Interview with Santa Barbara Cider Founder Ben Schroeder – Small Business Show 192

The Small business show episode 192 for Wednesday, October 10, 2018. Greetings folks and welcome to the Small Business show here at BusinessShow Co the show by, for and about small business owners here in Durham, New Hampshire.

I'm Dave Hamilton and out on the west coast, I'm Shannon Jean, BFA man. Excited to be here talking about, buy for and about small business.

Buy for and about small business. Speaking of about, Shannon, we have a guest with us today, don't we?

We do, yeah. You know, we talk on the show a lot about, you know, turning your hobby into a small business, pros and cons, all that kind of stuff. Trying to keep the joy that you've got for what you really love as you start your business. Today we're joined by a small business owner who turned his hobby into a business, started brewing cider in his garage and turned it into Santa Barbara Cider. Company moved from his garage, eventually opening up a tap room down in Santa Barbara, California. Thanks for joining us today, Ben. We appreciate you being here.

Absolutely. Thanks for having me. Yeah.

So, hey, let's talk for a few minutes about how you got started. You know, I always hear about guys brewing beer as a popular hobby, but you know, and you might have done that as well, but you know, eventually wind up with cider. How'd you, how'd you get down that path and how'd you take that big, you know, leap from your garage to, you know, your commercial space you're in now?

Sure, yeah. Actually, I hate to sound so unoriginal, but I actually did start with beer. So I, I was doing homebrew and I'm kind of a craft beer fanatic. So I'd head up to Northern California for like the Pliny the Younger release for Russian river or I'd go check out Rare Barrel in Berkeley. And you know, it's, I really just enjoy the craft beer scene and I was making beer with some friends and we were having a good time with it. And you know, the, where I, where I made a turn on that pathway was I have a daughter who has celiac disease, so she is gluten free. And not that my 12 year old drinks, but that we ended up hanging out with more people that have that same kind of thing. So we ended up, you know, I started making gluten free beer and then, you know, we'd sit around with our friends and we'd be talking about it and somebody mentioned cider and I, it kind of interested me and so I made what I like to describe as years and years of really bad cider. And that ended up turning into some decent stuff. And so, you know, I. I started. I'd be taking my. My cider over to my neighbor's house, and at one point, he looks at me and he goes, oh, this is great. Where'd you buy it from? And I was like, no, no, I made it in the garage. Right. So then that turned into somebody else hearing about it, and, hey, can you help me make this for a wedding? And so we, you know, it just kind of snowballed from there. And then, yeah, the leap actually came from, you know, I. I run another company out of the same warehouse, and I was finding that over time, I didn't need to carry as much stuff. So I was. I was doing some E Commerce and some shipping of, you know, merchandise, and I found that, as, you know, I needed less and less of that space. I was looking at it going, what am I going to do with this space? I've got this hobby I'm really enjoying. So, you know, I ended up really taking a good, hard, long look at it. I think I probably spent a couple years going, okay, if I did this, and then what if I put this thing here? And what would that even make sense? And so eventually, I ended up feeling confident enough about it that I ended up pulling in two partners. I talked with my sister and a good friend of mine of over 20 years, and we all kind of partnered up, had our own strengths, and we ended up going for it. So it took a while to open up, but we're having fun. That's great.

That's awesome.

Yeah. So was it a couple of years that you were making the cider in your garage, kind of perfecting things before you launched, opened the tap room?

I would like to be able to tell you that I picked it up that quickly, but it took a lot longer.

Really?

You know how some people are classically trained on the piano and they've got a method that they learned by. And then some people just pound out stuff on the piano until they finally go, wait a minute, okay, this will sound better, and this will sound better. And so over time, you know, utilizing a lot of the homebrew technique that we were working with, I ended up shaping the flavors and what I was looking for. And there's, you know, cider is one of those things where it, you know, there's enough information where you can probably get pushed in the right direction, but you could also definitely, you know, get bad information, too. So ended up kind of taking some Left turns as we went and just made our way to where we're at, and then finally got comfortable with technique, and here we are. So I want to say it probably took about seven, eight years before I felt comfortable with it.

Wow.

At what point did you know that you were working towards something that was potentially or likely even going to be a business as opposed to, hey, you know, I've got my other businesses, you know, I'll. I'll classify that as day job, even though that, that, you know, that can mean a different thing. Right. But you had income going. You didn't need to start a cash cow right away or anything, you know, so I'm just curious at what point you thought, hey, wait a minute, like, this could be the next thing or another thing.

You know, that's a really interesting question because I think that a lot of times people go, man, all the courage. And I feel like I took so many small steps that along the way that I always was trying to look at it through the lens of, okay, I don't want to bite off more than I can chew. I think that's probably the biggest danger people face when you're running a business is you look at it and you're like, I can take over the world. And they just, you know, they try and run before they crawl and et cetera, et cetera. And so the original plan was, you know, I enjoy doing this so much, and I'm inviting people over to try cider at the house and what do you think? And pair it with this food, and we can add this thing, or you can blend the different ciders together. And what do you. You know, I started going down that road and I looked at the space we had and I went, you know, if I open it up just enough so that it can produce some income. And I'm really careful about not spending money because, you know, there's only two things you can control in terms of, you know, a profit margin. You know, you're either selling more stuff or you're not spending money while you're doing it. And so just a real slow process of, okay, I'm enjoying doing this. How many hours would I want to be doing this if I really was going to do this full time? And so we. We just picked a couple hours on a Thursday, a Friday, and a Saturday and really just set expectations really low, wanted to spend just enough money to get open and create a nice experience for people. And to me, I was like, I said I would go and I'd be talking with the Craft brewery down the street going, what do you guys think of this? How'd you come up with your names? Why do you have a TV in here? Why do you not? Why do you have games outside? What's the thought process here? And I wanted to recreate that kind of an experience at a place where we can invite our friends and family to. And one of the things I enjoy about it, it's not even necessarily the cider, but that it brings people together. You know, if you look at marketing for, for example, like wine, wine's kind of a romantic, you know, villas and vineyards and, you know, there's, there's images that come up. But when you think of beer, the, the message and the imaging tends to be more of a, you know, sit down with your buddies and grab a drink. And then you have craft, which is more specific and just higher quality and really fresh. And the place we're at in Santa Barbara, what I enjoy about it, it's a very local, supporting kind of place. And so we wanted to have a local place to just kind of hang out and enjoy what we were doing and create some community. And so we looked at it and just started with three days a week, couple hours here, a couple hours there. And the advantage we had was that we had another business running out of there. And that was really the most expensive part of the overhead was, you know, trying to account for, you know, rent or whatever it may end up being.

Rent to yourself in this case. Is that right?

Yeah, so, and that, that, that was also part of the consideration when we looked at, you know, as everybody's putting in, you know, resources, time, money, you know, we looked at and we went, okay, let's, let's see, what, what kind of rent do we need to provide or can we cover or, you know, what can be chipped in in the meantime? Because when you're building out a business, that's one of the more expensive things is that build out and that, that permitting, especially with alcohol, it was. Oh, yeah, sure. It's a long process. So having the, having the rent covered essentially during that process was, was key to what we were doing.

So, so on your, you mentioned your other, your other company. Can you share what, that, what, what you guys do there and how. I would imagine that experience helped you, you know, to get the cider business off the ground, Right?

Yeah, sure. Well, welcome down the rabbit hole. So the company I have is a marching band supply company.

It's a niche.

Yeah, I was going to say you probably hear it all the time.

You are the fourth person this month, I bet.

Right. And so it's a really niche business, very seasonal, very relationship driven, and I really enjoy it. It's another one of those things that I just really enjoy doing. And so it was based out of a warehouse and we were doing a lot of orders via E commerce and phone. And because of the seasonality of it, I had time during the year where I knew I had a downtime and a busy time and I could kind of schedule around that. And so as we built that out, we were looking at, okay, well, does this fit into the rest of the schedule? And trying to raise a family and the whole bit and trying to balance all those things in unison. And so it's been a really busy couple of years, if you can imagine. Yeah, I'm sure.

So, and you mentioned like regulatory hurdles and that kind of thing, because with alcohol. Talk about that for a moment, if you will, and how you navigated through those, you know, barriers. I'm also interested to know, I mean, were you selling the cider before you opened up the tap room? You know, give us a little background on that.

Yeah, sure. So selling alcohol is actually hyper regulated. And it's one of those things where if you're producing it for your own personal consumption, you can only make 100 gallons a year. Only. Only. And so it's one of those things where if you're going to do a permit, the permitting process is designed to start with your neighbors. And so you have to start going around and talk to your neighbors. Are the neighbors okay with this? Is this going to work? So I went to all the other businesses in the area and we chatted it out. And I was trying to figure out, okay, how do I not interrupt their business and be a good neighbor while I'm doing this?

Did you bring them cider while you were asking?

It would have been malpractice if I didn't.

Yes, yes, that's right.

Yes. So, yeah. Well, hey, you guys, I need some help. Can you, can you give me some feedback on this? Oh, this is great. You know, it's funny you say that. I was thinking about opening a cider place here. What do you think? And so they're like, that's great. And everyone was really super supportive. You know, that's one of the things I've enjoyed about being a small business owner is that, you know, other small business owners kind of get it and they're supportive. And that's one of the nice things about the area that we started the business in. And I It made, it gave me comfort to know that it's a local supported place and they, you know, everyone's been super supportive and you know, then it's up to us to deliver. But, well, you know, so you start.

You did something though, you know, and I think, you know, you did this. But, but for anyone listening, we sort of just glossed over it. You started with, hey, I need some help. People love to help people. We all do, right? I mean, it's, it's not just all of them over there. Like, we're all humans, we love to help each other if it's the right scenario. And you can paint that scenario when you walk in the door and you say, hey, I need some help, it shows a little humility. It shows that you are willing to receive help. Right? That someone's help isn't going to fall on deaf ears. And that's a really smart way. Especially in a scenario like you were where you had to get permits and you had to get your neighbors to not block these permits. That's a huge thing. It's a great way to start. So folks, I just want to make sure you don't miss that one. So.

Yeah, no, it's very cool.

Please and please and thank you went a long way too.

Yeah, yeah.

And so, you know, the permitting process, you start with your neighbors and then you go to the city. So you have this concentric circles that get bigger and bigger. And then if the city goes, well, are your neighbors okay with it? And you post a sign and that's their way of making sure the neighbors are okay with it. And then after that you, you know, you get the approval from the state and the state will ask the city. And then you get the federal. Oh yeah, and then the federal asks the state, who then asks the city. So it all comes down to are your neighbors comfortable with what you're doing? And it's a process of trying to work your way through that. And that process generally takes anywhere from nine months to a year to walk through if everything's going right. And the challenge with that is that you can't sell anything during that timeframe. So that's kind of a barrier to entry for most of that scenario is you got to pick a space, you got to commit to it, and then you got to walk through that 9 month to 12 month process of what you know of getting it all approved while you, you then run the risk of at any point along the way somebody saying, no, no, we're not good. So, so if you start with you Know, being a good neighbor and asking for help and a little please and thank you and making sure that everybody in your neighborhood gets invited to things. It ends up working out really well and everyone's been really happy. So cool.

Are you guys. And now are you selling, you know, exclusively in the tap room, or you. Do you distribute to other, you know, restaurants, bars, liquor stores, or anything like that?

Great question. We're actually, originally, I opened it up with the expectation that maybe 10 people a week would come by and be like, oh, hey, what's happening? And, you know, pretty quickly we ended up, you know, we only opened up like a 600 square foot tasting area, and people were kind of outside of that, and we had to keep corralling people back in. This is our controlled area, et cetera, et cetera. And so we had to quickly expand to the outside area. And so we're at about 1800 square feet, mostly outdoor space. We've got a good amount of regular people coming through and some new people finding us in the areas as it's kind of a vacation spot. And what we're finding is that we originally were going to be just in the tasting room, but based on there not being that many places out there like it, and I think we offer a fun experience, we started having restaurants and bars in the area coming in, going, hey, how come you haven't offered to sell me your stuff? And I, well, that's. I don't think we can even produce that much. Nice. So then that slow, really conservative kind of approach to growth has been, okay, we can add one or two accounts. And so we went to, let's see, we're at the Santa Barbara bowl, which is the local concert place. We're at one of my favorite pizza places I went to when I was in college called Woodstock's. And we're at a couple of key accounts like that in town. But we've now reached the saturation point between our ability to supply and the demand that we get that we're now trying to figure out, okay, we've kind of reached this plateau now. We need to kind of take another level of risk. And so I've been doing a deep dive over the last six months to try and figure out, okay, I've now reached the outer boundaries of the experience that I have in this industry. And so I've been reaching out to other people that run breweries and wineries, and I've talked to my attorney and a number of CPAs, and they've directed me to people who have had other Multiple businesses in town. And I've been really fortunate to be able to pull off of their experience. And I already had a decent amount of owning my own business experience. But as I've gotten to this point and as I reach out to people for advice and help, I'm finding there's a genuine want to help. Like you had mentioned before. They then reach into their network and then pull out people that they have that I wouldn't have thought of or been connected to. And so I've been able to talk to some really interesting people in town and people who are really encouraging people who've owned number of multiple businesses or, you know, just. And I've gotten a couple pieces of advice that I. I wouldn't have thought of that have been really key in the decision making process as we move forward. So that's great. Kind of leads towards that.

That's cool. Yeah, we talk on the show a lot about kind of building out your, your board of advisors, your board of directors, if you will. It sounds like you've really taken that to heart.

Oh, yeah, absolutely.

That's killer.

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So, Ben, you guys have a ton of great reviews out there. When I looked around on Google, Facebook, Yelp and other sites, do you focus on growing those reviews to help your business or do you just let it grow organically?

You know, that's a really great question. We talk about it a lot. We talk about it a lot. And we've got some really great people doing their social media. I would say that our social media is on point. And for anybody who's interested in knowing, my wife does help with that. So she's amazing because I know she'll listen to this. That. And, you know, we look at social media in general as the number one way people are going to find you anyway. So we're tucked back off of the street and we're really hard to find. So the only way you're going to find us is if you're looking for an experience or something to do. And so we know that those reviews are really, really important and they do matter. And the way we looked at it and consistently approached it has been we don't really ask for reviews, but we look at it as a way to have a conversation and get that direct feedback. So what we're considering those reviews is really kind of an update or on like a live update date in terms of a conversation with our customers. So our focus has been on really providing an outstanding experience, high fives for people when they come in, whether it's their first time or their, you know, 20th time. It's good to see you again. Or congratulations on finding us. How'd you find us? Let me tell you a little bit about the stuff that we're doing here. And, you know, we're just so happy that you're here and we try and get to know everybody by name. So that's, that's really what we're focusing on. And I think that's what online reviews really are, is just. That's where people are. They're on their phones and they want to connect on it. So we hear a lot of, you know, we found you on this app or that app, so that's great.

So focusing on the. Go ahead.

I was going to say to, to sort of encapsulate that the, the best way to be good on social media is to simply be social when you're in person too. Right. I mean, that's the. At least that's where it begins, right?

Yeah, yeah. I think it starts. It starts with the actual experience when you come in. So we want to make sure it's relational and not transactional. We want people to have a good time, we want them to connect, and then we're there on social media and on these apps so that when people are there and they are communicating that way that we're able to respond to it, that's really where it's at. So we also tell people, find us on social media, find us on Instagram, if you want. We've got events and some other things happening, and then we have to deliver on that. Yeah, and that's the. That's the communication tool that we use right now.

That's cool. So on this show, we're big fans of mistakes, and in the sense that we all learn so much from them. And we ask this for every guest that comes on the show. What's been the best mistake you think you've made with, you know, Santa Barbara cider that you've learned the most from?

Oh, man. You know, I think, you know, when you talk about mistakes, really what that translates into later is experience. And I've been fortunate to have some really good business mentors over time where, you know, every time we have a meeting, you know, the question is, you know, all right, everybody check in. Let's hear how you're doing, what's going on, where you at? Just so everyone kind of has an idea very quickly, and then after that, we talk about, what mistakes did you make this week so that we can all learn from it? And the idea is to not shy away from learning from something. So we've had our successes. We've been really lucky with those. Not that I think that we're flawless and that we can't improve, but I'm fortunate enough to have made enough mistakes in some of my other experiences that, you know, I think it tempered some of our expectations heading into what we're doing. So, you know, there's a lot of opportunity where we could have rushed too far in or, you know, gotten ourselves caught up in, you know, let's invest in this now or let's do this other thing. And so far, we've been chugging along pretty decently that I feel really good about. But I don't want to say that's because we're super smart or anything. It's that we've made enough mistakes or I've made enough mistakes personally over the years to have learned enough to just temper expectations, consistently go through things. And I think when you look at mistakes in general, they only come from three things. And the first one is if you're rushing. The second one is if you're trying to do too much. And the third one is if you're just completely distracted by something else. And usually mistakes fall into those three categories. So whenever we're doing something that's of high importance, it's. Let's move slow because we just want to do it once instead of having to come back and do it again. You know, we've had stuff where we've had some failures of equipment, but it's just a thing that happens and you move on from it. But, you know, as far as mistakes, we haven't, you know, like I said, I don't think we're flawless and we're definitely going to improve. But, you know, we're, we've tempered our expectations and we've just, we've moved slow through the process. So that's great.

That's awesome. Well, it's a great story. And, you know, I love the, you know, this, this methodical, conservative growth and continuing to make decisions along the way. I think that's really valuable. So what's the best way for our listeners to learn more about Santa Barbara cider?

That's a great question. So I would actually look us up on Instagram. We always have some information there. We've got our sbcider.com which we're going to be redoing shortly. And actually, really, the best way to learn more about us and to really get the experience is to come see us in person. You know, I will, you know, if someone wants to come in and wants to chat and they want to kind of just set the time aside, I'm happy to do that. That's, that's my jam right there. And, you know, come on in. And part of what we do is we've got, as an example, we have 65 flavors, but we have 12 on tap, right? Well, we have 12 on tap at a time. So every time you come in, it's a little different. And so sometimes you'll come in and there'll be pineapple habanero on tap. Or we've got a peanut butter and jelly flavor, which is a grape cider with honey and peanut butter powder on the rim so it tastes like a peanut butter and jelly sandwich. We've got pineapple, we have apple pie. We've got honey crisp. We have mango, we've got pineapple guava, you name it. So we've got some fun stuff. We have hop ciders. So every time you come through, it's just a little bit different. And we're always having fun with the names, too. So awesome.

That's great. Well, we really appreciate you coming here and telling your story and sharing. And next time we're down in the area, I'll definitely stop by and have a drink. Man, that's great. Cheers.

So good. Thanks for joining us. And, folks, we'll see you next week. Make sure to find us at BusinessShow Co and our small business support group.

Of course.

BusinessShow. Co Facebook. Keep living that charmed life. We'll see you next week.