Please sign in to post in this forum.

ForumsFinancing Tips

Up to All Forums

This Question is Possibly Answered

1 "correct" answer available (5 pts) 3 "helpful" answers available (4 pts)
Post a new topic
8 Replies Last post: Oct 26, 2007 10:24 PM by WEBillions

Struggling Starbucks

Jul 2, 2008 12:11 PM

Click to view caffeinated's profile Mogul caffeinated 176 posts since
Apr 29, 2008

Read in the paper that Starbucks is closing 600 shops, which is like 12,000 jobs. Although its terrible that those people will be unemployed, but if they close the 2 shops that flank my establishment, I'll be very happy! Not likely, but competition is competition.

Has anyone had to lay off an employee? How did you handle it? I can only assume that if the economy doesn't bouce back, we're going to hear more stories like this.
Tags: Report as inappropriate
Click to view puzzleman's profile Mogul puzzleman 293 posts since
Oct 11, 2007
1. Re: Struggling Starbucks Jul 2, 2008 12:29 PM
in response to: caffeinated
The economy will bounce back. That always happens. What we are going through is a correction. Like Ronald Reagan said when the stock market was going down,"The market goes up. The market goes down. That is what the market does."

The real question is how will you be positioned when it does come back? What happens is that comapnies get lean and then stay lean, so profits increase. That is good for the economy.

Remember, when the going gets tough, the tough get going.

Jim
Report as inappropriate
Click to view Archangel's profile Mogul Archangel 40 posts since
Jun 26, 2008
2. Re: Struggling Starbucks Jul 2, 2008 12:42 PM
in response to: caffeinated
There was a guy I heard about who owned a hot dog stand at Venice Beach. His business was thriving. He advertised in a local paper, had four employees and sold hot dogs, pretzels and cold drinks at a stead pace for ten to twelve hours a day, depending on the season. This guy was doing really well. Then, one day his nephew, a financial analyst of some kind, was visiting and told him there was an economic slow down starting and that he should cut back his hours, lay off at least one employee and cut back on the advertising to save money as he was going to make a lot less sales. "People don't want to spend money on hot dogs when the economy is bad." The guy followed his nephew's advice and laid off one of his employees, cut his ad budget in half, and closed promptly at 6PM every day.

About a month later his nephew called to see how he was doing. The guy thanked him and explained to the nephew that he had been right. "I'm glad I did what you told me. Sales are way down since we last talked. I don't know what I would do now if I had to pay that extra person and all those ads, not to mention operating costs for staying open so late. I guess I dodged the bullet."

Nick
Report as inappropriate
Click to view coffee times's profile Professional coffee times 11 posts since
Dec 11, 2007
3. Re: Struggling Starbucks Jul 29, 2008 1:43 PM
in response to: caffeinated
hey its me coffeetimes no i have a partner and we are just hanging in there. there are a few places around us that have closed most of them are high end you know ?15 for lunch $25 for dinner one person we are struggling but we were first man standing out here have been here 3 years this fall and hope to be last man standing or at least one of them they are building a bbq rest. in our parking lot next to us a pretty famous one in our area hoping that will bring more traffic into our little end of town. i have been able to get myself in the local newspaper a few times in the past week for free advertising thats helped some but it is scarry out there. does cutting your hours back some really work?
Report as inappropriate
Click to view Interpreter's profile Mogul Interpreter 27 posts since
May 29, 2008
4. Re: Struggling Starbucks Jul 29, 2008 4:29 PM
in response to: caffeinated
Caffeinated,

How did everything turn out? Did they close either of those two shops near you? Will you have to terminate any positions at your shop due to the economy?
Report as inappropriate
Click to view BRMcHenry's profile Mogul BRMcHenry 39 posts since
Aug 20, 2008
5. Re: Struggling Starbucks Aug 21, 2008 1:48 AM
in response to: Interpreter
Being in the ice cream business we do 2x as much volume in the summer as we do the winter. Its getting towards the end of summer which was slower then I liked. I'm having to lay off several people right now. It is perhaps easier for me because I set it up when I hired them. I told them up front we are a seasonal business and that when the summer is over we'll likely scale back. The good thing is I can keep the best one's and have a good winter crew.

How to do it; be honest, be clear, do it in person
Report as inappropriate
Click to view caffeinated's profile Mogul caffeinated 176 posts since
Apr 29, 2008
6. Re: Struggling Starbucks Aug 21, 2008 9:07 AM
in response to: Interpreter

Interpreter,

Sorry for the late response. Unfortunately Starbucks didn't close those two storefronts. I'm not going to lie, I did get my hopes up. Eh, what are you gonna do ya know...business as usual. Still working at full force though. I have good people and I would do anything to keep them on.

Thanks for taking the time to respond to my post. How is your interpreting business going?

-caffeinated
Report as inappropriate
Click to view caffeinated's profile Mogul caffeinated 176 posts since
Apr 29, 2008
7. Re: Struggling Starbucks Aug 21, 2008 9:14 AM
in response to: BRMcHenry

Hi BRMcHenry,

Thanks for reading my post and welcome to the community! I can totally relate to the seasonality of the business. Iced coffees are a huge hit during the summer. Luckily I dont lose any sales come winter time. Customers simply convert to hot coffee.


Have you had the "talk" yet? Its a great thing that you let them know upfront that the job is seasonal. Do you usually hire students? That could be an easy solution than to laying someone off. Students have to go back to school so there wouldn't be a need to have the talk. Awkward moment avoided!

Are you a franchisee? I'd love to get your perspective on things if you are.

-caffeinated

Report as inappropriate
Click to view BRMcHenry's profile Mogul BRMcHenry 39 posts since
Aug 20, 2008
8. Re: Struggling Starbucks Aug 21, 2008 8:54 PM
in response to: caffeinated
Yes, I'm a Baskin Robbins franchisee, and no I haven't had the "talk" with the two students I have left to lay off, but they know. I've already laid off 3 in the past two weeks all of which were chosen to go because they would be the least effective in the winter months. Two more will go right after the next holiday, but in their case I'll ask if they'd like to remain on call.
Report as inappropriate

More Like This

Legend

  • Open Question
  • Answered Question
  • New content since your last visit
  • Updated content since your last visit
  • Content you have read