Holden Associates – Accountants & Business Advisers Blog

The Idea

Take three friends and a passion for coffee and the result is the beginning of an international business. The story of Starbucks is well documented and is often taught in business schools as an example of a good business model. It is absolutely amazing to think that a simple idea of selling coffee beans and roasting accessories could result in the creation of an international coffee business. In 1971 Starbucks was an unknown shop in Seattle Washington. Now Starbucks has over 9,000 retail outlets in 44 countries serving over 20 million customers a week.

Lessons to be learnt

There is no doubt that the story of Starbucks is inspirational. Nevertheless some thought needs to be given to how the Starbucks story relates to your business. There are some good points that have been demonstrated by in this particular entrepreneurial success story.

Firstly your business idea does not need to be complicated or difficult to understand. There have been other successful businesses that have grown out of simple ideas. The simpler the idea the easier it will be for other people to make suggestions or to add value to the idea. If your business idea is difficult to understand it may deter both buyers and investors from engaging with your business.

Secondly an international business cannot usually created by combining ad-hoc processes that do not relate to each other. Being able to replicate a process is often the first step in ensuring that more than a small number of customers will be able to access your services or products. There is no escaping it but all businesses do need systems and processes that contribute towards a completed product.

Thirdly sound financial procedures, planning and forecasts are required. Understanding the financial side of your business is essential. Knowing how much it costs to produce your products and services, what your profit margins are and having accounts all go a long way towards guiding your business in the direction of success.

Fourthly your business will require an ongoing development plan. Can you imagine being a passenger in a car driven by a blind person? How safe or secure would you feel? Likewise how confident would employees feel about working for a company that was not too sure of where it was headed or what the next step would be? Having a development plan enables your business to employ the most talented people that will contribute towards it success.

What can you take forward from the Starbucks model?

The Starbucks message is simple:-

• Do not be afraid to work towards market dominance.
• Plan to succeed today whilst planning far enough ahead in order to dominate tomorrow
• Paying attention finance is a vital side of your business

Every time you drink a cup of coffee think about the how you can turn your business into a multi million pound company. There is more to your business than you think – why not wok with us here at Accountants, Business & Tax Advisors – Holden Associates as your business advisors to helps you.