After making drastic changes in the previous week I decided to slow things down this week and play things a little more conservatively and not push my luck.
Since I was disappointed with weekend sales I decided to slash two hours off of both Saturday (opens at 10 a.m. instead of 8 a.m.) and Sunday (closes at 6 p.m. instead of 8 p.m.) store hours. I did not hire or fire any servers though, instead I felt that this would just help my server to hour ratio (since four hours of the week were cut) and hopefully in turn help raise customer satisfaction.
I also decided to lower costs in that I decreased the amount of advertising from 10 spots per day on the radio down to 5, feeling that I don't need such an aggressive campaign now that our name is out there.
Yet again this week I did not order enough coffee, falling 5 lbs short of the 75 lbs that were used.
I am very happy with the results of the week since we sold more coffee this week despite having less hours and spending less money in advertising. Also, the customer satisfaction rating rose a few points. I cannot comment on the comparative results since I was the first one to complete session 5, since today is only Monday but I feel that I will remain among the top few in every category unless radical changes occur.
Monday, September 28, 2009
Thursday, September 24, 2009
Week Four
This week was one of extreme changes in response to my slippage from the top of the customer satisfaction and total revenue rankings. I still sold lots and lots of coffee last week but I am not content to remain in third, so I decided drastic changes were necessary.
First off, I changed the hours so that Chandler's is open as often as possible on weekdays (from 7 a.m. to 11 p.m.) to allow for maximum sales. On the weekends I extended Saturday hours from 8 a.m. to 10 p.m. (the old weekday hours), and on Sundays from 8 to 8. This meant that Chandler's is open 106 hours per week. My goal was to have a better than 2:1 server:hour ratio, assuming that each server worked 10 hours. To meet this goal I added 10 servers, bringing me to 22 overall to meet and slightly exceed this goal.
Another important aspect in improving customer satisfaction I thought would be worker satisfaction to then make the customers happy. So I decided to raise manager wages from $650 to $700 a week ($100 better than the average). Server wages were raised from $9.50 to $9.75 an hour ($1 better than the average). I felt that this was more than fair compensation for a good attitude and work ethic.
Also, I decided to keep up the advertisement and actually exceed what I spent the previous week, going from 5 spots a day on the radio to 10. I kept the $.50 off coupon in the paper, despite the fact that I lowered the cost of a cup of medium organic coffee from $3.50 to $3.25. So my expenses went up but I still decided to lower the price because I am expecting so much volume of sales this week.
In the end I was right. This all did lead to an amazing week of sales that put me back on top (for the time being) in each of the three comparative categories. Last week 55 pounds of coffee were used, so this week I ordered 65 lbs and ended up being 10 pounds short of what was needed. That's not a bad thing though as the volume of sales even exceeded expectations.
First off, I changed the hours so that Chandler's is open as often as possible on weekdays (from 7 a.m. to 11 p.m.) to allow for maximum sales. On the weekends I extended Saturday hours from 8 a.m. to 10 p.m. (the old weekday hours), and on Sundays from 8 to 8. This meant that Chandler's is open 106 hours per week. My goal was to have a better than 2:1 server:hour ratio, assuming that each server worked 10 hours. To meet this goal I added 10 servers, bringing me to 22 overall to meet and slightly exceed this goal.
Another important aspect in improving customer satisfaction I thought would be worker satisfaction to then make the customers happy. So I decided to raise manager wages from $650 to $700 a week ($100 better than the average). Server wages were raised from $9.50 to $9.75 an hour ($1 better than the average). I felt that this was more than fair compensation for a good attitude and work ethic.
Also, I decided to keep up the advertisement and actually exceed what I spent the previous week, going from 5 spots a day on the radio to 10. I kept the $.50 off coupon in the paper, despite the fact that I lowered the cost of a cup of medium organic coffee from $3.50 to $3.25. So my expenses went up but I still decided to lower the price because I am expecting so much volume of sales this week.
In the end I was right. This all did lead to an amazing week of sales that put me back on top (for the time being) in each of the three comparative categories. Last week 55 pounds of coffee were used, so this week I ordered 65 lbs and ended up being 10 pounds short of what was needed. That's not a bad thing though as the volume of sales even exceeded expectations.
Monday, September 21, 2009
Week Three
On this week I decided to make rather large changes, which in retrospect might not have been the best idea since I had such a good thing going. These changes included extending hours on weekend and hiring more servers not just for these additional hours, but also to make my server per hour ratio higher in hopes of increasing customer satisfaction ratings. Along with that in anticipation of a huge week of sales I ordered 60 lbs of our premium organic coffee and kept the $.50 coupons in the paper.
All of this did lead to a huge week in total sales, but due to the higher costs revenue was somewhat stagnant. The percentage of potential achieved remained around 60 to 65% depending on the day of the week, that being actual sales divided by capacity. Everything rose, however comparatively I slipped out of the number one spot in each of the three categories. I was really disappointed that customer satisfaction did not go up higher, since my high-cost moves were to gain more satisfaction as opposed to simply gaining revenue.
All of this did lead to a huge week in total sales, but due to the higher costs revenue was somewhat stagnant. The percentage of potential achieved remained around 60 to 65% depending on the day of the week, that being actual sales divided by capacity. Everything rose, however comparatively I slipped out of the number one spot in each of the three categories. I was really disappointed that customer satisfaction did not go up higher, since my high-cost moves were to gain more satisfaction as opposed to simply gaining revenue.
Sunday, September 13, 2009
Week Two
In week two I wanted to continue the success I had in the first week, but make just a few slight alterations that I thought would enhance production. The only changes in decisions from week one was that I decided to cut back on advertising and add weekend hours.
The cutback on advertising was slight, keeping the newspaper ad but dropping the number of radio spots from 5/day to 2/day. The more dramatic change was the addition of weekend store openings. I decided to have the store open from 10 am to 8 pm because the weekend sales are not expected to be as great as weekday sales. Also, because of this move I added two more servers, still for the $9.50/hour wage.
I figured that this would definitely increase the volume of sales but I was unsure if this would actually lead to better revenue. I found that it did. It was worth having the extra manager shift and hiring two more employees to be open on the weekends.
Heading into week three I am very proud to have the highest customer satisfaction, and have the most sales in the class. Because of this success I do not plan to change a whole lot in the immediate future, except maybe cutting back on some costs like advertising since I really like the direction Chandler's is heading in.
The cutback on advertising was slight, keeping the newspaper ad but dropping the number of radio spots from 5/day to 2/day. The more dramatic change was the addition of weekend store openings. I decided to have the store open from 10 am to 8 pm because the weekend sales are not expected to be as great as weekday sales. Also, because of this move I added two more servers, still for the $9.50/hour wage.
I figured that this would definitely increase the volume of sales but I was unsure if this would actually lead to better revenue. I found that it did. It was worth having the extra manager shift and hiring two more employees to be open on the weekends.
Heading into week three I am very proud to have the highest customer satisfaction, and have the most sales in the class. Because of this success I do not plan to change a whole lot in the immediate future, except maybe cutting back on some costs like advertising since I really like the direction Chandler's is heading in.
Week One
Following the success of the first week, I decided to go with the same decisions as the practice week, with the exception of adding more coffee. The results were nearly the same but with slightly better revenue since an adequate amount of coffee was ordered this time. This means that we did not have to run to the store and pay extra for the coffee that we were short. So, this was an expected result that came as no surprise since I used the almost the same procedure for success just a week earlier.
Practice Week
For my startup decisions in the practice week I decided to get new furniture and a new espresso-maker. These were expensive decisions but investments that I believed would pay off in the future to enhance both ambiance and efficiency. I also decided to use advertising to get the word out about Chandler's and give a $.50 discount, as well as get 5 spots on the radio for the week. As for operations I decided on a 8 am to 10 pm daily schedule to include crowds throughout the day (from morning to studying to after-dinner). Thus, I concluded I needed 7 servers ans would pay them the above average wage of $9.50/hour to help improve worker satisfaction and hopefully efficiency as well. This is also why I am paying my managers $650/week, above the $600 average. I also decided to buy 10 pounds of organic coffee and 20,000 cups. I didn't want to buy too much coffee since it is perishable so I went with a very conservative estimate, and cups are not perishable so I decided to stock up on those.
In the end my customer satisfaction and units sold were very high. I was pleased with all the decisions I made except for the amount of coffee I initially purchased. I was about 25 pounds short of what I really needed. I feel like the advertising brought people in and the high pay of the workers led to the high customer satisfaction relative to the other people in the class. I was surprised by just how well the shop did, and how well it was in line with my view. I plan on keeping everything the same with my decisions on the real week one, except for ordering more coffee.
In the end my customer satisfaction and units sold were very high. I was pleased with all the decisions I made except for the amount of coffee I initially purchased. I was about 25 pounds short of what I really needed. I feel like the advertising brought people in and the high pay of the workers led to the high customer satisfaction relative to the other people in the class. I was surprised by just how well the shop did, and how well it was in line with my view. I plan on keeping everything the same with my decisions on the real week one, except for ordering more coffee.
Hiring Decisions
Chandler's is open 14 hours on weekdays (8 am to 10 pm) in attempt to appeal to both the morning rush and those going to grab a cup of coffee after a movie or dinner, as well as those looking to relax or study throughout the day. This means that 70 hours during the course of a five day week must be filled. Biz Cafe stated that each employee works about 10 hours/week, this means that 7 servers need to be hired as well as the two managers.
I wanted the servers at Chandler's to be experienced in the food/service industry and to have an upbeat attitude. The servers need to do their job well to keep the brand and mission of the coffee shop--good coffee with good service. To ensure server efficiency I made wages $9.50/hour to servers, well above the $8.75 average at other coffee shops. Also, the managers overseeing the servers need to have experience as well, and good people skills. I trump the average of $600/week for manager pay with $650/week. At Chandler's we're willing to pay well to ensure the job gets done right.
I wanted the servers at Chandler's to be experienced in the food/service industry and to have an upbeat attitude. The servers need to do their job well to keep the brand and mission of the coffee shop--good coffee with good service. To ensure server efficiency I made wages $9.50/hour to servers, well above the $8.75 average at other coffee shops. Also, the managers overseeing the servers need to have experience as well, and good people skills. I trump the average of $600/week for manager pay with $650/week. At Chandler's we're willing to pay well to ensure the job gets done right.
Advertising
I decided to run an advertising spot in the local paper, advertising 50 cents off a cup of coffee. This both rases awareness of Chandler's existance and gives people an incentive to come by the shop--a discount. In the advertisement the logo of the cafe and the discount are labelled, as well as a limit to the coupon. This advertisement cost $1,400 to run for the week, as did 5 spots on the radio per day for the week, so advertising in total was $2,800 for the week. This cost, however, is a necessary one since we are such a new company needing to get awareness of our grand opening out to the public so we can have a profitable business from day one.
Logo
My logo pays testament to the name of the coffee shop (Chandler's) and the local university--whose students are the main customer base--by the color scheme being comprised of purple and gold. Just like the name of the coffee shop, I decided to keep the logo simple and to the point. The goal is for the Chandler's name to be simple and easy to remember, and let the customer base know that we support the local university!Name Selection
I wanted my coffee shop to have a local feel and name to it. When I go around Baton Rouge to some of the local favorites they include places such as Louie's, Raoul's and Sammy's. All of these are simple names that are easy to remember, relying off of good food and good location to do business. My name is Josh which would sound a little odd as a coffee shop name, so I decided to go with Chandler's as the name of the shop because as my last name it sounds much more appropriate than my first name would.
The feedback I got on this name was positive, everyone believed it did sound like a local favorite of a coffee house which is what we strive to be. We intend on serving all of those in the campus community who are on-the-go people--people who need their coffee. We also intend upon providing the highest of quality coffee, even organic, still at reasonable prices to attract the multiple markets that exist within the area. A name like Chandler's is simple and easy to remember, allowing our coffee and service do the talking for us.
The feedback I got on this name was positive, everyone believed it did sound like a local favorite of a coffee house which is what we strive to be. We intend on serving all of those in the campus community who are on-the-go people--people who need their coffee. We also intend upon providing the highest of quality coffee, even organic, still at reasonable prices to attract the multiple markets that exist within the area. A name like Chandler's is simple and easy to remember, allowing our coffee and service do the talking for us.
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