In honor of its 10th anniversary, we’re highlighting Waterbean Coffee—another Texas Coffee School Coffeepreneur® all-star. With 14 locations and its own roastery, Waterbean is a great example of how vertically integrated scaling can lead to more efficiency, more profit, loyalty from the community, and a more positive impact for coffee producers. Learn more about Waterbean and its founder, former Texas Coffee School student Tony Vo, below.
Feature photo of Tony is by Kat Lawrence for Inside UNC Charlotte.
Building and Scaling a Coffee Shop Business
10 years ago, Tony Vo’s business idea began with a love for cars. He used to attend Cars & Coffee—morning gatherings for car enthusiasts to sip coffee and enjoy camaraderie. At the time, coffee shops in his area of North Carolina primarily consisted of Starbucks and Dunkin’ Donuts.
Tony and his wife, Annie, had an idea to open a business, but were brainstorming what kind of business to open. Then, Tony thought back to his time at Cars & Coffee. What if he could latch onto this rapidly expanding interest in specialty coffee?
A quick Google search later, and Tony was attending Texas Coffee School’s 3-Day Coffee Business Master Class. It took six months for him and Annie to get the coffee shop off the ground while learning the ropes, hiring employees, and understanding customer needs. Eventually, Waterbean Coffee was born in Cornelius, North Carolina, in 2013.
Today, Tony and his team of over 100 employees are operating 14 coffee shop locations. Read on to learn about how Tony scaled effectively and what makes him a successful Texas Coffee School Coffeepreneur®.
We teach aspiring and established coffee shop owners methods for scaling and creating coffee shop efficiencies in our coffee classes, like the one Tony attended more than a decade ago. You can read an introduction to scaling and growth here on the blog.
Original Waterbean Coffee
Original Waterbean Coffee
How Waterbean Coffee Created Efficiencies With Vertically Integrated Growth
Tony shares that mere months after the first location of Waterbean opened, he was already scoping out a second location. That second shop ended up having the most square footage of all their current locations and was instrumental in the brand’s growth. All of Waterbean’s pastries are baked there, and coffee was roasted there until the operations outgrew the space. After the second location was opened, Waterbean ran full speed ahead—with more than one new location per year, and sometimes even opening two or three at the same time.
Tony and his team have become so efficient that they can open a new location in less than a month from the time permits are issues. Here’s how they dialed in coffee shop operations to help the coffee business grow efficiently:
- Lease negotiation: Tony built the Waterbean brand so effectively in his local market that he’s able to negotiate leases and buildouts with significant advantages in his favor. When he wants to open a new location, landlords know that Waterbean will bring more traffic into all the neighboring businesses and drive lease values up. They know Waterbean is a low risk tenant. And they know Waterbean is a significant asset to have in their project. The lease terms Tony has the leverage to negotiate allows each new location to be profitable at a staggeringly fast pace.
- Buildout and contractors: Now with local relationships, Tony has the buildout of each new location down to a science. It’s fast, so there’s less downtime to get a location off the ground. And those relationships help keep costs down and speeds up.
- Roasting and distribution: Waterbean now roasts its own coffee and is able to buy all supplies in bulk, which has driven costs down substantially. They have significant consumption data that allows them to forecast inventory needs with makes them even more efficient. Plus, roasting extends the reach of their brand beyond their stores.
- Marketing: After 10 years and 14 locations, Waterbean is a well-established local brand. Each new location already has brand recognition and a local market of customers.
Traits That Make Tony a Successful Coffeeprenuer®
Tony shared with us some of his best tips and tricks for running a business with the growth mindset of a Texas Coffee School Coffeeprenuer®. These traits include:
- Commitment to Quality and Consistency: This also includes being uncompromising in your vision. “Stay true to yourself,” says Tony. He doesn’t copy other brands, but instead, has stuck with his original unique business concept. With a Vietnamese background, he incorporates Asian and French culture into specialty coffee. In today’s coffee world, most companies are trying to be all things to all people. (Sadly, many are more worried about impressing other coffee professionals instead of the larger customer base they serve.) At Texas Coffee School, we teach our students to know yourself first, so you are better able to define your unique selling proposition and specific audience(s) it will resonate with. This way you can make more strategic decisions and set yourself up for success just like Tony and Waterbean. Authenticity and focus are everything.
- Willingness to Take Big Risks to Get Big Results: This is especially important in the beginning as you set the pace for how your business will run. Tony explains that he is constantly reinvesting profits back into the business to keep it growing. Fortunately, each new location gets less risky as the brand becomes more established, and his processes have become more streamlined.
- Grit, Resilience, and Optimism: Waterbean had been open for seven years by the time the pandemic hit—but that didn’t make it any easier for Tony. Initially, he thought the company was done for. Instead, he was able to pivot and find opportunities where others didn’t, including opening a new location in the space where another coffee shop had closed. “How you run the business during a downturn will get you back up,” he says. “But if you pull back too much, or don’t know how to navigate when it’s tough, you won’t survive.”
The Waterbean Coffee team has grown over the last 10 years!
Take the Class That Helped Launch Waterbean Coffee
If you’re inspired by Tony’s story, why not take the same class that started it all? Our 3-Day Coffee Business Master Class has helped launch hundreds of successful coffee shops across the world. And yours could be next! We have multiple classes available each month to fit with your schedule. Sign up here today.