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Speaker 1: In March of twenty twenty, when the entire world was

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Speaker 1: first reeling from the pandemic, Doug and Jason Barrow's coffee

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Speaker 1: company had well other problems.

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Speaker 2: Well, when I get to the back and it goes

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Speaker 2: anything going on, Everyone's like, no, everything's perfect, and then

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Speaker 2: one person in the corner goes but it smells like campfire.

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Speaker 2: I'm like campfire. Coffee roasting doesn't smell like campfire. About

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Speaker 2: that time, the ceiling melted, opened up, and all the

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Speaker 2: trusses above us were on fire. Within an hour, it

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Speaker 2: was a complete loss. We weren't left with a paper clip.

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Speaker 3: I was like, I never thought this could actually happen.

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Speaker 1: What did you say to each other?

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Speaker 3: Oh shit? Oh shit?

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Speaker 1: Yeah? Oh shit is right. That's a moment every small

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Speaker 1: business owner can tell you about. It happens in the

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Speaker 1: lifespan of every company, and it's a moment that really

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Speaker 1: tests your resolve. It might also be a moment that

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Speaker 1: changes you and your business forever. I'm Ben Walter, CEO

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Speaker 1: of Chase for Business.

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Speaker 4: And I'm Tanya need Fanoe, a lawyer and consultant for

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Speaker 4: business owners.

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Speaker 1: And this is a show about those moments. Welcome to

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Speaker 1: the Unshakables from Chase for Business and Ruby Studio from iHeartMedia. Hi, Tanya,

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Speaker 1: Hey Ben, how are you. I'm great, We're here, we're

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Speaker 1: doing it. We're starting the podcast and I am fired up. Okay,

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Speaker 1: So do you want to tell the folks at home

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Speaker 1: what we're going to be talking about on the show.

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Speaker 4: This is a show about small businesses. It's a topic

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Speaker 4: that I'm very passionate about. I'm a small business owner myself,

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Speaker 4: by the way, shout out to the Nebo Law firm.

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Speaker 4: I know it can be hard to get a business

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Speaker 4: up and running, let alone lead a business through a crisis.

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Speaker 1: And that's what we're doing on this show. We're sharing

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Speaker 1: the daring stories of small business owners who face that

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Speaker 1: crisis point and tell the story of how they got

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Speaker 1: through it. Now, importantly, these aren't big Wall Street firms

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Speaker 1: or Silicon Valley companies with big, fancy venture capitalists behind them.

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Speaker 1: We're talking about regular people. They're the people who sponsor

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Speaker 1: the Little League in your town that you see at

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Speaker 1: the grocery store.

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Speaker 4: Yeah, people forget that. These unicorn stories are the exception.

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Speaker 4: I'm really excited that we're going to get a chance

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Speaker 4: to speak to typical business owners and we get to

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Speaker 4: hear their stories. So not only do we get to

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Speaker 4: be inspired, but the people listening get to be inspired

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Speaker 4: as well.

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Speaker 1: Okay, I think we should get to the stories. What

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Speaker 1: do you think?

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Speaker 4: I say, let's do it.

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Speaker 1: On today's episode, Luna Gourmet Coffee and Tea from Denver, Colorado.

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Speaker 1: At the top of the episode, you heard Doug and

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Speaker 1: Jason Barrow. They're brothers and owners of Luna Coffee. But

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Speaker 1: back in the early two thousands, Doug never dreamed of

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Speaker 1: owning his own coffee company. He worked an everyday corporate

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Speaker 1: desk job.

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Speaker 2: When you're in corporate America, in management, you know, there

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Speaker 2: are things like golden handcuffs, parachutes four one k's that

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Speaker 2: are very attractive, you know, and when you go out

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Speaker 2: on your own, it's a different game.

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Speaker 3: Now.

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Speaker 1: Doug wasn't sure what he wanted to do other than

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Speaker 1: he knew he wanted to leave corporate America behind, and

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Speaker 1: as it turned out, his brother Jason had been thinking

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Speaker 1: the same thing.

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Speaker 3: But then we kind of woke up one day We're like,

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Speaker 3: wait a minute, we're making a lot of money for

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Speaker 3: these big guys. We probably could go to this ourselves.

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Speaker 1: But exactly what they wanted to go do well, they

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Speaker 1: weren't really sure. They started working through a lot of

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Speaker 1: different business ideas, frankly, just throwing things at the wall,

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Speaker 1: including I think we should mention for posterity selling hot

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Speaker 1: dogs outside of hardware stores. Nothing really stuck. They kept

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Speaker 1: circling back to the same question.

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Speaker 3: How do we find something where the market is really

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Speaker 3: really big, but there are still niche opportunities to really

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Speaker 3: knock it out of the park with.

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Speaker 1: And finally it hit them coffee. Starbucks was national and

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Speaker 1: back in the early two thousands, a new location was

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Speaker 1: opening on every corner. They'd found their really really big market.

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Speaker 2: People go to coffee shops. It's a social, communal product,

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Speaker 2: but everyone has like a personalized way of brewing their coffee,

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Speaker 2: so this is an interesting medium to try to make

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Speaker 2: a difference.

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Speaker 1: So, yeah, it was big, but there was still opportunity,

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Speaker 1: there were niches that hadn't been cleared. And as a bonus,

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Speaker 1: it was their passion. The two of them loved coffee.

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Speaker 3: It's something that you live and breathe and when you

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Speaker 3: take a look back and look from a commodity standpoint,

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Speaker 3: I mean it's one of the most traded commodities in

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Speaker 3: the world, maybe like seventh or eighth to oil. Like

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Speaker 3: you know, we drank four hundred million cups a day

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Speaker 3: in the USA, but.

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Speaker 1: In Denver at the time, they weren't all good cups.

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Speaker 2: We thought to ourselves, well, why isn't there good coffee

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Speaker 2: out here? I mean, why isn't there a proliferation of

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Speaker 2: higher quality coffee.

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Speaker 1: So they'd found their market, their opportunity, and their why.

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Speaker 1: They found a small roaster just a few hours outside

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Speaker 1: of Denver called Luna Coffee, and they bought it. Tell

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Speaker 1: us about what it was like in those early days

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Speaker 1: when you first started.

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Speaker 3: Out, scary and fun, scary and liberating.

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Speaker 2: Being able to be on top and call the cards

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Speaker 2: and make the decision and actually pull the trigger was

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Speaker 2: I guess liberating and empowering. However, let's go thirty days

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Speaker 2: into being an entrepreneur. We didn't have our cushy offices.

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Speaker 2: I was start to roast coffee and my brother was

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Speaker 2: starting to package and deliver coffee, and we started to

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Speaker 2: look at ourselves and go, what exactly do we get

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Speaker 2: ourselves into here?

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Speaker 3: I had so much pride that I would deliver in

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Speaker 3: slacks and a button down.

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Speaker 1: When they first bought the business, Luna's existing clients were

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Speaker 1: mostly high end restaurants that offered gourmet coffee with dessert.

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Speaker 3: Walking into all these restaurants, it's not just a delivery guy,

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Speaker 3: it's I'm the owner of this coffee company.

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Speaker 1: It was a good start, but definitely not where Jason

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Speaker 1: and Doug wanted things to end. They knew they could

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Speaker 1: grow it, but they'd have to hustle.

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Speaker 3: I think I had many moments of oh my god,

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Speaker 3: we're here in the garage. We literally had like pallettes

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Speaker 3: of coffee in the middle, with a twenty five kilo

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Speaker 3: roaster on one side, which is a small batch roaster,

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Speaker 3: and then like a wooden old desk on the other side,

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Speaker 3: and that was it. We were really bootstrapping it from

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Speaker 3: the ground up.

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Speaker 1: Every single day brought new challenges, most of which Doug

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Speaker 1: and Jason fought through with a smile and sometimes with

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Speaker 1: a blowtorch.

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Speaker 3: We had a truck pull up to deliver coffee, but

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Speaker 3: it had snowed and it was really icy out there,

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Speaker 3: and we had this forklift that could only go on

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Speaker 3: flat surface. If you try to give it any incline

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Speaker 3: or whatever, it just didn't have the gusto to do anything. Okay,

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Speaker 3: so my brother's out there with a blowtorch trying trying

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Speaker 3: to melt the ice just so we can get the

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Speaker 3: forklift out to pull out, you know, a palette of

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Speaker 3: coffee to roast. It was just one of those moments

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Speaker 3: where you're like, what are we doing?

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Speaker 1: So sounds like you started out, you know, your angle

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Speaker 1: was selling coffee to restaurants so they could serve differentiated,

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Speaker 1: high end coffee to their clients. But at some point

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Speaker 1: you realized that wasn't going to scale as far as

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Speaker 1: you needed, right, So how did that evolve?

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Speaker 3: Our philosophy was not to operate coffee shops. We instead

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Speaker 3: acquired our way into the channels that we really believed

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Speaker 3: were important food service, E commerce, consumer direct, and retail grocery.

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Speaker 2: Now, every acquisition was a strategic acquisition. We were looking

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Speaker 2: for competencies that our company didn't have, and by pulling

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Speaker 2: it into the full were also looking to leverage the

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Speaker 2: synergies and the goodness across the brands. Across the channels.

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Speaker 1: They acquired a few smaller companies to supply their different

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Speaker 1: customer types, and in twenty fifteen they made their biggest

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Speaker 1: bet yet. It was a reverse acquisition of a family

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Speaker 1: owned roaster in Denver named Boyer's Coffee. Originally founded in

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Speaker 1: nineteen sixty five, Boyers was sold nationwide at large grocery stores.

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Speaker 1: It was by far the most expensive acquisition Luna had made,

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Speaker 1: and it brought a whole new set of challenges. When

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Speaker 1: you went out and did these acquisitions, how did you

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Speaker 1: you were still small? These were big bets for the company.

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Speaker 1: How did you finance that? How did you have the

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Speaker 1: guts to go for that? I mean, that's a pretty

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Speaker 1: daring thing to.

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Speaker 3: Do being in corporate. I think showed me being able

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Speaker 3: to bet with a big wallet is huge. And so

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Speaker 3: the angel investors that started with us seventeen years ago

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Speaker 3: are still with our company now.

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Speaker 4: Ben hold on, I'm sorry, I need to cut in here.

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Speaker 4: I'm not even a coffee drinker, but I feel like

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Speaker 4: a little fullmall because I you should.

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Speaker 1: Be, because their coffee is really good. Our friend Doug,

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Speaker 1: he knows what to do with a coffee being it's delicious.

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Speaker 4: Well, clearly they have something figured out. So I'm gonna

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Speaker 4: have to get on the coffee train, even though I

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Speaker 4: haven't been on it up to this point.

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Speaker 1: Come on, it's a good ride.

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Speaker 4: Okay. So you know already what my favorite part of

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Speaker 4: this story.

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Speaker 1: Is, No, I don't. What is it?

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Speaker 4: The acquisition spiece? You know? I love that stuff. There's

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Speaker 4: so many ways to be in business, and you don't

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Speaker 4: have to always start from scratch and look at what

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Speaker 4: it's done for them.

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Speaker 1: Yeah, but that comes with its own set of risks too, right,

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Speaker 1: I mean it's not always that straightforward.

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Speaker 4: It's not, but you got to find the way that

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Speaker 4: works for you, right.

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Speaker 1: Well, I mean they were able to do it without

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Speaker 1: taking on a ton of debt. When you have to

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Speaker 1: take on a ton of debt to do it, I've

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Speaker 1: seen that go badly as well. The most important thing

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Speaker 1: in any acquisition is buying the right company for the

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Speaker 1: right reaching truth.

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Speaker 4: Okay, so what happens next?

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Speaker 1: Well, with the reverse acquisition of Boyers, Luna Coffee wasn't

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Speaker 1: only in the local grocery aisle anymore. They were now

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Speaker 1: being sold in all fifty states, and with the deal

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Speaker 1: came a new factory that was three times bigger than

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Speaker 1: the one they had before.

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Speaker 3: So to paint the pictures of the nineteen twenty seven

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Speaker 3: schoolhouse really really cool, old schoolhouse that was converted to

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Speaker 3: the roastery for the Boyer's family in nineteen sixty five.

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Speaker 3: We acquired the roastery and the land when we bought

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Speaker 3: Boyers in twenty fifteen.

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Speaker 1: Okay, it's quite literally the School of Coffee. This cool

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Speaker 1: red brick schoolhouse even had a small retail space and

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Speaker 1: coffee shop in front. By early twenty twenty, they were

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Speaker 1: on track for their biggest year yet, and then COVID hit.

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Speaker 2: Being a food manufacturer, we were deemed an essential business

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Speaker 2: that couldn't shut down right right. At the same time,

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Speaker 2: we were really trying to learn fast what does it

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Speaker 2: mean to be COVID compliant Because there wasn't a ton

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Speaker 2: of guidance out there for companies like ours. We were

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Speaker 2: trying to figure out, what is this six foot rule?

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Speaker 2: What does this like wash your hands every sixty seconds?

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Speaker 2: What are we doing here?

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Speaker 1: And just two weeks after that, I was.

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Speaker 2: Sitting in my office and someone jumps up and goes, hey,

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Speaker 2: there's an alarm going off in the closet, and I'm like,

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Speaker 2: what do you mean an alarm going off in the closet.

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Speaker 2: Went to the closet and it said heat censor. I'm like,

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Speaker 2: what the what the heck is that? So I get

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Speaker 2: up immediately and run to the back, and then one

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Speaker 2: person in the corner goes it smells like campfire. About

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Speaker 2: that time, the ceiling melted, opened up and all the

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Speaker 2: trusses above us were on fire.

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Speaker 1: Oh my god, that must have been terrifying.

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Speaker 2: It was, so we immediately went into fire protocol, called

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Speaker 2: nine to one one evacuated the building. No one got hurt,

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Speaker 2: and I stayed back with a garden hose trying to

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Speaker 2: fight the fire. Within an hour, it was a complete loss,

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Speaker 2: the six thousand square feet of corporate offices, the award

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Speaker 2: winning four thousand square foot coffee shop, and then the

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Speaker 2: manufacturing plant. We weren't left with a paper clip.

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Speaker 1: That must have just been devastating.

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Speaker 3: It was really weird to stand across the street of

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Speaker 3: your business and watch it burn.

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Speaker 2: Oh it was. It was actually pretty terrible. I mean,

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Speaker 2: just gut wrenching watching everything burn so fast.

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Speaker 1: Their factory it was gone, leaving nothing but a large

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Speaker 1: pile of ash, moldering coffee beans, and melted steel.

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Speaker 3: It was definitely like, how is this really happening? The

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Speaker 3: parking lot across the street is full of all of

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Speaker 3: our employees and everyone's crying upset. We're like, okay, so

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Speaker 3: just come back to work tomorrow. We'll figure this out.

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Speaker 3: Just give us a minute.

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Speaker 1: Jason and Doug had a big decision to make, and

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Speaker 1: they had to make it quickly.

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Speaker 3: You can't just like say, hey, I can't get it done.

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Speaker 3: You can say I can't get it done, but if

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Speaker 3: you do, then you kind of lose your shelf space.

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Speaker 2: But the challenge we had at the same time is

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Speaker 2: there was pandemic buying going on. So do you remember

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Speaker 2: when you couldn't find toilet paper? Coffee was one of

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Speaker 2: those things as well. As soon as we put it

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Speaker 2: on the shelf, they'd ripped back off and put it.

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Speaker 1: Back terrified they wouldn't get caffeine in the morning, that

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Speaker 1: that was going to be a tragedy, real problem, as

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Speaker 1: bad as the toilet paper. But just a day later

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Speaker 1: they knew exactly what they had to do.

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Speaker 2: We kind of looked at each other within twenty four

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Speaker 2: hours and said, there's not really a choice but the

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Speaker 2: rebuild and move on, Like we've got to go forward,

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Speaker 2: there's no back. So we kind of very quickly said

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Speaker 2: we're going to rebuild and now we've got to figure

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Speaker 2: out what that means.

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Speaker 3: I feel like the mindset was survive.

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Speaker 1: So they got back to work.

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Speaker 3: Everybody woke up and totally pitched in. Our employees all

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Speaker 3: stood up and came back to work. We didn't lose

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Speaker 3: one employee, honest to God.

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Speaker 1: Luckily for them, they had taken a page out of

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Speaker 1: the liquor industry and had been stockpiling bagged coffee at

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Speaker 1: a different facility. They had a four week supply that

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Speaker 1: would buy them sometime while they figured out how to

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Speaker 1: make more. Doug and his team were scrambling. They had

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Speaker 1: to find another factory to rent that could handle roasting

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Speaker 1: over five tons of coffee beans every day.

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Speaker 2: We had to eat some humble pie right because we

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Speaker 2: went to one of our friendly competitors and said, do

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Speaker 2: you use your facility as a second shift at night?

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Speaker 2: And they said no. So imagine a chef that lost

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Speaker 2: a restaurant that went to their competitor and said, do

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Speaker 2: you use your restaurant overnight?

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Speaker 4: No?

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Speaker 2: Can I rent it from you and bring in all

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Speaker 2: the stuff I need to do my stuff, do it

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Speaker 2: all night long with my raw materials of my people,

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Speaker 2: clean up and exit before your shift starts every day.

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Speaker 2: Could we do that for the next year together? And

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Speaker 2: we found a partner and that's what we did.

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Speaker 3: So we were kind of in a position where we

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Speaker 3: had everybody rooting for the underdog. I think that whether

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Speaker 3: it was our customers, whether it was our employees, whether

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Speaker 3: it was our vendors, I think everybody was like, Yeah,

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Speaker 3: whatever we need to do, let's get this done.

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Speaker 1: Fortunately, they'd planned for the worst and they'd established a

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Speaker 1: disaster plan with a manufacturing partner a few years before,

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Speaker 1: and just two weeks after the fire, Doug and Jason

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Speaker 1: were back at at roasting coffee. But the problem there

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Speaker 1: was still the matter of packaging it. They no longer

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Speaker 1: had machines to label all these packages, so they literally

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Speaker 1: had to do it by hand.

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Speaker 2: Millions and millions and pounds of coffee.

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Speaker 4: Okay, so they have this devastating fire. Almost everything they

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Speaker 4: own goes up in smoke, except for what they've stashed

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Speaker 4: at this other facility. And I really can't believe this,

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Speaker 4: but their competitor allows them to use their equipment at right,

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Speaker 4: they had to bag three million pounds of coffee by hand,

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Speaker 4: But you can't do that.

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Speaker 1: Forever, absolutely not. It was completely unsustainable. Doug and Jason

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Speaker 1: really had to find Luna a new home, and they

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Speaker 1: had to find one that would scale with the business.

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Speaker 2: We had to completely get ourselves out of the core

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Speaker 2: business and start rebuilding. We need to pick ourselves up

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Speaker 2: and go work strategically on where the company is going

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Speaker 2: to go next.

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Speaker 3: We took some money from the company and then from

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Speaker 3: insurance and put that together and then said we're going

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Speaker 3: to build something that is state of the art and

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Speaker 3: for the future. We were already in a position where

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Speaker 3: we were at max capacity, so we can either just

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Speaker 3: build back exactly what we have, or we can be

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Speaker 3: entrepreneurs and reach the stars. And we built a facility

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Speaker 3: that had five times the capacity of our old facility.

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Speaker 1: And a year to the day after the fire left

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Speaker 1: them with nothing, they roasted their first batch of coffee

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Speaker 1: in their new state of the art facility. Six months

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Speaker 1: after that, it was fully operational.

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Speaker 3: Now that we have built that, it allows the company

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Speaker 3: to grow exponentially for the next five to seven years.

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Speaker 3: And that's basically the new master plan is to grow

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Speaker 3: to a fifty million dollar company.

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Speaker 1: So I have to ask your brother, since he's the

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Speaker 1: one roasting the coffee, I mean, is this like a

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Speaker 1: kid in a candy store for you now that you

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Speaker 1: have this new facility.

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Speaker 2: It absolutely is, because you know, one of the things

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Speaker 2: we had the opportunity to do is step back and say,

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Speaker 2: what do we really want to be able to do

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Speaker 2: and accomplish. We want high quality coffee at scale, So

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Speaker 2: being able to get everything brand new is fantastic. I mean,

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Speaker 2: we went from levers, switches and dials to full automation

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Speaker 2: in packaging, which is a light year evolutionary jump.

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Speaker 1: Moving into the new facility was a total game changer

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Speaker 1: for Luna Coffee up.

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Speaker 3: Until this year. Twenty twenty was in fact our highest

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Speaker 3: grossing sales year. So somehow, even though we burned down,

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Speaker 3: we produced more money in twenty twenty than any year previously.

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Speaker 1: And with that money they were able to focus on

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Speaker 1: something that had always been at the heart of their plan,

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Speaker 1: giving back.

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Speaker 2: Coffee grows around the equator, right, wrong or indifferent. There's

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Speaker 2: a lot of poverty around the equator.

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Speaker 3: And once you go to origin and you realize that

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Speaker 3: on equity, it's hard as a roaster to unrealize that.

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Speaker 3: And so as we began buying more coffee, we simply

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Speaker 3: began asking the elders of the farms that we buy from.

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Speaker 3: We're going to pay you a fair wage and we're

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Speaker 3: going to take but is there something that we can give?

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Speaker 3: Is there a hand up, not a handout? How can

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Speaker 3: we help?

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Speaker 1: In Peru and Colombia and Honduras, they've funded projects that

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Speaker 1: have provided healthcare and clean water to communities. But their proudest.

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Speaker 3: Achievement, we've built six schools in the last five years.

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Speaker 1: Wow.

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Speaker 3: And it's really really amazing. Thank you, I appreciate it.

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Speaker 2: I think there's something to be said about karma because

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Speaker 2: when we had our oh shit moment, people were there

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Speaker 2: to support us. But in our philanthropy and our mission,

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Speaker 2: we're trying to positively change lives and that includes everyone.

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Speaker 2: We want to lift the farmers, we want to give

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Speaker 2: career paths to our employees, and throughout that supply chain,

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Speaker 2: it needs to be equitable.

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Speaker 1: Between their four craft coffee brands, Luna Gourmet Coffee now

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Speaker 1: has two significantly less flammed facilities in Denver. They employ

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Speaker 1: sixty five team members between the locations, and their coffee

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Speaker 1: can be found at Costco, Safeway, Sam's Club, Target, and Walmart,

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Speaker 1: and it's sold in all fifty states. They went from

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Speaker 1: roasting thirty pounds of coffee every year to two and

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Speaker 1: a half million, and they're not slowing down anytime soon.

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Speaker 1: So we're going to be ending every episode of the

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Speaker 1: show by asking each guest the same question. Stay tuned

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Speaker 1: till the end of the show to hear Doug and

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Speaker 1: Jason's best advice for current or aspiring small business owners.

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Speaker 4: Okay, I can't even believe I'm about to say this,

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Speaker 4: but I think I'm ready for a cup of coffee.

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Speaker 4: And that's not even how I do it.

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Speaker 1: Men, I think Doug and Jason would support that.

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Speaker 4: Wow, I really can't imagine having my entire operation burned

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Speaker 4: down and then go to work the next day. Please

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Speaker 4: give me a minute to process that one.

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Speaker 1: Yeah, it really is an inspiring story.

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Speaker 4: Yeah, but you know the fact that it wasn't even

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Speaker 4: a question as to whether they were going to rebuild

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Speaker 4: or not. How are you standing outside watching your building

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Speaker 4: burn and you're pretty much already just immediately say, oh, well,

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Speaker 4: we already know what we're going to need to do.

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Speaker 4: Most people probably wouldn't even be able to think, let

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Speaker 4: alone decide what the next step is going to be.

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Speaker 1: Right, that's right. I can only imagine the emotion. I mean,

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Speaker 1: knowing what they had put into that, they left their

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Speaker 1: whole lives behind, they built this thing, they were about

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Speaker 1: to explode into a new era of growth, and just

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Speaker 1: watching it literally burn up before their eyes. You just

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Speaker 1: I can only imagine the steely resolve they had is

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Speaker 1: something else.

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Speaker 4: Yeah, it is. And just the amount of different thoughts

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Speaker 4: that had to have been going on in their minds.

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Speaker 1: And well, you hurt him? Oh shit, oh shit, shit? Right,

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Speaker 1: what you can't fault him? I mean that's what I

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Speaker 1: would have said.

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Speaker 4: Yeah, But I also thought, how cool is it that

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Speaker 4: everybody stayed with them?

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Speaker 1: Yeah? I know, And I think it speaks to the

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Speaker 1: fact that they didn't just build a company, they built

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Speaker 1: a culture. Yeah, and they built something that everybody believed in,

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Speaker 1: because otherwise they wouldn't have stayed.

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Speaker 4: Yeah, And they did such a good job with that.

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Speaker 4: And I think that's a huge challenge that that entrepreneurs

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Speaker 4: face all around. How do you build the kind of

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Speaker 4: team that will stay loyal, that will like these In

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Speaker 4: this situation with Luna, these folks didn't know how their

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Speaker 4: checks were going to be handled, frankly, right.

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Speaker 1: And it sounds like those relationships they built with their

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Speaker 1: employees are the same types of relationships that they built

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Speaker 1: with not just their vendors and their customers, but their

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Speaker 1: competitors even right all across the ecosystem, they were building

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Speaker 1: relationships based on trust, respect, doing the right thing, being reciprocity, reciprocity,

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Speaker 1: helping each other out. And then I thought it was

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Speaker 1: really fascinating how they were willing to go to a competitor.

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Speaker 1: That they were willing to go to a competitor, but

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Speaker 1: more importantly, I think that the competitor was willing to

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Speaker 1: say yes. And what I took away from that is,

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Speaker 1: you know, business can be brutal and cutthroat, and it

436
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Speaker 1: can and should be competitive, but it doesn't have to

437
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Speaker 1: be mean.

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Speaker 4: It doesn't have to be mean. But and I'm sure

439
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Speaker 4: it had a lot to do with who they are,

440
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Speaker 4: because everyone wouldn't have done that for some other competitor

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Speaker 4: who didn't have the same goodwill in the industry.

442
00:20:07,960 --> 00:20:10,080
Speaker 1: That's a lesson, right, is that the way you treat

443
00:20:10,119 --> 00:20:12,800
Speaker 1: people always matters because you never know when you might

444
00:20:12,840 --> 00:20:13,400
Speaker 1: need some help.

445
00:20:13,600 --> 00:20:15,960
Speaker 4: Yeah, inform that relationship before you need it.

446
00:20:16,040 --> 00:20:18,920
Speaker 1: Absolutely, relationships they're critical. You have to have the right

447
00:20:18,960 --> 00:20:22,240
Speaker 1: relationships with your employees, with your contractors, and, as they proved,

448
00:20:22,320 --> 00:20:25,159
Speaker 1: sometimes even with your competitors. But I think there's a

449
00:20:25,200 --> 00:20:27,160
Speaker 1: little more to this story of how they were able

450
00:20:27,200 --> 00:20:31,240
Speaker 1: to survive that fire because they were protected. They'd thought

451
00:20:31,240 --> 00:20:34,560
Speaker 1: about risk management, not just in terms of insurance, although

452
00:20:34,600 --> 00:20:36,800
Speaker 1: they did have insurance and they had coverage for the building,

453
00:20:36,840 --> 00:20:40,080
Speaker 1: which certainly helped, but they also had stored their products

454
00:20:40,080 --> 00:20:43,200
Speaker 1: somewhere else. They thought ahead. In my mind, they thought

455
00:20:43,200 --> 00:20:46,080
Speaker 1: about risk the way bigger companies tend to think about risk,

456
00:20:46,119 --> 00:20:50,000
Speaker 1: which is thinking through all the things that could go wrong,

457
00:20:50,560 --> 00:20:53,760
Speaker 1: having a plan for that, and then making sure that

458
00:20:53,800 --> 00:20:56,000
Speaker 1: they had the right things in place to be able

459
00:20:56,000 --> 00:20:57,800
Speaker 1: to pull the trigger if they needed to, and they

460
00:20:57,840 --> 00:20:59,160
Speaker 1: probably would have been dead without it.

461
00:20:59,400 --> 00:21:01,360
Speaker 4: What I liked about what these guys did is that

462
00:21:01,400 --> 00:21:04,960
Speaker 4: they literally said, we borrowed from another industry. We did

463
00:21:05,000 --> 00:21:08,199
Speaker 4: what the distillery industry did, and that's what set them

464
00:21:08,240 --> 00:21:10,680
Speaker 4: up to not have nothing when the building burned. Nowt

465
00:21:10,840 --> 00:21:13,520
Speaker 4: I view that as a short term risk management strategy,

466
00:21:13,600 --> 00:21:16,160
Speaker 4: but they also had the long term strategy in place

467
00:21:16,200 --> 00:21:18,320
Speaker 4: as well, where they had taken the time well in

468
00:21:18,400 --> 00:21:21,439
Speaker 4: advance years before to figure out what would happen if

469
00:21:21,480 --> 00:21:25,359
Speaker 4: something major happened, right, something big, where the product we

470
00:21:25,400 --> 00:21:27,960
Speaker 4: have stored off site just wouldn't cover us. That was

471
00:21:28,000 --> 00:21:30,560
Speaker 4: so savvy of them as small business owners, because a

472
00:21:30,560 --> 00:21:33,159
Speaker 4: lot of small business owners struggle with those things in

473
00:21:33,200 --> 00:21:37,000
Speaker 4: the business that aren't urgent but are yet very very important.

474
00:21:37,160 --> 00:21:39,440
Speaker 4: And I think that's a perfect example of something that's

475
00:21:39,480 --> 00:21:42,440
Speaker 4: incredibly important but frankly not urgent when you're trying to

476
00:21:42,440 --> 00:21:43,600
Speaker 4: handle the day to day, right.

477
00:21:43,760 --> 00:21:45,720
Speaker 1: Yeah. I asked businesses all the time, how do you

478
00:21:45,760 --> 00:21:47,520
Speaker 1: manage your risk? And a lot of times they say

479
00:21:47,560 --> 00:21:49,240
Speaker 1: to me, oh, yeah, you know, I have insurance, I

480
00:21:49,240 --> 00:21:51,480
Speaker 1: have a broker, And I always say, listen, I used

481
00:21:51,480 --> 00:21:54,439
Speaker 1: to spend my life providing insurance to small businesses and

482
00:21:54,480 --> 00:21:57,040
Speaker 1: that's great, but that's only one type of risk management.

483
00:21:57,440 --> 00:21:59,800
Speaker 1: And think about their situation. The insurance was great and

484
00:21:59,800 --> 00:22:01,680
Speaker 1: helped them rebuild the building, and certainly that would have

485
00:22:01,680 --> 00:22:04,280
Speaker 1: been difficult without it. But even if you have a

486
00:22:04,400 --> 00:22:05,879
Speaker 1: check from the insurance company, if you don't have the

487
00:22:05,920 --> 00:22:08,679
Speaker 1: product your clients want, you might still be in trouble

488
00:22:09,280 --> 00:22:11,639
Speaker 1: huge And then even if you have the product that

489
00:22:11,680 --> 00:22:13,280
Speaker 1: they want, for the next four weeks when they place

490
00:22:13,359 --> 00:22:14,680
Speaker 1: the next order. If you tell them it's going to

491
00:22:14,680 --> 00:22:16,919
Speaker 1: be a year before I'm open running, you could have

492
00:22:16,960 --> 00:22:19,680
Speaker 1: a problem. So they had thought not just one order,

493
00:22:19,720 --> 00:22:22,679
Speaker 1: but two and three orders ahead in terms of what

494
00:22:22,800 --> 00:22:26,000
Speaker 1: could go wrong. And that's hard to do for two reasons.

495
00:22:26,000 --> 00:22:27,560
Speaker 1: One is when you're, as you said, when you're in

496
00:22:27,600 --> 00:22:29,359
Speaker 1: the thick of it, it's hard to take yourself out

497
00:22:29,400 --> 00:22:32,600
Speaker 1: and think long term. But equally, optimistic business owners are

498
00:22:32,640 --> 00:22:34,399
Speaker 1: not conditioned to think about all the bad stuff that

499
00:22:34,400 --> 00:22:36,439
Speaker 1: could happen, where they're conditioned to think about all the

500
00:22:36,440 --> 00:22:38,639
Speaker 1: great stuff they're going to achieve. It's a tough balance

501
00:22:38,680 --> 00:22:41,000
Speaker 1: because to be an entrepreneur you have to be so positive,

502
00:22:41,080 --> 00:22:42,960
Speaker 1: but equally you have to have that reality check of

503
00:22:42,960 --> 00:22:43,600
Speaker 1: what could go wrong.

504
00:22:43,720 --> 00:22:45,639
Speaker 4: Yeah, and maybe you're not that kind of person. Some

505
00:22:45,840 --> 00:22:48,520
Speaker 4: entrepreneurs are just I see the vision, I'm going for it,

506
00:22:48,560 --> 00:22:50,240
Speaker 4: I know what I want to do, and they don't

507
00:22:50,280 --> 00:22:52,200
Speaker 4: think about the other part. But if you're that kind

508
00:22:52,200 --> 00:22:53,920
Speaker 4: of an entrepreneur, you need to have someone on the

509
00:22:53,920 --> 00:22:56,320
Speaker 4: team who does think like that. But I it is

510
00:22:56,400 --> 00:22:59,560
Speaker 4: my job to think of the things that can go wrong,

511
00:22:59,600 --> 00:23:01,760
Speaker 4: So I conditioned to think about those things and what

512
00:23:01,840 --> 00:23:03,840
Speaker 4: I want like I want our listeners to think about

513
00:23:03,840 --> 00:23:06,840
Speaker 4: what risk management looks like for them. These guys knew

514
00:23:06,880 --> 00:23:08,920
Speaker 4: that for the way that their business ran, they needed

515
00:23:08,960 --> 00:23:10,720
Speaker 4: to have offsite product and such, they needed to have

516
00:23:10,760 --> 00:23:13,280
Speaker 4: somewhere else to produce. What does it look like for

517
00:23:13,280 --> 00:23:16,040
Speaker 4: someone else in another type of business? Right, everybody needs

518
00:23:16,040 --> 00:23:18,240
Speaker 4: to examine what that is like for them. Maybe it's

519
00:23:18,320 --> 00:23:22,440
Speaker 4: just having the appropriate documentation. Does someone else know what's

520
00:23:22,480 --> 00:23:25,080
Speaker 4: in the head of the person who's running the business?

521
00:23:25,160 --> 00:23:28,199
Speaker 4: Beyond having an insurance policy? What do you have in

522
00:23:28,240 --> 00:23:31,040
Speaker 4: place to protect the business on a short term and

523
00:23:31,080 --> 00:23:33,640
Speaker 4: long term like our guys did here. I really want

524
00:23:33,680 --> 00:23:34,520
Speaker 4: people to think about that.

525
00:23:34,720 --> 00:23:38,120
Speaker 1: Yeah, big businesses call it business continuity planning. Small businesses

526
00:23:38,119 --> 00:23:39,439
Speaker 1: call it something I don't have time for.

527
00:23:40,200 --> 00:23:43,440
Speaker 4: Not urgent, but so important, exactly important. I want to

528
00:23:43,480 --> 00:23:46,520
Speaker 4: go back to something we talked about earlier, business acquisitions,

529
00:23:46,560 --> 00:23:50,280
Speaker 4: because this is really my lane. So Jason and Doug

530
00:23:50,400 --> 00:23:53,480
Speaker 4: chose to buy Luna Coffee and grow it themselves instead

531
00:23:53,480 --> 00:23:56,800
Speaker 4: of starting from scratch. Then they make an even bigger

532
00:23:56,840 --> 00:23:59,120
Speaker 4: bet acquiring a company that was larger than they were,

533
00:23:59,119 --> 00:24:01,280
Speaker 4: and that was of you know, of course, Bowyer's Coffee.

534
00:24:01,520 --> 00:24:03,600
Speaker 4: So Ben, what would you say is the most important

535
00:24:03,600 --> 00:24:05,600
Speaker 4: thing for a small business owner to think about when

536
00:24:05,640 --> 00:24:08,600
Speaker 4: looking to acquire a business. I've got my thoughts, of course,

537
00:24:08,760 --> 00:24:10,040
Speaker 4: but I want to hear yours well.

538
00:24:10,359 --> 00:24:12,639
Speaker 1: So first of all, the most important thing in any

539
00:24:12,680 --> 00:24:15,160
Speaker 1: acquisition is buying the right company for the right reacher.

540
00:24:15,640 --> 00:24:18,879
Speaker 1: So it doesn't matter how you finance it, it doesn't

541
00:24:18,880 --> 00:24:21,320
Speaker 1: matter how you pay. It matters that you're buying the

542
00:24:21,400 --> 00:24:24,119
Speaker 1: right company for the right reasons, with the right plan. Now,

543
00:24:24,119 --> 00:24:25,920
Speaker 1: they had it, and I give them a ton of

544
00:24:25,960 --> 00:24:28,080
Speaker 1: credit for it, but I've seen that go sideways in

545
00:24:28,119 --> 00:24:30,640
Speaker 1: so many different ways. They bought it because they thought, well,

546
00:24:31,119 --> 00:24:32,960
Speaker 1: I could never build that, so I'll buy it, and

547
00:24:33,040 --> 00:24:34,639
Speaker 1: I can do it better than they can. Well you

548
00:24:34,680 --> 00:24:37,440
Speaker 1: better really understand that before you get into that business,

549
00:24:37,440 --> 00:24:39,399
Speaker 1: because whoever runs that business, I promise they know more

550
00:24:39,400 --> 00:24:40,040
Speaker 1: about it than you do.

551
00:24:40,160 --> 00:24:42,560
Speaker 4: Oh absolutely, And that's why the due diligence part is

552
00:24:42,560 --> 00:24:44,680
Speaker 4: so important. Like I have had clients who have come

553
00:24:44,720 --> 00:24:50,760
Speaker 4: into the business acquisition model more cavalier than I prefer. They, Oh,

554
00:24:50,800 --> 00:24:53,119
Speaker 4: this isn't that big of a deal. I've looked at

555
00:24:53,119 --> 00:24:55,639
Speaker 4: the numbers and they, you know, they think they have

556
00:24:55,720 --> 00:24:57,680
Speaker 4: it all figured out, and I'm like, no, you still

557
00:24:57,680 --> 00:24:58,760
Speaker 4: need to do due diligence.

558
00:24:58,880 --> 00:25:01,119
Speaker 1: Well, the other thing I tell people is when you

559
00:25:01,160 --> 00:25:04,320
Speaker 1: are buying a company, even if the founder isn't coming

560
00:25:04,359 --> 00:25:07,479
Speaker 1: with the company, you're still buying that person because everything

561
00:25:07,520 --> 00:25:10,280
Speaker 1: about that company is about that person who owned and

562
00:25:10,280 --> 00:25:13,440
Speaker 1: built that company. Oh absolutely, And so you better believe

563
00:25:13,440 --> 00:25:16,600
Speaker 1: that whatever you're buying is going to feel and smell

564
00:25:16,760 --> 00:25:18,280
Speaker 1: and act like that person.

565
00:25:18,680 --> 00:25:21,760
Speaker 4: Yeah, and a lot of people underestimate that. I mean,

566
00:25:21,800 --> 00:25:25,399
Speaker 4: the business has that person's footprint, it's got them all,

567
00:25:26,320 --> 00:25:28,680
Speaker 4: it's all over it. Well, then I gotta say their

568
00:25:28,720 --> 00:25:32,640
Speaker 4: big bet clearly paid off. They really made the company

569
00:25:32,680 --> 00:25:34,399
Speaker 4: their own, and they found a way to make it

570
00:25:34,440 --> 00:25:37,639
Speaker 4: so that their DNA was woven into the business. And

571
00:25:37,760 --> 00:25:39,920
Speaker 4: let's be honest, that's a challenging thing to do.

572
00:25:40,160 --> 00:25:42,320
Speaker 1: Well, it sounds like they've really built something to last

573
00:25:42,400 --> 00:25:45,040
Speaker 1: and something that has purpose and has meaning both for them,

574
00:25:45,119 --> 00:25:47,440
Speaker 1: for their employees, and for the communities and farmers they're

575
00:25:47,480 --> 00:25:51,160
Speaker 1: working with, which is just a terrific story. Okay, now

576
00:25:51,160 --> 00:25:53,840
Speaker 1: before we go, I want to share one last part

577
00:25:53,880 --> 00:25:56,080
Speaker 1: of my interview with Doug and Jason that I think

578
00:25:56,080 --> 00:25:56,800
Speaker 1: you'll really like.

579
00:25:57,160 --> 00:25:58,239
Speaker 4: Okay, let's hear it.

580
00:25:59,520 --> 00:26:02,040
Speaker 1: We have a lot of small business owners listening today

581
00:26:02,200 --> 00:26:05,200
Speaker 1: who really aspire to the level of success that you've achieved.

582
00:26:05,880 --> 00:26:08,440
Speaker 1: What's the one piece of advice you have for them.

583
00:26:08,840 --> 00:26:11,200
Speaker 2: I would say, once you've done the research and have

584
00:26:11,240 --> 00:26:14,199
Speaker 2: a strong business plan, you figured out what your capital

585
00:26:14,240 --> 00:26:18,399
Speaker 2: funding requirements are, double that and then have a contingency

586
00:26:18,400 --> 00:26:20,960
Speaker 2: plan if you happen to need more capital to realize

587
00:26:20,960 --> 00:26:24,760
Speaker 2: your vision. Number two, I would say, take the time

588
00:26:24,960 --> 00:26:28,760
Speaker 2: within your network to talk to other entrepreneurs that have

589
00:26:28,880 --> 00:26:32,280
Speaker 2: done similar or different things and really listen and learn

590
00:26:32,760 --> 00:26:36,240
Speaker 2: from their successes and their failures. Don't assume you know everything.

591
00:26:36,840 --> 00:26:41,119
Speaker 2: And Third, build an advisory group. We realized very early

592
00:26:41,160 --> 00:26:47,520
Speaker 2: on whether it's banking, finance, taxes, distribution advice. For us,

593
00:26:47,640 --> 00:26:51,280
Speaker 2: we've built an external advisory team to make sure that

594
00:26:51,680 --> 00:26:53,560
Speaker 2: we would always be set up for success.

595
00:26:54,680 --> 00:26:58,200
Speaker 3: I would add two things. One is a support team

596
00:26:58,440 --> 00:27:01,080
Speaker 3: that is personal, whether it be your partner, whether it

597
00:27:01,119 --> 00:27:04,719
Speaker 3: be your dad or mom or friend. It is something

598
00:27:04,800 --> 00:27:08,960
Speaker 3: that requires a significant amount of support because you have

599
00:27:09,040 --> 00:27:12,600
Speaker 3: to focus on the business like it's a person. And secondly,

600
00:27:13,040 --> 00:27:15,639
Speaker 3: I really believe it requires one hundred and ten percent

601
00:27:15,880 --> 00:27:19,160
Speaker 3: every single day, twenty four hours a day. The thing

602
00:27:19,200 --> 00:27:21,760
Speaker 3: that they don't tell us about being an entrepreneur is

603
00:27:22,400 --> 00:27:26,000
Speaker 3: you've got to like put on your company's superhero cape

604
00:27:26,359 --> 00:27:30,040
Speaker 3: and be totally cool beyond that full time, because everyone

605
00:27:30,160 --> 00:27:32,840
Speaker 3: is looking to you for the answer and for the

606
00:27:32,960 --> 00:27:36,920
Speaker 3: vision and for the passion, and ultimately, when you get

607
00:27:36,920 --> 00:27:38,960
Speaker 3: to a point where you can hire a team, you

608
00:27:39,000 --> 00:27:41,440
Speaker 3: can instill that same ownership mindset downward.

609
00:27:43,160 --> 00:27:45,320
Speaker 1: Thanks so much for listening to the first episode of

610
00:27:45,320 --> 00:27:49,040
Speaker 1: The Unshakables. Next episode, we'll be back with a story

611
00:27:49,080 --> 00:27:52,840
Speaker 1: of a celebrity car detailer who redefined success by rebuilding

612
00:27:52,880 --> 00:27:56,800
Speaker 1: his business not once, but twice after being pushed out

613
00:27:56,800 --> 00:28:00,760
Speaker 1: of his own company. If you liked this episode, please

614
00:28:00,840 --> 00:28:03,960
Speaker 1: rate and review it. It'll help our show find more listeners.

615
00:28:04,960 --> 00:28:07,880
Speaker 1: I'm Ben Walter and this is The Unshakables from Chase

616
00:28:07,880 --> 00:28:10,560
Speaker 1: for Business and Ruby Studio from iHeartMedia.

617
00:28:12,640 --> 00:28:16,240
Speaker 2: The Unshakables is a production of Ruby Studio from iHeartMedia

618
00:28:16,440 --> 00:28:17,600
Speaker 2: and Wheelhouse DNA