Reuse Coffee Grinds

Melissa Breyer is the Author.  More on Melissa.

Perhaps one of us can share how to sell the grinds in order to improve profit margins.  Please comment.

I have to add that I started to ride an Electra Amsterdam 8i to work.  It’s a bike.  Here is the post in my Personal Blog.

Your Unit sales volume means a great deal.  Why? because it determines what your Unit Costs are.  These costs must be covered in the price you charge.  Your profit margin must cover unit costs in order to break even.  In the following example, the owners salary is considered a fixed cost.  For this example, too, imagine you sell only one item –> cups of coffee,  and your costs are:

1. $60,000 – Your Salary (always first on the list, for this is why you are in business).

2. $15,000 – Rent

3. $75,000 – Total Fixed Costs (I added the term Fixed, that is, they don’t vary no matter what your volume is.)

Now suppose two scenario’s.  First, you sell 1000 items per month.  Second, you sell 5,000 items per month.

Annual volume is therefore, 12,000 units in the first scenario, and 60,000 units in the second.

You can now calculate what your unit costs will be:

A. – $75,000/12,000 = $6.25 cents per unit in scenario one, and

B. – $75,000/60,000 = $1.25 per item in scenario two.

Now, if the cost of materials for a cup of coffee are: Cup – $.10; coffee – $.20; and other stuff – $.20, then the cost of materials is $.50 for each cup sold.

Let’s further assume your desired profit is $30,000 per year, or $2.50 per item at the 12,000 volume level, and $.50 if your volume is 60,000 units per year.  It is now easy to calculate your price.

Remember: Total Costs + desired profits/ volume = the price you must charge.

]]> http://kmocoffee.wordpress.com/2012/04/09/profit-margins-and-volume/feed/ 1 bobjohnson1945 You Can Think Your Way to What You Want http://kmocoffee.wordpress.com/2012/03/22/profit-margins-pricing-and-costs/ http://kmocoffee.wordpress.com/2012/03/22/profit-margins-pricing-and-costs/#comments Thu, 22 Mar 2012 01:41:22 +0000 Bob Johnson http://kmocoffee.wordpress.com/?p=139 ]]>  I mean no disrespect to anyone, including myself, who starts a business, and expects to make money, in great abundance and quickly.

This may happen in sites like large Malls or Broadway and 42nd Street in New York, but in the vast majority of cases, it takes a lot of hard work, time, and flexibility.

So if the problem you are researching is really a location issue, look to Improve Your Profits.  Location is not a profitability issue, unless you are paying more than the traffic is worth at a mall, for example.

Margins are: Price – Direct Costs = Margin.  They come with many names.  I’ll just stick with this definition.  Direct costs are your product costs, the classical Cost of Goods Sold.  Right now forget about labor, rent and other stuff, even if you know what the unit cost is.  Just accept my definition.

The most important part of this equation is Price.  If your margins are not getting you what you want in life, and thus making your business life less fun, you should start with price.  You need to know, for a fact, certain, what your competitors are charging.  No guessing.  I could get very fancy here and talk strategy, quality, service and product plans, but I will not.  Just price.

You have little control over costs.  They are market driven.  You may save a dollar here or there by changing, for a time, your coffee supplier, for example, but this is not going to solve a margin problem.

What will solve your profit margin problem is raising your price.  Obvious right.  Takes courage to do this.  I’ve learned the hard way that sudden, unannounced price increases really get customers angry.  This is not good.  In fact, it is very bad.  So decide, but give everyone fair warning.  Then raise them.  Why?  Too Simple, you say.

The reason is indeed simple.  Price increases, the amount of the increase, goes directly to profits.

And, without trying to pollute your mind or your store, take down all those negative ads; you know the ones.  Bathroom for my friends only, not you, outsider.

Never, never give up.  There is an answer.  Generally, always say ‘sure, I can do that”.  If you lay a foundation of always giving, you will get, and make the price increase stick.  And like this person, think.

Selling Like Hot Cakes - Hot Off the Griddle

This is Bob's Favorite

These two coffees are going to compete with the honors won by Special Blend, Navigator Blend and Rocket Fuel combined.   You think it is hot outside now, these two coffees will raise your sales temperature to new highs so keep the air going strong.

Smooth, Flavorful and Light Body

Black Satin is something to behold and savor.  It is a new taste sensation, sure it dark roasted, but this coffee possesses flavor, and remains smooth.  It is light to medium body, which you will enjoy and so will your customers.

 

I can say no more.  These three coffees and setting records at Kaffe Magnum Opus and if you brew them, add them to your daily offerings, they will set records for you too.  People come back for more.

 

Bob

Jill and Stephen June 26 2010 with full schedule of Cakes to Go

 It was a terrific Saturday Morning morning at Sweet Life Bakery.  Stephen invited me over, and I left with a box of buns after a double espresso, expertly made by Ariana, barista.  I recognized several people from my early 90′s shop on Landis Ave.   

Ariana with the Window to the Cold Kitchen behind her

Everyone is smiling and happy.  The window to the kitchen keeps everyone in touch with what is happening in the store and gives customers a chance to watch cake making.  Today there was a refrigerator door full of orders for today’s cakes.  The place was humming. 

Ariana made a very good double espresso with full crema that lasted till the cup was empty.  Well done Ariana. 

My wife loved the morning-glory muffin.  I loved the espresso and the Hot Havana Nights Coffee.  You can buy Sweet Life Bakery Hot Havana Nights Coffee by the bag in the store.  I guarantee you will like it. 

Bob Johnson

You can see Landis Ave. Through the Window

It is clear that this decade and perhaps this century requires more imagination, flexibility and dedication and committment to meeting your goals in the coffee business.  Sharing on the social net, or, Web 2  as it is also known, is a road you can travel largely researching and implementing change in your business, without a large investment in new technology. 

Please stay tuned.

Bob

Please contact Robert@kmocoffee.com if you would like to share in the experience and growth.

2008 was a tough year because the Wall Street crowd dominated the commodities markets, including coffee.  While oil has fallen drastically, however, coffee is still high. With Starbucks and others closing stores it is surprising that the fall in demand is not driving prices lower. 

We all know too that the collapse of the banking system led by lousy lenders is effecting overall demand.  As the saying goes: “When the going gets tough the tough get going”.    Now is the time to execute your backup plans, or, your plan B.  Nothing is a Sacred Cow, be tough on all your expenses.   This is the time to ignor the naysayers and get out and mix it up in the market.

Invest you time and effort in training, hiring well, and community connections, new organizations, house parties, speaking engagements at youth oriented groups.  Get to the High School and make sure they know your WiFi is free.  Sponsor talks in your shop directed at the demographic that will respond to coffee.  Too, sponsor recitals for the local music teachers or music stores, or schools, encouraging stage shows in your shop.  You’ll get the whole family out to see their children and grand-children perform.

Please, as soon as you read this, make a list of what you will do tomorrow to build your sales.   Tomorrow, begin to execute the new changes.  Change is good.  If you want higher sales you have to create activities that will bring in new customers and develop relationships with existing customers.   Do not do tomorrow what you do every day.  Start with getting up later, or earlier, take a different route to the store, open in the back instead of the front, stop at the local newspaper stand for the paper you will now leave on the tables.  Take down some handwritten signs, and make sure you rest rooms are available to everyone, not just customers.  (see the end of this post for an important question).

You might like to read “You Can Compete: Double Sales without Discounting” by Bob Phibbs as a start at finding new ideas.   Contact Robert@kmocoffee.com for a free copy. 

In the meantime I urge our customers to visit www.sellmorecoffee.com for ideas for improving your profits.

Thank you all for your continued support.  Since starting KMO we (Cathy and I and our staff) have insisted on above standard service as the primary advantage at KMO.  We answer our phones (people do), we basically will do whatever you want (we have a huge number of products, many of which are custom and not on our already long lists), and we unconditionally guaranty our products.  If the coffee does not meet your expectaions, we will take it back or replace it.  No questions are asked.  If you want to experience this service, give Robert or Terry or Ciara a call.  Or write to me at bob@kmocoffee.com

Bob Johnson, Founder

Question for all the owners of stores that have signs that read: “Bathrooms for customers only”.    What is a customer?  The person who buys a coffee today?  Yesterday or a week ago when you were out?  Why drive non customers away?  Are not non customers exactly the people you want to come in?  Keep the rest rooms clean and attractive.  Especially the ladies room.  If you have to put a sign up about the bath room, put this one up “unlike every other retailer in this area, our bathroom is clean and available for who ever needs it”  Come on in.  You will like our service and our coffee.”

They are a must read.  If you don’t have a copy Robert Kraeuter, president of Kaffe Magnum Opus will get one for you without obligation.  Healthy coffee retailers are a part of KMO’s mission.  It maintains several coffee sites one of which contains valuable ideas for increasing sales.

I’m very excited about this book and in particular these two chapters.  They contain basic information about hiring and training.  If we all do what is presented in these chapters we will all be more successful.

The summary is on Docspoc

Bob Johnson

Founder, Kaffe Magnum Opus, Inc.

Free.  Nada. Zero.

I remember around 1970 after purchasing my first home waiting impatiently for the advent of cable television.  I think I paid around $18 for the service, which I purchased in order to get good reception.  Over time this relatively modest sum grew 10 fold and I had added a bunch of high powered programming, all of which I purchased in order to watch Tony Soprano knock off a few friends.  He’s now gone, but the cable persists. 

Well not exactly.  After spending last winter in a motor home with the same antenna I have in my 2008 super duper motor home  now worth zilch, I cancelled my cable.  Now 63 I was able to get the basic plan for $12 per month.  It provided all the major networks and I think the History Channel. 

Now, with a super duper antenna at home I’ll be able to get digital and HD without the help of a cable company.  Then I’ll buy the DVD’s of the high powered HBO programs.  Or use the Netflix I pay $18 per month to funnel downloaded movies through my computer to my television.  So movies are handled by Netflix, programming by DVD or Internet streaming, and I still don’t need cable.

This is all because the antenna is coming back.  Hooray for History.

At the price of gas (I know it is down for the moment) we will soon be riding horse pulled carriages or bikes to work just when the Chinese People are getting their first car.  I have Vonage and Skype so I really should drop my land line, fax line, and mobile line. 

I purchased my first mobile telephone for protection so that Cathy would have a phone should she break down on the road.  Trouble was  most of her driving and mine was across the Pinelands where, you know what I’m about to say, there was no service.  The point is however, I purchased it for protection but now have an iPhone with all sorts of stuff I don’t use because of my laptop, Skype and Vonage. 

I can set up Vonage to forward my phone to all the places I’ll be today, like my sons, or the doctors office (they may not like it) and get all my calls, without a mobile phone.  Oh well, it was not my intention to go this far, just to cebrate the return of the home antenna.

Celebrate, Celebrate, Celebrate and save like $200 per month.   Oh, to be fair I have to say that I paid $2,000 for my laptop.  But having done that, why not drop all the other stuff.  Think I will.  It may be time to sell your cable stock.

Let us all know how  you are saving money, please.

Bob