Coffee Shop Learns to Diversify their Offerings to Earn Higher Income

Small businesses sometimes struggle to make ends meet. They suffer from an inability to capitalize on their niche offerings in a way that leads to higher profit margins and sustainable operations. Much like their larger competitors, they should consider diversification of offerings or specialization into a core demographic.

Lets look at an example in the historic city Dubuque Iowa. A small coffee shop struggles to survive selling coffee and must make a choice to draw in additional customers. They can add more coffee and food items to penetrate their core demographic or they can expand their offerings to draw in a slightly different crowd.

The owner decides that he doesn't want to be in the food business because of over concentration and regulation but decides to instead offer beer and wine. During the morning and day he has plenty of coffee drinkers but as the evening rolls on they die off and the beer/wine drinkers come in. At 9pm the coffee shop turns into a trendy lounge bar.

This is a place for the Iowa hipster. The lap top coffee drinker dots the place during the day and the socializing wine drinker takes over the evening. Their sales increased and their fledgling business draws in a different crowd. They have two routes to  by finding a connection between customers that like coffee and beer/wine drinkers that frequent lounges.