At Bellissimo, our consulting clients fall into one of four categories. The first consists of entrepreneurs in the early stages of planning a new coffee operation. We often work with these clients from the inception of their projects, and the consulting we do for them usually includes writing a business plan, projecting financials, designing the store, aiding in equipment purchases, developing the menu, and, finally, store opening and training.

This is the type of client who understands that a consultant can help them avoid the pitfalls that inevitably face anyone undertaking an endeavor as complicated as starting up a coffee business. In fact, two recent clients who hired us well before they signed a lease are each averaging approximately 3,000 dollars a day in sales. Given the challenges a new start-up coffee business faces, these huge numbers aren’t always the norm, so when our clients achieve this kind of success with our help, we are thrilled. The old adages "Do it right the first time" and "You only have one chance to make a great first impression" are both very true!

The second category consists of those who call us well into their project or when they are ready to open their store. These clients usually ask for help in only a few areas, i.e. on-site training. When we arrive at their operations, we often see costly mistakes in build-out and equipment selection that could have been prevented if we had been involved in their project from the beginning. Some of these errors can be rectified, others can’t.

The third category of consulting client consists of those who contact us for the first time after they are already open. These clients often have semi-successful operations and either want to expand or increase their revenues. These clients realize that the expert advice they receive from a qualified consultant will help them achieve their goals and more than repay the cost of hiring the consultant.

The fourth category of client is the one I am going to write about today -- those who are in desperate need of “damage control.” In the past, this type of client was uncommon, but lately, we have received a rash of calls from panicked operators asking for consulting advice and services. Typically, these operators don’t have a lot of money to fix their broken businesses, but they know they will lose everything if they don’t seek outside help...but sometimes they enlist a consultant too late. I believe the increase in requests for this type of help are indicative of where specialty coffee is today, and I have worked with three clients in this category in 2007 alone.

Often when I arrive at a damage control job, the ambiance of the operation is wanting or poorly planned. If changes need to be made in this area, this is generally not where a struggling operation with a limited budget can afford to start. Seating areas are often limited. Lighting and materials used in construction are poor. The overall store layout could be at least 50 percent better. However, the reasons these operations don’t make a profit are usually more complicated.

There are a number of similarities in the three operations in which I have done damage control this year. Drink quality was totally unacceptable, though in every case the operator thought it was fairly good. Staff training was done by either a coffee roaster or equipment dealer and was sub-standard. Menu was either too sparse or too complicated. Customer service was sub-par and the staff was never trained to up sell. Employees had little or no coffee knowledge, passion for the product or for the operation in which they were working. Branding and signage were fair to poor.

These retailers don’t realize that they must do all the above much better than the large chains or they will be out of business within a year. Two of the operations were undercapitalized from the onset and couldn’t afford to do the marketing they needed to do to get people through the door. None of the three were marketing effectively to their target group. In each case, I was happy they had not executed a marketing plan because drink quality and customer service needed to improve first. If they had been able to get customers through the door initially, most of them wouldn’t have come back. In two of the three operations, I saw bad equipment choices, staffing mistakes and little or no operational controls.

In the above list, some changes can be made quickly and others will take time to implement. Before I leave a damage control job, I make a list of what needs to happen in the next seven days, a checklist for the first month, and, finally, a priority list of other changes that should, and must, be made over time as cash flow permits.

One of the three clients was from the East Coast. He traveled across the country to attend Coffee Fest Seattle last fall, and Matt and I spent a good deal of time with him at the tradeshow. After meeting with us, it was apparent he was excited about working with Bellissimo. He told us he would call as soon as he got home. He didn’t, nor did he return our phone calls. When he finally did call a few weeks ago, he asked if I remembered him. I said I did, thinking the reason we hadn’t heard from him until now was because he hadn’t been able to find a location, and was just now ready to get started. I was shocked to learn he had already been open for two months and was tracking a half million-dollar loss for 2007. We spent two full days together at his location, and I plan to be in close contact with him over the coming months. As he drove me to the airport, he said, "Bruce, even though I have a background in business, I can't believe I thought I knew it all. I wish so much I had worked with you from day one."

Retail specialty coffee is not the slam-dunk that so many budding entrepreneurs think it is. It is very sad to see people lose their life savings and watch their dream turn into a nightmare. I always give potential clients the following advice: “If the match isn’t right, don’t work with us; but please, if you are investing hundreds of thousands of dollars in your project, work with someone who can guide you.”

It is in your best interest to hire a consultant to help you through the process of opening your specialty coffee business. But be warned: everyone who wants to sell you something will try to be your expert. Even those who aren’t even qualified to help you will claim they are experts. Remember, free advice is usually worth exactly what you pay for it! So do your homework and avoid consultants who have an agenda other than helping you succeed. But how do you tell who is an expert and who is not? Many who claim to be experts will tell you they have slain armies when in reality they have only done battle with windmills. To protect yourself, call references and do as much investigation as you possibly can. Your life savings could depend upon your due diligence.

Of course, we love the challenge of turning an operation around -- if it isn’t already too late. But I have to admit, no matter how satisfying that is, it is so much more rewarding to help clients avoid costly mistakes. As I said earlier, do it right the first time. It is much easier to buy a new car than repair one after an accident.