Tuesday, August 11, 2015

Coffee Jam: Small Business Report

The coffee shop now known as "Coffee Jam", 6427 Centurion Dr. (517-327-1111), was originally scheduled to open September 15, 2001 with the name of "Ground Zero".  The events of September 11, 2001 made starting any business a huge gamble.  It also made the name "Ground Zero" an absolute non-starter.  The menus, napkins and marque were scrapped.  They opted for Coffee Jam as their new name.

They have been in continuous operation since then.  Everybody thinks they know how to run a coffee shop.  There are few barriers to entry.  It is not a particularly expensive business to enter; you only need $25k to get started. Competition is cut-throat.  Operating income is razor-thin (<2.5%).  Most restaurants do not survive long enough to celebrate their first anniversary. Coffee shops probably have even less longevity than the typical restaurant.

Any coffee shop that survives a rocky start and goes on to have a 14 year run is an anomaly and is worth studying.

I don't understand

Frankly, I selected Coffee Jam because I do not understand them.  Clearly, I am not one of their core customers.

I took Belladonna there as a special treat.  I felt outnumbered.  Bella counted customers, there were twenty-two women and two men.  The other guy left shortly after Bella's count.

One key indicator of a successful business is how much business they can pull in during non-peak times.  Costs are related to square-footage.  Square-footage limits revenue during peak times.  The opportunity to shine is during non-peak times.  These ladies were in Coffee Jam at 2:30 PM, a non-peak time.

I had to get humble and ask the experts why Coffee Jam is so successful.  This is what they told me.


$8.00 will buy a double roast beef, swiss cheese and marbled rye bread sandwich at Coffee Jam.  It probably has 350 Calories.  At Taco Bell, you can buy 3 Cheesy Potato Burritos for $7.17 and those three burritos will have 1470 Calories.

My experts explained it this way:  We don't need 1470 calories in one meal.  That is almost a day's calorie budget.  We are not rich, but our needs are few.  We are at a time in our lives where we can pay a little more for the higher quality.

Not only that, the portion sizes make it easy to save room for dessert.  We like the ease.  We do not have to be ever-vigilant to maintain our portion control.


Ownership is highly motivational.  I think Coffee Jam's success is because the owners have been able to nurture, to cultivate a strong sense of "ownership" in the majority of their customers.

Coffee Jam's customers are mature enough to understand that the prices are higher because Coffee Jam offers a certain exclusivity.  That exclusivity not only commands a higher rent.  That higher rent reinforces the exclusivity.  That rent is embedded within the prices on the menu.

Exclusivity is an expression of "freedom of association".  Higher prices tend to discourage the harshly assertive, the bullies, the loud, the brash and the kinetic.  While all customers are welcome at Coffee Jam, some are more welcome than others.  The most welcome are the gracious, the gentle, the kind, the soft-spoken, the intelligent, the good listeners, the polite and those who move with fore-thought and purpose.

Coffee Jam is a space that celebrates the excellence of "Nice".

The patrons have ownership and defend it.

These clocks were donated by patrons to decorate the walls.

A patron made this quilt and gave it to the owner for decoration.  There was also much framed wall art donated by customers but the reflections off the glass defeated my camera.
Unlike many places that sell food, there is only ONE television in the place.  It is an itty-bitty 24" flat screen tucked in the corner with the volume turned down low.

This is a womb-like cozy area for those who might want to linger and, perhaps, read a book in peace.
I cannot claim to understand the appeal of Coffee Jam.  It looks like the owners have a very clear image of their clientele....and that picture does not look like me.  They never got sucked into the trap of trying to be all things to all people.  They never got caught with one foot on the dock and the other in the canoe.

The furniture is sized and spaced to make their customers feel welcomed and at home.  Their food is flavorful but the portions are...well...dainty.  The pace is civil.  The servers quickly learn your name and remember your preferences.

This may come close to how Coffee Jam customers feel about their coffee shop....except, of course, they are far more civilized and refined.

Index of other Small Business Reports

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