Note: I have this friend I work with. Let’s call him Peter. Every text I send him gets accused of being click bait. He’s right half the time, but it always evokes a response. So blame him for the title of this post, not me.
Almost exactly a year ago, while all my friends were launching e-commerce sites to build their side businesses, I bought a neighborhood coffee shop. A neighborhood coffee shop is the ultimate in unscalable businesses- it is limited by demographics, has fixed costs, requires involvement in hiring people, I can go on and on and on. Even so, buying the coffee shop has been one of the greatest learning experiences in my life.
How it Happened
I live in a neighborhood north of Chicago. The neighborhood is tight- we’re densely populated (for the suburbs) and everyone on my block knows everyone on my block. Just after we moved there a good friend opened a neighborhood coffee shop. He had just left real estate and wanted to spend his time doing something different. Turns out there’s just not a lot of money in running a coffee shop, so he wanted to go back to selling real estate. One night, last February we had a conversation like this:
Him: So, I’m thinking about selling the coffee shop.
Me: Wow. That sucks- why?
Him: I’ve got two kids and it just doesn’t pay the bills. I think I need to go back to real estate.
Me: Really? So what are you going to do, sell it?
Him: I’m going to have the world’s nicest espresso machine at my house.
Me: What if someone wanted to buy it? (side note, we were two drinks in and I’d just left an especially tough day at work. pro-tip, don’t carry your check book in your backpack.)
Him: Who would want to buy it?
Me: What if I wanted to buy it, how much?
Him: OK. Names a price/requirements.
Me: Pulls out check book. Writes check. Done.
And thus, as a guy who barely knew how to make coffee, I owned a coffee shop.
Let’s be real clear. There was no business plan here. I eyeballed some numbers, but I wasn’t going to go all GAAP accounting on this chance. If worse came to worse I’d lose some cash, have some fun stories, and call it a day. My goals were as follows:
1) Get the business to run itself- I did not want to be involved in every daily decision. Need more milk? Great, grab a few bucks from the register and buy the fucking milk. Don’t bother me.
2) Keep the business afloat while losing as little money as possible. I knew it would take some capital investment to get the shop going, the goal was to keep that minimal.
3) Build a community around the shop. Ideally surface a few ideas in the area that didn’t exist before.
What actually happened
1) The first person I hired to run the shop didn’t work out. That’s putting it nicely. That said, I limited my exposure, found someone great and now he runs the shop to this day. He calls me for advice and I manage the books of the shop, but largely from day to day the shop runs itself. I notice little things (Dude, why aren’t there bagels, we should have bagels every day) and he takes care of it. My customers love him and the folks that work for him. The best part about this goal is that it’s taught me to manage from above. None of this lead from behind bullshit- I have to create a structure that allows me to be comfortable with not getting involved in every single decision. If it involves cash, hiring, firing, or the extreme end of quality of product I get involved. Otherwise, I pretty much stay out of it.
2) The shop has required more capital than I anticipated, but not so much that I’m in dire need. At this moment the shop is cash flow neutral and we’re in the slow season. That’s a very good thing.
3) This is where I’m having the most fun right now. This all started with me hanging out with a few people after hours when the shop was closed. Then it evolved into me throwing a Facebook post up about starting a running club. The post got incredible engagement, so next month we’ll start a running club. We’re seeing people flock to the shop as a place to meet and greet with the folks that live around them.
So, is it worth it?
I’m having fun, the shop is largely running on its own, and when I wake up at the earliest part of the day I can always get shots of espresso. Next month I’ll have a place that I can meet a group of my neighbors and go for a run. Yah, it’s worth it. Beyond that, it’s a lot of fun and I’m learning a ton about how to run a business from a distance. This might be the most fun I’ve had in a long time.