Small Business Series: How to Run a Coffee Shop
Capitalising on coffee culture: meet James Dickson
There has scarcely been a more exciting time to get into the coffee-shop business.
Worth £5.8bn the UK market grew by 7.5% – outpacing the stagnant wider economy by a factor of seven – in 2012.
And the proliferation of growers, bean varieties and barista training courses has generated so much scope for new entrants to offer a fresh take on the coffee shop experience.
James Dickson’s London-based coffee chain Workshop Coffee Co certainly stands out from the competition. From two outlets, one in Marylebone and the other in Clerkenwell, East London, Workshop serves breakfast, lunch and dinner as well as bakery goods and wine.
But if the possibilities in this industry have never been more myriad, then the challenges have never been as daunting either. “You have to be very, very good at what you do” to stand a chance in current marketplace, says Dickson.
There are now 5,225 branded stores, with the chain market doubling in six years and growing by 1,000% in the last 15. Meanwhile, capricious weather and the growing appetites of the Chinese, Indian, Brazilian and Indonesian middle classes will likely see wholesale prices rise in the long term.
Then there’s the hard-to-please consumer; they’re a bit fussier than they used to be.
“You can’t just open a coffee shop and just say ‘oh, we sell coffee’ anymore,” says Dickson, who reels off a dizzying list of questions any aspiring barista-cum-entrepreneur must ask themselves, questions that will inspire true aficionados but terrify anyone who thought they could just sell any old coffee.
“What sort of coffee are you selling? Where has it been roasted? How as it been roasted? When has it been roasted? Is it fresh? How are you extracting it? What kind of espresso technology are you using? Are you using reverse osmosis to take the hard solubles out of the water?
“All this information is becoming increasingly important in coffee, and that's where the industry is going to go.”
While the – formerly – humble coffee shop has become more sophisticated, Workshop is ahead of the pack, Dickson believes. “We differ in lots of ways. We're not a typical coffee shop.
“We roast all the green on site, which makes us a fully established coffee company as opposed to a coffee shop.
“Workshop is about 'speciality coffee' and sourcing the best possible green – gradient-specialty coffee as opposed to just coffee – of a certain quality. We then take the product and roast it. Every coffee has a different roast profile.
“Roast profiles are designed to highlight the individual nuances in every coffee. We're trying to highlight the most bespoke flavours in every coffee, through the roasting process and the sourcing process.”
Two years into after launch the business still dominates Dickson’s life, although things have calmed down somewhat.
“You go through phases where there's slightly more time to be at home more. Then there are periods of time where you're just not there – you're out and about, running around meeting people, looking at new sites, you're worrying, analysing trade figures at times.
“So it really depends. In the early days it was pretty full on. Then it kind of settles as it becomes a day-to-day operation. There's a structure in place, systems in place and we have the right people in the right positions.”
Sense of churn
Few retailers, even restaurants, tinker with their product or monitor and evaluate their supplier so endlessly. The sense of churn is exhausting to contemplate.
Describing a typical week he says: “Monday I tend to be in the office with my financial controller and office manager and we look at what's going on in the business across two stores.
“We also look at what the wholesale division is doing” – yes, a wholesale division for just two stores – “and compare sales with like-for-like sales from last year. Then it will normally be meetings.”
Frequent meetings are unavoidable when the product is tinkered with endlessly – although they give Dickson, a former chartered surveyor, a pretext to sample his product. “One of the great things about meetings is doing it over coffee,” he says.
“Quite frequently I'll liaise with the director of operations and understand what's going on the coffee side, what's in season from the green side, where do we need to be to buy the best green [unroasted coffee seeds].”
Which brings us to another dimension to his exhausting itinerary: international travel. In the last six months Dickson has been to Ethiopia, Kenya and Rwanda. “We need to have a presence in those countries to understand how we can maintain our commitment to procuring the best green possible.”
Far from being barista all day, every day, Dickson is here, there and everywhere and always thinking about the bigger picture. Business development involves “looking at new sites, understanding why the brand should be in that area, understanding why landlords would want a Workshop in that area.”
Not every coffee shop owner will have designs on owning a chain or need to be quite so cutting edge to thrive. Much depends on location and the expectations of customers.
What Dickson’s story does show, however, is that you can’t open a coffee shop without thinking long and hard about your market, where you supply your coffee from and how you make it.