Barista Case How Could She Manage the Seemingly Eternal Rush of Cars?

Barista Case

Act One: How could she manage the seemingly eternal rush of cars? Was it time to consider expanding the business . . . and if so, how?

• If Kelly wanted to manage the drive-thru better she could use her extra percentage of sales to hire more staff. One staff member could be outside getting ahead on orders in the drive through so there is two people taking orders rather than just one. She could also hire another staff for making the orders to keep up with the extra staff outside. I don’t believe she should expand immediately because if she rushes into opening another shop, she will likely lose the culture and environment that is so valued in the original shop. It will take time and more capital to fine the right space, management, and another set of employees to operate a whole new shop.

Act Two: Why did the banker not share her excitement about market opportunities? How could she find a banker who understood the industry and was willing to help Barista’s grow now? What other funding options might exist?

• The banker is not excited about the market opportunities because he is not comparing Kelly’s business to the coffee shop industry. The loan Kelly is asking for might seem more attractive to him when seeing more similarities to a similar industry. He also is not excited that she is only one year into her business, meaning the risk is still high. Kelly could wait a few years or start approaching other banks just to see what she is offered. There may be a banker that is a regular at her shop and is more willing to negotiate her proposal.
• Another funding option for Kelly’s business is selling more products and expanding in that way instead of another shop. She could sell coffee by the bag, coffee mugs, travels cups, or t-shirts. Since she is getting a lot of business she could even allow other businesses to sell their items on a shelf in her shop for a small fee.

Act Three: What alternatives did she have? How could she prevent others from stealing her idea?

• Kelly could franchise and start building locations in other cities. This will allow her to expand her business before others begin to copy it. As people begin to know her shops and she gains customer loyalty, it will be a small entry barrier for new businesses that are the same or similar to hers. However, there is no way to completely avoid competition. Kelly needs to consider what other things she can do to differentiate herself from the market.

Act Four: What steps should Kelly take now to address her concern about the conversation with the prospective franchisee?