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Why do most beverage startups fail?

Why do most beverage startups fail?

Monday 13, 01 2020
The real reason most drink and coffee startup startups fail - perhaps from the beginning, they shouldn’t have been so immersed in their own illusions.

First of all, failure of an F&B start-up does not mean closing, but failure in the business sense of not being able to pay owners or managers what the funding and timing. This will bring a combination of bank interest rates and employment for businesses.

So, what is the reason for that loss and "hunger"?

The top reason why a coffee and coffee shop startup does not achieve economic stability is that they are too easy to cheat!

It is unsurprising for a man who does not know anything about how to value products, or how to generate a competitive income after long hours of work, as well as a background in investment, to fail.

Even the good cafe managers will have to struggle to get a reasonable income for themselves.

In fact, when the market turns in place of the flattered faces with newcomers, only the survivors bitterly understand that opening a coffee shop or restaurant has never been a sustainable and worthwhile source of investment.

Of course, you can use other resources to cover losses and boost your business. But in the long run, no stable business exists in such a patchy way.

Even without the common issues related to price instability from the source of raw materials, there is still no lack of subjective causes from the starter that makes the coffee/beverage shop fail.

Disobeying discipline

There are countless food-related issues that you have to face when participating in the sector. Many people ignore the laws as well as the operation and then spend money and time to enhance customer experience and marketing just because of laziness. Right from the start, a lack of discipline can cause a beverage shop to collapse and never recover like before.

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Spending too much on set-up

The same is true when you invest too much in a first-class kitchen or bar rather than the customer experience in the dining area. Be careful with the chef, bartender or restaurant manager you plan to hire if that person thinks food art is more important than reputable, fast and friendly services.

Why do most beverage startups fail?

Unprofessional payment service

With the average cost per order being quite low, cafes will need to serve thousands of transactions a day to maintain. If the dispensing area is not appropriately designed, the order and payment system will not be sufficient and efficient, and the food production will cause many people to move. As a result, the limitation of service space may limit the ability to achieve sustainability, not to mention the huge salary paid to redundant employees who may suffer from poor design.

Limited menu

Coffee is a popular beverage, but it has a huge gross profit margin. Shops with a strategy of only one or two drinks can be busy for the whole day but still cannot generate enough cash profit enough to cover the costs. A store needs to have a varied and reasonable menu strategy in the first place if they want to get enough sales to stabilize.

Preferring shortcuts

Many beverage and coffee startup start-ups step into the game obsessed with the quick lightness that people often see in chains that have been running along with the reel and have a long construction time. Many 'newbies' immediately rush to reduce the number of products on display or try to retain more foods for longer than necessary. The problem here is, you will never be able to stabilize your work if the cabinets, tables, and chairs seem to be inadequate and serve customers with old food!

Focusing too much on profit

Similarly, when focusing too much on profit from the beginning, we will try to negotiate prices with suppliers instead of focusing on building important relationships, important, reputable shipping, and will be too stingy in every serving when selling and ignoring winning customers with the best products and services. It is important to get customers, not sales because of the fact that you can go bankrupt when you think too much about profits, as you cannot bring anything to your customers while demanding money from them.

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Poor recruitment

Snack shop doesn't just sell food/drinks... They sell comfort, closeness, good feelings, relationships and many other intangible added value, things that only come from the way you and your employees treat them. Only restaurants that have employees remember their guests' names, what they order and the conversation from yesterday will be successful, the rest will fail. Customers will soon forget what you sold but will never forget the feeling you gave them.

Lack of advantages and the ability to use them

Many snack food startups offer too many options while their customers are simply hungry and thirsty. Too many options can make management difficult and costly, leading to bad results and then sales or customer losses. When preparing the menu for its store, it is best "a profession for nine".

Inappropriate location

​An unsuitable location may be the single biggest reason why a store fails. No matter how perfect your store is, if you put it in a corner or not many people pay attention, you will never have a fixed and close customer base.

Wrong pricing strategy

Beverage and coffee startup startups struggle with industry prices, which makes it difficult to create a stable job. With just a few more poor pricing strategies, your failure will be obvious. For example, lowering your espresso price to 'hook up' while it is one of the least volatile products in terms of price if of good quality. At the same time, calculate equal prices for products or take the cost as the selling price instead of the market average. The restaurant pricing should be based on the subjective margin, which is wise only experienced connoisseurs can build.

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