Whether it’s a big chain store or a small cafe, a coffee shop lives and dies on how good the baristas are. The cafe industry is a service industry after all and part of the cafe experience is an experienced barista filling out your order whether it’s a simple black coffee or some bizarre secret menu item you read about online. With baristas being such an integral part of the cafe experience, you might wonder how will you decide how much to pay them. Several factors go into making that decision.
To determine how much to pay your barista consider these things:
Your budget and the possible non-monetary incentives
Experience and the tasks you’re asking them to do
The local cost of living
The type of coffee house you’re running
Many baristas are often underpaid. According to ZipRecruiter.com, most baristas make around $24,000 a year. In some states, this is below the poverty line and often requires baristas to take on second or even third jobs. While you have to stick to your budget, you have to remember to pay your workers well. Workers that are exhausted are more prone to making mistakes that could result in having to issue more refunds and getting bad reviews.
One factor you’ll likely consider is whether or not the baristas are tipped. For tipped workers, the minimum wage is lower. You can also adjust your tipping policy. Some cafes allow individual baristas to keep the entire tip. Others practice tip pooling, where all the tips are split evenly between all the baristas on a given shift.
You must also keep things like the local and state minimum wages in mind. Others may have different laws on how to do tip pooling and at the time of this writing, tip pooling rules are under review at the Federal level. There may be some variance on what holidays are mandatory as well. It is important to research all these issues before you finalize your budget.
You can also offer non-monetary incentives. Many baristas struggle to pay for health insurance for example. This can be a good public relations move as the new generation of customers, many of whom currently or have worked in service industry jobs with low pay and almost no benefits are more sympathetic to other service workers. Paying your baristas well can draw in more consistent Millennial/Gen-Y customers.
Experience, Tasks, and Hazards
When you’re deciding what to pay your barista, you should remember all the work that goes into the job. Experienced baristas do more than pour coffee. They make specialized drinks for customers. These drinks can often come down to split-second timing. A button pressed too early or too late can ruin a drink and leave a customer dissatisfied.
One could argue that being a barista involves a degree of artistry. For every customer that just wants to get a black coffee and get out, many want their coffee prepared specially. They want the milk foamy or they want some specialty preparation they read about on a website that neither you nor your baristas have ever heard of. Maybe they will want your barista to replicate something a friend got at a different cafe. While you should instruct a barista to tell the customer to stay on the menu if the request is too complicated, you might also want to encourage them to at least try the simpler experimental drinks customers come in with. These experiments take some skill if all they’re going by is a customer’s description or a picture on their phone.
Baristas are also expected to be knowledgeable. If you’re opening up a cafe where cafes aren’t especially common, you’re going to have a lot of customers whose main experience with coffee is either store-bought or coffee from fast-food establishments. Those customers are there looking for something different and they often won’t know exactly what different means. It is usually on a barista to help a customer make a selection based on several questions that a barista will ask to get a feel for the customer’s preferences that often have to be asked in rapid succession while keeping track of everything else going on in the cafe.
Baristas are sometimes typically required to have advanced knowledge of coffee from farm to the coffee cup that many customers do not have. This is particularly true in upscale markets. The advanced coffee-related knowledge of the barista could cover a lot of things, especially when dealing with coffee connoisseurs who are at your cafe for the education about coffee as much as they are for the coffee. Some of the knowledge could include but isn’t limited to whether or not the coffee is fair trade, what fair trade means, to any amount of minor historical details about where your coffee comes from.
Check out how train new employees HERE.
You must also remember that a barista, like any service job, is more work than our culture gives it credit for. A cafe can be a chaotic place, particularly on a busy morning. Customers are grouchy and in a rush to get to work. Anything going wrong can and will set a customer off. A barista must be able to make the drink have a good and welcoming attitude and a sunny personality even when the people around them don’t.
When deciding what to pay your baristas, you should also factor in hazards on the job. In most cases, a barista could be standing and running around a cafe their entire shift. This can lead to leg and back problems. You should also remember that a barista is working around scalding liquids most of their day and burns are an issue.
When cleaning the cafe, something that should be done frequently to stay on the good side of health inspectors, baristas will often work with caustic chemicals. This is particularly true when cleaning bathrooms, which can also contain biohazards if something has gone wrong with the plumbing.
You should also be aware of mental health hazards. Dealing with customers is mentally draining Many service workers report higher instances of depression and anxiety. If you can pay your workers better, that will alleviate some of these problems.
According to researchers at Oregon Health & Science University-Portland State University, “The higher prevalence of mental health problems may be linked to the precarious nature of service work, including lower and unpredictable wages, insufficient benefits, and a lack of control over work hours and assigned shifts,”
Cost of Living
Your barista is a human being. They need to eat and have a place to live. If at all possible, you should factor in your area’s cost of living into your budget. An underpaid barista will likely leave for a better job the instant they can get one. Meaning you have to train someone entirely new on a routine basis.
Having to constantly retrain people is inefficient as having a constant stream of new employees leads to more mistakes being made during training periods. While it can be more expensive, having a well-paid and consistent staff does have benefits. Many customers will often come back because they have a favorite barista who knows them by name. Having “regulars” is an essential part of building your business.
One of the major factors in deciding how much you’ll pay your barista is your cafe itself. There are some lower-end that focus strictly on coffee and drinks that require less skill. You can justify paying them slightly less. Fancier cafes with drinks that require lots of preparation and fine motor skills could require a slightly bigger paycheck.
Controlling for Bias
As a final word, you should control for biases in pay and promotions. Making sure you’re paying your workers fairly will avoid legal troubles that can bring you bad publicity and bring down your business.
Frequently Asked Questions
You should always make sure to pay them what they’re worth but there are some other benefits you can offer. Many baristas feel more valued when you invest in them. Do things like having them professionally trained in more advanced techniques and knowledge. This tells them that you care about their development. It also makes your cafe better and the baristas can teach any future new co-workers the techniques they learned. This helps maintain continuity of good service.
You should always try to promote from within whenever possible to keep morale up. If you import people from outside when you don’t need to, baristas who have worked for you for a significant amount of time will feel under-appreciated and it may cause conflict between the staff. You should also make sure that you compensate a promoted employee rather than just giving out empty titles. Employees know the difference between an empty title and a promotion that is worth something.
To learn more on how to start your own coffee shop checkout my startup documents here
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Hi! I’m Shawn Chun
My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!
As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.
I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.
Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.
Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.
Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.
Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!