Mindset

When I first started to explore the world of Specialty Coffee in the early 2000's, and we started visiting the places everyone considered to be the best roasters, coffee shops, and purveyors of espresso, I was delighted, and fascinated. And through it all, I had one mindset.
 

Whatever they were doing, whatever level of sublime tastiness they had achieved, whatever level of mastery they were showing in their craft -- whatever it was had already been done. That meant it was possible. And because I knew it was possible, and that someone had already been doing it at that level, then that was my minimum standard.

My minimum standard, my starting point for coffee excellence was measured by what the best of the best were doing. And until what I was doing was on par, or better than what they were doing, it never saw the light of day. Whether it was learning how to roast or understanding that siphon brewing has everything to do with philosophy first, technique second.

There's always someone who will be doing something great. And to whoever you are, I applaud your genius. Thank you for showing me that, now I'm going to do it better.

That's my mindset.

Ideas shared, nurtured, and cultivated grow into dreams realized

It was an early summer evening in 2001, Yiching called me and said, "I think we should start our own (coffee/tea) business."

I was making the bulk of my income delivering pizza at the time, "Let me run some numbers," I replied. I spent the next several hours driving around, furiously jotting down notes and figures on a stack of napkins, until I eventually called her back.

"We can do it." I said. The napkin never lies.

And at that moment, we forever changed our lives.

From an early feature on caffe d'bolla

A seminar or two from the Small Business Development Center. Determining how to best fund our venture. Two years of traveling to CoffeeFest, and the SCAA with each of us taking different sets of classes with reams of notes, and figuring out by the following year what was and was not relevant to us. This was followed by months of hitting numerous coffee shops and espresso bars locally, in the Pacific Northwest, and overseas, where we quickly developed an understanding of why that first sip is so important.

We also sought out those owners who were doing something special and did our best to pick their brains with what limited understanding we had at that time. Sprinkled in the midst of it all was an on-going search for wares and ceramics, as well as eighteen months of location searching and lease negotiations until we found the right spot. Design decisions, planning, re-drawing, and more planning. Menu development, espresso testing, and a whole host of other decisions made on the fly, which was only possible because of our extensive research and planning.  And that barely scratched the surface of what happened.


The beginning comes and goes so fast that you barely have time to appreciate it. There were many relationships being built behind the scenes, most which we still maintain today. It was a time of discovery and a time of challenges, but soon a greater challenge loomed ahead. There came a day for both of us, in the early summer of 2004, when we said goodbye to the our former lives, unlocked our doors and pulled the string on the OPEN sign for the first time.

caffe d'bolla first year store front

When I look back to how this all started as an idea some fourteen years ago, just a few short months after we were married. I am most proud of the support and belief we had in each other so early in our lives to know that together, we could accomplish anything.

Best of State 2015, our third straight.

And as soon as Alex learns how to pull shots, we can think about our next adventure.

Alex, Yiching, and me. Kansai, Japan 2015.

Coffee and Inspiration

We have hundreds of amazing customers who come for our espresso and coffee, and each one is met with a cheerful, "Hello" from my wife, Yiching. She knows most everyone by name, and always remembers their drinks. 

She catches the eyes and stomachs of many who come in with her cakes, brownies, muffins, and cookies, which she bakes daily. 

She helps me identify flavors in all of our espresso. She takes the simple and makes it beautiful, whether it's with an addition to our china and ceramics or her latte art. She consistently makes the best cappuccino around, and always gets a smile when she tells our customers it's because she makes them "with love".

So every time you taste an espresso, enjoy a siphon, or wonder why the coffee you take home is so good, thank Yiching. She is the reason I am inspired to create something wonderful.

The right mindset will take you far

When you are starting your coffee business, the mindset you have will determine your path down the line.

Be like the Samurai warrior.

Develop your skills through discipline and training.
Understand the battlefield.
Strategize.
Implement your plan of attack.
Strengthen your core to counter any opposition.
Master your skills through continued discipline and training.

Customer Growth - common mistakes and solutions

Author's Note: Many new shops come and just as quickly as they come, they are gone. 
Nearly all failures can be attributed to poor planning, but improper strategies can be almost as fatal. This short piece is for all new and prospective owners. Dismiss this at your own peril.

You have navigated through all the hoops, attended trade shows and seminars, traveled here and there to gain perspective, and now you've opened your doors. The one issue that sends many new owners in the beginning months into a panic, and a panic that often leads to poor decisions; is "How do I get more customers RIGHT NOW?"

There are several responses to this state of panic. I will talk about the most common, when they can be good, and when they are likely a road to failure. There are a few major metropolitan areas in the country that are also coffee-centric, so it is possible to blindly stumble through a successful run just based on pure numbers. For most of the country, it's a much more precarious balancing act.

The three most common (and misused) responses to "How do I get more customers right now?" are: Punch Cards, Coupons, and Changing the Menu.

Let's look at these.

Punch Cards:

This is perhaps the worst thing you can do in terms of a long term strategy. Can they do some good? Yes. IF you have a strategey in place ahead of time. The strategy is data collection. The end result of a long-term punch card program is not customer retention... it doesn't work that way. They are not loyal to you, they are loyal to the discount.

If Punch cards are brought into play, a better strategy is to use them as a one time thing. One new customer, one punch card. And the card can only be redeemed by having X purchases, and filling out name and email legibly on the back. Now the drink should be "one on us" not FREE.

Words matter. FREE says, "This drink has no value" but if it's "on us", it has a value, and you are gifting it to them. So, you're not exchanging the drink for the purchase of nine drinks. You are exchanging the drink for their information. The other drinks just get them to form a habit. But no second card! Just enough to "thank" the newcomers, and to collect their data. Now you can direct market to each of them. No, don't send them coupons. Interact. Include them on inside information about what you are doing, what coffees you have coming, and pass along a little education. Let them know that you are their Jeeves when it comes to questions about coffee and espresso.

Coupons:

The most often used is the infamous BOGO. Again, not good as a long term strategy, and should never be used outside of your opening months, if at all. This can sometimes be used when you first open to get people in the door, but once again, it's of utmost importance to never use the word FREE in your advertising. Now a number of marketing tomes, most useless, will say that FREE is one of the words that grabs attention. Yes. It grabs the attention of people looking for a discount. "Buy a latte have a second of equal or lesser value on us." would be fine. Have a "One coupon per customer" and to all that is holy, put a freakin' expiration date on it. No more than two to four weeks out.

As a long term strategy, neither punch cards nor coupons are good. And here's why.

Punch cards and coupons are the number one contributors to "The leaky bucket syndrome" -- you keep trying to plug the hole with a discount, but you keep leaking customers because they are NOT customers, they are bargain shoppers. So if you use them at all, use them only as short term strategies. Get their attention, sure, but if you need to offer a discount a second time, then you have to face the reality -- you have a lousy product.

Changing the Menu:

"You should add blended drinks", "How about adding breakfast items", "Maybe you need soup." OR "Your prices are too high".

Changes like this are never good. Does it gain you customers? NO. But it will give you plenty of opportunities to test the merits of Excedrin.

The moment you take these kinds of suggestions from customers seriously is the moment you've signed on for a downward spiral of doom. Those people who want you to change what you are doing are not your core customers, and probably will not be long term supporters of your business.

Have a core philosophy. Know what you are doing as a business and stick to it. It is as simple as that. You're an owner now, act like one.

Raise prices, yes. Lower prices, never. A wise man once said, "I never saw someone go out of business by charging too much" It's about value, and value isn't a number, it's about getting more than they expected. It's about the customer saying, "$4.50? That was fantastic! I would have paid $5"

So the question was, "How do I get customers?"

Have a plan in place.

To expect hundreds through the door on the day you open is not grounded in reality. You should expect to have enough capital to cover all of your expenses for several months out. Didn't do it? The honest answer would be, "Good luck." That kind of situation is why 7-10 businesses fail. It can all be directly related to poor planning. So avoid failure by planning well.

Building a customer base takes time, but panicking never solves anything. With Twitter, Yelp, Google, Facebook, and all the other social media forums, it's much easier to get the word out now than it was five or ten years ago. Take advantage of the mediums available. They can connect you with potential customers in a way that wasn't possible before. Word of Mouth is always the fastest way to grow as a small business, and Word of Mouth via social media is a whole new ballgame today.

Have a great product.

This goes without saying, but this is where most fail. Don't do the "old and busted" do the "new hotness".

Offer something unique.

Be the first in your area to roast on site, to offer coffee by the cup, to offer espresso only, to offer house made syrups, to teach classes, etc...

Building a customer base is something you are constantly doing. It begins day one, and it never ends. It's a testamant to your business savvy, the quality of your product, and your willingness to be daring.

It all starts with your first cup.

Perspective

During a recent vist, a colleague of mine brought up the Gerber (E-Myth) quip, "You're working IN your business, rather than ON your business." when he asked how much time I spent at work.

There are two main reasons why someone opens a small business.
1) They love what they do (and they make money doing it).
2) To make money supporting what they love(d) to do.

Now if your love is money, or your love is owning a business, then there are many businesses you can start with that end goal in mind. Create a business. Create a system. Watch the business grow. Repeat. Now if your love is books, or pastries, or sushi, or coffee, or cute crafts, then at what point does your love become business?

Let's look at owner operated shops in other countries. You can see many of them if you watch Rick Steves travel shows, where tourists walk around happily to happy owners in happy shops all over Europe. Small restaurants, wineries, caffe, pub, clothing stores, etc. Some of these are fourth or fifth generation. Families go into work doing something they love as part of their culture, family, or something they discovered in their journey of life. Work schedules are long, but not overwhelming... Want a vacation? Take one! Want to change the schedule? Change it! Want to begin something new? You can do that too. The idea that working successfully IN your business is not as rewarding as standing aside and watching someone else do it often mystifies me.

Again, ask yourself the question, "If I love X so much, then why is someone else doing it for me?" And that's ok. It's just a different perspective.

I love working for myself. I love working with my wife. I love making, tasting, brewing, roasting, and understanding coffee and espresso. It's not work. It's love.
But I don't think I need to limit myself to one song, one drink, or one business. Sharing the daily opportunity for us to grow this business together will always make the caffe "home", but that doesn't mean there isn't a little condo we have our eye on as well.

Stay tuned...

The Market Gap

Understanding the Market Gap is what comprises our capacity for long-term success and continued growth.

[This is a simple post about a very complex issue, but for those of you who understand marketing, innovation, differentiation--these sorts of issues-- will have no problem reading between the lines and filling in your own gaps.]

At the beginning of each project, we ask ourselves these questions:

1) Where is there a gap in the market?
2) How do we fill that gap, and furthermore, how do we differentiate within that gap?

In a greater sense it's about differentiation, but that in itself is nothing but a meaningless term-- as are many marketing principles. The key to the solution of solving this particular Market Gap was easy.

The market as a whole is comprised of two distinct tracks. The first track is comprised of the Chains--the Starbucks, Tully's, Caribou, Dunkin' Donuts, etc. of the world. The second track consists of Those Who Insist They Are Different (but really aren't) the "Indies". Most of the independents are a rehashing of the Starbucks menu--including sizing, blended frappa-crappa drinks and the like. The only difference is an insistence of better product but a result of greater inconsistency.

Where's the Gap? Quality.

What's our differentiation within the Gap? One cup at a time. And a relentless and continuous pursuit of Knowledge of Quality and its immediate implementation.

For our purposes, Quality can be defined as, "Sourcing quality ingredients, utilizing quality knowledge and training, and producing a quality product every time." This is a standard held by many top caffe, top restaurants, and other top businesses.
There are differences in each company's level of knowledge as to the answers to these questions:

* Within our industry, what is the standard of quality?

* Is our standard of quality higher, lower, or on par with the industry?

* What empirical proof do we have of our standard?

* Does the market dictate our standard or do we dictate our standard?

* Does our level of standard stay the same (i.e. repackaging old as new)?

* Does our level of standard lower in order to cater to the Lowest Common Denominator?

* Does our level of standard continuously change as our Knowledge of Quality changes?

It is this final question and a resulting answer of "yes" that leads us to the heart of our differentiation, and this does not only apply to us, but to every business that pushes itself to the forefront and quietly leads by an aggressive qualitative approach rather than an aggressive quantitative approach.

(in our case) Whether it's an espresso, or a cup of single origin siphon coffee, or a latte, or a hot tea, or an iced tea, or a bubble tea, or a chai, etc. it's all by the cup. No bulk drip coffee. Everything is by the cup.

Of course this approach puts us as a sliver within the Gap, but with deep penetration. But the main factor that gives us certainty of long term viability is a continuous search for knowledge and its immediate implementation. This is a concept which extends to our other pursuits as well and will be clear in our future endeavors.

Ask yourself these questions?

* How can we make our X better?
With our example, X can be (our espresso, our coffee roasting, our tea containers, our store layout, our internal marketing, our external marketing, our hot chocolate, our bubble tea, our gelato, etc.

* What can we learn from the best in the field (in terms of Quality)?
Know who the top players in your field are and study what they are doing. Pick their brain, speak their language, and break down their years of knowledge into months of hard work.

* What can we do to improve upon what they are doing?

* What is the best thing they do? Can we do it? Can we improve it?

* What is the second best thing they do?...

* What new thing can I learn today?

Whether you learn about proper heel placement and body-weight shifting during a tenkan kotegaeshi, the perfect sesame cold noodle, how to train your dog, the difference between coffee A at temperature X vs. temperature Y, the best day to water your flower garden, etc. The more you know, the more you are exposed to, the more you understand, the more your mind can relate things together that are seemingly unrelatable. Genius and inspiration often occur when we least expect it. It is when are minds are at rest that everything can come together. So while you're not thinking about much, there's sure to be a lot stirring around in that head of yours. But if there's nothing in the pot, all you'll end up with is a wet spoon.

Understand the Market Gap for YOUR particular industry, and how you answer that question will be the defining concept of your entire business. Do it right knowing that improvement by innovation and quality will always lead to long term success.

Observations on Failure and Success

After watching most of the BBC version and the first two shows of the US version of Gordon Ramsay's "Kitchen Nightmares," it is easy to see why so many in the foodservice business, be it a restaurant or a coffee shop, fail. Not including location and lack of capital, which are often two of the primary business killers, I want to look at those things that are overlooked but often prove to be the death nail.

Lack of Preparation Before Opening: This is the time to do serious homework. You need to do everything including flow in the kitchen, color and size of plates, where will you source your products--have you tested all of these products... How will you price? Why will you price? What is on the menu? Is everyone trained?, Who is your target? Is the menu developed to attract that target? What type of external marketing will you do? What type of internal marketing will you do? And hundreds of other things.

Too Complex: Menus with too many selections. If your customers take fifteen minutes just to read the menu, they will probably get bored or confused.

No Leadership: Poor management and/or lack of leadership. This is 100% fault of the ownership.

Lack of Detail: This goes in conjunction with Lack of Preparation. Once you have opened, it's understanding those little details that make the difference. Is all the food going out at the same time? Is it all hot? Is there crema on your Americano? Are you testing your shots daily? Do you put latte art on all latte? Are your plates clean, etc. Details.

These problems are both universal and easy to remedy, but you have to have the will to do it. Success is not a byproduct of passion and the fact that you love something doesn't mean you will be good at it. Understanding the reasons for business failure is one way to assure your competitive edge and move beyond mere survival.

Do you have what it takes?

The Concept of "Firing Customers"

In "Lessons in Excellence from Charlie Trotter,(pp195-196)" Paul Clarke writes,

"After you pick your customers by carefully targeting a relatively homogeneous market, it's time to narrow the market further. More than likely, some customers aren't right for your business, particularly if your is an enterprise that attempts to offer customers truly distinctive products or services. So get rid of customers who aren't right. This contemporary and somewhat unconventional business practice is known as "firing customers."

"If you want to make your business better sometimes, it's not always a question of trying to make every customer happy," explains Trotter. "Maybe it's better to fire certain segments of your customer base to make what you do even better for your best customers."
...

Why would any business want to get rid of paying customers? For one thing, your product, company, or service is defined not only by its features, uses, and benefits, but also by its customers or users. Also, in service businesses, certain customers--for example, smokers or young children--could alienate your best customers. Most important, the objective of firing is not simply to get rid of certain customers, but to fine-tune the product or the marketing message for your target market."

It is important for each of us to designate our position in the market and craft our entire business philosophy from product quality to quality of service to reflect that. This is something that we have been doing since day one, and while this is foreign to many in our industry --trust me, I've seen their ideas of "marketing"-- it is an important lesson that we can learn from one of the greats in the service industry.

This idea of "firing customers" is more evolved in European, and to some degree, Asian countries. The faulty logic that too many in our industry have is that a "customer" is anyone with a couple of bucks who walks through the door and orders a drink. Those who understand market positioning, and dominating that position will tell you that in order to define your market, you have to create a culture of excellence where the customer seeks your expertise, rather than questions it.

If the industry is to evolve, you should not be afraid to "fire" customers from time to time...BUT to do so without understanding and defining your place in the market will be perilous.

The Cart Before the Horse

Another coffee shop has succumbed to the Reaper, now while it is a wholly unfortunate thing, it was easily foreseeable once their primary marketing scheme was revealed. The death was easily predictable once coupons and BOGO were used as their method(s) of promotion.

Any reputable marketer will tell you, and all the market research bears this out, that coupons/discount marketing is not only the worst form of marketing, but it does more harm than good.
In terms of marketing we want to:
1) Establish a niche or 'position'
2) Increase our customer base
3) Increase awareness of the #1
4) Increase long term revenue

Here are the obvious problems with discount marketing.
1) Establishes your business as a 'discount' business-- one not capable of having products worthy of the full price.
2) Increases number of people wanting something "FREE" does not increase PAYING customer base. In fact, it decreases paying customer base because it erodes their confidence in your product.
3) Discount marketing does reaffirm to everyone that the particular business is failing or has positioned themselves with the mindset of failure.
4) The decrease in paying customers and the increase in non-paying/discount customers leads to an easily predictable decrease in revenue.

But then WHY do so many local/small businesses have such a poor understanding of marketing? Most people want an easy fix, they want to be the Day Trader or the lottery winner. This is business folly. So before you put the gimmick before the quality of your product, Beware! A picture paints a thousand words, eh?