Worth opening?

One large UK city has a remarkable coffee scene, and within that scene one coffee shop stands out for its decor, atmosphere and working buzz. It is popular and it’s easy to understand why. It has found just the right formula, in an industry of plenty of comings and goings all in search of a good formula.

There have been several weeks lately when trading has been allowed, with certain rules or for take-away only, but this coffee shop has opted to stay closed. We assume that businesses want to keep trading, that unless they are fitting around specific constraints in their owners’ personal lives (and more and more we are alert to this) they will be open unless they are shut down. This particular case feels a little odd.

Who are we to pry into another business’s finances? It does not feel right to demand that a private business open, or trade in a certain way, when the only people who properly can make those choices are the shareholders. Yet, what signal does a business send when it can open but chooses not to? By not opening, the business invites us into its finances by suggesting to us that it does not need the money; precisely that it does not need the cashflow. Alternatively a world in which all business open whenever they can, hides from us any one business’s situation.

I suppose that the calculation that governs any shop or cafe’s decision each day, will be whether that day’s gross profit will cover the staff plus heating and lighting. Rent is paid anyway. If you make £2 on a £2.50 cup of coffee, how many coffees do you need to sell to pay the staff and open the shop? I suspect that the answer is not very many.

Even if the answer is ‘too many’ and opening would lose more money than staying closed, we might want to open, and this is my interest here. I suspect that some firms overlook the longer-term and the social impacts of being closed.

What might these other impacts be? Of course there is the effect over time of simply being open, of serving a customer well and seeing that person return, of looking appealing and bright to passers by. The social impacts are more interesting. Being open shows to your regular customers that you are in it with them. Whatever their struggle during the lockdown, or perhaps none, you share it with them. You are working. You are a person to talk to. Even in normal times, someone’s first human interation of each day might be with their barista and in many cases that will be the only interaction. To close is to walk away from these interactions, at a time when they have become more important.

To open is to signal that your service and product is important to you, that you value it because of the happiness it gives to your customers and not simply because it makes money. You are proud of your coffee and you want people to experience it.

How much would all this be worth, if closing were to save money relative to opening? If opening would cost you £10 a day, £50 or £100? If you can sustain a daily loss then there will be some number that is still worth it.

Author: Simon Stevens

Simon Stevens is an independent researcher. He is a founder and Director of the travel company Alpine Exploratory based in Edinburgh in the UK. Simon studied philosophy and economics at Bristol University and economics at Oxford University.