Episode 522: Success Comes by Overcoming with Luke Schneider & Jason Patton

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell. I'm here with Luke Snyder and J. Jason Patton. And we're having fun talking about something pretty unique. A community of people, you know, a brand. And a community of people that are passionate about coffee, fire, you know, the firefighters and coffee, and turning it into a business, turning into a community, turning it into a business that could go all over the country. And sometimes, you know, we, a lot of times guys, you think for me to have a company, I've got to invent something that's never been, something unbelievable, something only a genius. You have to be a genius to come up with a new idea or an idea for a company. But here, what you guys have done is taken something, basically connecting dots. What you do see about geniuses is that geniuses are able to connect dots, take things that are out there and put them together and then do great things with them. You know, it's like the world is full of people, ideas and money, but the leaders, the special people are the ones that take those people, ideas and money and do something special with them. You know, and it may not be their people, their money, their ideas, but they can put those things together and make some magic happen. I see that as kind of what you're doing and it could be something really substantial and make a big positive impact. And so talk about. But success comes. Let's talk about the startup. I really want to hear success comes from overcoming. And when you got started, what are. Luke, do you remember, what are some of the biggest things that you had to overcome from the beginning? Did people, Was everybody behind you or, you know, was this an easy kickoff?

We had a lot of support from the firefighter community. I would say more support than people. There's always going to be haters in anything and everything. They're always around. But for, for the most part, we had a lot of support. And I would say challenges is one that, you know, most businesses see, especially new businesses. I say, I think the, I forget where the stat comes from, but about 80% of businesses fail due to cash flow problems. And cash flow is a real issue in any new business, especially fast growing businesses, because the more you grow, the more needs you have. And there's just needs you don't realize you need until you get into them a lot of times, especially in any new business. So when we started Out I had a plan with $20,000 and I said, I'm going to take this $20,000 and I'm going to buy a roaster, get a space and everything I needed to, to make coffee and sell coffee. Well, quickly spent that $20,000, then maxed out about, I think close to $100,000 on credit cards. And then, you know, ran out of that money, then had to get some more money, went to my parents, asked for another 20 grand. And so, you know, it's been a hustle. We've, we've worked through that, that stuff, been able to, to pay off all that debt and, and really have a positive, profitable cash flow and are, I meant to say, a profitable business and in a nice cash flow. And we're growing and it's been good, but we have had a lot of challenges that we needed to work through and cash was one of them.

Well, the thing is that, you know, people know you got to work like a dog, you got to hustle to start something. But I don't think they always think about, you know, I'm probably going to get in a situation where I got to hustle for money too. I've got to find some money that's not here right now. But your determination to do that can be a make or break point. You know, even big multinational companies get behind the ball on cash flow and things like that. You know, in fact, countries, when countries go to war, you know, down through the, one of the, one of the great things you, if you're a student of history and student of wars is like, that's how the bankers, the bankers love a war, you know, because the countries will have to go into huge debt, you know, to build off this thing, buy the ammunition and the clothing and the guns and all that stuff, you know, so a big behind the scenes thing in small even countries, something even like war, down to the starting up of your local coffee operation, funding is going to be a key role and you're probably going to run out and you're probably going to have to hustle one way or the other. And that's why it's good to have a lot of friends. It's good to be coachable and have other, you know, you can see what other people have done. And that's why a lot of good that comes out of this broadcast is people hear what different people have done at different times in, in their life, in all different areas. And sometimes you can get by with maxing out the credit cards and maxing out the parents Sometimes you got to be more creative, you know, temporarily. And you know, for that I would encourage you to listen to the shark tank and listen how Mr. Wonderful structures some of his deals.

Yeah, that guy gonna tell you, you.

Know, it's kind of like if you don't have money to buy a house, well, you can do, you know, lease, purchase, or you can do a five year balloon, you know, keep. You know, there's all kind of financing things you can do and you got to be that kind of creative and clever with, you know, you can get assets. You know, if your parents don't have money, maybe they'll pledge assets where you can go get a loan or something like that. And as you looked at this thing, what, what other kind of things did you run into? When was the big, big first? Big. I don't know if we're going to make it through thing.

I'd say our first, the first time we moved from our, our original building. So we, we started off in a, in a small strip mall space. It was incredible. It's very cool. Again like the, the when you picture the roots of a business, that, that this is it, you know, barely any room to move. We were able to do things efficiently, but we needed a bigger space. So again, Luke being who Luke is, and I've always said, like, if it was up to me when it came to finances and stuff like that, we would have gone broke about six years ago.

Because I can entertain people.

But Luke is the guy that at one point I'm getting our K cups for less than the people that were doing 50 times the distribution just because of his incredible ability to negotiate and understand, you know, shipping and receiving, so on and so forth. But so the first time we moved from our strip mall little area to our now roasting facility, it was hard because we needed to find a facility that we could afford and we essentially bought a shell and then we needed to build that shell out. It was literally CBS structure. Like we had to do everything. So, you know, but building that out was extremely expensive. The capital that was required to be able to do that, we didn't even have at the time. So we had to figure it out and take from cash flow and be able to manipulate stuff and be able to work appropriately, get, you know, a loan from the bank, so on and so forth. But that was one of our biggest struggles because there was a point where I remember Lou called me and he's like, I don't know if we can do this, man. I don't know if we can do this. And one of the biggest saving factors that we had was we as owners, as CEO and vice president, we were not taking monstrous pay from the business. We were doing what we needed to do to make sure that the business grew, that we could reinvest into the business and keep it growing without being greedy and trying to put money in our pocket.

And so how big was the strip mall location?

It's, it started, it started 800 square foot strip mall. We ran out of space, which we ran out. We had space constrictions and also that limited our capacity and inventory that we can keep on hand. So we needed space. And one of the mistakes I made was we were on a month to month lease and I had some, I have some of my own rental properties as well. So I, I went to the landlord and just said hey, giving you a heads up, we're going to be looking for a building to move into. And quickly then he, he, he listed the property, said he's going to double the lease if we don't, if we don't sign an extended lease. And just really kind of, we, we got into a situation there where we almost didn't have a facility. But we, we were able to work it out with the new tenant that he leased to that spot. And we, we leased a few months from that tenant and we were able to get, you know, over there, but it was, it was a little rocky.

And so how big of a space did you move into? Because I know these warehouses, it's amazing. Like you go into warehouse and you just want to paint the walls. I mean the paint for the walls in a warehouse, it costs a fortune. Plus get the guy to, you know, getting it painted. And he said well I'll do it myself. Oh no you won't.

And I mean it was things like making sure that because it's, you know, I'm in Florida, we don't have that, that thing called snow. But they're making sure, you know, that the he working properly, that the roof was, was good, that it was sealed. You know, we had to put a parking lot in there. We had to, you know, because it's, because we're roasting coffee inside of there. We have to make sure that the ventilation systems are set up properly. And we're installing our brand new huge roaster along with, you know, bagging systems and all this stuff. And then again more inventory that we needed to buy. So we moved into 3300 square foot building is what we moved in for that.

It's 38, 38 38. Yeah, but it's 38. But then we. We're doing our shipping out of the. Shipping and roasting out of there and quickly outgrew that. And then. So we then bought another building that's 36,000 and 36,000 square feet. So now we have the roasting facility. All we do is roasting there. And then we have our fulfillment center and some other. Some of our other operations there as well.

And your employees. Your employee number ramped up accordingly as you went up, you know, had to. And so we're. What part of that are you the most proud of? That it almost knocked you out, but you kept on going. You found a way through. When you look back on. On a daily basis.

On a daily basis, we're proud of everything we're doing. Yeah, I think honestly.

And I.

And I.

In other words, you're saying. In other words, you're saying yesterday, you're the most proud.

Yes, I am proud of yesterday.

Yesterday.

I mean, this business.

What I. What I have gathered is, you know, I was a mechanic before I became a firefighter, and I've never owned a business. And you don't understand the true struggle it takes to be able to stay, move forward, progress with the business and balance going bankrupt and still being able to move appropriately so. Or move forward and grow. But every. It's every big move from. From our first cafe to the shipping and receiving facility, you know, down to our, you know, down to our, you know, our roasting facility. And then even before that, our first Christmas, our first major Christmas that we. Luke will tell you stories. He was sleeping in the roastery because we were roasting 24 hours a day, seven days a week. And I mean, all of those things are proud. I would say if I had to pick one outs, my proudest moment to date would be that shipping and receiving facility that we got into and how quickly we were able to outfit that and grow a business that now employs 50 people. And we pay them appropriately. We make sure people are taken care of. We care.

How quickly were you able to. How quickly were you able to get into that?

So we. We moved into that what is now just our roasting facility. And then I'd say probably a year later, we're like, okay, this is not enough space. And then started looking for other buildings. We found the. Build this. The fulfillment center that we're in right now. And we. From the time we purchased it to move in, I'd say probably six months. We moved pretty quick and. And we did a lot of work to the building too.

It was a, it was a, a furniture store before, so you can imagine it was not set up for coffee distribution.

So, yeah, hard to find those places that are set up for roasting coffee. And so you're sleeping in the roaster, Luke.

Yeah. So we, we actually. Jason came out.

That can be good. I don't know what that entails, but that can't be good.

It goes back to when you got a job to do, you get it done. You, you don't, you don't have any other option. It's really like, okay, do we get this done or do we not get it done? And the option for us has always been let's get it done. Let's do what we have to do to get it done. And in that situation, we needed to rotate shifts and have somebody sleeping there and pick up the shift as soon as you took a nap to be able to keep going. And in between doing shifts at the fire department, because during that time I was still a full time active firefighter paramedic for the city of Rockford.

How'd you keep your wife happy? The new barista. The barista, who's the new wife, and then probably mom pretty soon along the way. How, how did you keep her happy? Be going, gone so much.

It was tough. There was a point where we, we almost, almost had a divorce and, and just from, just from a lot of, a lot of factors, you know, with, with a new marriage and, and then, and then just business being busy all the time, you know, but we, we were, we were fortunately able to work it out and, and those types of rocky roads, you know, in our marriage and, and we've grown a lot through it. And so, you know, we're, Jason and I, we're not, we're not people that are going to tell you sugarcoat anything. There's that. We'll give you the, the real story here. And yeah, it's, it's not easy, but we, we've been able to get through and it's made us stronger.

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