A Brief History of The Coffee Plantation – Part 4 (Continued)

2010 April 6
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6. Understand the Meaning of Key Words

When we sold The Coffee Plantation, we sold to The Second Cup. There were many long discussions about culture, people, and quality before we inked the deal. We both dealt in good faith and I have considerable respect for The Second Cup. However, I came to learn that while we spoke the same words and affirmed our allegiance to certain concepts, the meaning of key words in the minds of each party were quite different. Whenever you plan to do something significant with another person or firm, you really need to go deep on the meaning of key words and concepts. What is quality? Who are the most important people? What motivates you to be in business? What is your definition of “success”? How does money figure into priorities? What if things go wrong — what will you do? The answers to these questions and more are much better discussed up front than discovered when you step on a land mine in the future.

Application: Flesh out all of the key words and concepts with people or firms you are doing something significant with. Find differences now, not later!

7. Make Layers

It always amazes me how hundreds of people decide on any given day decide to come to our place. What was it that caused them to choose us over one of the many alternatives? I honestly don’t know and if I asked them, they might not be able to put it into words. Since I have no clue what motivated their decision, I have made it a practice to build in as many layers of reasons as I can possibly think of. At The Coffee Planation, we had several layers: roasting our own coffee, sourcing only the best green coffee, a well trained barista corps, speedy service, a great looking build out, a relaxed and inviting atmosphere, very large baked goods, a huge selection of local cheesecakes, a full kitchen, ample outdoor seating, a great location, getting the best teas direct, using toddy for all iced drinks, happy hour, late night, and lots of community involvement. After the sale, slowly these layers were removed. One or two layers being peeled off didn’t matter hugely, but after awhile, the reasons for choosing The Coffee Plantation over other places was less and less. At all subsequent endeavors, I have tried to build in lots of layers and add layers over time, not strip them away. Even little things can be the tipping point in the buying decision.

Application: Build in as many layers of reasons to come to your place as you can possibly think of and execute. You never know which of them tips the buying decision of an individual in your favor.

8. Be Different

There is so much boredom and homogeneity in foodservice and retail. The chains have made the landscape so bland and one community indistinguishable from another. Always work to be distinctly different. The chains go for a bland, inoffensive, generic look that is comforting to many people. Be weird. Do things that a chain would not do. Rehab a building that has a past and real story. Infuse your personal taste. Make things in-house and in front of the customer. Don’t wear generic uniforms. Have a music play list that is unique, not “generic wine bar music”. If you are different, you will have to market much less. That is because most “marketing” is an attempt to differentiate products with no real differences. Media will seek you out and you will get free press, which is invaluable. The only caution would be that you can be so weird as to cut out your appeal to the local customer base. If you paint the walls black and play acid rock in a wine bar in Scottsdale, you are different but you will not survive.

Application: Differentiate yourself from the pack. The chains tend to be bland and homogenous– be yourself. Just be sure not to cut off your potential customer base.

9. Location, Location: Be Patient

It is an old adage: “location, location, location”. It is not entirely true because I would also add “concept, concept, concept”. Nevertheless, a poor choice of location is one of the fatal mistakes a business owner can make. I always wait for a great location. Settling for a ‘B’ or a ‘C’ location is signing up for a struggle. The lower rent in worse locations results in lower sales and profits. The time it takes to ramp up to break even is much longer and people are tempted to market/advertise their way out of the sales doldrums (expensive and of dubious worth). Patience is tough, when you have an idea and eager to start. There is always the fear that someone else is going to beat you to the punch. Please  believe me, you are better off waiting.

An ‘A’ location for your business is not necessarily a high traffic mall or other conventional location. You have to really understand your concept and the customer base you wish to attract. Then you need to do a general search for what parts of your community fit with the concept and have the right demographics (both resident: who lives there and transient: who visits or works there). There are numerous companies used by chains that can do general demographic and psycho-demographic studies for a certain location (some data you can get for free from the Economic Development department in the community or your potential landlord). Add to that your personal visit of various sites on various days and times. Talk with other tenants in the area about their customers and sales trends.

Do not set you heart on a particular location too early. You must be dispassionate to some degree and cast your net wide in looking for sites. There would not have been The Coffee Plantation, as we know it, if we had chosen our “first” location: on Central Ave across from Patriot Park. Of course you should pray about locations, too!

Application: Be patient and logical in choosing a location based upon your concept and desired customer base. Choose wisely: it can be a fatal mistake. If you’re lucky — a quick death, if not — a slow, painful death.

10. Have One Great Unit (or Five)

In the USA, the concept of “bigger is better” is firmly entrenched. I bought into it. I do not believe any longer that it is true (in most cases). For most serious “mom and pop” businesses (and I use that term with admiration), they are best served by having one great unit. Focusing on refining a concept and an operation into a finely honed work of art is the most profitable and enjoyable thing they can do. This is true for their customers, as well. Think about the places you love. How many units do they have? Most of them have just one. Why? To be truly different and great takes a huge amount of effort and focus. Spreading that over multiple locations while maintaining any semblance of family life is virtually impossible. Of course, one can make work their entire life, but in the end: faith, family and friends are what’s important.

It all depends on your “end game”, though. My end game for Joe’s Farm Grill, Joe’s Real BBQ, and Liberty Market (separately owned and operated units with operating partners) is : NO END. We are building institutions of quality and longevity with excellent operating economics and sustainable lifestyle for the long run. We are not building them to sell. The alternate approach is to build for sale. It is a path I’ve been down (accidentally, due to the aforementioned mismatch of my giftedness) and have no interest in going down again. For those who do have a build/sell end game plan or blindly succumb to  “bigger is better”, you need to be aware of one thing. In all likelihood you will make LESS money with two units than with one. Better plan on five units to absorb the additional overhead and layers of systems and management needed for the new units to be as good as the first.

Application: The best things come in ones. If you must go down the multi-unit path, search your heart first for why (greed, dissatisfaction?) and realize that you need five units (plus plenty of headache) to be as profitable as one great unit.

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4 Responses
  1. April 6, 2010

    Once again, fantastic and inspiring!

  2. April 6, 2010

    Good stuff, Joe. Need to get this published in book format.

  3. April 7, 2010

    The layers comment resonated most with me. Layers give people less reason NOT to go to your establishments over others. Any business can have great product, but if paired with lousy service – you may put up with it as a customer a few times, but likelihood of repetition diminishes. The same can be said for great location, great service, lousy product. People can put up with a lot, but eventually there will be external forces (competition) pulling customers away as the layer of negativity pushes them out the door.

    The thing I love about every establishment you have created is that the argument is just as strong as to why I decided to go there as it is why I didn’t go somewhere else.

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