The Idea That 'Cafes Are Not Profitable' Is a Misconception | The Structure Where the 'Relationship Economy' Creates Value, Deciphered Through CAFES
The Idea That 'Cafes Are Not Profitable' Is a Misconception | The Structure Where the 'Relationship Economy' Creates Value, Deciphered Through CAFES
Cafes are not profitable.
This is a common saying.
Let me start with the conclusion.
This is half true and half a misconception.
Why are they said to be 'unprofitable'?
The conventional view is simple.
・Low average customer spend
・Low turnover rate
・High fixed costs
If you calculate based on these premises, it is certainly difficult to make a profit.
Up to this point, it is a fact.
The overlooked premise
The problem lies beyond this point.
In many cases, cafes are only analyzed as a 'food and beverage business.'
However, the reality is a bit more complex.
A cafe is a place where
people gather, conversations are born, and relationships are formed.
What is happening from an academic perspective
In economics and sociology, there are concepts that explain these phenomena.
・Network externalities
(The value of the whole increases as the number of users increases)
・Social capital
(Trust and connections function as resources)
In the space of a cafe, it is not the product itself, but
the relationship between people that becomes the source of value
that is observed as a structure.
Re-evaluating through CAFES
CAFES is a design for a store, and
it is also a design for the structure where relationships are born.
Customer is the client, and
'who to introduce to whom'is what it is.
Access is about attracting customers, and it is
about which context of people you bring to this space.
Frequency is about visit frequency, and it is
why people keep coming back to meet others.
Economics is about the revenue structure, and it is
how value and money are generated from relationships.
Story is about the concept, and it is the reason
why relationships naturally emerge in this space.
The moment when relationships turn into value
When you break down what is happening in a cafe, it looks like this.
・Regulars see each other
・Conversations are born
・They learn about each other's work and interests
As a result,
・Work consultations begin
・Small collaborations are born
・New projects get moving
What is important is that
many of these develop outside the shop.
Differences in structure
General business is established through the flow of
Product → Sales
On the other hand, in a cafe, the path of
Relationships → Trust → Value → Sales
overlaps.
This is where the difference lies.
Why does this structure work?
As the number of people increases, the combinations of relationships increase.
As a result,
・Referrals increase
・Touchpoints increase
・Opportunities increase
This is not linear,
but has the property of increasing through combinations.
Points prone to misunderstanding
Caution is needed here.
It is not about a cafe generating large profits on its own.
Rather,
it is a structure where a network of relationships starting from the cafe creates value
.
The cause of many failures
There is a commonality in cases that do not go well.
・Trying to compete solely on products
・Trying to improve only turnover rates or unit prices
・Relationships are not designed
In this state,
you are subject to the constraints of the restaurant industry as they are.
The essential question
This is what is important.
Is it designed so that relationships are born naturally?
Conclusion
A cafe is not merely a restaurant business.
It is a place with a structure where value is amplified starting from relationships.
Finally
The value of a cafe is not determined by the coffee itself.
It is determined by the combination of people there,
and how those relationships expand.