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Rebuilding After a Blaze: Luna Gourmet Coffee & Tea · The Steve Harvey Morning Show

0:01
Speaker 1: In March of twenty twenty, when the entire world was
0:03
Speaker 1: first reeling from the pandemic, Doug and Jason Barrow's coffee
0:06
Speaker 1: company had well other problems.
0:10
Speaker 2: Well, when I get to the back and it goes
0:11
Speaker 2: anything going on, Everyone's like, no, everything's perfect, and then
0:13
Speaker 2: one person in the corner goes but it smells like campfire.
0:16
Speaker 2: I'm like campfire. Coffee roasting doesn't smell like campfire. About
0:20
Speaker 2: that time, the ceiling melted, opened up, and all the
0:23
Speaker 2: trusses above us were on fire. Within an hour, it
0:26
Speaker 2: was a complete loss. We weren't left with a paper clip.
0:29
Speaker 3: I was like, I never thought this could actually happen.
0:32
Speaker 1: What did you say to each other?
0:34
Speaker 3: Oh shit? Oh shit?
0:41
Speaker 1: Yeah? Oh shit is right. That's a moment every small
0:44
Speaker 1: business owner can tell you about. It happens in the
0:47
Speaker 1: lifespan of every company, and it's a moment that really
0:49
Speaker 1: tests your resolve. It might also be a moment that
0:52
Speaker 1: changes you and your business forever. I'm Ben Walter, CEO
0:57
Speaker 1: of Chase for Business.
0:59
Speaker 4: And I'm Tanya need Fanoe, a lawyer and consultant for
1:01
Speaker 4: business owners.
1:02
Speaker 1: And this is a show about those moments. Welcome to
1:06
Speaker 1: the Unshakables from Chase for Business and Ruby Studio from iHeartMedia. Hi, Tanya,
1:12
Speaker 1: Hey Ben, how are you. I'm great, We're here, we're
1:14
Speaker 1: doing it. We're starting the podcast and I am fired up. Okay,
1:17
Speaker 1: So do you want to tell the folks at home
1:19
Speaker 1: what we're going to be talking about on the show.
1:21
Speaker 4: This is a show about small businesses. It's a topic
1:23
Speaker 4: that I'm very passionate about. I'm a small business owner myself,
1:27
Speaker 4: by the way, shout out to the Nebo Law firm.
1:30
Speaker 4: I know it can be hard to get a business
1:32
Speaker 4: up and running, let alone lead a business through a crisis.
1:35
Speaker 1: And that's what we're doing on this show. We're sharing
1:37
Speaker 1: the daring stories of small business owners who face that
1:39
Speaker 1: crisis point and tell the story of how they got
1:42
Speaker 1: through it. Now, importantly, these aren't big Wall Street firms
1:45
Speaker 1: or Silicon Valley companies with big, fancy venture capitalists behind them.
1:48
Speaker 1: We're talking about regular people. They're the people who sponsor
1:51
Speaker 1: the Little League in your town that you see at
1:52
Speaker 1: the grocery store.
1:53
Speaker 4: Yeah, people forget that. These unicorn stories are the exception.
1:57
Speaker 4: I'm really excited that we're going to get a chance
1:59
Speaker 4: to speak to typical business owners and we get to
2:02
Speaker 4: hear their stories. So not only do we get to
2:04
Speaker 4: be inspired, but the people listening get to be inspired
2:07
Speaker 4: as well.
2:07
Speaker 1: Okay, I think we should get to the stories. What
2:09
Speaker 1: do you think?
2:10
Speaker 4: I say, let's do it.
2:12
Speaker 1: On today's episode, Luna Gourmet Coffee and Tea from Denver, Colorado.
2:21
Speaker 1: At the top of the episode, you heard Doug and
2:23
Speaker 1: Jason Barrow. They're brothers and owners of Luna Coffee. But
2:27
Speaker 1: back in the early two thousands, Doug never dreamed of
2:29
Speaker 1: owning his own coffee company. He worked an everyday corporate
2:33
Speaker 1: desk job.
2:33
Speaker 2: When you're in corporate America, in management, you know, there
2:36
Speaker 2: are things like golden handcuffs, parachutes four one k's that
2:41
Speaker 2: are very attractive, you know, and when you go out
2:43
Speaker 2: on your own, it's a different game.
2:46
Speaker 3: Now.
2:46
Speaker 1: Doug wasn't sure what he wanted to do other than
2:48
Speaker 1: he knew he wanted to leave corporate America behind, and
2:51
Speaker 1: as it turned out, his brother Jason had been thinking
2:53
Speaker 1: the same thing.
2:54
Speaker 3: But then we kind of woke up one day We're like,
2:56
Speaker 3: wait a minute, we're making a lot of money for
2:58
Speaker 3: these big guys. We probably could go to this ourselves.
3:02
Speaker 1: But exactly what they wanted to go do well, they
3:05
Speaker 1: weren't really sure. They started working through a lot of
3:08
Speaker 1: different business ideas, frankly, just throwing things at the wall,
3:11
Speaker 1: including I think we should mention for posterity selling hot
3:15
Speaker 1: dogs outside of hardware stores. Nothing really stuck. They kept
3:19
Speaker 1: circling back to the same question.
3:22
Speaker 3: How do we find something where the market is really
3:25
Speaker 3: really big, but there are still niche opportunities to really
3:29
Speaker 3: knock it out of the park with.
3:31
Speaker 1: And finally it hit them coffee. Starbucks was national and
3:36
Speaker 1: back in the early two thousands, a new location was
3:39
Speaker 1: opening on every corner. They'd found their really really big market.
3:44
Speaker 2: People go to coffee shops. It's a social, communal product,
3:48
Speaker 2: but everyone has like a personalized way of brewing their coffee,
3:51
Speaker 2: so this is an interesting medium to try to make
3:54
Speaker 2: a difference.
3:55
Speaker 1: So, yeah, it was big, but there was still opportunity,
3:58
Speaker 1: there were niches that hadn't been cleared. And as a bonus,
4:01
Speaker 1: it was their passion. The two of them loved coffee.
4:05
Speaker 3: It's something that you live and breathe and when you
4:08
Speaker 3: take a look back and look from a commodity standpoint,
4:10
Speaker 3: I mean it's one of the most traded commodities in
4:12
Speaker 3: the world, maybe like seventh or eighth to oil. Like
4:16
Speaker 3: you know, we drank four hundred million cups a day
4:18
Speaker 3: in the USA, but.
4:20
Speaker 1: In Denver at the time, they weren't all good cups.
4:24
Speaker 2: We thought to ourselves, well, why isn't there good coffee
4:26
Speaker 2: out here? I mean, why isn't there a proliferation of
4:28
Speaker 2: higher quality coffee.
4:29
Speaker 1: So they'd found their market, their opportunity, and their why.
4:33
Speaker 1: They found a small roaster just a few hours outside
4:36
Speaker 1: of Denver called Luna Coffee, and they bought it. Tell
4:39
Speaker 1: us about what it was like in those early days
4:41
Speaker 1: when you first started.
4:42
Speaker 3: Out, scary and fun, scary and liberating.
4:45
Speaker 2: Being able to be on top and call the cards
4:49
Speaker 2: and make the decision and actually pull the trigger was
4:51
Speaker 2: I guess liberating and empowering. However, let's go thirty days
4:55
Speaker 2: into being an entrepreneur. We didn't have our cushy offices.
4:59
Speaker 2: I was start to roast coffee and my brother was
5:02
Speaker 2: starting to package and deliver coffee, and we started to
5:04
Speaker 2: look at ourselves and go, what exactly do we get
5:06
Speaker 2: ourselves into here?
5:07
Speaker 3: I had so much pride that I would deliver in
5:10
Speaker 3: slacks and a button down.
5:12
Speaker 1: When they first bought the business, Luna's existing clients were
5:15
Speaker 1: mostly high end restaurants that offered gourmet coffee with dessert.
5:18
Speaker 3: Walking into all these restaurants, it's not just a delivery guy,
5:21
Speaker 3: it's I'm the owner of this coffee company.
5:23
Speaker 1: It was a good start, but definitely not where Jason
5:26
Speaker 1: and Doug wanted things to end. They knew they could
5:28
Speaker 1: grow it, but they'd have to hustle.
5:31
Speaker 3: I think I had many moments of oh my god,
5:34
Speaker 3: we're here in the garage. We literally had like pallettes
5:37
Speaker 3: of coffee in the middle, with a twenty five kilo
5:40
Speaker 3: roaster on one side, which is a small batch roaster,
5:42
Speaker 3: and then like a wooden old desk on the other side,
5:45
Speaker 3: and that was it. We were really bootstrapping it from
5:47
Speaker 3: the ground up.
5:49
Speaker 1: Every single day brought new challenges, most of which Doug
5:52
Speaker 1: and Jason fought through with a smile and sometimes with
5:55
Speaker 1: a blowtorch.
5:56
Speaker 3: We had a truck pull up to deliver coffee, but
5:58
Speaker 3: it had snowed and it was really icy out there,
6:02
Speaker 3: and we had this forklift that could only go on
6:05
Speaker 3: flat surface. If you try to give it any incline
6:07
Speaker 3: or whatever, it just didn't have the gusto to do anything. Okay,
6:10
Speaker 3: so my brother's out there with a blowtorch trying trying
6:15
Speaker 3: to melt the ice just so we can get the
6:17
Speaker 3: forklift out to pull out, you know, a palette of
6:21
Speaker 3: coffee to roast. It was just one of those moments
6:24
Speaker 3: where you're like, what are we doing?
6:28
Speaker 1: So sounds like you started out, you know, your angle
6:30
Speaker 1: was selling coffee to restaurants so they could serve differentiated,
6:33
Speaker 1: high end coffee to their clients. But at some point
6:36
Speaker 1: you realized that wasn't going to scale as far as
6:37
Speaker 1: you needed, right, So how did that evolve?
6:40
Speaker 3: Our philosophy was not to operate coffee shops. We instead
6:45
Speaker 3: acquired our way into the channels that we really believed
6:48
Speaker 3: were important food service, E commerce, consumer direct, and retail grocery.
6:52
Speaker 2: Now, every acquisition was a strategic acquisition. We were looking
6:55
Speaker 2: for competencies that our company didn't have, and by pulling
6:59
Speaker 2: it into the full were also looking to leverage the
7:01
Speaker 2: synergies and the goodness across the brands. Across the channels.
7:05
Speaker 1: They acquired a few smaller companies to supply their different
7:07
Speaker 1: customer types, and in twenty fifteen they made their biggest
7:11
Speaker 1: bet yet. It was a reverse acquisition of a family
7:14
Speaker 1: owned roaster in Denver named Boyer's Coffee. Originally founded in
7:18
Speaker 1: nineteen sixty five, Boyers was sold nationwide at large grocery stores.
7:23
Speaker 1: It was by far the most expensive acquisition Luna had made,
7:26
Speaker 1: and it brought a whole new set of challenges. When
7:29
Speaker 1: you went out and did these acquisitions, how did you
7:31
Speaker 1: you were still small? These were big bets for the company.
7:35
Speaker 1: How did you finance that? How did you have the
7:36
Speaker 1: guts to go for that? I mean, that's a pretty
7:38
Speaker 1: daring thing to.
7:39
Speaker 3: Do being in corporate. I think showed me being able
7:42
Speaker 3: to bet with a big wallet is huge. And so
7:45
Speaker 3: the angel investors that started with us seventeen years ago
7:48
Speaker 3: are still with our company now.
7:50
Speaker 4: Ben hold on, I'm sorry, I need to cut in here.
7:54
Speaker 4: I'm not even a coffee drinker, but I feel like
7:56
Speaker 4: a little fullmall because I you should.
7:58
Speaker 1: Be, because their coffee is really good. Our friend Doug,
8:00
Speaker 1: he knows what to do with a coffee being it's delicious.
8:03
Speaker 4: Well, clearly they have something figured out. So I'm gonna
8:06
Speaker 4: have to get on the coffee train, even though I
8:08
Speaker 4: haven't been on it up to this point.
8:09
Speaker 1: Come on, it's a good ride.
8:12
Speaker 4: Okay. So you know already what my favorite part of
8:15
Speaker 4: this story.
8:15
Speaker 1: Is, No, I don't. What is it?
8:16
Speaker 4: The acquisition spiece? You know? I love that stuff. There's
8:20
Speaker 4: so many ways to be in business, and you don't
8:22
Speaker 4: have to always start from scratch and look at what
8:24
Speaker 4: it's done for them.
8:25
Speaker 1: Yeah, but that comes with its own set of risks too, right,
8:27
Speaker 1: I mean it's not always that straightforward.
8:29
Speaker 4: It's not, but you got to find the way that
8:31
Speaker 4: works for you, right.
8:32
Speaker 1: Well, I mean they were able to do it without
8:34
Speaker 1: taking on a ton of debt. When you have to
8:35
Speaker 1: take on a ton of debt to do it, I've
8:36
Speaker 1: seen that go badly as well. The most important thing
8:39
Speaker 1: in any acquisition is buying the right company for the
8:41
Speaker 1: right reaching truth.
8:43
Speaker 4: Okay, so what happens next?
8:44
Speaker 1: Well, with the reverse acquisition of Boyers, Luna Coffee wasn't
8:48
Speaker 1: only in the local grocery aisle anymore. They were now
8:50
Speaker 1: being sold in all fifty states, and with the deal
8:53
Speaker 1: came a new factory that was three times bigger than
8:55
Speaker 1: the one they had before.
8:56
Speaker 3: So to paint the pictures of the nineteen twenty seven
8:58
Speaker 3: schoolhouse really really cool, old schoolhouse that was converted to
9:02
Speaker 3: the roastery for the Boyer's family in nineteen sixty five.
9:05
Speaker 3: We acquired the roastery and the land when we bought
9:08
Speaker 3: Boyers in twenty fifteen.
9:10
Speaker 1: Okay, it's quite literally the School of Coffee. This cool
9:13
Speaker 1: red brick schoolhouse even had a small retail space and
9:16
Speaker 1: coffee shop in front. By early twenty twenty, they were
9:19
Speaker 1: on track for their biggest year yet, and then COVID hit.
9:24
Speaker 2: Being a food manufacturer, we were deemed an essential business
9:27
Speaker 2: that couldn't shut down right right. At the same time,
9:30
Speaker 2: we were really trying to learn fast what does it
9:33
Speaker 2: mean to be COVID compliant Because there wasn't a ton
9:37
Speaker 2: of guidance out there for companies like ours. We were
9:39
Speaker 2: trying to figure out, what is this six foot rule?
9:42
Speaker 2: What does this like wash your hands every sixty seconds?
9:44
Speaker 2: What are we doing here?
9:45
Speaker 1: And just two weeks after that, I was.
9:49
Speaker 2: Sitting in my office and someone jumps up and goes, hey,
9:52
Speaker 2: there's an alarm going off in the closet, and I'm like,
9:54
Speaker 2: what do you mean an alarm going off in the closet.
9:57
Speaker 2: Went to the closet and it said heat censor. I'm like,
9:59
Speaker 2: what the what the heck is that? So I get
10:02
Speaker 2: up immediately and run to the back, and then one
10:04
Speaker 2: person in the corner goes it smells like campfire. About
10:08
Speaker 2: that time, the ceiling melted, opened up and all the
10:11
Speaker 2: trusses above us were on fire.
10:13
Speaker 1: Oh my god, that must have been terrifying.
10:15
Speaker 2: It was, so we immediately went into fire protocol, called
10:18
Speaker 2: nine to one one evacuated the building. No one got hurt,
10:21
Speaker 2: and I stayed back with a garden hose trying to
10:24
Speaker 2: fight the fire. Within an hour, it was a complete loss,
10:28
Speaker 2: the six thousand square feet of corporate offices, the award
10:31
Speaker 2: winning four thousand square foot coffee shop, and then the
10:34
Speaker 2: manufacturing plant. We weren't left with a paper clip.
10:37
Speaker 1: That must have just been devastating.
10:40
Speaker 3: It was really weird to stand across the street of
10:42
Speaker 3: your business and watch it burn.
10:44
Speaker 2: Oh it was. It was actually pretty terrible. I mean,
10:47
Speaker 2: just gut wrenching watching everything burn so fast.
10:55
Speaker 1: Their factory it was gone, leaving nothing but a large
10:58
Speaker 1: pile of ash, moldering coffee beans, and melted steel.
11:03
Speaker 3: It was definitely like, how is this really happening? The
11:06
Speaker 3: parking lot across the street is full of all of
11:08
Speaker 3: our employees and everyone's crying upset. We're like, okay, so
11:11
Speaker 3: just come back to work tomorrow. We'll figure this out.
11:15
Speaker 3: Just give us a minute.
11:16
Speaker 1: Jason and Doug had a big decision to make, and
11:18
Speaker 1: they had to make it quickly.
11:20
Speaker 3: You can't just like say, hey, I can't get it done.
11:22
Speaker 3: You can say I can't get it done, but if
11:24
Speaker 3: you do, then you kind of lose your shelf space.
11:26
Speaker 2: But the challenge we had at the same time is
11:28
Speaker 2: there was pandemic buying going on. So do you remember
11:30
Speaker 2: when you couldn't find toilet paper? Coffee was one of
11:33
Speaker 2: those things as well. As soon as we put it
11:35
Speaker 2: on the shelf, they'd ripped back off and put it.
11:36
Speaker 1: Back terrified they wouldn't get caffeine in the morning, that
11:39
Speaker 1: that was going to be a tragedy, real problem, as
11:41
Speaker 1: bad as the toilet paper. But just a day later
11:45
Speaker 1: they knew exactly what they had to do.
11:47
Speaker 2: We kind of looked at each other within twenty four
11:49
Speaker 2: hours and said, there's not really a choice but the
11:51
Speaker 2: rebuild and move on, Like we've got to go forward,
11:54
Speaker 2: there's no back. So we kind of very quickly said
11:57
Speaker 2: we're going to rebuild and now we've got to figure
11:59
Speaker 2: out what that means.
12:00
Speaker 3: I feel like the mindset was survive.
12:02
Speaker 1: So they got back to work.
12:05
Speaker 3: Everybody woke up and totally pitched in. Our employees all
12:11
Speaker 3: stood up and came back to work. We didn't lose
12:13
Speaker 3: one employee, honest to God.
12:15
Speaker 1: Luckily for them, they had taken a page out of
12:17
Speaker 1: the liquor industry and had been stockpiling bagged coffee at
12:20
Speaker 1: a different facility. They had a four week supply that
12:23
Speaker 1: would buy them sometime while they figured out how to
12:25
Speaker 1: make more. Doug and his team were scrambling. They had
12:28
Speaker 1: to find another factory to rent that could handle roasting
12:31
Speaker 1: over five tons of coffee beans every day.
12:33
Speaker 2: We had to eat some humble pie right because we
12:35
Speaker 2: went to one of our friendly competitors and said, do
12:38
Speaker 2: you use your facility as a second shift at night?
12:41
Speaker 2: And they said no. So imagine a chef that lost
12:44
Speaker 2: a restaurant that went to their competitor and said, do
12:47
Speaker 2: you use your restaurant overnight?
12:48
Speaker 4: No?
12:49
Speaker 2: Can I rent it from you and bring in all
12:51
Speaker 2: the stuff I need to do my stuff, do it
12:54
Speaker 2: all night long with my raw materials of my people,
12:57
Speaker 2: clean up and exit before your shift starts every day.
13:00
Speaker 2: Could we do that for the next year together? And
13:02
Speaker 2: we found a partner and that's what we did.
13:04
Speaker 3: So we were kind of in a position where we
13:07
Speaker 3: had everybody rooting for the underdog. I think that whether
13:11
Speaker 3: it was our customers, whether it was our employees, whether
13:15
Speaker 3: it was our vendors, I think everybody was like, Yeah,
13:18
Speaker 3: whatever we need to do, let's get this done.
13:23
Speaker 1: Fortunately, they'd planned for the worst and they'd established a
13:26
Speaker 1: disaster plan with a manufacturing partner a few years before,
13:30
Speaker 1: and just two weeks after the fire, Doug and Jason
13:32
Speaker 1: were back at at roasting coffee. But the problem there
13:36
Speaker 1: was still the matter of packaging it. They no longer
13:38
Speaker 1: had machines to label all these packages, so they literally
13:42
Speaker 1: had to do it by hand.
13:43
Speaker 2: Millions and millions and pounds of coffee.
13:46
Speaker 4: Okay, so they have this devastating fire. Almost everything they
13:50
Speaker 4: own goes up in smoke, except for what they've stashed
13:53
Speaker 4: at this other facility. And I really can't believe this,
13:55
Speaker 4: but their competitor allows them to use their equipment at right,
14:00
Speaker 4: they had to bag three million pounds of coffee by hand,
14:03
Speaker 4: But you can't do that.
14:04
Speaker 1: Forever, absolutely not. It was completely unsustainable. Doug and Jason
14:08
Speaker 1: really had to find Luna a new home, and they
14:10
Speaker 1: had to find one that would scale with the business.
14:12
Speaker 2: We had to completely get ourselves out of the core
14:15
Speaker 2: business and start rebuilding. We need to pick ourselves up
14:18
Speaker 2: and go work strategically on where the company is going
14:20
Speaker 2: to go next.
14:21
Speaker 3: We took some money from the company and then from
14:24
Speaker 3: insurance and put that together and then said we're going
14:27
Speaker 3: to build something that is state of the art and
14:29
Speaker 3: for the future. We were already in a position where
14:32
Speaker 3: we were at max capacity, so we can either just
14:35
Speaker 3: build back exactly what we have, or we can be
14:37
Speaker 3: entrepreneurs and reach the stars. And we built a facility
14:40
Speaker 3: that had five times the capacity of our old facility.
14:43
Speaker 1: And a year to the day after the fire left
14:45
Speaker 1: them with nothing, they roasted their first batch of coffee
14:48
Speaker 1: in their new state of the art facility. Six months
14:51
Speaker 1: after that, it was fully operational.
14:54
Speaker 3: Now that we have built that, it allows the company
14:57
Speaker 3: to grow exponentially for the next five to seven years.
15:00
Speaker 3: And that's basically the new master plan is to grow
15:03
Speaker 3: to a fifty million dollar company.
15:05
Speaker 1: So I have to ask your brother, since he's the
15:06
Speaker 1: one roasting the coffee, I mean, is this like a
15:09
Speaker 1: kid in a candy store for you now that you
15:10
Speaker 1: have this new facility.
15:11
Speaker 2: It absolutely is, because you know, one of the things
15:13
Speaker 2: we had the opportunity to do is step back and say,
15:15
Speaker 2: what do we really want to be able to do
15:17
Speaker 2: and accomplish. We want high quality coffee at scale, So
15:20
Speaker 2: being able to get everything brand new is fantastic. I mean,
15:23
Speaker 2: we went from levers, switches and dials to full automation
15:27
Speaker 2: in packaging, which is a light year evolutionary jump.
15:31
Speaker 1: Moving into the new facility was a total game changer
15:33
Speaker 1: for Luna Coffee up.
15:35
Speaker 3: Until this year. Twenty twenty was in fact our highest
15:38
Speaker 3: grossing sales year. So somehow, even though we burned down,
15:42
Speaker 3: we produced more money in twenty twenty than any year previously.
15:46
Speaker 1: And with that money they were able to focus on
15:48
Speaker 1: something that had always been at the heart of their plan,
15:50
Speaker 1: giving back.
15:51
Speaker 2: Coffee grows around the equator, right, wrong or indifferent. There's
15:54
Speaker 2: a lot of poverty around the equator.
15:56
Speaker 3: And once you go to origin and you realize that
15:58
Speaker 3: on equity, it's hard as a roaster to unrealize that.
16:02
Speaker 3: And so as we began buying more coffee, we simply
16:05
Speaker 3: began asking the elders of the farms that we buy from.
16:08
Speaker 3: We're going to pay you a fair wage and we're
16:10
Speaker 3: going to take but is there something that we can give?
16:12
Speaker 3: Is there a hand up, not a handout? How can
16:15
Speaker 3: we help?
16:16
Speaker 1: In Peru and Colombia and Honduras, they've funded projects that
16:19
Speaker 1: have provided healthcare and clean water to communities. But their proudest.
16:24
Speaker 3: Achievement, we've built six schools in the last five years.
16:28
Speaker 1: Wow.
16:29
Speaker 3: And it's really really amazing. Thank you, I appreciate it.
16:33
Speaker 2: I think there's something to be said about karma because
16:36
Speaker 2: when we had our oh shit moment, people were there
16:38
Speaker 2: to support us. But in our philanthropy and our mission,
16:41
Speaker 2: we're trying to positively change lives and that includes everyone.
16:45
Speaker 2: We want to lift the farmers, we want to give
16:47
Speaker 2: career paths to our employees, and throughout that supply chain,
16:51
Speaker 2: it needs to be equitable.
16:54
Speaker 1: Between their four craft coffee brands, Luna Gourmet Coffee now
16:57
Speaker 1: has two significantly less flammed facilities in Denver. They employ
17:02
Speaker 1: sixty five team members between the locations, and their coffee
17:06
Speaker 1: can be found at Costco, Safeway, Sam's Club, Target, and Walmart,
17:10
Speaker 1: and it's sold in all fifty states. They went from
17:12
Speaker 1: roasting thirty pounds of coffee every year to two and
17:15
Speaker 1: a half million, and they're not slowing down anytime soon.
17:23
Speaker 1: So we're going to be ending every episode of the
17:25
Speaker 1: show by asking each guest the same question. Stay tuned
17:29
Speaker 1: till the end of the show to hear Doug and
17:32
Speaker 1: Jason's best advice for current or aspiring small business owners.
17:39
Speaker 4: Okay, I can't even believe I'm about to say this,
17:42
Speaker 4: but I think I'm ready for a cup of coffee.
17:44
Speaker 4: And that's not even how I do it.
17:46
Speaker 1: Men, I think Doug and Jason would support that.
17:49
Speaker 4: Wow, I really can't imagine having my entire operation burned
17:53
Speaker 4: down and then go to work the next day. Please
17:57
Speaker 4: give me a minute to process that one.
17:59
Speaker 1: Yeah, it really is an inspiring story.
18:01
Speaker 4: Yeah, but you know the fact that it wasn't even
18:03
Speaker 4: a question as to whether they were going to rebuild
18:06
Speaker 4: or not. How are you standing outside watching your building
18:09
Speaker 4: burn and you're pretty much already just immediately say, oh, well,
18:13
Speaker 4: we already know what we're going to need to do.
18:15
Speaker 4: Most people probably wouldn't even be able to think, let
18:17
Speaker 4: alone decide what the next step is going to be.
18:19
Speaker 1: Right, that's right. I can only imagine the emotion. I mean,
18:23
Speaker 1: knowing what they had put into that, they left their
18:24
Speaker 1: whole lives behind, they built this thing, they were about
18:27
Speaker 1: to explode into a new era of growth, and just
18:30
Speaker 1: watching it literally burn up before their eyes. You just
18:32
Speaker 1: I can only imagine the steely resolve they had is
18:35
Speaker 1: something else.
18:36
Speaker 4: Yeah, it is. And just the amount of different thoughts
18:39
Speaker 4: that had to have been going on in their minds.
18:41
Speaker 1: And well, you hurt him? Oh shit, oh shit, shit? Right,
18:45
Speaker 1: what you can't fault him? I mean that's what I
18:48
Speaker 1: would have said.
18:49
Speaker 4: Yeah, But I also thought, how cool is it that
18:52
Speaker 4: everybody stayed with them?
18:54
Speaker 1: Yeah? I know, And I think it speaks to the
18:56
Speaker 1: fact that they didn't just build a company, they built
18:58
Speaker 1: a culture. Yeah, and they built something that everybody believed in,
19:01
Speaker 1: because otherwise they wouldn't have stayed.
19:03
Speaker 4: Yeah, And they did such a good job with that.
19:06
Speaker 4: And I think that's a huge challenge that that entrepreneurs
19:08
Speaker 4: face all around. How do you build the kind of
19:11
Speaker 4: team that will stay loyal, that will like these In
19:15
Speaker 4: this situation with Luna, these folks didn't know how their
19:18
Speaker 4: checks were going to be handled, frankly, right.
19:19
Speaker 1: And it sounds like those relationships they built with their
19:21
Speaker 1: employees are the same types of relationships that they built
19:24
Speaker 1: with not just their vendors and their customers, but their
19:26
Speaker 1: competitors even right all across the ecosystem, they were building
19:30
Speaker 1: relationships based on trust, respect, doing the right thing, being reciprocity, reciprocity,
19:37
Speaker 1: helping each other out. And then I thought it was
19:39
Speaker 1: really fascinating how they were willing to go to a competitor.
19:43
Speaker 1: That they were willing to go to a competitor, but
19:46
Speaker 1: more importantly, I think that the competitor was willing to
19:48
Speaker 1: say yes. And what I took away from that is,
19:51
Speaker 1: you know, business can be brutal and cutthroat, and it
19:55
Speaker 1: can and should be competitive, but it doesn't have to
19:57
Speaker 1: be mean.
19:58
Speaker 4: It doesn't have to be mean. But and I'm sure
20:00
Speaker 4: it had a lot to do with who they are,
20:02
Speaker 4: because everyone wouldn't have done that for some other competitor
20:05
Speaker 4: who didn't have the same goodwill in the industry.
20:07
Speaker 1: That's a lesson, right, is that the way you treat
20:10
Speaker 1: people always matters because you never know when you might
20:12
Speaker 1: need some help.
20:13
Speaker 4: Yeah, inform that relationship before you need it.
20:16
Speaker 1: Absolutely, relationships they're critical. You have to have the right
20:18
Speaker 1: relationships with your employees, with your contractors, and, as they proved,
20:22
Speaker 1: sometimes even with your competitors. But I think there's a
20:25
Speaker 1: little more to this story of how they were able
20:27
Speaker 1: to survive that fire because they were protected. They'd thought
20:31
Speaker 1: about risk management, not just in terms of insurance, although
20:34
Speaker 1: they did have insurance and they had coverage for the building,
20:36
Speaker 1: which certainly helped, but they also had stored their products
20:40
Speaker 1: somewhere else. They thought ahead. In my mind, they thought
20:43
Speaker 1: about risk the way bigger companies tend to think about risk,
20:46
Speaker 1: which is thinking through all the things that could go wrong,
20:50
Speaker 1: having a plan for that, and then making sure that
20:53
Speaker 1: they had the right things in place to be able
20:56
Speaker 1: to pull the trigger if they needed to, and they
20:57
Speaker 1: probably would have been dead without it.
20:59
Speaker 4: What I liked about what these guys did is that
21:01
Speaker 4: they literally said, we borrowed from another industry. We did
21:05
Speaker 4: what the distillery industry did, and that's what set them
21:08
Speaker 4: up to not have nothing when the building burned. Nowt
21:10
Speaker 4: I view that as a short term risk management strategy,
21:13
Speaker 4: but they also had the long term strategy in place
21:16
Speaker 4: as well, where they had taken the time well in
21:18
Speaker 4: advance years before to figure out what would happen if
21:21
Speaker 4: something major happened, right, something big, where the product we
21:25
Speaker 4: have stored off site just wouldn't cover us. That was
21:28
Speaker 4: so savvy of them as small business owners, because a
21:30
Speaker 4: lot of small business owners struggle with those things in
21:33
Speaker 4: the business that aren't urgent but are yet very very important.
21:37
Speaker 4: And I think that's a perfect example of something that's
21:39
Speaker 4: incredibly important but frankly not urgent when you're trying to
21:42
Speaker 4: handle the day to day, right.
21:43
Speaker 1: Yeah. I asked businesses all the time, how do you
21:45
Speaker 1: manage your risk? And a lot of times they say
21:47
Speaker 1: to me, oh, yeah, you know, I have insurance, I
21:49
Speaker 1: have a broker, And I always say, listen, I used
21:51
Speaker 1: to spend my life providing insurance to small businesses and
21:54
Speaker 1: that's great, but that's only one type of risk management.
21:57
Speaker 1: And think about their situation. The insurance was great and
21:59
Speaker 1: helped them rebuild the building, and certainly that would have
22:01
Speaker 1: been difficult without it. But even if you have a
22:04
Speaker 1: check from the insurance company, if you don't have the
22:05
Speaker 1: product your clients want, you might still be in trouble
22:09
Speaker 1: huge And then even if you have the product that
22:11
Speaker 1: they want, for the next four weeks when they place
22:13
Speaker 1: the next order. If you tell them it's going to
22:14
Speaker 1: be a year before I'm open running, you could have
22:16
Speaker 1: a problem. So they had thought not just one order,
22:19
Speaker 1: but two and three orders ahead in terms of what
22:22
Speaker 1: could go wrong. And that's hard to do for two reasons.
22:26
Speaker 1: One is when you're, as you said, when you're in
22:27
Speaker 1: the thick of it, it's hard to take yourself out
22:29
Speaker 1: and think long term. But equally, optimistic business owners are
22:32
Speaker 1: not conditioned to think about all the bad stuff that
22:34
Speaker 1: could happen, where they're conditioned to think about all the
22:36
Speaker 1: great stuff they're going to achieve. It's a tough balance
22:38
Speaker 1: because to be an entrepreneur you have to be so positive,
22:41
Speaker 1: but equally you have to have that reality check of
22:42
Speaker 1: what could go wrong.
22:43
Speaker 4: Yeah, and maybe you're not that kind of person. Some
22:45
Speaker 4: entrepreneurs are just I see the vision, I'm going for it,
22:48
Speaker 4: I know what I want to do, and they don't
22:50
Speaker 4: think about the other part. But if you're that kind
22:52
Speaker 4: of an entrepreneur, you need to have someone on the
22:53
Speaker 4: team who does think like that. But I it is
22:56
Speaker 4: my job to think of the things that can go wrong,
22:59
Speaker 4: So I conditioned to think about those things and what
23:01
Speaker 4: I want like I want our listeners to think about
23:03
Speaker 4: what risk management looks like for them. These guys knew
23:06
Speaker 4: that for the way that their business ran, they needed
23:08
Speaker 4: to have offsite product and such, they needed to have
23:10
Speaker 4: somewhere else to produce. What does it look like for
23:13
Speaker 4: someone else in another type of business? Right, everybody needs
23:16
Speaker 4: to examine what that is like for them. Maybe it's
23:18
Speaker 4: just having the appropriate documentation. Does someone else know what's
23:22
Speaker 4: in the head of the person who's running the business?
23:25
Speaker 4: Beyond having an insurance policy? What do you have in
23:28
Speaker 4: place to protect the business on a short term and
23:31
Speaker 4: long term like our guys did here. I really want
23:33
Speaker 4: people to think about that.
23:34
Speaker 1: Yeah, big businesses call it business continuity planning. Small businesses
23:38
Speaker 1: call it something I don't have time for.
23:40
Speaker 4: Not urgent, but so important, exactly important. I want to
23:43
Speaker 4: go back to something we talked about earlier, business acquisitions,
23:46
Speaker 4: because this is really my lane. So Jason and Doug
23:50
Speaker 4: chose to buy Luna Coffee and grow it themselves instead
23:53
Speaker 4: of starting from scratch. Then they make an even bigger
23:56
Speaker 4: bet acquiring a company that was larger than they were,
23:59
Speaker 4: and that was of you know, of course, Bowyer's Coffee.
24:01
Speaker 4: So Ben, what would you say is the most important
24:03
Speaker 4: thing for a small business owner to think about when
24:05
Speaker 4: looking to acquire a business. I've got my thoughts, of course,
24:08
Speaker 4: but I want to hear yours well.
24:10
Speaker 1: So first of all, the most important thing in any
24:12
Speaker 1: acquisition is buying the right company for the right reacher.
24:15
Speaker 1: So it doesn't matter how you finance it, it doesn't
24:18
Speaker 1: matter how you pay. It matters that you're buying the
24:21
Speaker 1: right company for the right reasons, with the right plan. Now,
24:24
Speaker 1: they had it, and I give them a ton of
24:25
Speaker 1: credit for it, but I've seen that go sideways in
24:28
Speaker 1: so many different ways. They bought it because they thought, well,
24:31
Speaker 1: I could never build that, so I'll buy it, and
24:33
Speaker 1: I can do it better than they can. Well you
24:34
Speaker 1: better really understand that before you get into that business,
24:37
Speaker 1: because whoever runs that business, I promise they know more
24:39
Speaker 1: about it than you do.
24:40
Speaker 4: Oh absolutely, And that's why the due diligence part is
24:42
Speaker 4: so important. Like I have had clients who have come
24:44
Speaker 4: into the business acquisition model more cavalier than I prefer. They, Oh,
24:50
Speaker 4: this isn't that big of a deal. I've looked at
24:53
Speaker 4: the numbers and they, you know, they think they have
24:55
Speaker 4: it all figured out, and I'm like, no, you still
24:57
Speaker 4: need to do due diligence.
24:58
Speaker 1: Well, the other thing I tell people is when you
25:01
Speaker 1: are buying a company, even if the founder isn't coming
25:04
Speaker 1: with the company, you're still buying that person because everything
25:07
Speaker 1: about that company is about that person who owned and
25:10
Speaker 1: built that company. Oh absolutely, And so you better believe
25:13
Speaker 1: that whatever you're buying is going to feel and smell
25:16
Speaker 1: and act like that person.
25:18
Speaker 4: Yeah, and a lot of people underestimate that. I mean,
25:21
Speaker 4: the business has that person's footprint, it's got them all,
25:26
Speaker 4: it's all over it. Well, then I gotta say their
25:28
Speaker 4: big bet clearly paid off. They really made the company
25:32
Speaker 4: their own, and they found a way to make it
25:34
Speaker 4: so that their DNA was woven into the business. And
25:37
Speaker 4: let's be honest, that's a challenging thing to do.
25:40
Speaker 1: Well, it sounds like they've really built something to last
25:42
Speaker 1: and something that has purpose and has meaning both for them,
25:45
Speaker 1: for their employees, and for the communities and farmers they're
25:47
Speaker 1: working with, which is just a terrific story. Okay, now
25:51
Speaker 1: before we go, I want to share one last part
25:53
Speaker 1: of my interview with Doug and Jason that I think
25:56
Speaker 1: you'll really like.
25:57
Speaker 4: Okay, let's hear it.
25:59
Speaker 1: We have a lot of small business owners listening today
26:02
Speaker 1: who really aspire to the level of success that you've achieved.
26:05
Speaker 1: What's the one piece of advice you have for them.
26:08
Speaker 2: I would say, once you've done the research and have
26:11
Speaker 2: a strong business plan, you figured out what your capital
26:14
Speaker 2: funding requirements are, double that and then have a contingency
26:18
Speaker 2: plan if you happen to need more capital to realize
26:20
Speaker 2: your vision. Number two, I would say, take the time
26:24
Speaker 2: within your network to talk to other entrepreneurs that have
26:28
Speaker 2: done similar or different things and really listen and learn
26:32
Speaker 2: from their successes and their failures. Don't assume you know everything.
26:36
Speaker 2: And Third, build an advisory group. We realized very early
26:41
Speaker 2: on whether it's banking, finance, taxes, distribution advice. For us,
26:47
Speaker 2: we've built an external advisory team to make sure that
26:51
Speaker 2: we would always be set up for success.
26:54
Speaker 3: I would add two things. One is a support team
26:58
Speaker 3: that is personal, whether it be your partner, whether it
27:01
Speaker 3: be your dad or mom or friend. It is something
27:04
Speaker 3: that requires a significant amount of support because you have
27:09
Speaker 3: to focus on the business like it's a person. And secondly,
27:13
Speaker 3: I really believe it requires one hundred and ten percent
27:15
Speaker 3: every single day, twenty four hours a day. The thing
27:19
Speaker 3: that they don't tell us about being an entrepreneur is
27:22
Speaker 3: you've got to like put on your company's superhero cape
27:26
Speaker 3: and be totally cool beyond that full time, because everyone
27:30
Speaker 3: is looking to you for the answer and for the
27:32
Speaker 3: vision and for the passion, and ultimately, when you get
27:36
Speaker 3: to a point where you can hire a team, you
27:39
Speaker 3: can instill that same ownership mindset downward.
27:43
Speaker 1: Thanks so much for listening to the first episode of
27:45
Speaker 1: The Unshakables. Next episode, we'll be back with a story
27:49
Speaker 1: of a celebrity car detailer who redefined success by rebuilding
27:52
Speaker 1: his business not once, but twice after being pushed out
27:56
Speaker 1: of his own company. If you liked this episode, please
28:00
Speaker 1: rate and review it. It'll help our show find more listeners.
28:04
Speaker 1: I'm Ben Walter and this is The Unshakables from Chase
28:07
Speaker 1: for Business and Ruby Studio from iHeartMedia.
28:12
Speaker 2: The Unshakables is a production of Ruby Studio from iHeartMedia
28:16
Speaker 2: and Wheelhouse DNA