· By Jos Whettingsteel
Good Is the Enemy of Great. Your Cafe Is Proof.
Most cafes do not fail. They plateau.
They settle into a rhythm where the numbers are fine, the regulars are loyal, the staff are mostly good, and nothing is actually broken. That sounds like success. It is the most dangerous place a business can sit, because there is no crisis to force a decision.
Jim Collins opened his research on this with a line worth taping to the office door. Good is the enemy of great. Not bad. Good.
Bad businesses know they are in trouble. Good ones talk themselves out of changing anything.
The three circles
Collins and his team spent years working out why a handful of companies broke out of "fine" while their direct competitors stayed there. The pattern they landed on is the Hedgehog Concept, and it is three questions that only matter where they overlap.
One. What can you be the best in your area at? Not what you want to be best at. Not what you are currently doing. What you could genuinely be the best version of within the patch you serve.
Two. What drives your economics? The single number that, if it moved, would move everything. Collins calls it the economic denominator. Profit per what?
Three. What do you actually care about? Because the first two will not survive a bad winter without the third.
The trap is that every operator can answer all three separately. Almost nobody can answer them together. And the overlap is the only part that counts.
Why "the best in your area" is the hard one
Owners hear "best in the world" and switch off. Fair enough. But scale the question to your actual market and it gets uncomfortable fast.
Best coffee in the suburb. Best breakfast within a ten minute drive. Fastest quality takeaway on the industrial strip. Best place to take a toddler on a Tuesday.
Those are winnable. And the honest answer for most cafes is that they are not the best at any of them, because they are quietly competing in all of them at once.
A menu with 40 items is not a menu. It is a refusal to choose. It costs you in stock, in waste, in prep time, in staff training, and in the four minutes a customer spends deciding instead of ordering.
Choosing one thing to be best at is not narrowing the business. It is the only way to be genuinely better than the cafe up the road at anything.
The number underneath everything
The second circle is the one operators skip, and it is the most useful.
Collins's question is simple. If you could only pick one ratio to improve, and improving it would drag the whole business up with it, what would it be?
Most cafes default to daily revenue. That is a scoreboard, not a lever. It tells you what happened and gives you nothing to pull.
The better candidates are ratios, because a ratio can be worked on:
| Denominator | What it pushes you to fix | Suits |
|---|---|---|
| Profit per seat | Turning tables, layout, dwell time | Sit-down venues |
| Profit per labour hour | Rostering, prep systems, menu complexity | Anywhere wages are the biggest line |
| Profit per transaction | Pricing, attachment, what sits by the till | High-volume takeaway |
| Profit per regular | Retention, frequency, knowing names | Suburban locals trade |
Pick the wrong one and you will optimise honestly toward the wrong outcome. A takeaway bar chasing profit per seat will buy furniture it does not need. A locals cafe chasing profit per transaction will start upselling people it should be building a twenty year relationship with.
Pick the right one and it makes decisions for you. That is the whole point.
The flywheel, and the loop that looks like progress
The second idea from the research is what happens after you choose.
Collins describes a heavy flywheel. The first push moves it almost nothing. So does the second. You keep pushing in the same direction and at some point it is turning under its own weight, and from the outside it looks like a breakthrough. There was no breakthrough. There were a few hundred pushes in one direction.
The opposite is the doom loop. Results are slow, so you change direction. That resets the momentum to zero, which produces slow results, so you change direction again. Every individual decision is defensible. The pattern is fatal.
In cafes the doom loop is easy to spot. New menu in autumn. New supplier in spring. A loyalty app for three months. A burst of posting, then silence. Someone suggests a food truck.
None of that is laziness. It is the opposite. It is a lot of effort spent resetting the wheel.
The uncomfortable truth is that the operators who look like they got lucky are usually the ones who got bored of their own strategy years before you noticed it working.
What to do this week
Take an hour. Not in the venue, and not on a trading day.
Write the three questions down and answer them honestly. What could we be the best around here at. What is the one ratio that drags everything else with it. What do we actually care about enough to still be doing in five years.
Then find the overlap and write one sentence. Ours might read: we are the best morning coffee on this stretch, we measure profit per regular, and we care about the people who come in.
Now the real exercise. Take that sentence and go through everything you have changed in the last twelve months. Every promotion, every menu edit, every new line.
Mark each one as a push on the wheel or a change of direction.
Most people find the ratio confronting. That is the finding, and it is a useful one. You do not have a strategy problem. You have a consistency problem, and consistency is free.
Next month, before you approve anything new, ask one question. Does this push the same wheel we pushed last month?
If it does not, it is not an opportunity. It is a reset.
Inspired by Good to Great by Jim Collins. If this hit home, the book goes deeper.
Keep reading: If It's Not a Clear Yes, It's a No. · Fix the Bottleneck. Ignore Everything Else.
We roast for cafes across Perth. If you want a wholesale partner who thinks about your business the way we write about it, start a conversation.
