Behind The Scenes Of A $24,000 a Month Coffee Shop Business
- Would you guys like to know how much this drive through coffee shop makes? It'll surprise you; stick around to find out. (upbeat music) - On today's episode, we are interviewing Sandy Eden, who bought a struggling drive-through coffee shop and turned it into a successful business. She started as a barista in college. After seven years, she got a management position.
Then in 2010, she bought Shots Two Go. How does someone start their own coffee shop like this? Is it better to buy an existing location? What's some crucial equipment to have? - I go through probably one to two microwaves a year. - Today, she's going to share some strategies and answer questions about how she got started. How she evaluated this business before she purchased it, the biggest business mistakes she made, and most importantly, what advice she has for those looking to start their own coffee shop.
You sell a cup of coffee. What's your profit margin? What's your monthly overhead as of today? What about marketing for Shots Two Go? What are you doing today to market? If anything, what's your budget? - And I'm averaging on monthly basis. - Make sure you subscribe to our channel so that you don't miss any of our videos, and please espresso some enthusiasm by liking this video. And let's go talk to Sandy. (energetic music) - All right, let's go meet Sandy, the owner of Shots To Go here on Meridian in Bellingham. (knocking on door) Is this the right place? - This is the right place.
- Are you Sandy? - Yes I am. Nice to meet you. - Good to meet you, Sandy. Likewise, we're looking forward to sharing your story and why don't we just dive into it? - Okay. - Tell us a little bit about yourself and why you ended up buying Shots two Go and kind of the history behind that a little bit.
- I've actually been doing coffee for it'll be almost 28 years this year. I started when I was 18. When I started college, I started a little kiosk. Worked in coffee all the way through college. In 2000, I started managing another coffee place called Espresso To Go out in Custard, it is now a pot shop, and then got another management position up at what is it's called New Grounds, now, but it used to be Rocket Coffee, managed there for a couple of years.
The guy who delivered our coffee there told me about this place being for sale. My mom and my grandmother and myself were able to pull the money together to buy it. And I didn't have to take a bank loan out. - Nice. - It is a turnkey, it was built in 2005, and it was just right time, right place, and being that I'd managed for 10 years I knew the running of the place. - Gotcha.
(energetic music) Cool operation, show us, maybe, the equipment. I think that's important to know for coffee shops. So what's, what's some crucial equipment to have in order to run a smooth operation here.
- Double door fridge. - Double door fridge, okay. - So, depending, you know, I get milk deliveries twice a week, so this thing gets packed full.
You want your freezer, especially if you do like we have hard ice cream shakes, this guy has been great. True Freezer's fridges are generally some of the best. - So it would be top choice? - Like, this one has been here since I bought the place and I've only had to have it repaired maybe two, three times in 10 years. - What else we got? - I just got this guy. I actually only paid 700, he was refurbished. - And it's a fridge, right? - And it's a fridge, I'll open the door, so this is where we keep all our breakfast.
All our breakfast stuff in. - Yeah, so all the goodies and foods stay right inside there? - Yeah, so that's where all that is at. - Why refurbished? I mean, obviously you get a better price, but-- - Totally, like, this brand new would be four to five grand.
- Wow, and you got it for what? (laughing) - Yeah. - You got it for seven hundred bucks? - I got it for 700 bucks out the door. You know, usually refrigeration companies a lot of times they'll have these or other items that you can get for a lot cheaper. (upbeat music) - Looking for a small business loan to get the funds you need? We've recently partnered up with some of the top rated business lenders. If you have a business and need a loan then visit uplift.com forward slash business dash loans. You can look at all the business financing solutions.
You can compare different lenders side by side, and get the funding you need to keep your business growing. (upbeat music) Like I said, and this is a, the bacon cheddar bagel. We do premium bagels, which they're a little bit bigger a little more expensive, but we have like variety like a bacon cheddar, we have cheddar herb, jalapeno, cheddar, Swiss everything, you know, super good. - Who bakes them? Where do they, who delivers, or you go pick up? - So the, one, these ones are that's called Seattle's favorites. It's a company down in Seattle. And they actually overnight everything fresh to us.
So we just call, put our order in it's here the next day. - Do you have any kind of hot sauces that you have on the side, or anything? - We don't, we have like salsa is all we have because we have for the burritos, but. - Ah, look at all that cheese.
So look at this pretty delicious. You've got bacon bits all around. They're kind of infused with the cheese in the bagel, looks pretty good.
Try not to burn my tongue here with the hot cheese. (talking in distance) - Oh wow, this is good. (laughing) I mean-- - We have people that come through just for food. They won't come through for drinks. - I mean the bacon bits and then the egg and the bagel. - It is everything. (laughing)
- No cream cheese needed, huh? - You guys make sure you always keep them camera man well fed, so here's this piece. Here you go, Nick, enjoy it. (upbeat music) All right, you guys, I just came to Cash and Carry. There's Sandy, and she's going to take us inside and we're going to do some shopping.
So let's go check it out. (mumbling) along. - All right. So what are we buying today? And tell us a little bit about what that adds up to on a weekly basis. - So I generally, this is where I get all my syrups my chocolate, cups, lids, you know, some of my produce, and cheese and you know, everything. We do food as well as drinks.
Weekly basis, you know, I spend anywhere, probably between I'd say like around a thousand, to two grand a week, probably, just keeping things going. So chocolate, that is definitely the main source, right? Without that, no mochas. - You got it? - Oh yeah. (box rattling) I provide probably around 75 different flavors.
Caramel and white chocolate sauce, we use these. - More sugar? - Yes. (laughing) - (mumbling) I'm going to get sugared up. (laughing) - The sauces are used for a lot of times we use the sauces on like our iced drinks.
The caramel sauce is super popular. Caramel macchiatos, you have your caramel lattes, the caramel frappes, that's what we use in that. (upbeat music) We sticker our own cups.
So I order in bulk 25,000 stickers at a time with our logo and our colors and everything, and then we on slow times, down times, that's what the girls are doing are sticker-ing cups. And that's what we do. - Cost-wise have you compared it to buying customized branded cups? - To customize, I kind of looked into, and it's a little bit, it's quite a bit more pricey, so. - 'Cause this one was five point eight cents per each. - Right.
Basically, so six cents per cup. - And then our stickers, we figure it's the, I get 25,000 stickers for $600. So you figured that they're barely pennies, yeah, and then you got your lids, you got your straw. So you're looking at I'd say like around 20, you know, between 15, 20 cents per cup, depending on the size. Cream cheese.
- Okay, just the whole box? - You know, we go through, yes, we go through two of those in I'd say three days. Because of, you know, we have tons of bagels and we have some really good bagels that we use, so. - I'm afraid to guess now, but you know what? Since I said, I'm good at guessing. - Got to do it. (laughing) - I would say you're probably in the five 65 range? Maybe a little, maybe a little steep, but.
- I'm going to say three, three, 90. - You're gonna say three, 90, okay. Well, we're done shopping for today and you definitely came closer to my guess, guys. So it's, check out the total here, $405 and 82 cents. You guessed three 90. - I was pretty close.
That's pretty good. - You know, you know your stuff, Sandy. Let's go put this in the car. - Well, you gotta figure there was some sales in there that I probably didn't know about. So that's why it was a little cheaper.
Our breakfast sandwiches are amazing. - What's your best seller? - We have a couple of, well, we do croissants. We do English muffins, we do bagels, and it's, yeah, amazing. (laughing) - Okay well we're going to go back to your shop. - All right, I'll see you there. - And continue sharing the story.
(energetic music) What did you pay for this back in the day? - So 10 years ago, I paid 60,000. Which reason why I thought that was a really good deal is I mentioned earlier about trying to buy the rocket coffee at the time. He wanted a hundred thousand and there was no bathroom, or septic, or running water, which I have here. - The value here was good. - So I knew the valuation was definitely there, it was a good price.
You got a big attic there, why don't we come up there with you? - Sure. - Well, you bought this as a struggling business. What gave you the confidence that you can come in and improve on it? - It was the location, definitely. Being behind the gas station you get people, I get truckers coming up that walk up.
I get people that, you know they go and get a snack, but want a coffee a real coffee, who wants gas station coffee? You know, that's always on a lot of people's heads. So we have coffee. So people come over here and I've just had done it for so long.
I just felt like I could do it. - Having a gas station next door you would say helps? - Oh yes. - It does. Yes. - Okay.
So for any business looking for like to build from say the ground up location. You know, corner spots where there's easy access in and out. Having some other businesses around you generally help because you're going to have employees like all of Rod's, they all come over here for coffee all the time. So you definitely want to keep that in mind when you're looking for a place, for sure. (upbeat music) - Okay, so you paid 60,000 for this how many years ago? - 10 years. - 10 years ago.
And what was revenue like when you bought it? - From what, I think they were only doing like 820, maybe? I can't remember exactly what it was, but I know a lot of times when you purchase a place, it's like a percentage, especially since I lease. So you, I bought the business and not the building. - What's your lease payment? So my lease payment now is 18, 20. When I first bought it it was 16, 50. So my landlord has been awesome and not jumping up my increases.
- So revenue was around the one 10 when you bought it and tell us again, what your goal is for 20, 20, 20, 21. - So, 20, 20, you know, we were at 20, 80, 22, 80 300,000. I'm hoping for, you know, 20, 21 to match that and you know hopefully we'll get a little better.
- I think you will, place is amazing. Food is delicious. (laughing) I'm curious about, let's talk about overhead a little bit. What's your monthly overhead as, as of today? - So, you know, rent is 18, 20, so, you know, utilities I pay probably with everything, I'd say, you know around seven to 800 for a power, internet, phone.
- So that said so 2,500? - 2,500, you know, the girls, and maybe around three grand a month. For employees, okay. - Yeah, so, cause I, since I worked so much I only have those couple of girls at work, and then with all the product and stuff, you know, you figure with everything I do, that's probably around another I'd say four to five grand a month. - Yeah because if you're doing at one to two grand a week, sometimes. Okay, so you're at 55, so just under 10,000. - So, and I've been so around, yeah, I'd say around 10 to 12 for overhead.
- Okay. - And I'm averaging on monthly basis we're, we've been doing between 25 and 34,000 a month. - Okay, that's pretty good. - Yeah. (upbeat music) I go through probably one to two microwaves a year because I use it so much and it burns out.
Toaster's. - Never seen those kinds of toasters. - Yeah, I got these all, I actually had to get these online because it's hard to find a good toaster because I get, I go through probably four to six toasters a year because they burn out. - So much use, yeah. - Yeah, so much use, so you, these ones are a little more expensive. They take a little bit longer, but hopefully they'll last a little bit longer.
- What do these cost, Sandy? - These ones were each 125. - Okay. - So this guy was about 250, so. - I mean one 25 is pretty steep for a toaster. - Yeah, you would never think to spend that much on a toaster.
Ice machine, I just got this about three, four years ago, about $2,700 new, it was. - You got the bun drip, and what do those run, usually? - I'm not sure this is actually provided by my coffee supplier. So they gave this to me to use what since I use their product.
So, and same with the Pepsi fridges. So the two Pepsi fridges, because I use their products they supplied both the fridges. Anybody getting started check out who's supplying you, you know, cause a lot of times they'll give you deals for carrying their products. (upbeat music) - How does someone start their own coffee shop like this? Can you in general break down the cost? Is it better to buy an existing location? Do you think it's better to just start from scratch? - It is, I mean, with all the equipment and everything that's in there, this place I would value at over a hundred thousand with all of the equipment, all the product. And I bought it with pretty much everything in it for 60,000. - For 60? - Exactly, so, but if you go to build, you know be prepared to, you know, if the building isn't already there and you have to actually build then you're looking, you know, a lot more now if the building's already there, right.
You could probably do a startup, I'd say for, you know 75 to 100. - Something small like this? - Yeah, yeah. So, cause just your coffee machine, your espresso machine will be between seven and 10 grand. So you know, just that one thing. (laughing) - Right. - So you want to make sure to have enough and hopefully get good deals.
- Right, okay. By the way, you guys just a quick snippet for you. If you are looking to buy a business or sell a business you can do that on up flip.com, check it out. (energetic music) You sell a cup of coffee, what's your profit margin? - I try to stay at like say between 25 and 35% so, above. So if, and then some drinks or more and some drinks or less. - Well, let's touch on that.
So what's the highest profit margin drink that you sell, and lowest one? - I would say our highest profit is actually our Lotus energy drink. You know, it's a concentrate similar to red bull and you just add your flavor, ice, and club soda. And you know, so say for a 24 ounce we charge, you know say six 52, and my margin is probably around $3 on that drink.
It's a really good seller for any coffee stand. So I would say, you know, definitely look into that. (laughing) - That's right it's the natural energy drink. - With red bull, and red bulls yeah, and red bulls are a huge seller. A lot of places don't realize how big of a seller red bull is.
- Just by itself, individually, or? - I go over the flavor and the ice. - Interesting. - Oh yeah. It's people are addicted. - So that's the highest profit margin drink.
What's the lowest? - The lowest profit would be, you know, I'd say like the drip coffees or, you know, cause I don't charge a lot for them. I try to keep them under, under price. So it gives some people. But the nice thing, when you upsell people is like people will get a shot or a flavor or you know, so that will increase your profitability. It's the little things.
(energetic music) - Blitz with Sandy. All right, first question. What's the most bizarre business encounter you've had? - One day I had this guy coming up and it was, his car was making a really loud sound. He jumps out of his car at me give me a gallon of milk, give me a gallon of milk. I need a gallon of milk right now.
And I'm like, okay, here, gave him a gallon, pours it on himself. Pours it on himself. And I'm like, what the heck? He takes off he's on all four of his tires are on the rims. He has no rubber left.
He left a whole trail of rubber all the way out, went all the way over there. We called the cops, well supposedly he got pepper sprayed. - Oh wow. - And the cops were like, what the heck? - Milk works. - Milk works, and that scared the living daylights out of me. I was on nine one, one immediately.
(laughing) - I bet, next question. If you have the power what would you do today to make one thing illegal? - I would make cell phones illegal completely while driving. Because one of the biggest things I hate is when someone pulls up to my drive through, gives me the finger to hold on while they're on the phone. - Like, wait a minute. (laughing) What's your least favorite experience in running your business? - Yeah, the least favorite would be just lack of time to be able to take a vacation. - Okay, you keep busy.
- You know, I've only had one actual vacation of like four days in the 10 years I've had it. It is really hard to get away. I did have one plan. We were supposed to go to The Bahamas for 10 days in may, but it got canceled because of COVID - Okay, happened to all of us. - Yes. (laughing) - What's one thing you would tell your younger version, don't do this, specifically? - For me not to buy so many cars.
- Not to buy car some... - Not to buy so many cars. - You like cars? - We have lots of cars. - That's awesome. I like that. - I'm a car addict. (laughing) - Okay.
And then last but not least let's just say aliens show up tomorrow. They shut every business down and then you have to convince them to stay open. What would you tell them? - You need caffeine, man.
You need caffeine. - I like that. (laughing) (upbeat music) What about marketing for Shots two Go? What are you doing today to market, if anything? What's your budget on that end? I, you know, I do small things.
One of my biggest things that I do, I sponsor Demi Speedway, which is in Everson, Demi. And I spend, you know, it's about $4,500 a year, and I have a big sign, and I get all the drivers that come through, and then I also sponsor drivers and they put their name on, you know, my name on their cars. - Do they get smashed? - Oh yeah, oh yeah, and it's you know, we definitely missed it this year but it, you know, there's that. And then other things I do, I do a lot of sponsorships and donating to the schools. We're in a really, right in the middle of Meridian school district. So I do, when they come up and ask for money, I always get it.
I'm like, yes, yes. - You're generous? - Yes, you know. - Comes back to you tenfold, it seems like. - Oh, it does, you know, you gotta spend money to make money you know? And if you don't do that, then you're not going to make anything. If you don't just put yourself out there and start just giving, and it comes back. - Right. (upbeat music) What's been your best month ever, and what do you think you did differently or, or to make it happen? - Well our best month actually was this last December.
We did probably close to 35 grand. A lot of it was because we we were open through COVID the whole time and people got to know that we were here and once they tried us, they've been coming back. So we've got a lot of, I'd say COVID clients because we were drive-through only and that was our saving grace to be able to stay open. What was the other part of the question? - Do you have any loyalty programs? - Yes, punch cards. (laughing) - So you do, okay? - Yes, we have punch cards.
It's just a simple paper card, 10 punches and they get free one, but we do like double punch Tuesdays. So if they come in every Tuesday that fills their card up, and we do free flavor Fridays. So you're going to add a flavor and try something different every Friday. - Okay, any size you can get on the free one, or do you limit that? - I usually try to get people to try to stay within the price range that they normally get. You know, we do have four different colored cards for different drinks, so we can kind of keep people honest because sometimes you get some of the people who they want, they've ordered something, that's a buck 50. And then for their free one, they want a seven dollar drink.
So we try or we're trying to cut that out. So I don't want to have to raise my prices because people are wanting more than what they usually get. (laughing) - Okay.
(upbeat music) Quickly want to touch on upselling, you know, in restaurants that's typical. Hey, we've got this on the menu. Would you like this? Would you like that? Does that happen here at the shop? How do you do it professionally, effectively, and... - It's super easy, like right now I don't even have menus up, so we really have to upsell and that's all my girls are like, oh, hey, you know, do you want a flavor in that? Did you want just say, oh, you know, we have food, do you want a bagel, and muffins, scones, you know? So you just kind of see like, oh, is there anything else, you always ask that because people will be like, yeah. And then you kind of walk them through and help them out.
The other thing, when we have, when they drive around we have baskets of goodies sitting on the outside. So it's the sight, you know? Oh, that looks good, and they'll just grab it. - It's outside on the other side, okay. - Mm-hmm, just on the thing, yeah.
If you didn't see it it's on the other side, but, you know, so having things for people to see is also a really good thing. So, and word of mouth has been good about our breakfast sandwiches. I have people that come through just for food and they know what we have. - Just 'cause they tried it once, and their whole family now wants to visit? - Yeah, yeah. (laughing) (upbeat music) - People assume that, you know a busy coffee shop place makes a ton of money.
Is that about an accurate statement? - Yeah, I have people that think, you know, oh you must be rolling in it, cause you know, but I manage my money. I do manage my money. It is my only location. I'm not in it to make tons of money. That's why I can keep my prices down. So to get, you know, quality as well as, you know good price keeps people coming back.
- And then your best month you said was what, again in December? - December, so where, yeah, we did 35,000. And it was a lot of work but a lot of product went out, you know? So you figure, my overhead probably shot up on that month. I haven't done the numbers yet. That was just in December. - What would you think your net would be? - Probably my net on that month I would say would be like maybe 10 to 15.
So, and but yeah, and I sock everything away and I don't, I try not to touch it just in case something breaks down or, you know, some major catastrophe happens, or what if we get shut down because of COVID? - Right. - You know, so yeah. - Yeah, it takes discipline, so. - Yeah, you really have to be disciplined with your money. - Well coffee's amazing, delicious, food's delicious, and your story is even more incredible than that.
So thank you, Sandy. - Thank you. (laughing) - It's been a pleasure. Well, that's a wrap you guys.
I hope you really enjoyed us talking to Sandy the owner of Shots two Go here in Bellingham. It's all about customer service. That's what really stood out to me. That's what keeps people coming back, coming back, coming back.
So focus on that, take care of your customers. Make sure you check out all other videos that we've got, subscribe to our channel. Hit that like button. And thank you so much for watching.
We appreciate you a ton.