Coffee Shop Monthly Expenses: Cost-Cutting Strategies

Try as you might to run a tight ship, even the best-laid plans can go awry — especially if you’re in the coffee business. Each day can bring with it new challenges that can wreak havoc on your coffee shop’s monthly expenses.

But don’t despair! At Dilworth Coffee, we know all too well how the hustle and bustle of running a coffee shop can make it difficult to keep up with costs, which is why we’ve created this handy guide to help you out.

Modern cafe operations require a competitive strategy — and we’ve got the inside scoop to help you knock your savings out of the park.

Common Pitfalls for Coffee Shop Monthly Expenses

First, it’s helpful to understand what exactly is driving up your costs and losing you money. Some of the most destructive costs can be easy to miss when you’re busy grinding the hours (or coffee beans) away. These can include:

• Waste
• General inefficient processes
• A lack of training
• Unethical vendors
• Over scheduling
• Poor hiring practices
• Disorganization
• Rundown equipment
• Poor inventory management

There are, of course, numerous other things that can end up costing you money, but these are some of the most common. And the first step in any quality cost-saving plan to improve your coffee shop’s monthly expenses is knowing which things are costing you too much money.

How to Control Your Coffee Shop Monthly Expenses

Now for the fun part — tips and tricks to help you eliminate high costs and reap the rewards of extra savings. You might even end up with enough money to make some upgrades and buy that fancy espresso machine you’ve been eyeing!

1. Eliminate Waste

Two types of waste come with running a coffee shop — inventory waste and energy waste. If you want to boost profits, you’ve got to cut out the waste. This means adopting a quality inventory management system to avoid reordering items that end up going bad or unused and going green to eliminate carbon waste.

Inventory management software can help you only keep in stock exactly what you need when you need it. And going green, such as upgrading to more energy-efficient equipment, systems, and lighting can also help you eliminate emissions and save on your energy bills.

2. Automate Marketing

It’s not uncommon for small businesses like local coffee shops to handle all of their marketing manually and in-house. While this might seem easier initially, it will end up costing you more money in the long run.

If you are marketing on a budget, automation is the answer. There are numerous marketing automation tools available today that can help you cut down on the time and money spent on marketing efforts. This includes content creation tools, social media post creation and scheduling tools, and even tools that can help you automate your emails and digital newsletters.

3. Optimize Training and Scheduling

When it comes to losing money from operational efficiencies, one easy way to solve this problem is with better training. A thorough barista training program can ensure your staff have all the knowledge, skills, and resources they need to work efficiently and more productively.

Let's take a closer look at milk, the most common item wasted in busy coffee shop, to understand the financial impact of minor inefficiencies.

It’s not unusual for a barista to pour an ounce or two more into their pitcher before steaming. Let’s say your shop is pouring 200 12 oz. lattes every day of the year, and your barista pours out 2 oz. of excess milk with every drink. Just those two wasted ounces are costing you around $2000 every year! That’s a raise for an employee; that’s the repair of an essential piece of equipment; and that’s money that could be in your pocket instead of down the drain.

Not only will better training improve performance, but it can also improve worker morale and help with retention, which can also save you money. If you have staffing shortages or need to spend more time on recruitment and hiring, then you are going to end up losing money.

It’s also important to optimize your scheduling after training your cafe workers. There are automation tools that can help with this. These types of tools can help ensure you have exactly the right amount of staff on hand at all times. It can also help you schedule the right people for the right time, such as those who are a little more experienced working during your peak hours.

4. Optimize Your Menu

Menus are often an overlooked source of inflated coffee shop monthly expenses. The profitability of your coffee shop could come down to how smart you are with your menu offerings.

The key is to focus on high-margin items that bring you a better return on your investment. If you are overspending on food and drink items that people aren’t ordering as often, for example, then you might need to remove those items or give them an upgrade to draw new interest to them.

It’s also important to utilize seasonal items to make the most of your menu. Seasonal items stir interest and create that fear of missing out—FOMO, as the kids call it. Each season you should be rotating items to freshen things up and entice your costumes to try something new.

Another great way to optimize your menu is to suggest pairings and add-ons. Coffee shop customers are all about convenience, so present easy pairings upfront at the counter, like pastries to go with your drinks and other grab-and-go items.

5. Evaluate Your Vendors

Your vendors and suppliers could also be running up your monthly expenses if you aren’t careful. It’s easy to fall into the habit of sticking with the same old vendors if you know they are reliable, but just because they are consistent doesn’t mean they are right for your business.

Look at everything you are paying for and compare prices to other vendors and suppliers, including the cost of materials, supplies, equipment, shipping costs, delivery fees, and any other fees. If you are getting overcharged, don't be afraid to negotiate or find a new vendor.

6. Conduct Regular Maintenance

Regular equipment maintenance should be a must for any coffee shop. Unfortunately, a lot of service and repair processes get put off when things are busy and you have numerous other tasks you are juggling. The problem is that waiting too long to have your equipment serviced can lead to costly repairs down the road.

A regular maintenance schedule will ensure your equipment is always in top shape and will prevent unexpected breakdowns and failures. It’s also a good idea to consider warranty coverages when you first buy your equipment to avoid unnecessary repair expenses.

7. Upgrade Your POS System

The cream on the coffee — the thing that ties everything together — is a quality POS system. The right POS system can make your life much easier as a coffee shop owner and help you reduce your monthly expenses.

There are a lot of advanced systems out there today with smart features that can assist with inventory tracking, scheduling, and reporting. You should also look for a POS system that offers data analytics tools that can give you insights into how you make further improvements to your operations.

Partner with Dilworth for Coffee Shop Success

With over 30 years of experience in the coffee industry, we know coffee like we know our own minds — which is to say, quite well— maybe too well. But can you ever really know TOO much about coffee? We don’t think so.

So if you need some good advice, we’ve got you covered! Not only do we offer an array of coffee products, but we also offer a range of coffee business services, including helping you enhance your business plan to cut costs.

Let’s settle down and chat over a nice hot (or iced!) cup of Joe. Contact us today to see what Dilworth can do for you.