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