Be Careful the Next Time You Order a Double Shot at Starbucks!

Starbucks, everyone’s favorite coffee mega-chain, made an announcement recently that had a few people scratching their heads; they are going to try and offer alcohol in one of their Portland stores. People don’t typically look for a shot of whiskey to go with their double shot no-foam latte, at least not publically. So coffee consumers all across the country are wondering what Starbucks is up to. They have already tried the model in Seattle, with some success, and some analysts are predicting that Starbucks is looking to expand into sit-down dining.

This raises an interesting question that many businesses face after a while; when do you decide to expand to other products? While selling booze may not exactly fit in your business model, there are plenty of linkable items that make sense together. A T-shirt company could expand to sell jeans, or a soda company may expand to sell water. Before making this type of change, you should ask yourself five key questions about the your plans and your company.

1. Does this make sense?

If you think about it, the coffee/liquor hybrid isn’t the oddest thing in the world. Sure, most people don’t go to Starbucks to get two fixes out of one trip, but who out there hasn’t added a shot of Bailey’s to an after-work Cup of Joe? This is going to be the absolute easiest question to answer, but sometimes there are moments where our genuinely great ideas unravel after a few days of thinking. Put yourself in the position of the consumer; if I go to this company to buy X, will I genuinely want to buy Y with it? Sometimes, odd mixes work really well together. Roscoe’s Chicken and Waffles is a testament to that. Most of the time, though, it is better to stick to two products that are a bit more alike.

2. What does the current market look like?

Your company may have done really well selling a certain product by filling a niche in the community you market to, or simply meeting long-unheeded demand. Before you expand, you need to give as much thought to the new market you will be trying to break into as you did when you first began your company. You may have had your first great business idea quite a while ago, and it is easy to forget how hard it is to start a business when you have a successful one already chugging along. If you have the capital, hire someone to give you a good, well-researched report on current conditions for the product you want to sell. It is better to spend the money now, and not end up with boxes of product on your hands and no one to sell it to.

3. Will my customers prefer convenience to name?

It is highly likely you will be competing with another company for market share, and that company probably put a lot of time and effort in associating their name with their product. There is a lot of goodwill in a name, and people trust what has been firmly established. If you decide to break into the market, you need to figure out if your current customers will be willing to make the switch. If your products are related, it makes this process a little easier; someone looking to buy shampoo will probably be willing to buy a comb in the same store. You are going to have to offer something to entice new consumers over to your company, whether it is convenience, price, or quality. In this case, convenience is on your side as a lower price is indicative of a lower quality product, and a higher price will scare customers away.

4. Will this damage my reputation?

This is the question that Starbucks has to ask itself. Right now, it is trying to market itself as a neighborhood hangout. Young moms pushing their kids in strollers can relax for a couple of minutes with friends on the patio. If they start selling alcohol, the clientele will change, and that neighborhood image will definitely be lost. If you spent a lot of time, money, and effort on linking your company with a good quality product, you need to make sure that selling something else will not damage that reputation. Trust is a major component for consumers when they decide whom to do business with, so make sure you don’t destroy that trust.

5. Is it even worth it?

After you exhaustedly thought through those four, objectively ask yourself if it is worth all the effort to build up another product. It will take capital, dedication, and passion, just like when you first began your business. If you can look yourself in the mirror and say, “Yes, this is worth it,” then go for it. A successful company means you have a mind for business, and sometimes an entrepreneur needs to follow their gut feelings.

Coffee and Liquor, Chicken and Waffles, Bacon and Chocolate: not the most obvious combinations, but each delicious in its own way. Despite these exceptions, most companies will not do too well if they sell two, conflicting products. When deciding if to sell something new, always be sure to be as objective as possible and ask yourself the necessary questions. You may not have the next Roscoe’s or Starbucks on your hands, but you could sell a few more units, making your business that much stronger.

About Deborah Sweeney

is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best.