In the 55 days that The Cereal Bowl has been open, the three entrepreneurs behind the venture have learned more about their market than they ever did during months of industry research and poring over plans. It's not that they didn't do their homework, but their entrepreneurial crystal ball couldn't account for things like Little Leaguers, health freaks and catering opportunities.
When twin brothers Josh and Kenneth Rader - both 24 - and their childhood friend Michael Glassman, 25, came up with a plan for a place that dishes out more than 30 different kinds of cereal and dozens of toppings in a café setting, they imagined it would be a hot spot for college kids from the nearby University of Miami.
But ever since their Feb. 4 opening, they've found their retro aluminum tables and futuristic plush couches often crammed with high-schoolers and kids young enough to actually fear Tony the Tiger.
But that's OK. ``Younger customers tend to spend more money than the adult customers - which is fascinating,'' said Josh, who has been crunching numbers on an almost daily basis to tease out trends at The Bowl. While adults are doling out about $4 to $5 per order, younger clients spend between $6 and $7, he said.
Other things his data show: Beverage sales spike on weekends, and there seems to be an unusually large appetite for oatmeal and peanut butter-flavored cereals.
The Miami Herald has been following the three entrepreneurs since they first started wrestling with construction permits in October and will be reporting on the first year in the life of the fledging business, located at 1560 S. Dixie Hwy.
At the heart of their business plan is the idea that customers will fork over $3.79 for the opportunity to combine two cereals and two toppings (fruit, M&M's and cookie crumbs among them) from the café's extensive list. They also offer dozens of their own combo creations.
THE WATER SECRET
According to their pre-opening calculations, they needed about 250 clients a day spending $5 a pop to break even. While they did a good job of pegging their costs, they actually seem to have under-estimated their profit margin, said Kenneth. Two reasons are that oatmeal and coffee - both heavy on cheap H O - have been selling better than expected. (Oatmeal is accounting for almost half of all cereal sales.)
As Kenneth sheepishly points out: ``A cup of coffee probably costs us 10 cents to make - it's a cup of water and a few coffee beans.''
Daily traffic is also up more than 100 percent since opening. The 1,700-square foot café sees about 200 clients on weekdays (still under budget) but partially makes up for it with weekend spikes of between 300 and 320.
SATURDAY CRUSH
Saturdays from about 10 a.m. to 1 p.m. there's really a crush of customers, said Josh. ``During those three hours every seat in the store is filled, and there has been a line out the door three [Saturdays] in a row now,'' he said. ``That's a great feeling.''
An even better feeling is finding pockets of income they weren't expecting. For starters, there are the salads and sandwiches they've started selling (man cannot live on Coco Puffs alone). They're only selling a dozen or so of the $8 offerings a day, but it could add up to about $30,000 in additional revenue a year.
And then there's the catering. Since opening, The Bowl has had two requests for catered events - one at Mercy Hospital and a second, a condo party at the Flamingo on Miami Beach. That last event ran about two and a half hours and grossed some $3,000 for The Bowl.
The nature of the entrepreneurs' product - cold cereal, which doesn't require cooking or heating - means they can cater large events cost effectively, said Kenneth. The Flamingo event served about 250 to 300 and required little more than an employee's SUV. Once they start promoting the service, the trio is hoping they can host about six catering events a month, which they estimate could bring in an additional $70,000 a year.
``We're trying to find ways to make money off this that were never budgeted for on our business plan,'' said Kenneth.
The trio are also trying to figure out how to build on what appears to be their natural strengths - youngsters and health aficionados.
READY TO PARTY
The Bowl has agreed to host three birthday parties to see - among other reasons - if they can use the events to fill mid-afternoon lulls. But it's also part of The Bowl's philosophy of giving customers what they want, said Glassman, the vice president and general manager.
He recently spent his one day off getting ready for the first of those parties.
``They're some of our regulars,'' he said of the gaggle of teenagers he was expecting. ``Sometimes they come twice a day, and they were so excited about this - as much as it is my day off - that I promised them I'd be here.''
Another trend they spotted early on is the brisk sales of healthier fare. And that has had them visiting the local gyms to try to learn what the fit community wants. In coming days, the trio will be creating a new calorie-counting menu board that highlights their healthy options and will include such additional toppings as pumpkin seeds and whey.
While things are off to a good start, there's always room for improvement. The surge and lull of the business day has required shuffling of the staff. And the trio are just now getting a handle on their ordering.
Since they've turned over inventory control to one of their managers, they haven't run out of any key ingredients in more than two weeks, Kenneth reports.
COLLEGE RECRUITING
And then there's the issue of the missing college students. Kenneth has been accepting offers to speak at UM clubs and classes that deal with entrepreneurship, and The Cereal Bowl has just entered into an agreement with a marketing firm that should help raise awareness on campus.
But it could be months - or longer - before they can fully absorb and react to all the things they are learning about their customers, said Josh.
``The store is never going to be perfect; we are still tweaking things,'' he said. ``It has been a learning experience for all of us - nothing has been this educational.''
