This Father And Son Created A Coffee Subscription Business
Hello! Who are you and what business did you start?
My name is Jon Butt and, with my son, Harvey, we own Blue Coffee Box in the UK.
It’s a specialty coffee subscription that creates a voyage of discovery of specialty coffee for our members.
Our customers range from coffee lovers who want to see which flavours and roaster they love rather than diving right in with a single roaster to those that just want to experience truly great coffee. There’s also the gift buyer who want to give the gift that keeps giving. After all, who doesn’t love gourmet coffee?
Right now, we generate around $14,000 a month and it increases month on month, no matter what marketing we do.
What's your backstory and how did you come up with the idea?
I have been running my own businesses since I left school (that means I have grey hair). During my travels in the USA a few years ago, I read about speciality coffee subscriptions that curated from various niche coffee roasters. In the UK, subscription services tend to only supply from the one roaster and are more for convenience of reordering rather than discovery of new coffees.
I was busy enough with other businesses so I asked my sensible business friends to talk me out of it. They all said “do it”.
Having told my son, Harvey, being 17 at the time and not wanting to be encumbered with a student loan after university, he suggested setting up something similar in the UK to pay his way through University and not be burdened with $65,000 of student debt. So, Blue Coffee Box was born in 2017.
I was busy enough with other businesses so I asked my sensible business friends to talk me out of it. They all said “do it”.
I wrote out detailed cash flow forecasts and, even with my pessimistically low predictions, it still looked worth doing. Plus, I’d get a never ending supply of great coffee.
I’m not a firm believer of all the validation theories for a simple business like this that was not designed for mega growth or VC investment or an early exit sale. It’s easy to see the growing demand for specialty coffee and the UK was behind the USA. Nuff said.
So, my back bedroom was turned into a mini coffee factory with shelving and an incredibly expensive grinder and off we went.
Take us through the process of designing, prototyping, and manufacturing your first product.
This was pretty much bootstrapped. Huge finance was not needed.
For the web platform, we thought we’d be spending big money to get it custom programmed but then stumbled on Cratejoy who, in the same way that Wordpress is a dedicated blogging platform, is a dedicated subscription box platform. And it’s only $39 a month. A no brainer.
They have a free subscription school site with resources, including designers and coders.
I found a coder in India who had great feedback and was ridiculously low priced.
However, I have always sold B2B products that nobody really wants. My customers are forced to buy fire safety by legislation. Branding, social media and the rest have never been an essential requirement.
But, a luxury consumer product via subscription needs more attention so I found a couple of designers (not on Fiverr or Upwork, who I normally use daily) in the Cratejoy resources listings who had either subscription box or coffee experience.
In fact, by coincidence, one had designed for our favourite model coffee business in the USA. But they turned out to be way too expensive. So I struck a deal with the subscription lady who’d worked as a creative director in the past.
Before she started, we got a three logos designed and finally selected one on 99Designs. But, our new designer made a new one without asking and it was perfect. That validated our decision.
For price, we looked at our potential rivals and then priced it slightly above as we regard this as a lifestyle choice product and being the cheapest is not a great policy. We also had to try and make a margin so £17.99 was the price.
There were then discounts for prepaying 3-months and 6-months as this is a normal practice for subscriptions. Money in the bank helps cashflow so these prepays as essential.
We eventually brought in a reduced size £7.99 product at around the price of most of our rivals (but a little above) and had to reduce the main product price in ratio for the content to £16.99
The only prototyping was for our box size. We used Dominos pizza boxes that we cut down to make as small and tight as humanly possible to fit through a UK letterbox (all homes have a letterbox in the door). That was fun and we love pizza.
Describe the process of launching the business.
Lindsay, our designer (from Portland, Oregon, not from the UK) was told how our sales flow will work and she designed the website layouts. I reduced her price by only asking for the home, subscription, about and contact pages.
She used stock images as placeholders until I took some photos with my iPhone and the CameraPlus app.
To buy customised printed boxes at the best price, we got lots of quotes and bought 2000. The cutting tool and print plates (inside and out) cost more than the actual boxes but were a one-off.
To finance the business, I took out a personal loan as that costs less than a business loan and is so much easier to get (in the UK). The business repays it over three years.
To launch, I sent an individual email to every person I’ve ever met, got business cards for, have had email contact with, was friends on social with, was related to, etc, etc.
We also set up a Gleam giveaway to give 20 free boxes in exchange for social follows to build our social footprint.
To be honest, friend and family were a waste of time and effort. I won’t even go there. I mean, close (very close) family did not even reply or make excuses not to buy. And they were offered discounts!!
My biggest hope was to put inserts into my fire business’s daily shipments with a discount voucher. That tanked. Badly. Crickets.
Lesson learned - a great offer will be wasted on the wrong audience, no matter what you think.
But sales started to come in at 25-35 or so a month. Many came from suppliers to my other businesses. I didn’t ask to buy, just to “support” my 17-year-old son.
Since launch, what has worked to attract and retain customers?
The other great hope was to contact bloggers to get reviews and giveaways. But, if they agree, the process can take a while for them to get a post up, run a giveaway and then get the results.
The thought was to get a sale or two from each blogger and to track it via dedicated discount coupons.
Sales did not happen (so-called “influencers” hardly ever have real influence). However, each review left us with a link and that helped us climb Google. A result.
Something to remember. Do not waste your time with time-saving software. Nothing can simulate the genuine.
After a few months of testing and more testing to find what works to get customers, I decided that we either give up (as in, shut down), or figure it out fast.
So, I went back to basics, what I did when I started online years ago. I did a serious deep dive into keyword research and competition on SEMrush. I spent 2 days on it and then set up new Google Adwords ad groups based on the findings. I started my main business with Adwords so have years of experience.
This was February 2018 and we suddenly started getting sales from Adwords and didn’t stop. It was like starting again and has grown steadily from there. Yay!
The other smart move was to properly contact individual bloggers with the right audience and do everything to sound like I was speaking to just them - no templates or software.
I own two “outreach” software systems but did not use either. This is la ong and laborious task. But, done that way, it works. People (including me) get inundated with template “I found your article on….” emails daily.
Something to remember. Do not waste your time with time-saving software. Nothing can simulate the genuine.
How are you doing today and what does the future look like?
Sales are now growing steadily and enable us to buy in more services to grow to a sustainable level.
Our coffee sales are now high enough for us to demand the price we need, and for suppliers to agree. That price is roughly two thirds the price we paid at the start.
Web traffic has grown to around 7500 users a month but much of the growth is down to our blog ranking and bringing in more readers. These readers don’t often convert and reduces the overall conversions. So, we try to tempt them with an exit intent popup offer.
One of the main things we learned is not to try and give traffic attribution to each sale. We look at the overall marketing spend as a whole and regard each part as an essential part of that mix. Blog reviews, Adwords, facebook ads, social, emails, content, exit pops, giveaways, etc.
Consistency is key. Everything you do that makes sense and works, keep doing. Genuine outreach is better known as PR. Do it always as it can pay dividends a year later.
At the start, we had three steps to reach. Step 1 was to break even. Step 2 was to move out of my home and employ packers to do the doing. Step 3 was to pay towards Harvey’s University fees.
Step 2 had to be passed before Harvey left for University. I spend every other month in Vancouver, Canada, so could not be around packing boxes.
We (Harvey did this) wrote out processes for how to do everything we do (easier than it sounds unless you’re doing it wrong) and hired two part-timers for 3-hours a day, 5-days a week in July. The reason for getting two was to cover for holidays and illness of each other.
As for Step 3, the business is paying his accomodation and will be paying his entire fees ($20,000 per year) in February or March.
Through starting the business, have you learned anything particularly helpful or advantageous?
Luckily, I’d learned a lot in 10 years online. My businesses are run on the Emyth system (book by Michael Gerber - Emyth Revisited) so they are self-managed and not dependant on me. That is when the magic happens.
A lesson that was good to learn all over again was that the basics are essential. These days, we all worry about social media and Facebook ads. They didn’t exist when I started online (none of them) and were not needed then so they are not as important as you’d think today. Not on day 1.
Going back to the basics seemed a bit backwards and boring but it worked last time and worked again.
Don’t believe the hype of online magical solutions. They are rarely worth the time.
The main lesson I’d implore people to learn is to make every effort to get yourself out of doing the doing (packing, admin, answering emails, admin, opening post, and did I mention admin? Etc) in the first year.
Yes, you can afford it. If you are packing boxes, you are not marketing. No customers and no growth means no packing needed.
Spend 80% of your time and effort getting sales. Just aim for one at a time as they all add up and momentum comes. You’ll learn what works best if you try everything so try all the free methods before spending a penny on ads.
What platform/tools do you use for your business?
As mentioned before, our business runs on the Cratejoy platform. Their website makes it look like they are just a marketplace but they don’t advertise it well.
That takes away hosting, programming issues, security worries and allows us to get on with the work.
For other stuff, Google Docs is still free and enables us to work remotely and share everything. We store files in Dropbox as it’s easier than Drive.
For all the things you don’t know, start with Fiverr. For bigger projects, use Upwork. Our production system is an Excel macro built as requested on Upwork.
What have been the most influential books, podcasts, or other resources?
I used to have a marketing podcast myself and recorded nearly 700 episodes including interviewing all the people who I wanted to get free training from. That helped.
For books, if you have not read the E-Myth Revisited, it is a must. I’d also read Built to Sell by John Warrilow. If you have a subscription business, John also wrote The Automatic Customer.
Advice for other entrepreneurs who want to get started or are just starting out?
Don’t try to start a business unless you already have the idea and a plan. Don’t plan to make some money on the side and then look for ideas.
Start with a plan. There’s plenty of free templates online. Write out everything about your idea, just for yourself. Then edit it until you are convinced that it can be done.
Do not use credit cards to start a business. Imagine the interest you’ll waste and the debt you can get in. Get a loan, no matter how small. Don’t believe the made up stories of “I was $100,000 in debt, sleeping on my sister’s couch and then…..” These are never true so do not try to copy.
And, this will be hard work so block out time to do things. Make appointments for yourself in your calendar. Schedule the time to do regular tasks.
Are you looking to hire for certain positions right now?
As we make more sales, we hire part-time staff to do jobs that we don’t want to do. That includes our social media manager and, during 2019, a part-time marketing manager will be on our radar.
That person is likely to be a professional marketing person in the UK who has left their industry to start a family and decided to stay home. But they are going stir crazy talking about nappies (diapers). If that’s you, get in touch.
Where can we go to learn more?
The best way to find out what we do and how we do it is to buy something from us at Blue Coffee Box, lol. We ship worldwide and it’s great research ;-)
On social media, we are @BlueCoffeeBox and we’d love for you to say hello (and show us pics of your coffee).
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