Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/58144
Opening and running several outlets can lead to increased hassles—but also significantly greater rewards. BY PAN DEMETRAKAKES W hat could be as momentous as opening your fi rst coff eehouse? Opening your second one. Starting a second (or third, or more) outlet is one of the most signifi cant, and nerve-wracking, decisions a coff eehouse owner can make. It's a step that can potentially multiply profi t—or, if it goes wrong, multiply workloads and frustration. Coff ee industry consultant Bruce Milletto says expansion should only be considered once the fi rst store is well established and running almost without a hitch. "If you have one store open and you're looking to expand, you need to make sure, of course, of the obvious: your fi rst store is operating almost fl awlessly," Milletto says. Milletto recalled a client who opened a second store within six months of his fi rst one, which turned out to be too soon. Th e second store "was such a ball and chain that it drained all the profi tability out of the fi rst," he says. Eventually the client righted matters, but it took years. By contrast, Joe Valente waited before opening his second Boston Coff ee in Florida. Th e fi rst store, in Deland, a city about 22 miles north of Orlando, opened in 1996, and it took fi ve years before he opened the second in Orange City, about fi ve miles south. "One thing I did want to do was establish the concept, establish the business, go through the mistake period," Valente says. "So I really took my time, I didn't want to grow faster than I was capable of." Brandon Knudsen also was in no hurry to open his second Ziggi's Coff ee in Longmont, Colo. He and his wife started the 12 | March 2012 • www.specialty-coffee.com fi rst store in 2004, building it from the ground up, doing most of the work themselves at fi rst and then adding staff . It wasn't until early 2010 that the second Ziggi's came on line: Th ey bought a drive-thru located three miles away. Once the second store was established, however, Ziggi's quickly developed momentum. Th e Knudsens opened a third store about a year later, and at press time had plans to open up two more, all in Longmont, a city of about 86,000. REMODELING IS BETTER Th eir experience with the second store illustrates two key considerations about expansion. One is that it helps if a new store is, like Ziggi's No. 2, an existing coff ee shop. "Instead of starting from scratch, we remodeled and put our machines in and gave it our look and our comfortable furniture, and it took off right away," Brandon Knudsen says. "If you can fi nd a space that was a café before, like we've done, then you cut out that initial $100,000 or $125,000 in buildout and permits and sitting on a space paying rent when you don't have any revenue coming in. All those things are really big. What we've done is we've just had to put our equipment in there and redecorate." Th e second consideration is that sometimes it's a good idea to make the second store at least a little diff erent from the fi rst. "It wasn't necessarily a destination like the [fi rst] store," Knudsen says. "It's a commuter location, and you don't need to have that same personal touch in a drive-thru that you have in a sit-down café." Th e two stores have the same coff ee drinks and some of the same food items like burritos and basic pastries. But the drive-thru has a smaller overall food selection, which