What is an important issue that your company is currently facing?

Issue:

Lay_Yong_Tan_Issue: What is an important issue that your company is currently facing?

Hi I am Lay Yong Tan, CEO of Tan Coffee. The issue that we are dealing with is market saturation. We have been very successful during the last five years growing to five cafes in a low population area. So how do we grow from here?

 

Cause:

Lay_Yong_Tan_Cause: What caused this issue to arise and why is it important?
You need to grow. And of course you start by selling one bag, two bags, three bags. To reach a level where you are sustainable and for the business to continue, you need economies of scale. You need to grow to the point where you can manage as a CEO. You need to grow because as a small business owner I am doing a lot of things myself. But it is not the best us of my time. I am trained as a Chartered Accountant. I could be doing other things. I need a higher rate of return for my time use. Currently I am working for $11.00 or $15.00 per hour. I’d like to be getting paid $200, $300 or $400 per hour. I need to grow to that point. That is the reason. We also have excess capacity. Currently we roast two days a week for a total of 15 hours. Given that there are seven days in a week, we could be roasting at least another three days a week. So our capacity is not being fully utilized. We also have demands from staff. They want to work more hours.

 

Background:

Lay_Yong_Tan_Q1: Can you tell us a bit about yourself and your career path to date?
My name is Lay Yong Tan and I am the CEO of TAN coffee. My career path to date includes being a graduate from Acadia University and then after that I moved onto accounting. So I became a Chartered Accountant and then I worked with TD Waterhouse and from there I went on to become a business consultant and now I am back to Wolfville.

Lay_Yong_Tan_Q2: Can you describe a typical workday for yourself?
As for a typical workday for me, I get up in the morning. I get up around seven. When I leave my house I go to the kitchen in Kentville, pick up the food and then I go to all the cafes and get the orders from the night before. Then I go to my office.

Lay_Yong_Tan_Q3: Can you describe your role in the organization?
My role in the company is to manage the company and the growth. My main role is still financing, because my background as a chartered accountant. Even though I’m a CEO, I’m still a big part CFO.

Lay_Yong_Tan_Q4: How would you describe your leadership style?
I do not look over the shoulder. I delegate a lot. I do a lot of delegation and in some ways it is always good so people work for me. I have big expectations but those individuals have a lot of freedom.

Lay_Yong_Tan_Q5: What does good performance mean for you in your position?
Basically because of my financial background I look at growth. I look at the bottom lines. I look at the financial health of the business. Other than that it is the impression of the coffee and the quality of my coffee. I am very proud of it. So it is like a hobby. If I have coffee I want to make sure it is the best.

Lay_Yong_Tan_Q6: What does your company do and how is it different?
Our motto is, fresh is best, so we roast coffee in small batches. It is 10 kilogram batches. We select very good specialty coffee. A lot of the time we have a relationship with the producer and roast coffee in small batches and usually we have very strict inventory control. In our cafe when we roast coffee the same day it will be on our shelf and sits for three days. If it does not sell in three days we turn it over to what we use to brew. The coffee and then the shelves will all be replaced with new coffee and usually in a cafe the coffee will be less than a week to 10 days old for brewing. For the shelves it is usually three days or under fresh for buying

Lay_Yong_Tan_Q7: How is your company structured or organized?
Right now I am the CEO but I do lots of what any small business owner does. Like I said in the morning I still do the night orders and collect the cash because I do the rounds to the cafes. I go to my bakery to pick up my food and still do the deliveries to all the cafes. There are a lot of company CEOs that would not do that for a small company. I am still doing it part of it is because it only takes about 45 minutes and second part is I can see all the cafes and sort of monitor it. Then I wll be in my office around 9:30 a.m.. We used to have eight stores but right now we have five cafes, four in Nova Scotia and a fifth in Ottawa but it is under license. TAN coffee does four in Nova Scotia and I manage them along with my sister. Each store would have a team leader, the team leader would over look at the entire shelving and would communicate directly to myself or my sister who is the operations manager. So there are a lot of little things every day. You can see the supplies of stocks and how the scheduling is done. In terms of training issues we have to deal with each how cafe, so for each cafe we have a team leader.

Lay_Yong_Tan_Q8: Can you describe any key events that occurred either in your life or that of the company that were critical to success over time?
Back when I was a Chartered Accountant and then when I was a consultant I was introduced to coffee as a consultant to another company and somehow when I started to experience the coffee business and dealing with the producers in countries like Peru, Bolivia, and Guatemala I developed a passion for coffee. I think the key event would be that I just love the product.

Lay_Yong_Tan_Q9: How does your company make money?
Our company is T.A.N. Coffee. It stands for the alternative network. So usually in a typical cafe they buy coffee from a roaster or a distributor. For us it is seed to cup. So I know coffee from basically the seedling to the cup. So I would visit a producer four or five times a year in different countries. I judge the coffee in the producing countries. It is more of a passion than a product.

Lay_Yong_Tan_Q10: Who are the customers of your company and why do they buy its products or services?
We have a wide range of customers from university students to young families, even retirees. In town a lot of customers come to our cafe, people who can taste the difference between specialty coffee and freshly roasted coffee, and then coffee just for a caffeine.

Lay_Yong_Tan_Q11: Can you describe the industry within which your company operates and how it is changing?
If you remember before Tim Hortons coffee, in any restaurant or cafe usually the coffee was not the focus. I think about 40 or 50 years ago you had the introduction of specialty cafe’s like Tim Hortons that specialized in coffee and then Starbucks. So when they did the specialization, it was like 30 years ago where I first tasted Tim Hortons, from restaurant coffee to Tim Hortons, there was a big quality improvement. So that is why Tim Hortons sold well. And then Starbucks was introduced and again they brought up the quality one more level and then when Starbucks was doing so well I think a lot of smaller roasters saw the opportunity to enter the market. It is almost like a winery or a brewery beer. You go from mass marketing to specialization to a very special specialization which we are. I was interested in coffee but not just caffeine, from coffee roasting to how to preserve the quality of coffee to the consumer.

Lay_Yong_Tan_Q13: What is the role of regulators or government in this industry?
Right now the government does not do very much in terms of promotion or anything. There is no government intervention between us and our business. I am not sure the government has any role.

 

Company: T.A.N. Coffee
Size: Small
Industry: Coffee Retail
Business Activity: Accommodation and food service activities
Type of Entity: Private Company
Number of Employees: Fewer than 25
Country: Canada
Headquarters: Windsor, Canada
Yearly Revenue: Less than $1 million
Gender: Male
Subject: Marketing
Keywords:

 

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