growing a successful coffee business

Lessons learned growing a successful coffee business

Espressology’s Instaurator shares some valuable experiences that can help grow a new coffee business and set an existing one up for further growth and success.

In the first year of my little garage roasting business, I managed to double the turnover. In the second year, I doubled it again. In the third year I doubled it yet again. That was eight-fold growth rate in just three years. 

How did I do this? For one, I hired a young hardworking mum to do my deliveries while I focused on sales and tried to “sell the sizzle not the sausage”. I purchased a set of sales training cassette tapes by American Tom Hopkins. I listened to those tapes continuously, and even memorised some of the motivational prompts that were designed to help sales people cope with rejection, some of which I still recall on cue to this day: “I never see failure as failure but only as the opportunity to practice my techniques and perfect my performance.”

I also learned from another sales-training guy called Alan Pease, an Australian body language expert who used to be an insurance salesman. In one of his books he analysed every individual word in a sales presentation sentence and the impact each word had on the listener. This helped me train myself for phone prospecting.

Now in the modern era we have podcasts readily available on such topics, but there’s nothing like life experience to teach us valuable tools and tricks of the trade that we can pass on. Here are some valuable ones I’ve learned along the way:

 

LESSON ONE: BE MORE THAN A SALESMAN
Being a professional salesman is more a matter of being an honest consultant than acting like the archetypal rude and pushy salesman. It’s almost a matter of diagnosing what someone actually needs, much like a doctor does to a patient by asking about their symptoms. Once you figure out what’s important to your client, provide professional solutions, and are honest about what you don’t actually know, people will put their trust in you. 

The businesses that make the customer feel highly valued by understanding their needs and wants, and structures their behaviour based on this, will do well. 

Instaurator says equipment changes over the years and it’s good to invest, but sometimes old models are just as reliable.

 

LESSON TWO: BUILD TRUST
Good personal relationships are based on trust, and good business relationships are exactly the same. One of the things I managed to do to cement my first few new customer relationships was to impress them with a prompt level of service. Tailoring your week to see your customers is so important and extremely valuable.  

David Jones, one of the largest chains of upscale stores in Australia, was a very good payer for us and a great example of how business relationships work well. We received payments within about seven days of delivering our goods. It certainly made us look upon them favourably, and we would go out of our way to make sure we filled their orders as a priority. When the supplier works hard to fulfil the orders on time and the customer pays on time, there is more time spent on positive, productive, and creative ideas, and less time wasted on unproductive conversations and frustrations. 

 

LESSON THREE: DON’T DISCOUNT THE VALUE OF RETAIL
Most of the recent successful coffee brands in Australia over the last 15 years or so have gone the other way and built their wholesale brand after starting with a retail outlet – brands like Toby’s Estate, Campos, and Single O in Sydney, and St Ali and Seven Seeds and countless others throughout Australia, New Zealand, and the world, for that matter.

Good retailing is actually a matter of good hospitality. Make people feel good for having been in your store. If you do that, they will come back and your business will grow. It’s that simple. In wholesaling by contrast, it takes a huge effort just to arrange to talk to the right person and even then, it may be only one in 10 people who might actually buy something from you. Your own retail outlet can showcase how good your coffee can be by controlling the quality. This way, people are much more likely to consistently enjoy a good experience and you get a new guaranteed retail customer. 

 

LESSON FOUR: INVEST IN GOOD EQUIPMENT
Operators who genuinely invest continually in improving their business for the right reasons will reap the rewards. From my experience, the more you invest in substantial equipment, the more people feel like you are taking your business seriously. In my experience, each time I purchased a bigger machine, the sales jumped up without me doing anything else. It was like the bigger the machine, the more customers felt like I was taking our coffee seriously.

If you’re setting up a new café and are worried about competing with the million-dollar fit-outs of the café world, don’t. Just be practical. Set up your work bench with operational workflow in mind and consider visual signals. It sounds simple but if you can’t see the coffee machine from outside your shop window, change that. It’s a drawcard for passersby and new customers, as are tables on the footpath. 

The Coffee Entrepreneur
The Coffee Entrepreneur is available on Amazon, Kindle, ibooks, Barnes & Noble, and Kobo.

 

LESSON FIVE: LOOK FOR WIN-WIN-WIN OUTCOMES
Hiring good people is key. Sometimes you can hire someone on a positive gut feeling and it becomes the best decision you’ve made, and sometimes it just doesn’t feel right. Back your instincts. 

One thing I did learn out of necessity was how to interview and select people quickly. Because I was so rushed off my feet, I would place an advertisement for a new worker with my mobile phone number. This was long before the internet. I would be too busy to answer my phone during the day, but in the evening I would go through all the voice messages of everyone who had applied for the position. I would find no more than three people who I felt may be suitable and made appointments with them 30 minutes apart. If people could not be bothered to leave a polite, well-spoken voice message, I would not bother calling them back, because a) it’s rude to leave an incomprehensible message and b) if they couldn’t communicate with a prospective employer effectively, then they would not be able to communicate satisfactorily with customers either, and would not be suitable for the job.

 

LESSON SIX: CASHFLOW IS KING
Consider your environment and make it work to your advantage. One of the best retail promotions I ever did was accomplished at my Wahroonga coffee shop on Railway Avenue in Sydney. There were, and still are, two very good schools nearby, Knox and Abbotsleigh. To incentivise the largely school-populated community, I devised a simple advertisement along the lines of: “1 FREE cappuccino, hot or cold. Limit one per person. Expiry date: two weeks’ time.”

When the $20 advertising investment was printed and handed out to every child in the school, things went ballistic. That first afternoon our café was packed to overflowing with schoolkids jostling for their free cold cappuccino, and I didn’t mind. These are our future customers after all.  

The wonderful thing for this business was that the schoolkids started telling their mums to come and pick them up from the “new” coffee house. This introduced their mums to our newly refurbished store, where they ordered hot coffees for themselves. Before long, groups of mums would arrange to meet long before school was out so they could enjoy a bit of relaxation and socialise. A $20 advertising investment returned hundreds of thousands of dollars of new sales and added value to the business. 

 

LESSON SEVEN: KEEP LEARNING
There is always cause for humility, because no matter how much knowledge even the most intelligent human being can accumulate, it is always pitifully limited in relation to the infinite universe that we live in. 

*This information is an edited extract from Instaurator’s book The Coffee Entrepreneur, available on Amazon, Kindle, ibooks, Barnes & Noble, and Kobo.

This article appears in the February 2020 edition of BeanScene. Subscribe HERE.

Instaurator published his first book, The Espresso Quest, in 2008. With his second book, The Coffee Entrepreneur, he turns his attention from the art to the business of coffee.

For more information, visit www.espressology.com/shop