Building Sustainable Business
By Robert Schroeder
A successful business will post its profits, but what makes a successful sustainable business?
That's the question National Louis University's Doug Schreder, associate professor in the College of Management and Business, explored in his publication "Kickapoo Coffee – An Entrepreneurial Case Study." Schreder recently presented his findings at the 28th International Conference on Case Method Research and Application in Dublin, Ireland June 25-29, 2011.
"Identifying what would be important ingredeitsn for an entreprenuerial start-up is one thing, but it's another that this can happen in a sustainable way, that it can happen in a way that balances work and one's private live, and can be in a rural setting," Schreder said.
Kickapoo Coffee is a privately-owned coffee roasting company specializing in organic fair-trade brews with humble roots in Viroqua, Iowa. Founder Caleb Nicholes dabbled in coffee brewing as a hobby but eventually turned his interest into a business. After a slow half-year starting up, Nicholes partnered with T.J. Semanchin, who had studied sustainable development in Latin American and brought much-needed business acumen to the company.
With the two at the helm, the company has grown into a nation-wide operation with over $1 million in annual sales. Schreder identifies numerous factors that enabled the partners to achieve their success. First, the two never took on debt to finance start-up costs. Rather, they dipped into their own personal finances; for example, Nicholes sold his wine collection to obtain initial capital.
"They didn't overextend themselves," Schreder said. "They grew at a sustainable rate and really focused on building the business in their own community."
The two utilized their separate talents and divided work to suit their abilities—Nicholes with the creative passions, Semanchin with the financial end. Finally, the company reaped the benefits of positive public relations after earning the title of Roaster of the Year by Roast Magazine in 2010.
"It didn't just happen naturally," Schreder said. "They had to apply a couple of times and make the effort to put themselves into consideration for that kind of accolade."
Schreder uses the case study in his Master of Business Administration capstone management course, a class in which he says usually 2/3 of students express an interest in opening their own business. He says the study is a tool to show students that building a business does not have to become a life-encompassing affair. He develops the idea of sustainability to include local or intimate relations with suppliers, paying above market rates, giving back to the community, and providing for the people of the company.
A sustainable focus does not mean an exclusively local focus, Schreder says. He points out that Nicholes and Semanchin used social media to build territory and expand the brand from a local focus to nationwide recognition.
"It's a great example of people who have followed their passion," Schreder said. 'if someone asked me the number one ingredient for success, I would say it is to do something you really love doing. "Don't worry about the results; if you do that and really have a passion, and stick to it, y ou will be successful in the long run."