The Little Red Roaster
A Case Study
Small family operations, like the Little Red Roaster make up the largest part of our country’s business base. The problem is that too many of them fail, not because of the lack of expertise or motivation, but because of poor business decisions. The LRR is a perfect example of a small operation taken over by a very capable and knowledgeable person, Kendra Gordon-Green. She is one of those hard working employees that have been given the opportunity to become an owner-operator of a small business operation. At this point Kendra has not made the transition from employee to owner. Sadly this very situation is the reason most small businesses like the LRR never make. With two locations and 25 or more employees Kendra can no longer act like an employee or her business will most likely not make it. These are the changes she should make. (1) Kendra must begin to delegate the hands on operations of the business to key employees. (2) Concentrate on the retail and the catering and wholesale will naturally grow. (3) Invest in her people for they are her most important asset. The Little Red Roaster, originally just a retail coffee shop in London, Ontario, offering a menu of coffees, teas, gourmet beverages, breakfast, light lunches and snacks, was established in 1995. The coffee shop had a reputation for having good food and coffee. Kendra Gordon-Green had been an employee of the LRR for seven of the eight years of operation and, in a leadership role, had been able to expand the business from a single retail business in to two, offering retail, wholesale and catering services. The original location was located in Wortley Village, the business and retail area of London. The second location, at Covent Garden Village, was in downtown London, where the vendors were numerous offering the best selection of organic foods, award-winning meats, ethic foods, dairy products, varieties of sweets, and fresh flowers and elegant restaurants. Frequently hosted local art and cultural events were held in the indoor skating rink. Covent Garden Market’s LRR was established in 1999. Kendra had purchased the LRR business in late 2003 and soon realized she was competing in the service industry. With this in mind, she differentiated the LRR from other cafes by concentrating on quick service, a friendly atmosphere and knowledgeable employees.
LRR’s retail business attracted the 26 to 45 age female demographic, who lived or worked within 15 minutes of Covent Garden Market. They were considered coffee drinkers and most were dinking at least one cup of coffee per day. Kendra knew her customers wanted premium coffee and did not mind higher paying a higher price for it.
The wholesale accounts were as follows. Novacks, a retail camping products supply. UPI’s EnviroStation, a gas station, offering coffee to employees and customers. David’s Bistro and Café One, offered coffee on its menus. Also the John Labett Centre, a new arena in town had signed a five-year contract with the LRR to use its coffee exclusively.
Catering by the LRR originated through a radio station, Q97.5 FM, “Office of the Day Event”. The promotion consisted of free coffee and snacks. It generated a significant amount of awareness, but at an average cost of $5 per person, it turned into an expensive one. The promotion did get the LRR in to the catering business and as a result, the company’s catering service became well known and the LRR’s retail customers became the main source of catering business.
The LRR was a family-run business and Kendra, as owner-operator, was very hands on with regard to day to day operations. Her husband, who owned his own marketing business in London, helped her with marketing and promotions. Kendra’s father, who had years of experience as a purchasing agent, planned to handle all operations for the business after he retires in three years, but in the mean time helps out when he can.
Coffee as a commodity...
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