When Fabian and Lindsey Leite bought Wesley Owens Coffee (WOC) shop in Monument, Colorado, they knew the business could become even more successful. WOC had already become a popular coffee shop, but it was in need of innovation to take it to the next level. The Leites were up for the challenge and had plenty of ideas to put into action.
The Leites had some advantages to be coffee shop owners. They bring an international flair to the small-town coffee shop as they were both raised in South Africa and then worked in England before making the move to Colorado to take over WOC. Also, Fabian is a credentialed Barista. Further, they had valuable experiences to build upon.
Not Their First Entrepreneurial Rodeo
The Leite’s first entrepreneurial activity was starting an IT consulting company in the UK. Fabian had been employed providing IT services for a company that experienced a drastic and unappealing change in culture. He made the decision to leave for better pastures – ones that he would plow himself. While he had a good reputation from his previous work, he still needed to find customers. Lindsey, admittedly the sales person in the relationship, saw an opportunity. A celebrity chef appeared on TV and was complaining about his IT provider. Lindsey tracked down the chef and sold him on the idea of trying their services instead. The business officially had their first contract. Lindsey was responsible for the back office and Fabian provided IT service, with both doing some networking and winning more work through word-of-mouth referrals. They gained valuable small business knowledge as the IT consulting practice grew.
Moving to the US
Fabian and Lindsey had a fondness for the US, especially Colorado, after seeing it. They hoped for the opportunity to move, but US Immigrations provided no options to do so, until they heard about the Treaty Trade Visa. The Visa application was accompanied by their detailed business plan for purchasing and growing WOC. They received a rare five year Visa (many Treaty Trade Visas are only for two years). This also created additional motivation – they must make the coffee shop a successful business to receive a renewal on their Visa.
Key Innovations and Activities
They have taken many actions already after only owning WOC for six months, including:
- Controlling costs,
- Introducing new products (English High Tea, Red Tea Latte, and other items),
- Offering homemade food,
- Providing more consistent quality,
- Amping up social media and community connections,
- Upgrading the loyalty system,
and more. See the next section for details on the Growth Plan.
The Growth Plan – Important Innovation Lessons for a Small Business
- Leverage Strengths. The Leites were careful to analyze what was working well in the coffee shop before jumping in and making changes. Like skillful physicians, they were wise to diagnosis before prescribing. The coffee shop was known for personal service and a Cheers-like atmosphere. The previous owner of the store knew the names and favorite drinks of over 300 customers and many customers came to the store because of him. They did not want to lose the personal experience customers expected. Also, they needed time to understand how the small-town culture differed from their experience in England and South Africa. What they expected to work from their prior coffee experiences did not always work in Colorado.
- Control Costs. An immediate need was to reduce operating costs. Fabian and Lindsey analyzed current operations and identified cost expenditures that could be reduced. This included revamping food options (e.g., menu items not sold at a reasonable profit were eliminated), reducing perishable waste (e.g., using non-edible display items while fresh items are stored in air-tight containers), using mugs more frequently instead of disposable cups, switching credit card processing to Square to reduce merchant fees, reviewing suppliers to arrange for the best terms, and more.
- Provide Consistent Quality. Fabian recognized that WOC was not serving consistent coffee drinks. If you came each morning for a latte, it may have tasted different day to day. Addressing this issue was critical for creating a high-quality coffee experience each time customers visited the shop. The solution was three-pronged. First, Novo, the coffee supplier, visited the store and offered their analysis. Second, the espresso machine was recalibrated to use the correct pressure and temperature for each drink. Third, staff received additional training to make drinks the same way each time. This created a baseline for consistency, which provided the flexibility for new possibilities. Now customers can make detailed requests about how they like their drinks and baristas customize accordingly.
- Incorporate Compelling Stories. Fabian and Lindsey choose the products in their store for their high quality and their compelling stories. The richness of the stories provides additional touch points with customers to create a unique experience. Two notable examples are Novo Coffee and Ritual Chocolate. Novo Coffee is a Colorado business that works hard to source fine green coffee beans in a socially responsible manner, roast them in vintage Vittoria machines, and create unique and fresh blends. Novo Coffee beans are many times the cost of Starbuck beans and the Leites are glad too discuss why they are worth it. Ritual Chocolate, another Colorado success story, is a nationally respected cacao bean-to-bar artisan chocolate maker dedicated to a hand-made quality products. Customers’ experience with WOC is deepened through the stories of the products chosen. Lindsey says many customers expect to have a conversation about what they choose to eat or drink, and that each product has an interesting story.
- Extend Customer Base. Taking over an existing store is a bit like walking a tightrope. You have to be careful to not alienate existing customers while trying to grow the base of customers. Some customers loved WOC because of the interactions with the previous owner and were unwilling to give the new owners a try. Consequently, while some customers were lost, actions needed to be taken to keep most previous customers coming back and encourage new customers to visit. The previous owner had successfully built a social media presence with customers through Facebook and email marketing, and Lindsey focused attention to build this further. They have seen steady increases in their social media metrics, including a surge when they launched the Red Tea Latte, a new product offering. They executed this launch well, building anticipation for several weeks about a mysterious drink new to Colorado, full of antioxidants, and naturally decaffeinated. Their single highest revenue day was when the Red Tea Latte was introduced. In another effort to grow the customer base, Fabian worked with the other business owners in the stores nearby to get their names put on a sign in front of the store. Fabian wisely chose to describe the business on the sign, displaying “Coffee & More + Drive Thru.” They have received several new customers simply because of the sign, which is more visible from the road than the one on their building.
- Sell More. Small businesses are wise to look for opportunities to sell more products to existing customers, which also creates opportunities for selling to new customers. With their South African origins and many years living in England, Fabian and Lindsey have had several international experiences. They leverage this in a few ways, such as offering a traditional English High Tea, which they consider an innovation for the coffee shop. This Tea experience is offered by reservation only – a great choice for individuals looking to experience High Tea, as well as groups such as birthday parties of all ages. Another innovation is the Red Tea Latte. While this is now a drink available in South Africa, it was new to Fabian and Lindsey. One of their employees, Seth Wilson, discovered the drink and introduced it to WOC. At first the Leites were not very keen on the idea and Seth had to persuade them to try it. This is rather common in organizations of all sizes – employees with an innovative idea need to sell their superiors on the concept. They have also expanded their food offerings and are making more of them fresh daily as opposed to purchasing from suppliers.Watch Seth tell the story of the Red Tea Latte.
- Be Unique. Obviously a small local coffee shop cannot compete with the marketing power of Starbucks, but they can be different. The accumulation of activities previously listed provide a different experience for customers – higher quality coffee beans with an inspirational story, baristas that strive to be artists, Red Tea Latte that is available nowhere else locally, English High Tea, homemade soups, and more, all with a Cheers-like welcoming experience. As Lindsey shared, Starbucks and others have created the “café culture”, but she loves hearing customers say they choose WOC because they offer something unique.
- Experiment. Lindsey and Fabian are not afraid to experiment and try new things. They limit the risk by starting small and changing quickly if the response from customers is not positive. One example was the English High Tea. They solicited a few customers to be a beta test group, listened to feedback and refined the offering. They have also started experimenting with a Bean-to-Cup Coffee Tasting Experience, which is a behind the scenes look at the entire journey from coffee bean to coffee drink, including many variations of beans and how that impacts taste, how the different coffee drinks are made, and of course, numerous tasting opportunities.
- Diversify. When looking for successful coffee shops to benchmark, Fabian and Lindsey recognized they often have a shop-inside-a-shop. In addition to coffee and some food items, the successful businesses have another revenue stream with examples including wine, bakery, books, etc. In some of the benchmarks, the coffee shop was inside a larger store, such as the bicycle business with an independent coffee shop on its premises. They plan to pursue the shop-inside-a-shop concept in the future, but will definitely stay focused on creating a high-quality coffee experience.
A Guiding Belief
As is the case with most entrepreneurs, the Leites had a lot to learn when they started their IT consulting business and still more to learn as they grow WOC. Further, making the move to the US was another drastic change for them. These are experiences that pushed them outside of their comfort zone. They did have some safety nets that provided stabilization through all the changes, including their love for each other and modest savings from a good real estate transaction. However, as they have matured, the safety net they now focus on is their personal faith in God. Prayer has been their foundation. They prayerfully considered each opportunity and felt God leading them in the new direction.
They are in good company according to the ongoing Baylor Religion Survey, that concludes American entrepreneurs feel closer to God, viewing God as personally involved in their lives, and are more committed to frequent prayer. The Leites have seen God lead them at many times during their lives and regardless of the outcome, are confident they are doing what they should be doing now.
Skills – Accumulation and Reuse
Both Lindsey and Fabian recognize that their skills they have learned since their youth have prepared them for their current business adventure. Lindsey provided the example of working in a theatre when she was 15 that taught her marketing skills that she still applies today. The same is true when she studied human resources. For Fabian, his customer service skills he developed as an IT consultant still apply today. It is a good reminder that we are always learning and we don’t always understand how our experiences will apply in the future until we need to draw from previous experiences. I have heard many business owners and innovators share similar comments – that their accumulation of past experiences prepared them directly or indirectly for their current responsibilities, often without a master plan. This is also good advice for employees, as what they learn now will help them with larger responsibilities in the future.
Highlights — Innovation Lessons for Entrepreneurs and Small Business Owners
- Create opportunities – just like Lindsey did selling the celebrity chef on the idea of switching IT providers.
- Have a guiding belief – understand why you are doing what you are doing, and in the case of the Leites and many entrepreneurs, consider God’s role in your plans.
- Learn as you go – Fabian didn’t know all he needed when starting the IT business and taking over WOC, but he learned what he needed as he needed it.
- Seek out ideas – ask and listen to employees, customers, and suppliers for ideas to improve the business.
- Diagnosis before prescribing – analyze current operations and business environment before deciding what to change and improve.
- Give it time – change takes persistence and exposure. It may take longer than you think for new products to catch-on with customers.
- Lean towards your passions – if you are not excited about your products, your customers won’t be either. The Leites are passionate about coffee and it shows in their work.