Small business owners in Ireland are opting for transparency by sharing their operational costs with customers. This move comes as stubborn core inflation continues to hurt firms and consumers alike, leading many businesses to raise prices. However, some entrepreneurs see this as an opportunity to educate customers about the costs of doing business and explain recent price hikes.
One such business is Guji, a boutique coffee bar with locations in Cork’s Marina Market and on O’Connell Street in Limerick. The owner, Alan Andrews, took to social media to detail the costs of opening their Limerick coffee shop earlier this summer. In the first part of a three-part series, Andrews outlined the initial fixes, legal fees, and deposits paid for the O’Connell Street shop, which totaled €17,000. He explained that this is just the tip of the iceberg, with total fixed costs exceeding €100,000.
Apart from the initial costs, Guji also spent €65,000 on equipment and an additional €25,000 on the final finishes. Andrews emphasized that these figures exclude labor costs, which have also skyrocketed in the past year. He stated that last year, for every €100 earned, €30 went towards paying staff, but now it’s about €37. Taking into account the costs of higher-end coffee stock, labor retention, and staff education, Guji had to adjust its pricing plan to accommodate these expenses.
Another business owner adopting a similar approach to transparency is Rob Coughlan, owner and manager of the Boatyard in Cobh. Coughlan opened the site just over a year ago, converting five old shipping containers into various businesses along the seafront. Following the launch, Coughlan began posting on social media, providing customers with an unfiltered account of the costs involved in transforming the containers.
In one video, Coughlan focused on the beauty salon within the Boatyard, detailing the expenses of delivery, carpentry, electrical work, windows, plumbing, fabrication, equipment, and the container itself. The total cost amounted to €8,235, and Coughlan planned to earn up to €16,000 per year by renting it out to technicians. In another video, he listed all the costs of his fish and chips shop, Hook’d, which exceeded €22,000.
Coughlan believes that it is difficult for someone outside the industry to understand what it takes to set up a business. He wants to show aspiring entrepreneurs the process involved and what they can expect. Similarly, Andrews believes that more businesses should follow suit and be open about their costs. He stated, “Someone has to break the barrier, and it looks like very few are prepared to do it. I have no problem doing it as I am happy to justify all of my costs. We’re not hiding, and we’re happy to share.”
By sharing their operational costs, these small business owners hope to provide transparency to their customers and help them understand how prices are set. They aim to dispel the misconception that running a coffee shop or any business is cheap and highlight the financial realities faced by entrepreneurs. This approach not only educates customers but also defends recent price increases in the face of rising inflation.
