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Published: Mar 08, 2022 7 min read
Dollar Scholar Banner With Coffee Cups
Money; Shutterstock

This is an excerpt from Dollar Scholar, the Money newsletter where news editor Julia Glum teaches you the modern money lessons you NEED to know. Don't miss the next issue! Sign up at money.com/subscribe and join our community of 160,000+ Scholars.

Here in New York, we're in the winter doldrums, and the 100-year-old radiators in my apartment are proving wildly inadequate at keeping me warm. Rather than risk catching frostbite in my own home, I’ve been taking my laptop to a nearby cafe. It has wifi, pastries and — most importantly — reliable heat.

I don’t even like coffee that much! I’m just trying to avoid freezing my butt off.

The only problem is that when I spend an afternoon working from the cafe, I feel like a total mooch. I get paranoid that I’m not buying enough, that I’m taking up too much space, that the baristas are secretly judging me for bankrupting their small business with my lizard-like habits.

To make matters worse, there’s not a lot of information online about “coffice” etiquette. Perhaps it’s not a big deal. Maybe nobody else cares about coming off as a freeloading jerk. But I certainly do, and I've been worrying about how much to budget for my increasingly frequent cafe sessions.

How much money should I spend when sitting in a coffee shop?

I reached out to Claire Bowen, a self-described “coffeepreneur” and one of the authors of The Daily Grind: How to Open and Run a Coffee Shop That Makes Money, to get some answers. Bowen started by explaining to me why cafes provide decidedly non-coffee features in the first place.

“We tell our clients that their main business is not selling coffee; it is providing hospitality. The coffee shop business model has been based around selling a comfortable space for a period of time for the price of a cup of coffee for hundreds of years,” she adds. “Typically the more delightful the environment and food, the more frequently people will visit and the more they will spend.”

It all goes back to the idea of a cafe being a third place, as sociologist Ray Oldenburg termed it in 1989. A third place is a home away from home — not your house, not your work, but a spot like a library or a church.

Bowen explains that creating a third place isn’t cheap. The biggest costs for a cafe are “staff wages, the cost of the ingredients and then the rent and power, in that order,” she says. The simple process of opening the shop for the day can cost $300.

“People don't necessarily think about that when they expect free internet 24/7 or are buying a cup of coffee and camping out for four, five, six hours,” says Melissa Villanueva, the founder and CEO of Brewpoint Coffee in Illinois.

Villanueva says to pause and really consider what goes into that (heated) space I enjoy so much. Cafes often diversify their offerings as a financial strategy. For example, she has a 4,000-square-foot location where she not only lets people sit and work but also roasts coffee beans, holds events, allows private rentals and more.

The revenues those opportunities generate allow the shop to keep the lights on. But a warm spot for me to sit in? That’s not the core purpose — especially if I’m not meaningfully contributing to the bottom line.

“Everything else we're giving you is an amenity we don’t have to give. It’s part of our mission and what we want to provide to the community, but who’s paying for that?” Villanueva adds. “At the end of the day, a $5 latte isn’t covering our rent and furniture and upkeep.”

This is true in normal times but especially so during the pandemic, which caused 38% of small businesses to cut their budgets in order to survive, according to one poll. The supply chain situation isn’t helping, either: Coffee cups and straws are scarce, and the price of Arabica coffee recently hit a 10-year high.

With all of this in mind, Villanueva says I should plan, as a bare minimum, to buy $5 of product an hour.

“Think through: If you’re spending three hours, spend $15: a drink or two and a pastry,” she says.

Along the same lines, Bowen recommends purchasing “something for each part of the day” I’m there, including breakfast, lunch and afternoon.

There are other ways to be a good coffice worker, too. Bowen says to keep my personal items close by and be kind to the staff. Tips are always appreciated. Spreading the word about how great the cafe is, both IRL and by leaving five-star reviews online, can’t hurt. And I should always be careful not to take up more space than I need.

It may seem obvious, but “if you’re an individual person, find a smaller table so the coffee shop can accommodate bigger groups when they come through,” Villanueva says.

The bottom line

Nursing a cheap cup of tea isn’t cool. If I’m spending multiple hours at a coffee shop, I should be buying multiple items, dropping at least $5 every time. After all, I’m taking advantage of several free amenities (cough, heat, cough) for which the cafe is footing the bill.

On that note, Villanueva says, I shouldn’t be surprised if the retailer raises its prices in the near future, given current trends. These increases might seem arbitrary, but they’re often out of the owner’s control.

“If you really believe that this coffee shop should exist in terms of having a space for a customer — that third place — it costs something,” she adds. “Are we willing to take on the burden together?”

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