Lean Coffee

How I built a coffee shop that broke even in five weeks. 

The COVID19 pandemic only accelerated the conditions that lead to the downfall of many small businesses. In 2020 Food and Wine reported that the number of coffee shops opening up declined for the first time in nearly a decade. 

Another report found that coffee shops will not return to pre-pandemic numbers until 2023. 

In October of 2021 I opened Zero Day Coffee in Leadville, CO. We fully recouped our startup cost on November 3rd of that year. Here are four principles that helped us accomplish that:

No Bullshit, Just Good Coffee

In a time when most were cutting costs to maintain their bottom line, Zero Day made the decision to double down on the quality of our product and invest heavily in the important stuff. 

I’m not talking about cups, lids, etc. The important stuff: coffee, matcha, chai. 

High-quality product always beats marketing…always. 

Guaranteed, your people have a first-rate bullshit detector. Businesses that weather difficult times tend to double down on quality.

Tons of Questions, Like a Million 

Most organizers don’t talk to their people enough. The people who give you money to make software, paint paintings, pour coffee, etc. 

We asked questions early and often, right at the point of sale. This 1. Made us buddies with the community. 2. Gave us insight into what people will actually buy. We literally just asked folks, “would you pay $5 for an empanada?” and based our business decisions accordingly. 

All too often I see folks in marketing, product, and leadership guessing about what their customers would find useful. You don’t have to guess. Go ask! 

Just-in-time ordering

It is possible for small business owners to leverage just-in-time supply management to keep their orders lean. Zero Day often negotiates with suppliers to reduce minimum order sizes, allowing us to order exactly what we will sell in a two-week increment. 

With the advent of smart data, even small companies can harness the benefit of predictive analytics. You don’t need to hire a data scientist to use info from your POS to predict order sizes within a solid margin of error. 

Everything from daily break-even, the amount of product you need on the shelf, and even average customer transactions are now easily accessible with most POS software. This data-driven decision making allowed us to take strategic losses early to collect data, and use that data to shape our business moving forward. 

Minimum Viable Everything

Minimum viable doesn't mean cheap. Minimum viable = The least amount of work…to make the minimum viable product…to make the minimum viable business. Then we take the winners (processes, products, ideas) scale those, and get rid of what isn't working. Zero Day isn’t attached to sunk costs and won’t over-invest in things that drag our business down. 

We rent-to-own our equipment, rent the space, and started our organization with only a few pounds of coffee, enough for a few weeks. This kept our upfront costs extremely low. We really only had to sink cash into permitting and upfront product.

Organizers all too often try to scale their ideas and lack customer-centricity. If, through experiments and process, I discovered that my customers really needed a snowboard shop…I’d be selling snowboards tomorrow. I don’t try to force brand, product, processes. The organization constantly responds to the needs we discover through experimentation. 

Through focusing on small experiments we 1. Kept our risks minimal 2. Never had to front-load costs and sit with a ton of product. 

These are just a few of the principles that helped drive our business forward!

If you have questions feel free to message me on LinkedIn!