WHY: Some Coffee Businesses Succeed and Many Fail

Specialty coffee, craft beverages, local baked goods, and just about all things “artisan” are in high demand these days (Even toast!). It doesn’t matter if you are in a big city like Los Angeles or you are in a small town outside a suburb of Tulsa, you’ve likely seen a small locally owned coffee shop crafting, or at least selling an array of artisan goods.  Each year, thousands of would-be entrepreneurs, tired of working for someone else, risk everything for a taste of the American dream by way of opening their very own coffee shop business.  Some go on to achieve great success, while many more end up closing their doors, never to open again.  The question is, what’s the difference between these two groups of people?  Why do some achieve their dream and others fail?

When starting their coffee businesses, both of the above mentioned groups have access to the same research, the same coffee business consulting, the same coffee schools and coffee business classes, the same coffee roasters and equipment vendors, the same marketing companies, and the same barista training.  So why do such a small number of coffee shop entrepreneurs achieve significantly greater success than others that may be even better funded, better educated, better located, and have an even better written business plan?

As Simon Sinek said in his acclaimed TED Talk – “It starts with why.”

Most people looking to start a coffee shop business cannot explain why they are opening their coffee shop. They can merely justify it.

  • There isn’t a coffee shop in my town, so I want to jump on the business opportunity before someone else does.”
  • Coffee is a multi billion dollar industry. People love coffee and are willing to spend upward of five bucks a cup at some of those big chain shops. The market it ripe!”
  • I don’t really drink coffee, but I’ve always loved the vibe in coffee shops. I just want to create a place in our community for people to come hang out.”

These are not reasons why one opens a coffee business.  These are justifications for carrying out an idea.  There’s a key difference.  None of the above reasons will motivate or inspire anyone to stay the course through the low points of business – and there are always low points.  None of these reasons have enough substance to act as a driving force to get back on top.  This is a very important factor. 

When asked to explain their coffee business concept in more detail, many can easily tell you what they intend do.  It’s the easiest thing to describe – It’s the products and services they plan to sell. Example: We are going to sell delicious coffee and pastries.” 

Some can even explain how they intend to do what they do.  Meaning, they can explain how different or better they are going to be than the guy down the road.  Example: We are going to be in a high-traffic area, we are going to source the very best coffee beans from the top coffee roasters in America, all of our baristas will pour latte art, and we will be using the very best espresso machine on planet earth!”

Many think it’s these things that are the differentiating or motivating factor for why people will support their coffee shop.  Unfortunately, these things don’t inspire people, change lives, generate brand loyalty, or propagate long term success.  They also don’t get you through the rough patches.  These “hows” are ultimately just tricks and shiny objects to make people think you are better.  It works to a degree – for a while.

A coffee shop relying on their “hows” will typically open to a warm public reception, be the cool “happening place” for a little while, then customers are on to the next new place that is equally convenient, but has newer tricks and shinier objects.  When there is no substance beneath the surface, the longevity of the coffee shop business is doomed from the start.

“People don’t buy how or what you are doing.  They buy why you do it.” – Simon Sinek

By why, I don’t mean “to be a means of making money.”  Money is a result.  It’s not the reason.  (This understanding is where the two groups mentioned above are vastly different.)

By why, I mean what’s your purpose?  What’s your cause?  What’s your belief?  What are you passionate about?  Why does your coffee shop exist?  And, why should anyone care?  Why you do this is your real differentiating factor.  This is why people will loyally line up at your counter everyday even after other coffee shops open nearby. (Which they most certainly will once you prove there is a market for specialty coffee in your area!)  This is why you are great, and why people will be fiercely loyal to you. It boils down to passion.

Anybody can have a product or service – meaning anyone can sling a decent cup of coffee.

Who cares!  That’s a given!  You are a coffee shop.  Of course you should be serving the best coffee possible!  But great coffee isn’t what makes you unique or great for the long haul.  That is a feature that can be easily replicated. Why would anyone stay loyal to your business once a new shop opens down the road with coffee at the same or better level?

Truly great coffee business entrepreneurs have a point of view – a passionate belief in a cause for which they are deeply committed down to the core of their being.  It’s why they get out of bed every day.  It excites them.  They live this.  They breath this.  It is woven into the fabric of who they are.  It keeps them focused and motivated through the low times.  It is not a business, it’s a lifestyle.  A lifestyle that inspires others.

It all revolves around the love for something bigger just coffee.

These coffee business entrepreneurs understand that their passion is not for everyone, and they are okay with that.  They don’t try to be all things to all people.  They are focused on why they do what they do, and they do it well!  These are the coffee entrepreneurs that change the world.  Coffee is their catalyst.

This is why Texas Coffee School exists.  If we can reach people from all over the world and help them understand the real power of a truly great coffee experience, then inspire the mindset and ecosystem and provide the business and management tools to shepherd this movement in their own neighborhoods and cities, we can positively impact the places we live and inspire others through the things we are into, which just happens to be – coffee.

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