I've served coffee a few times and secured the rest of August, so I have 5 more weekends of serving. I'm feel'n really good about it which has spurred some questions. Am I profitable? Am I on track for getting a new bean before I run out? Is this building my business?
I got up early last Sunday to roast coffee for the next weeks cold brew and realized that I'm down to one more bucket of green coffee beans. This made me worry a little because, as you all know, my debt free approach could pinch me with inventory. It's summer time, so people aren't buying whole bean coffee and Ready-To-Drink sales are kind of a slow bleed. Since I have no data on how to anticipate sales, I kind of just have to brew a bunch and hope I don't throw any away. I went back to my numbers to see what I had.
The RTD is profitable, but has a lot more churn. Where as whole bean sales pretty much just has money coming in, RTD has money going out and money coming in a lot of small increments. That means the money I have in my account is not static, which adds some complexity to making a large purchase.
I also realized I don't track inventory at all. I have some profitability numbers, but was only doing inventory once a year. With all the churn of RTD, I need to do inventory much more often. There are quite a few more windows for shrinkage in this than whole bean coffee.
Lastly, I need to start getting ready to level up my RTD game. I can't keep it stagnant for long. It needs to be constantly changing and I have to always bring new fresh offerings or people will lose interest. My next step will be in selling jars of cold brew. This has a nice profit margin on it, but will have another upfront investment. Up front investments means I won't have enough money to buy my next coffee.
I need to find my balance on how to make everything work. The numbers all look good, except for the number of new clients. I really need to find a way to expand my customer base, or drive my current customer base to secondary offerings such as whole bean or cold brew jars.
So what lessons have I learned?
I would say the main take away is that I need to take this serious and treat it like fully operational coffee shop, not just some hobby stand. That means inventory counting and ordering and tracking and monitoring loss, etc. This is my business and I need to treat it like a full business, because if I don't, no one else will either.