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This is going to depend a lot on location. Coffee chains are able to support this sort of behavior because the many customers that drop $4 in one minute on thei

This is going to depend a lot on location. Coffee chains are able to support this sort of behavior because the many customers that drop $4 in one minute on their morning commute, are subsidizing the few customers that pay $4 for six hours of seating and wifi. Assuming you open your cafe on a viable commuter path, you can take advantage of this subsidy and your economics can work out. You can improve your economics even further with the tactics a lot of cafes already to nudge behavior at the margin, some of which you've already noticed (e.g., less-than-stellar wifi, thermostat at slightly cold temperature, limited actual seating space, only 1-2 customer-accessible wall sockets, etc.). On the question of charging-by-the-minute: the marginal profit you can earn on coffee is higher than marginal profit you can earn on real estate. That's why Starbucks (which sells coffee and gives away real estate) is a better business than WeWork (which sells real estate and gives away coffee). Therefore instead of charging by the minute, you might consider raising your coffee prices and/or controlling the average amount of real estate you're giving away per unit of coffee sold.

mongol 5y ago
Buy more coffee - get more minutes?
s3233323 5y ago
clairity 5y ago
most folks here are overthinking/armchairing the problem. coffee shop owners have their economics figured out or they wouldn't stay in business. cafes (like the dozens near me) are perfectly capable of sustaining their business with a blend of folks grabbing coffee to go and others sitting for hours. you don't need to institute limits, subscriptions, nudges, or any other customer-hostile action. just price well, and provide value beyond your costs. one pro-customer option is providing food (beyond pastries) for the lingerers, which adds some marginal cost but adds significant marginal revenue.
- bko 5y ago
  I think you're armchairing the problem by stating coffee shops exist therefore there is no problem. Many coffee shops do impose user hostile actions like loud music, small uncomfortable seating, etc. The others are big chains that have efficiencies (e.g. lower prices, more efficient workforce, better analytics) that are not available to smaller shops. In most competitive markets you cannot compete (i.e. not lose money) when you have costs that a competitor does not have the bear. For instance, if 20% of your customers are money losers, a competitor can cut those customers out and make a higher return. Everything gets priced in. So that means that person can charge X% less for coffee, or pay X% more for real estate, or have better coffee or better service etc. Ignoring the trade off doesn't make it go away
  - clairity 5y ago
    as an avid cafe-goer, i've looked into the economics of cafes and talk regularly with the coffee shop owners around me. competition is almost never a concern for most small/independent cafes. starbucks doesn't matter competitively because their prices aren't appreciably lower and they cater to a different segment than independent cafe owners. the biggest problem is almost always reaching their target segment--like the people already sitting there with laptops--to drive enough transaction volume to be sustainable, which is squarely a marketing problem. rent and labor costs (operations) are usually the next biggest problems. competition ain't the issue.
    - bko 5y ago
      "Marketing" usually means getting people to know about your product or service and getting them through the door. If the owner has people sitting there and wants them to purchase more, that's more increasing average revenue per user which is limited. How much coffee can someone drink? If someone drinks a plain coffee, getting them to upgrade to a higher margin sugary drink is hard. You can push food and snacks, but that's also limited since you're not a restaurant and the person can only eat so many pastries or dry goods. For every one customer sitting down there are likely 10 customers that come in during that time. Why focus on the person sitting down? Getting more people in the door is probably an easier way to get more revenue. Especially considering the amount of people that can sit around all day versus the amount of people that can walk by and pick up a cup of coffee to go. In that regard, competition is definitely a huge factor. If a coffee shop has a 15 minute wait while another one is 5 minutes, I would likely pick the faster one. You can prefer one brand to another, but service is a huge factor.
RcouF1uZ4gsC 5y ago
> only 1-2 customer-accessible wall sockets, Before I got an M1 laptop, this was a real issue for me. Now, it really doesn't matter. My battery will easily last the entire time I am in the cafe without really thinking about it.
- kazinator 4y ago
  M1: it's not just WWII tank, but an invasion machine against the cafe and its hapless operators and patrons. Mouhaha!
loceng 5y ago
A busy cafe with seated people also psychologically has an impact on people just stopping in for takeout.
- MathCodeLove 5y ago
  Precisely this. Empty shops have an unconscious (sometimes conscious) effect on people making them less likely to drop in themselves. 1-3 people taking up wifi and electricity could easily attract enough customers to pay for their visit with each stay. This does only really apply in shops in areas with decent foot traffic though.

mongol 5y ago

Buy more coffee - get more minutes?

s3233323 5y ago

clairity 5y ago

most folks here are overthinking/armchairing the problem. coffee shop owners have their economics figured out or they wouldn't stay in business. cafes (like the dozens near me) are perfectly capable of sustaining their business with a blend of folks grabbing coffee to go and others sitting for hours. you don't need to institute limits, subscriptions, nudges, or any other customer-hostile action. just price well, and provide value beyond your costs. one pro-customer option is providing food (beyond pastries) for the lingerers, which adds some marginal cost but adds significant marginal revenue.

bko 5y ago
I think you're armchairing the problem by stating coffee shops exist therefore there is no problem. Many coffee shops do impose user hostile actions like loud music, small uncomfortable seating, etc. The others are big chains that have efficiencies (e.g. lower prices, more efficient workforce, better analytics) that are not available to smaller shops. In most competitive markets you cannot compete (i.e. not lose money) when you have costs that a competitor does not have the bear. For instance, if 20% of your customers are money losers, a competitor can cut those customers out and make a higher return. Everything gets priced in. So that means that person can charge X% less for coffee, or pay X% more for real estate, or have better coffee or better service etc. Ignoring the trade off doesn't make it go away
- clairity 5y ago
  as an avid cafe-goer, i've looked into the economics of cafes and talk regularly with the coffee shop owners around me. competition is almost never a concern for most small/independent cafes. starbucks doesn't matter competitively because their prices aren't appreciably lower and they cater to a different segment than independent cafe owners. the biggest problem is almost always reaching their target segment--like the people already sitting there with laptops--to drive enough transaction volume to be sustainable, which is squarely a marketing problem. rent and labor costs (operations) are usually the next biggest problems. competition ain't the issue.
  - bko 5y ago
    "Marketing" usually means getting people to know about your product or service and getting them through the door. If the owner has people sitting there and wants them to purchase more, that's more increasing average revenue per user which is limited. How much coffee can someone drink? If someone drinks a plain coffee, getting them to upgrade to a higher margin sugary drink is hard. You can push food and snacks, but that's also limited since you're not a restaurant and the person can only eat so many pastries or dry goods. For every one customer sitting down there are likely 10 customers that come in during that time. Why focus on the person sitting down? Getting more people in the door is probably an easier way to get more revenue. Especially considering the amount of people that can sit around all day versus the amount of people that can walk by and pick up a cup of coffee to go. In that regard, competition is definitely a huge factor. If a coffee shop has a 15 minute wait while another one is 5 minutes, I would likely pick the faster one. You can prefer one brand to another, but service is a huge factor.

RcouF1uZ4gsC 5y ago

> only 1-2 customer-accessible wall sockets, Before I got an M1 laptop, this was a real issue for me. Now, it really doesn't matter. My battery will easily last the entire time I am in the cafe without really thinking about it.

kazinator 4y ago
M1: it's not just WWII tank, but an invasion machine against the cafe and its hapless operators and patrons. Mouhaha!

loceng 5y ago

A busy cafe with seated people also psychologically has an impact on people just stopping in for takeout.

MathCodeLove 5y ago
Precisely this. Empty shops have an unconscious (sometimes conscious) effect on people making them less likely to drop in themselves. 1-3 people taking up wifi and electricity could easily attract enough customers to pay for their visit with each stay. This does only really apply in shops in areas with decent foot traffic though.