E T&P
Barista’s Battle Scars
Susan M. Jensen Srivatsa Seshadri Larry G. Carstenson
This case tells the story of an entrepreneur couple who launched an upscale retail coffee business in a mid-sized college town in the Midwest. Barista’s enjoyed immediate and overwhelming market acceptance and was even named “Entrepreneur of the Year,” yet had tremendous difficulty in obtaining expansion capital. The choice of legal advisor also proved to have enormous impact on the future viability of the business. Written from the perspective of the entrepreneurs, the case provides unique insight regarding the importance of cultivating the effective professional relationships needed for business success.
Act One, June 2001: The Eternal Line at the Drive-Through
“We can never close!” Kelly1 realized, with a mixture of wonder and dread. As she worked feverishly to fill orders, Kelly watched the line of cars waiting to be served stretch across two city blocks. Since opening 6 months ago with a loan from Community Bank, sales had been booming at the drive-through coffee shop. With its distinctive European design, unique products, and commitment to personalized service, Barista’s had quickly built a reputation as the quality place for gourmet coffee. Kelly felt so proud to have realized her dream of creating a drive-through setting that mirrored the experience of an upscale sit-down indoor restaurant, with beautifully tended gardens, waterfalls, and soft music coming from outdoor speakers. The shop was built on a small plot of land that was surrounded on all sides by other businesses. She utilized her prior experience as an interior designer to create a uniquely welcoming location (see Figure 1). No impersonal, scratchy loudspeaker ordering system here; instead, Kelly and her staff fostered a close interaction with customers by taking their orders face to face at the window. And no operating hours were posted. The business operated on the policy