What a Losing Independent Coffee Shop Says About the Coffee Industry

An independent café owner invested close to 2 million yuan and now loses nearly 40,000 yuan a month. He launched an online poll asking whether to keep going, and more than 80 percent of respondents advised him to cut his losses. He decided to push on for another four months, adding food combos, extending business hours and reworking the space.

The costs break down into a 600,000 yuan transfer fee, three months of renovation and preparation, and 50,000 yuan monthly rent paid on a two-deposit-one-month basis, across a 120-square-meter site. The planned coffee-by-day, drinks-by-night model did not deliver the expected spending power. His situation reflects a coffee industry where new entrants keep arriving while others exit quietly.

The coffee industry constantly sees new players entering the game, while others make quiet exits. One café owner invested nearly 2 million yuan in the early stages and is now losing up to 40,000 yuan a month. He launched an online poll asking whether he should keep going. Faced with high transfer fees, rent and operating costs, over 80% of netizens advised him to cut his losses in time. The owner ultimately decided to push on for another four months, trying to save himself by adding food combos, extending business hours and creating an atmospheric space. This article takes a detailed look at his entrepreneurial predicament, netizens' opinions and the overall state of the coffee industry, offering reference for coffee lovers and entrepreneurs.

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In the new year, the coffee industry is still seeing the old go and the new come—some bow out and change careers, but there are always others mid-renovation... The independent café business keeps drawing people in, one after another.

"Coffee completely changed my life—turned me into a debtor." This line comes from a shop owner anxious about his business. Having invested a full 2 million yuan up front, he recently realized his café might have no hope of turning a profit, and the losses were becoming clearer by the day—nearly 40,000 yuan a month. So he launched a poll to ask everyone's opinion: "Is it still worth holding on?"

Perhaps because the investment sum was so large, the owner's story sparked plenty of curiosity among passersby—partly because they wanted to know where all that money went, and partly because they wondered what the point was in holding on when the losses were already so severe.

Facing netizens' questions, the owner candidly replied one by one: he had originally received investment from a shareholder friend, and his café underwent an expansion and renovation last October. It currently occupies 120 square meters, with a transfer fee of 600,000 yuan, three months of renovation and preparation costs, plus monthly rent of 50,000 yuan on a two-deposit-one-month basis—so all told, he had spent close to 2 million yuan.

In his view, the location was first-rate, and he had assumed people's spending power there would be high. At first he also planned to operate on a "coffee by day, drinks by night" model, but never expected to face such a predicament three months later. Quit, and all the early investment is simply gone; keep going, and he loses money every month until he cries—every extra day open means another day of losses. He truly didn't know what to do. "If I could do it over, I'd never start a business. Before starting, I had 3 million; now I have negative assets of 2 million."

On one side, leading brands are breaking the 10,000-store mark, crossover players keep joining in, and café density is rising; on the other side, coffee prices keep spiraling downward, even dropping below single digits. Since last summer, "closing," "transferring" and "losing money" have become several inescapable realities for countless food and beverage entrepreneurs. And now, the restaurant industry is in the depths of winter, people's spending power has clearly declined, and low-price coffee is "running rampant"—making it even harder to survive on ambiance alone.

So the outcome of the poll at the beginning—persist or give up—was obvious. Seeing such a huge investment and such losses, over 80% of netizens ultimately cast a vote for "cut losses in time," urging this "brave shop owner" to close down. Rather than pinning hopes on recouping his money by selling coffee and waiting for a miracle that might never come, it would be better to step away from this track for now—at least keep the green mountains, and there'll be firewood to burn.

Of course, a few netizens in the comments did support the owner keeping the shop open: "Of course you persist—after the New Year it'll be fine, all industries will recover, and then coffee will be a huge money-maker..." "Don't be afraid, keep going—you might just turn it around."

Other netizens believed this question shouldn't be left to netizens to decide. Whether to keep the shop open depends on whether the owner has carefully examined and assessed the business situation: Why is the shop losing money? Is it possible not to lose? What must be done to stop losing? If there's hope of turning losses into profits, then persist a while longer, and re-analyze the shop's location, surrounding demographics, product types and pricing, and other details, and draft a reasonable response plan.

Considering the huge upfront investment, this café had also become the owner's entire life's effort, and he truly couldn't bear to give it all up. So in the end he decided to fight on for four more months—if it didn't work, he'd close the doors outright.

When it came to the shop's current operations and his self-rescue plan, he said he was currently working on expanding the product line, rolling out more food-and-coffee combos, and also opening for breakfast. He hoped that by extending business hours, he could raise the average spend per customer and table turnover. Later on, he might also build out the indoor environment, creating an atmospheric space by setting up scenes and buying trendy collectibles.

In the end, it's still that same saying: investment carries risk, and entrepreneurship requires caution.

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The above content is compiled by CoffeeHunters, a coffee news website.