At Scripps College in Southern California, a student-run coffee shop has positioned itself as a small business leader in sustainability. Across organizational levels from barista to head manager, employees at the Motley Coffeehouse pursue three concurrent goals: ethically sourced product lines, a customer-focused environment and maximizing profits. Students work at the Motley to learn, but they're constantly facing the difficult task of building a viable and value-driven organization on a small business budget.
Sustainability and ethical sourcing are ideals that can sometimes be difficult to reconcile with profitability. The students leading the Motley exemplify the idea that rationality, research, persistence and community relationships are key in addressing the challenge. We talked to a few Motley employees about the lessons they've learned on sustainability.
Know the price thresholds of your customers. Motley head manager Leah Munsey explains that balance is a matter of economics.
"Ethically sourced products are on the expensive side. But our coffee is a product that our regulars are not willing to give up unless the prices are outrageously high," Munsey says. "It is, more or less, inelastic, meaning that the demand won't change very much when the price changes. Other products we sell, however, are more elastic. Our Kombucha is on the expensive side, and if we increase the price at all, some customers would choose to purchase another drink."
According to financial manager Katharina O'Brien, customer support is invaluable and may override the deterrent of a small premium.
"Our customers seem eager to try new products," O'Brien says. "We are lucky to have such a supportive customer base, and it is incredibly rewarding that we can provide for customers who wish to buy these ethical products."
Be creative with your sourcing. Networking manager Kopano Ramsay says that sometimes you have to be creative to find the ethically sourced products you're looking for.
"When it comes to merchandise, especially clothing, it can be even harder to find ethically sourced products within a budget," Ramsay says. "A while back, I had a hard time trying to find a reliable and affordable clothing company to buy T-shirts from."
Unable to find the right product line for T-shirts, Ramsay created one of her own.
"Eventually, I decided to purchase our T-shirts from local thrift stores, washed them and screen printed our logo on them. I was able to make our shirts affordable at $7," Ramsay says. "The trade-off was that rather than providing T-shirts that all look the same, we now have a diverse range of shirts that all look different. But it still complements our brand identity."
Market intelligence is key for budgets and blind spots. When in doubt, research is invaluable. Budget-minded small businesses cannot afford to take risks in buying products that won't sell. A simple customer survey may prevent these problems ahead of time.
"Each manager works within a budget, so we need to be particularly mindful of each product's cost," Ramsay says. "Occasionally, we will do surveys before putting a product on our shelves. Last year, I wanted to start selling Motley buttons, but I was not sure whether our customers would think the buttons would be worth the price. After about two weeks, I looked at the results and found that the prices we were thinking of charging was about the average amount that people were willing to pay."
Think big, but stay efficient. Facilities manager Alice Opalka reminds business owners to set high, but practical, standards.
"I think that if you are considering trying to become a more socially responsible business, think of a big, but feasible, project," Opalka says."For example, as a coffeeshop, our highest-volume items are milk and coffee. To transition these two products to organic, fair trade, humanely-treated, etc., is going to make a much bigger impact than ordering composted straws. It makes more sense to evaluate the most harmful practices and change those first. That being said, you have to find solutions that are practical for you, your customers and employees."
Ritika Puri is on online media professional who specializes in user research, product strategy and data analysis. She enjoys writing (and ghostwriting) about marketing, user experience, new business models, startups, high-tech, social media and entrepreneurship. Ritika blogs via Contently.com.