From a Single Bean Grew a Beanstalk: The Private Company Era (1987-1982)
As a private company between 1987-1982, Starbucks opened 150 new stores in five years, which surpassed its 1987 business plan objective of 125 new stores. Schultz’s business plan had predicted that there would be losses in Starbucks early years; and he was right: Starbucks posted losses of $330,000 in 1987, $764,000 in 1988, and $1.2 million in 1989. In 1990, Starbucks finally boasted a profit. Despite being in the red those initial years, Starbucks was still able to raise the needed funds from venture capital financing. When board members tensely questioned Howard Schultz about the company’s lack of profitability, he had to find a way to justify those losses to the board and prove that they were necessary for an investment strategy.
