to someone getting into coffee?

  • Perhaps more simple names would encourage more to try.

  • Yes and no.

  • I think a lot of those words.

  • A lot of those Italian words have become extremely normalized.

  • Now, I definitely think that, um, I definitely think that when we sell coffee by the name of the farm, that can be deeply intimidating, right?

  • If you if you got like a coffee on from Kenya and you're hoping that the customer will step up and say hi, I would like a cup of the key, our Maru Double A, please that that is intimidating to say, like that's definitely challenging.

  • You know, we put up words in a variety of different languages with no pronunciation guides because we feel that's the transparent thing to do.

  • But I think that is definitely intimidating at proof.

  • Rock.

  • Obviously, the historic like four ounce, six ounce, eight ounce thing was like soon amount of coffee burying amount of milk.

  • But ultimately, most people still come on order a cappuccino, a flat white or what they kind of know.

  • So I think those names aren't really an issue.

  • But I would say coffee farm names can be an issue, and Anna were thinking about you know when you're putting them on many boards or encouraging customers to try and say those words to order a drink at 6 30 in the morning when they haven't had coffee yet.

  • Okay, um, Mobile Van Cafe businesses.

  • Any advice?

  • I'll give you one piece of advice, which is key, which I've learned from supplying some coffee.

  • Businesses in band failed be in the same place at the same time every day.

  • That sounds really stupid, But But if you're thinking, I'm gonna do, like, Monday Tuesday at this place Wednesday at this place Thursday, Friday at this place.

  • No, it doesn't work.

  • People don't wanna have to work out what day of the week it is in order to go and get a coffee somewhere, right?

  • They want to trust you.

  • So when they don't have a coffee at home or they don't have coffee at the usual spot and they come to you that you will be there and they don't have to go always a Tuesday or Wednesday.

  • They're here.

  • I can't remember.

  • You'll just lose them, right?

  • Like the the key to those kind of outdoor businesses is to turn up every single day.

  • You have to turn up when it's raining, you have to turn up when it's snowing.

  • You have to turn u

Yeah.

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A2 初級

主題咖啡事業 (Topic: Coffee Business)

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    林宜悉 發佈於 2021 年 01 月 14 日
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