Lessons Your Small Business Can Draw from the Success of Coffee Franchises

Coffee franchises are some of the most successful businesses around. Take Starbucks, for instance. This Seattle-based brand has taken the world by storm with over 29,000 branches globally. Their success isn’t just about the number of locations—they saw an 11% increase in net revenues in the last quarter of 2018 compared to the same period the previous year, reaching a record $6.3 billion.

Other coffee brands are thriving too. In the US, the coffee industry is valued at over $18 billion and growing. In the UK, Costa Coffee has expanded from 170 franchises to over 2,000 in just ten years.

The formula for their success isn’t a secret. Coffee brands follow certain steps and evolve with the times to keep growing. As a small business owner, you can adopt some of these strategies for your own success.

Firstly, identify your key product or service. Once you’ve established this, focus on honing your business’s talent to excel in that area. This doesn’t mean you can’t explore other offerings. For example, Starbucks, known primarily as a coffee shop, expanded into offering food and other beverages. In 2012, they acquired Teavana, adding tea to their menu. You don’t need to buy another business to expand—just choose offerings that complement your core product.

Costa Coffee has grown by teaming up with other businesses. Their Costa Express self-service machines are found in mini-markets globally, and they have small cafes in stores like Primark and Waterstones. These partnerships are mutually beneficial because they bring in more customers and share revenue.

You can apply these ideas to your small business by exploring partnerships with other local small businesses. Whether you run a physical restaurant or an online marketing company, forming relationships with other enterprises can boost revenue for everyone involved.

Big coffee chains also excel at customer retention. Offering free Wi-Fi and loyalty programs helps bring customers back. Some, like Dunkin’ Donuts, even offer in-app ordering so customers can skip the line.

Consider what your business can do to stand out and keep customers returning. Offering unique advantages over competitors can make a big difference.

If you want to grow and attract more customers, franchising might be a smart move. Starbucks reached 29,000 branches by franchising, not by opening each branch directly. Franchising allows growth without bearing all the costs. Even web-based businesses can franchise online, charging a franchise fee for new operations without shouldering all the expenses.