- [Marcus] Coffee is an amazing thing.
- [Maliesha] It's first dates.
It's business meetings.
- [John] I mean, some theorists say that,
you know, coffee kind of started
the industrial revolution
and took us out of the dark ages.
- [Jess] It's part of the love of coffee,
staying on top of the
curve, ahead of the wave.
- [Marcus] I don't know.
There's nothing like it.
(funky music)
- The kind of person
that excels at running
or opening a coffee
house, I hate to say it,
but, really unusual person.
You have to have every skill set.
- Number one, they have
to have enough capital
to open a business.
Number two, they have to have
a passion to run a business.
- And you have to be willing to learn.
You have to be wide open
to learning at all times
and never say, I got this right.
- I mean, you definitely
have to have the quality
of being okay with the unknown.
- You have to be a perfectionist,
but you also have to be
half-assed about everything.
- You really need to sort of fall back
on all the things you've
ever done in your life.
- If you don't talk, if
you're not out there,
you're not gonna get anybody interested
in what you're doing.
- They have to love being around people
because this is really a people business,
from your staff to your guests.
- It also helps to be community-minded,
cause that's really at the end of the day,
what a coffee shop's all about.
- It's an odd skill set.
I don't run across a lot of
people that can multitask
that many things, the financial
side, the people side,
the product side, the equipment,
relations with vendors, watching numbers.
It's hard.
My name is Marcus Goller,
and I run coffee houses.
I've been in coffee 35 years.
I've run, probably, the busiest
coffee house in the world.
I've run really slow coffee houses,
so I've done it all, all over the country.
So, I grew up in California,
and I went to UC Davis,
studied psychology.
But I got a job at a cafe in
Davis, because I begged for it.
I was like, you gotta hire me.
Everywhere I went in the
Bay Area coffee scene,
I met wonderful people,
people that were passionate about coffee.
They just made me realize what
a fun occupation it could be,
so I just wanted to be part of that.
(funky drum beat)
If you have any thoughts at all about
going into the coffee
business, you gotta work it.
So, get a job at a cafe.
Especially try and go
to a successful cafe,
to one that's more craft.
So get a job, and then
just excel at your job.
Put everything you've got into it.
Do it right.
Work with the team and
try and work your way up,
and gain more knowledge.
Cause either you're going
to find you don't like it,
or you love it.
- And then also, you
can, through that job,
make some connections that might
help you open up your shop.
At the end of the day, if
you don't know something,
you can only google it so far.
And you're probably going
to end up spending more time
on the Internet than you
would've if you had just
asked someone you knew had
the answer to your question.
Networking is essential because
we all have answers that
we're ready to give.
But you have to be asked the
question in order to give it.
And without networking,
I think I would've spent a lot of time
second-guessing myself.
And also looking for answers that were
more readily available
if I had just, like,
looked to another coffee professional.
My name is Jess Harmon, and
I am the Director of Coffee
for Cultivate Coffee and Taphouse.
Outside of Cultivate, I help other people
who are interested in starting
up their own businesses,
and I answer a lot of questions for people
who have general questions about roasting,
questions about machines,
and also just health code
questions and concerns.
If you don't have a good
idea of what your budget is
going into it, it's more likely
that you're gonna run out
of money sooner than later.
In reality, if you're serving coffee,
you're not there to make money.
It's not a business people
should go into to make money.
It's a business you should go into
if you want to be a part of your community
and if you want to serve people
and have that type of environment,
and just be that kind of person.
There's not a very high margin
on a lot of coffee products,
and it takes a lot to end up
turning a profit, you know.
The biggest costs that go
into starting a business,
how much you want to renovate,
if it's turn-key or not.
You can buy out coffee shops,
and have pretty much all
the equipment ready to go.
But that's not usually what
people are stepping into
when they buy a coffee shop,
so a build-out can cost a lot of money.
And then also, your espresso
machine's gonna cost you
a lot of money as well.
It's probably anywhere between,
if you're gonna get a two
group automatic machine,
$8000 to $20,000.
It's like buying a car.
Yeah.
So just your three big
main pieces of equipment,
the water system, the grinder
and the espresso machine,
can cost you up to $20,000, at least.
- The number of things you need are huge.
The only way to know that is
to have worked in the business.
So, then, once you know what
all your costs are gonna be,
add 20%.
I'm sorry, you know, as
fine as you can get it,
there's always cost
overruns in construction,
unforeseen things.
You don't wanna go into the
biz underestimating the costs,
but you wanna be as accurate as you can.
Add 20% and then think,
okay, what have I got?
How am I gonna finance this?
Can it be done?
Sometimes you have to go
back and rework the solution,
cause it just may not work.
Not everybody can pull off, you know,
a half a million dollar coffee house.
In fact, they shouldn't.
It's not smart.
- Well, when I was
starting, I had no finances.
I got a scholarship.
My finances were dire.
I know some people cash out 401ks.
Some people start with all kind of stuff.
I had nowhere to go but up.
That's one thing I really
appreciate about, like,
the cold brew coffee, is,
it's a way to get into
the coffee industry.
I think when you talk to other people,
coffee shops and stuff, espresso
machines are like $15,000
or, you know, like,
they're really expensive.
And actually, when I opened
my shop, my niche was,
everything was made with cold brew coffee,
so I could still make hot drinks,
but I would make them with,
like, I had a $30 frother,
and I would froth milk
and stuff like that.
I didn't have to buy an
expensive espresso machine
because that would've been it.
I would not have been in the business,
just from that piece of equipment alone.
Ultimately, I want the story
to resonate with people
that look like me or have the
experiences that I've had,
so that they can feel as
if they can do it, too.
Like, yeah, I don't have a trust fund.
It's okay.
I can still do this.
- I had read a little story
about coffee roasting at home.
So I was roasting some
coffee in this garage.
I mean, I did that for four years exactly.
But during that time, I
was sort of like, you know,
slowly, methodically, like, learning about
what I'd have to do to open a cafe.
But I also wanted to open a roaster,
so that's what I did, you know.
It started off as just roasting coffee.
I just kept doing it,
and I kept, like, just,
kept boot-strapping it
and reinvesting and saving
and reinvesting and saving and saving.
You know, just saving.
And, like, I didn't pay
myself for probably the first,
you know, I didn't pay
myself for the first,
like, eight years of this business.
I mean, I would drink coffee for free,
but, I didn't pay myself, like, any money.
I had another job.
(funky drum beat)
- [Marcus] You know, unless
you have a rich uncle
or you're wealthy yourself,
you're probably going to have to go out
and get an SBA loan or
some kind of private equity
or a family loan.
But they're gonna wanna
know what are you doing,
and what are the chances of
success, and is it believable?
Does it pass the smell test?
So, wrote a formal business
plan, it was very thorough,
so it included executive summary,
products, pricing, costs,
all the financials for three years.
- It's really you saying
that you know how to go
from point A to point B
and that you've thought
through the entire process.
It's also really important
to look at your business plan
to see how well you've
thought through the thing.
And to know that you're,
it's not just at the end of the day,
this is how much I spent
and this is how much I have,
so that's my profit.
It's like, you really have to
plan for the whole picture,
the whole health of the entire business
and its sustainability.
- And then you really
have to do a narrative
on what it is you're doing.
So, as best you can, in detail, like,
what is the business, what's it, why, who,
what's the impact, why this
location, who's your customer?
You need to know, like,
what's gonna bite you.
You need to list those things out, like,
if anything goes wrong, what
could they be, most likely?
All that kind of stuff.
- A business plan is meant
to be changed and updated,
but also, the business plan is just, like,
the structure of where you're going.
And if you're not willing to adapt that,
then you're probably not
going to succeed over time.
It's really about setting
small goals and achieving those
one little bit at a time.
(funky drum beat)
