Martyn Dawes admits that when he founded Coffee Nation he wasn’t quite on the right track. Having identified a gap in the market between instant coffee out of a jar and increasingly popular espresso bars, he set about installing coffee vending machines in service stations and other retailers.
But rather than the gourmet bean-to-cup machines we’re used to seeing now, the company began life offering low-value, low-quality instant coffee and powdered milk.
Business was steady but Dawes had trouble attracting angel investors to make the business grow.
“One thing I feel really grateful for in my own journey was going through that at an early stage,” he says. “I nearly gave up, I nearly ran out of money, I was technically insolvent at one point, but I managed to hang in there to find the X Factor that would make it work.”
The eureka moment came when he decided to switch the instant machines for ones using gourmet coffee and fresh milk.
Despite an increase in price per cup, sales began to grow. Suddenly investors began to take note.
“I had been banging my head against a brick wall trying to raise capital until that point,” he says. “Why? Because I’d got a shit business. It was a dud, it was a duck. But with that switch of the product it suddenly became easier. Raising money isn’t difficult if you’ve got something that works.”
Dawes’s new book, Wake Up and Sell the Coffee, meticulously details every aspect of his journey growing Coffee Nation. He hopes it will help others following in his footsteps to avoid making the same mistakes.
“A lot of people continue to make the same mistakes that I made at the start. Starting a business is like having a child. You don’t know what you don’t know. It’s exciting but it’s a very precarious path,” he says.
A key part of navigating this path is research, he says.
“Do the homework upfront. Test, test, test and test but spend very little money,” he adds. “Spend a little to learn a lot. Don’t be so focused on building a business before you even know you’ve got a business.”
Understanding where your business is and where it’s going can be invaluable for everything from attracting staff to convincing investors and approaching potential partners, because it gives you the confidence to put together a killer pitch.
For instance, Dawes was able to attract Coffee Nation’s operations director from a good career with a large company because he had a compelling message.
Continue reading on page two…
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