$6M/Year Coffee Business... Started On the Side!?

In this episode, we dive into the remarkable journey of Jake Paulson of Anchorhead Coffee who opened a coffee shop from his humble garage setup. Before venturing into the coffee business, Jake worked in the music industry—where he discovered that his favorite part of the day was that magic cup of joe. Ditching his career, Jake and his partner decided to start crafting cold brew in the garage. Thus, Anchorhead Coffee was born.

Join us as Jake recounts how he expanded Anchorhead Coffee to 300 retail stores in just two years. He opens up about navigating the complexities of business partnerships, and the critical decisions in choosing suppliers, and the art of marketing a niche product. And he shares the personal sacrifices and strategic moves that helped Anchorhead move into Seattle’s first bottled cold brew and America’s Best Espresso winner.

Discover the strategic insights and personal anecdotes from an entrepreneur who has made significant strides in the coffee industry by offering a combination of innovation and traditional flavors. Whether you’re a budding entrepreneur or a coffee aficionado, Jake’s story is a rich blend of inspiration and practical advice, revealing the essence of building a successful coffee company from the ground up.

Resources

Timestamps:
00:00 - Start
00:56 - Meeting Jake
02:54 - First location
04:31 - Lessons learned
05:47 - From coffee to bakery
08:06 - Revenue breakdown
09:38 - Startup costs
11:52 - Fan Blitz
13:51 - Myth to debunk
14:49 - Learning the industry
15:41 - Time management
16:44 - Rental costs
18:07 - Suppliers
20:21 - Getting investors early
22:02 - Secret to winning awards
23:56 - Getting into retail
25:58 - Selling vs. Retailing
27:34 - Marketing strategies
28:54 - Employee wages
29:26 - Top sellers
30:20 - Location advice
31:57 - Challenging times
34:21 - Success mindset
35:11 - Advice to viewers
35:58 - Outro

#coffeeshop #coffeebusiness #openingacoffeeshop

[KevinBroce]

I toured with Jake back in both our audio engineer days. This was living on a tour bus, working and an outside music festival 14+ hour days, something like 50 shows over 57 days, rain, shine, lighting, tornados, dust storms, in the middle of the summer. You can't fault his work ethic, passion or sense of humor. His business partner is cut from the same cloth. Just a couple solid dudes.

[clutterreductionjunkremoval]

This episode felt much more realistic vs your standard "success story". He's in a great spot but not thriving like most people assume business owners are. I really enjoyed this one!

[whymindsetmatters]

There's no such thing as failure when you've accomplished the thing you set out to do. Even if it shuts down tomorrow you can look back and say I did that, and then do it again!

[beingemma]

Ive been in the food space for 7 years. Yes, restaurants, coffee shops, etc have a low profit margins. This is why you will see franchise models pop up to expand the brand, but make some money without as much headache since the daily operations fall onto someone else.

[rccpromotions]

Thank you so much for providing high quality interviews that look into detailed specifics and the mistakes that we can learn from. These are incredibly valuable 🤘

[pj]

Attention, his salary disclosure is only for irs audit purposes. I promise u he gets more than that via profit distributions which is legally taxed at a much lower rate due to it not being “actual and recurring rate” salary. Business comes with stress but also perks for that stress. Also he can offset his income with many legal tax write offs . All that while providing employment and hence additional tax revenue for the state. Or u can just worry about urself and no one else and work a single job from home as a techie and make 100k. One benefits only one person while the other serves an entire community with services and jobs. This is why the tax code was written to benefit and encourage small business development. Because at the end of the day businesses do “more”.

[CHEFPKR]

I had anchorhead 5 times in 3 days over the weekend. Delicious coffee.

[riffpad]

Great advice. We are 6 months into a commercial venture from starting at home many years ago. It's tough, the first few months were hard but it's getting easier. I agree with the baseline of stress being a little higher, you learn how to take and avoid big hits as time goes on! Thank you

[AB-fqmr]

Makes me really grateful to work on my own. You have to deal with 68 workers and only take home 150k each after everything. Sometimes its just better to work by yourself from home. Less stress, same salary. Oh and I can live in the middle of nowhere and buy a cheap mansion, I dont have to be in the middle of an expensive city.

[surge]

As a coffee shop owner as well, this guy is the truth! 👏

[downeyToronto]

he's a really cool guy.... 5% profit margin is wild especially with the cost of living so high now days

[ionutmarin]

Absolutely amazing interview and honest answers. I was really feeling the things he said as i am in a very similar situation. Keep going at it man!

[harambeexpress]

The other thing about bringing baking in house or at least not outsourcing to a big supplier is that as a consumer it makes me take the cafe more seriously (as they clearly care about quality).
It also helps justify the relatively high cost of these items.

[yogayoggie]

You know what, Jake by far is the most truthful guy who indeed sincerely wanna share. He will reach the success he wants one day. What a great chap.

[sutats]

Great spisode. So much insight. Just do it and keep trying.

[ChalkboardMom]

I REALLY loved this one! So relatable, realistic, open, and packed with hope in this unstable economy. Thank you!

[BenJohnston]

I'm opening a coffee shop in Denver called Grounds Operations Coffee, and this is extremely informative. Maybe next time I'm in Seattle, I'll check out Anchorhead Coffee.

[plokkum]

With a 5% margin, this really has to be your biggest -hobby- passion. Good for him, though! Thanks for the grounded insights.

[grischawillrich]

What brewing machine is it for the V60 at minute 3:24?

[GregStenson]

I love Anchorhead. Every time I visit Seattle I always book a hotel near their downtown location purposely so I can stop by for a daily cup or two