I really hate the idea of tipping. To think that someone expects me to pay them extra for actually doing their job well, kind of frustrates me. And it’s always awkward now when you turn the square register back to the person behind the counter because they clearly see that I indeed didn't tip them to their expectation. I’m aware that the argument for tipping is that some people survive off their tips because they don’t get paid well enough, but even still, the fact that their stingy employer doesn’t want to pay them enough doesn’t mean I have to tip someone regardless of the quality of the service. I also realize that for some people tipping makes them feel really good. There is a certain feeling you get when you drop a $20 down as a tip and you know you’ve made someone's day. I get that it makes people feel good on both ends, if it works. But at Arcade we’ve decided to forgo the tipping method and instead share profits with our employees.
We’ve thought long and hard about ways that we can get our team more invested in the business, so that in a small way, they feel almost like they own the place. If all of our team thought the way Shane and I do, then our service would be excellent, the equipment would be taken care of and the drinks would be perfect every time we served them. The profit sharing model makes so much sense for us to motivate and inspire our team to ensure that every customer has a no less than a perfect experience every time they come. So instead of having an awkward moment where you don’t know if you should tip or not, you’ll just have the ability to enjoy the service and know that an even larger portion of your drinks goes to support our baristas. We are excited about this and can’t wait to implement it into our shop!
Heres a breakdown of what profit sharing could look like here at Arcade :
While we were running our pop-up we were doing between 175-200 drinks per day. So, if we stay with those numbers and charge $4 on average per drink(which is low), then our monthly gross revenue will be $10,920 serving on average 182 drinks per day. To sell that many drinks our cost would be around $6,263 leaving us $3,265 profit and at a 10% profit share, 4 team members split $326.56 which is $81.64 working 2-3 days per week. We think that's pretty exciting.
182 drinks for one month (15 days of operation) = $10,920
Cost of Goods & Overhead for Cafe (400 sf) = $6,263
Profit = $3,265
Profit Share between 4 team members = $81.64
We hope this inspires others to do a similar model. After all, we are all in this together.