Would you call this a good business decision for a small, independent cafe?

My friend Maxie and her girlfriend Amy are equal co-owners of a small coffeeshop. Though it’s not made them rich, it does support them reasonably well. Most of their income comes from Maxie’s corporate job, but she likes owning and operating the cafe because she hates Starbucks, because she likes giving local musicians a venue to perform and local artists a venue to display their artwork. In addition, Amy (who is at the coffeehouse more than Maxie) likes the place because she thinks it’s a stabilizing influence in the neighborhood.

Like most cafes, M&A’s place offers free WiFi. This causes a slight problem: moochers. Maxie has no problem with people staying on the net on her dime for hours as long as they’re spending money at the same time. But she’s slightly bugged by people who come in at 7 in the morning, get the smallest possible cup of coffee, and stay through the lunch rush; and she is frankly infuriated by people who bring in outside food or drink while using her electricity and and internet. So she wants to start a new policy. To access the WiFi network you have to enter in a code that is printed on your receipt. If your purchase is ten dollars or more, you get a code that’s good for the rest of the day. Spend less than that, you get a code that’s good for three hours, after which you have to buy something else.

Amy does not like this idea. She’s kind of a hippie idealist, you see, and she worries about people who need the internet to look for work or whatnot but don’t have it in their home; to her mind, she and Maxie have an obligation to those folks. In addition, she thinks the policy is slightly unfriendly and may offend some customers. Some people may end up going to the Starbucks a mile and a half away if they begin this policy.

Pretend you’re the third owner in this business. Maxie & Amy are deadlocked; you have the deciding vote. Whom do you side with, and why?

Depends.

  1. How much of their capacity is taken up by moochers? Are they taking up enough space to discourage customers from using the cafe? If not, putting this policy into effect may lose them more customers than they gain.

  2. This receipt-code system: how much does it cost to implement? How likely is it that it will make them more money than it costs? How long will it take to amortize the initial flat fee? Are there recurring payments for service subscription?

Implementing the receipt-code system is a one-time expense that in itself is not onerous.

As for how much space the moochers take up: isn’t even one table too many for the ABSOLUTE moochers–those who never buy anything? They’re contributing jack shit to the bottom line.

People bringing in outside food should not be allowed in the shop full stop, let alone be able to use your friends wifi. Those people are taking advantage. As for the people who order a tiny coffee and stay for hours, I would approach them after a while and ask if they wanted to order anything more. Most, I imagine, would be guilt tripped into ordering something more. If not and there were paying customers unable to get seats then that might become a problem and more words needed to be had. If, after all that and any further reasonable methods were exhausted, the problem was still occurring, then I would consider such a move.

The biggest question is are they actually losing significant revenue by people talking space in the cafe, or is it just a psychological thing for Maxie?

If they’re not really losing anything significant, I would think that the expense in time, maintenance, and goodwill capital of enacting a tiered wifi access policy would probably be more than whatever the wifi moochers are actually costing. If, however, they are actually turning people away on a regular basis because of lack of seats which are regularly full of moochers, then it might be worth investigating.

ETA: I voted for Amy being right, on the general assumption that this “problem” is likely not actually costing the cafe anything significant.

I was reading while Colander was posting, but my opinion is much the same. Are the campers taking up space that’s causing other’s to pass them by?

And as for Colanders question, it can vary. One time purchase with a year support will be one option. Monthly/yearly subscription for system with updates is going to be another. Work out a deal with a friend to impliment something. It will come down to as little or as much as you want to with varying degrees of success.

In any case I’m implimenting a ‘No outside food or drinks’ pollicy.

ETA: And several other posters got in while I was formulating my awesome response.

I side with Maxie -the restrictions are not unreasonable. Amy is right, the policy may drive away some customers- but are the customers being driven away the customers M&A really want?

Way back when I worked in fast food, it wasn’t uncommon to hear the owner respond to customers’ threats of never returning by saying “Business like yours, I don’t need”. It wasn’t a response to legitimate complaints- it was his response to various types of moochers who actually cost him money. The ones who wanted to spend all day sitting at a table with a cup of coffee, so that other people passed by because the tables looked full. The ones who wanted a free cup of hot water, lemon and sugar because they brought their own teabag. The ones who were told that yes, they too had to pay for the salad bar, and not simply use their burger wrapper as a plate.

I suspect that the only customers that will be driven away from M&G's cafe are those who buy a small coffee and stay through the lunch rush. The ones who bring their own food and drink will leave, but they aren't customers anyway.

The all-day campers, in particular those using laptops rather than pads, prefer tables to the comfy chairs. People coming by for a meal, particularly in groups, also prefer tables. If a pair of paying customers come by during the lunch rush and see that only the comfy chairs are available (and no two together), they’re likely to go next door to the pizza place, particularly during the week.

That’s not necessarily true. Customers often make cafe choices in part by how popular the cafe seems to be, and if the place isn’t usually very full, losing the moochers may result in an unpromisingly empty-looking establishment. Plus, maybe the moochers tell their non-mooching friends about the cafe. Small businesses can live and die by word-of-mouth.

This policy won’t only discourage absolute moochers. It will turn away intermittent customers as well.

Bottom line is you gotta run the numbers.

This sounds like something that wouldn’t be so hard to try out for a month. If it results in lower sales, they can ditch the idea and go back.

I can see how having people just hanging out can make the place more attractive and “hip”, especially if they are typing away on laptop computers. But you can give back to the community without being a doormat. A cup of coffee is what, two dollars? If you are too broke to afford two dollars but you’ve got a mobile device, I’d have to wonder what makes you so attractive to be a permanent fixture in my place of business. Even winos pay for the privilege of hanging out in front of the liquor store.

How much business does the free WiFi bring in? Do they even need it?
What if they were to try disconnecting the WiFi for a short time (I don’t mean cancel it, I just mean manually disconnect it. Can that be done??), and during that time put up a notice saying “Sorry WiFi problems” or something - not let customers know exactly how long it’s actually down for, just to see if they could turn away the couple moochers that come for nothing else. Maybe then those moochers would find a new place to haunt and business could get back to real customers for your friends.

You may not be able to recapture lost customers, though. I’d err on the side of caution. How are margins now? If they’re thin, I wouldn’t make any changes that have a strong chance of cutting into the bottom line.

Yeah, that’s bullshit and should be stopped immediately.

Those folks can either pony up the buck or so it costs to buy a small drip coffee, or go the public library and use the free internet there. I mean, sheesh.

My vote would be for the middle ground–put a password on the WiFi and print it on the receipt, but have the password good for all day. That way WiFi is available to all customers, but restricted to actual customers.

I think you could just reset the password every hour or two. If someone complains you can point them to a discreet sign that says 1 small coffee = 2 hours free wifi. Even people who are buying more than just a small coffee aren’t going to stick around longer than that, and if they do you can just give them the new password. Catering to people who buy one thing but expect all day service isn’t a very smart business plan, and poor people can look for jobs online at the library.

I bet your plan would be simpler from a coding POV, and would work as long as the password were only good for one computer at a time.

I don’t think the wifi password is the issue here; I think Amy needs to take better control of her business. All day moochers need to get moved along - as CrazyCatLady says, the library has free internet - no business is required to supply it to people who buy a small coffee and want to take up space all day. No outside food and drink is the usual policy at any business selling food and drinks - that shouldn’t surprise people. Amy needs to get straight in her head what she’s doing - is she running a business or a charity?

No restaurant I know of allows outside food to be brought in, but some will allow drinks if they don’t offer an equivalent and you are nice about it.

The “moochers” might not be a loss to the restaurant. They might be the store’s best advertising, so alienating them could actually cause lost business by generating badwill.

The people bringing in outside food & drink are sneaking them in in backpacks or other such large bags and eating them on the sly. They’re the same folks staying bell to bell.

Really? Seems to me they’re not praising the food or drink; they’re telling their friends that they can play World of Warcraft all day* at M&A’s for free. Why would you want to encourage that?

Wow, some great responses in this thread.

No vote for me as there is insufficient info. I lean heavily towards Maxie, but an emotional response is often a bad response.

I agree with colander. Run the numbers. If the moochers are taking up tables that would be generating income, Maxie is dead on. If the tables would be empty anyway, the moochers are good—a popular looking cafe is a good thing.

But bringing in food and drinks from the outside. No way. That stops now.