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More Business Lessons From the Coffee and Donut Guy

A few years ago, I posted an entry about a Manhattan coffee and donut vendor who let his customers make their own change.

When an environment of trust is created, good things start happening. Ralph can serve twice as many customers. People get their coffee in half the time. Due to this time savings, people become regulars. Regulars provide Ralph’s business with stability, a good reputation, and with customers who have an interest in making correct change (to keep the line moving and keep Ralph in business). Lots of customers who make correct change increase Ralph’s profit margin. Etc. Etc. And what did Ralph have to pay for all this? A bit of change here and there.

I get my occasional donut in another part of town now, but I noticed something similar with my new guy. Last Friday, the woman in front of me didn’t order anything but threw down a $20, received a coffee with two sugars a moment after she’d stepped to the window, and no change. As they chatted, I learned that the woman pays for her coffee in advance. The coffee guy asked her if she was sure she owed today. “Yep,” she replied, “It’s payday today; I get paid, you get paid.” Handy little arrangement.