Friday, October 3, 2014

An Element of Business

I'll sometimes point out business start-ups and failures that occur in Germany.

I came across this coffee shop back in the spring of this year (2014).  It opened in December of 2013.  Small operation....110 square meters....just a plain coffee shop on a side street of the shopping district of Wiesbaden (Wagemann Strasse).

Nice exterior, and pretty decent interior.  There are twenty-odd coffee shops around the shopping there's a fair amount of competition.  Unlike most.....they offered free wi-fi.

I noticed a week ago....the "front" is up for rent.  The operation folded.  Likely occurred by late they made it eight months before giving up.

The failure?  I can only guess.  Rent (as listed on Scout24) is 1,200 Euro a month.  Figure in electrical, heat and needed to sell at least fifteen-hundred (1,500) cups of coffee a month to break even (not even getting to your employee cost).

This was a block off the main district, and one of those places that you wouldn't notice unless you did lots of advertising.  It was a great place for a discreet meeting or a quiet place away from urban traffic.  My guess is that ninety-nine percent of the people who frequent the district....never noticed the coffee shop, and the rent requirement alone.....became too big of a burden to continue.

You can figure the numbers....they needed to sell at least four-hundred cups of coffee a week to be a flat marginal success.  To cover salary, insurance, pension, needed to sell double that.  They just never were going to get that kind of business at the coffee shop and it's location.

A lot can be written over business location in Germany, and why it matters to the bottom line profit situation of a small operation.  Down the street and closer to the Market-place of Wiesbaden....there's a ice-cream and coffee shop at the corner of two avenues.  This guy probably has over two thousand customers a day in the summer (ice cream sells at top levels), and five-hundred in the winter.  In his case....location guaranteed him success.  Course, I'm guessing he pays a minimum of 3,000 Euro a month for the location.

The next business up for this old coffee shop location?  I'm not sure, but I doubt if it'll be another coffee shop.

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