Coffeehouse Successes and Failures

My office is located in the heart of Fremont, a funky artistic neighborhood in Seattle, which also happens to have three very good coffeeshops (Caffe Ladro, Fremont Coffee Company, and e.t.g.) and two half-decent ones (Starbucks, Peet’s Coffee & Tea), all within a four-minute walk. After grabbing a nice hot latté (at Ladro; I’m not exclusive to any of the first three) for this cold, wet winter morning, I came back to my office to find a link to the following great article in my email: “Bitter Brew – I opened a charming neighborhood coffee shop. Then it destroyed my life.

Some years ago, my officemates and I tossed around the idea of finding a space that let us have a coffeeshop in front and our working offices in back, but we knew the idea was folly: we’d never leave the front if we expected to actually make money.

Of course, not everyone fails. A long-time Apple employee I know got burnt out writing code and decided to open his own café. When I saw him the next year at Macworld Expo, he confessed that he missed the “slower pace” of his previous 80-hour workweeks. But he’s doing something right: although I haven’t visited the place, Zocalo Coffeehouse in San Leandro, California is not only still in business, but they’ve just undergone a major renovation. Stop by for a cup if you’re in town and tell me how it is!

  1. I don’t mind that someone has a romantic vision of opening a coffeeshop. But this Slate writer seemed to lack any common business sense, which is not unusual for new businesspeople. In his narrative, he seems to have figured out how to run the business backwards.
    This is one reason why cafes need things that go beyond just coffee and pastries. I was trying to tell Herkimer that if they just carried a handful of sandwiches, they’d sell out every day, but it doesn’t go with the owner’s interest. A recent review of Herkimer in the Post-Intelligencer said more or less the same thing — how about some savories?
    Starbucks makes the big bucks because they keep introduced more gear they can sell in the stores beyond coffee, all of it with a higher profit than anything else but coffee. Although I still remember all the nonsense a few years ago about people trying to get service for espresso machines they bought at Starbucks.

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  2. With regard to sandwiches, we tried them (for probably longer than we should have) and ended up having to pull them. The biggest drawback for a coffee shop without a kitchen space (like Herkimer) is that you have to resell them (a la Briazz at Tullys). The Slate author talks about the low markup on pastries vs coffee, well it drops by half again with prepared sandwiches. We were selling a sandwich that cost us 4 or 5 dollars for 6 or 7 out the door. Couple that with the non-existent shelf life and you’ve got a money pit.
    There are a number of places in town to get a good (decent?) cup of coffee and a sandwich or quiche as well, but I think all of them have a kitchen in the back or at least an off-site kitchen space. I wish there were more, but without real forethought on the part of the owner, it’s really a tricky proposition.

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  3. BTW, as of June 07 we’re just past four years at Zocalo Coffeehouse and we’re still going just fine.

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  4. Zocalo Coffeehouse is just entering our 8th year and the wifi is faster than ever!

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  5. I love that Zocalo is still going strong. After seeing several places fold or get turned into something else (or, sadly, one of my favorites in Seattle was the victim of an arsonist and burned to the ground), I know how hard it is to run a coffeehouse. Congrats!!
    Jeff

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