are a number of beautifully packaged, high-grade teas that can be a nice complement to your coffee selection. Loose teas are very popular among tea lovers because they are typically made from higher grade tea leaves. The challenge with loose teas, however, is containment. If you are going to sell loose teas, it is a good idea to carry a line of tea balls (infusers) or, alternatively, sell loose tea in gauze tea bags. Gauze tea bags expand when steeped in hot water (unlike paper tea bags), allowing the tea leaves to reach their full flavor.
6.1j Juices and smoothies
Freshly squeezed juices and health blends can be a great addition to your product line and offer your customers a cool, healthy alternative to coffee.
6.2 Services
What services will appeal to your customers?
6.2a Custom roasting service
We recommend you make custom roasting the heart of your business. Because you will be roasting in small quantities (assuming you decide on a roaster/retailing concept), you will be able to offer not only fresh roasted coffee beans but also custom roasted beans. Custom roasting means blending and roasting to the individual tastes of a customer. A customer may order, for example, a blend of Guatemalan and Peruvian beans roasted to a medium-dark roast.
Custom roasting also means you can develop signature blends for your wholesale accounts. A large restaurant or hotel may want to market the coffee you provide them as their own blend. A hotel in Vancouver for example, may want to call one of its variations the “Vancouver Hotel Breakfast Blend” and promote the coffee in its hotel rooms and on its restaurant menus. With a small batch roaster you will be able to provide this marketing opportunity to wholesale accounts.
A custom roasting service will be a key selling feature for all the bean business you do.
6.2b Free home delivery service
A free home delivery service can be a great way to launch your whole bean coffee business. You can easily plan drop-off routes along your way to and from the coffee bar in early morning or evening. Five stops a day, five days a week can translate into an additional $15,000 in revenue per year (based on a $12 per pound purchase price).
6.2c Email or voicemail bean ordering service
This is a service that only requires a bit of promoting. With this service, you can encourage your customers to call or email ahead to place their bean order, making your roasting efforts that much more efficient.
6.2d Wholesale coffee services
As we indicated above, wholesale coffee volume can quickly grow to cover major expenses such as your rent and labor costs. A wholesale coffee service involves giving discounts off your retail price for larger coffee orders and possibly working in conjunction with a finance company to provide brewing equipment to your large accounts. Typically, you would offer a 30 percent discount off retail price for orders of five pounds or more.
6.2e Office coffee services
Coffee is supplied to thousands of offices across North America on a daily basis.
6.2f Free services
In today’s competitive marketplace, we believe it is important to have free wireless internet. If you are not offering it, you may lose customers to the coffee bar down the street that is. Free Wi-Fi also encourages longer visits with an associated increased average expenditure per customer (in theory). The argument against encouraging longer visits is that a table is being taken up by say, a single individual who slowly sips on a single cup of $3 gourmet coffee versus that same table generating more income with a party of four who is interested in lunches and specialty coffees at $13 per person.
Generally though, a busy establishment attracts more customers and more customers generally mean more sales. Think of the last time you ate at a busy restaurant, maybe even waiting in line to get in. Isn’t the hidden message along these lines: “if the place is this busy, the food must be really good!” Now think of a time when you have been the only guest at a very quiet restaurant. Did you not wonder if maybe everyone knew something you didn’t? That maybe the food was bad or the restaurant had had some bad press? Same thing with a coffee bar. If people walk by and see lots of customers, they assume that it must be a great place!
7. Risk Assessment
Eighty percent of all businesses fail in their first five years. To ensure that you don’t become just another statistic, you need to examine all the risks associated with your venture.
Spend a few minutes now to brainstorm anything and everything that could go wrong in your business. Ask yourself how you will overcome these challenges should you encounter them. To help you get started, we’ve included several sets of questions for you to answer.
(a) Should you own your own business?
• Are you prepared to put in the time and effort necessary to build your business?
• Are you prepared for the sacrifices you will need to be successful?
• Are you prepared to learn the skills you will need?
• Are you prepared to implement the strategies successful businesses use?
• Building a wholesale business involves knocking on doors and selling your service — are you comfortable with this?
(b) Are you familiar with the market you are choosing to get into?
• What are the current trends?
• What are the trends of the future?
• How will these influence you and your concept?
• Are you well positioned to meet these trends?
(c) Is your concept suitable?
• How strong is your concept?
• How focused is it?
• How vulnerable is it to competition?
(d) Are you offering the right products?
• Will your products appeal to your specific target market?
• Is your product line focused or are you trying to sell all things to all people?
(e) Are you offering the right services?
• Will your services appeal to your target market?
(f) Are you financially set?
• Do you have enough start-up capital to fund your concept properly? (We discuss this in detail in Chapter 2.)
• Have you considered how negative cash flow will affect you?
As you continue through this book, you will see that there are many other potential risks. They include —
• Poor site
• Too high rent
• Poorly designed coffee bar
• Unaccounted-for cost overruns during construction
• Poor staff hiring and training practices
• Poor business, product, staff, facilities, and financial management practices
• Inferior quality products
• Poor customer service
• Failure to market the business
• Lack of funds to market the business
• Poor marketing strategies
• Lack