The title of this article is by design. The things I learn, the challenges I overcome, continue to shape the way I view life and business.
I would not yet define my first business as successful. We haven’t been open for four years, much less the magical number of five. The Coffee Shelf is on the path toward success and I’m working to maintain the current direction. In other words, jamming to Pink Floyd’s Have a Cigar is on hold. Come in here, dear boy, have a cigar,...
At the end of this article I recommend four books which greatly impacted me, and helped to shape my view toward running a business, though they have very little to do with actually running a business.
When I hear, “it’s the way we’ve always done things,” my internal alarm bells go off. While there are many practices from past successful businesses we can chalk up to “tried and true,” I feel it is healthy to question those practices, and when deciding to implement them, honestly evaluate their effectiveness.
-- Discounting your product to increase volume and get your business noticed. --
I’ve rejected this idea since the day I opened my doors. For many types of businesses this is a great practice, tried and true. I simply feel this strategy is not a fit for what I’m trying to accomplish.
My worst day running The Coffee Shelf is a day which still stands as a record for the number of people who came to my store. The grand opening.
I was given strong advice to not only hold a grand opening, but offer all of my regular sized drinks at one dollar a piece. The same drinks which normally sell for anywhere from four to six dollars. This advice came from my supplier who has been in the coffee industry for 25 years. When they speak, I listen. I did not like this idea, but I went along.
Before the day ended two things were apparent to me:
The majority of the customers who walked through my door would never return. They were there for the bargain.
After only one month of operations, we were far from prepared to handle the level of volume thrown at us. Many of the customers we might have gained did not return for some time.
I’m not claiming the grand opening was without positives. I witnessed an uptick in business the following weeks. But running a grand opening with large discounts flew in the face of my strategy for building a business. My goal is to build a long term sustainable business by providing value, in order to attract and retain customers.
Discounting your core product can cheapen its value in the eyes of your customers.
That is not to imply a business model of providing the lowest price does not work. Walmart. Amazon. There is value in a low cost business model.
My business model involves providing more than a quality product. It is also about the overall experience. The atmosphere and warmth of a bookstore with great coffee.
Given the high intelligence and discriminatory buying nature of today’s consumer, I believe the path to establish my type of business model is difficult. It takes time and patience. Customers can recognize a gimmick, and they appreciate receiving value in return for spending their hard earned money.
Building a loyal customer base to drive long term sustainability requires a multi-faceted strategy. I will be diving deep into these subjects in future articles.
And now, the books.
Nassim Nicholas Taleb is what I would call a modern philosopher. I fell in love with his books because they brought into question the way I view everything.
Malcolm Gladwell’s books challenge our understanding of success, provides insight into what pushes a product beyond the tipping point, and even touches on building teams.
I encourage you to consider these reads. If for no other reason, to step outside of your comfort zone. I can state with confidence these reads will challenge your views and beliefs.