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

[@UpFlip]

If you own a business, try Melio and make your payment process easier! go.melio.com/upflip

[@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.

[@startingtech3900]

Beast no wonder they needed 4 coffees per day how did they sleep?

[@tagndash01]

That's awesome man! That definitely sounds like long hard work but there had to be some fun involved in that! Lol

[@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!

[@Brodragon2225]

his main costs are workers and rent and electricity if we can make it cheap we are winners

[@tagndash01]

Man, seriously! I owned and operated a dispensary in Oklahoma and everyone assumed I was just raking it in. I was barely scrapping by!

[@clutterreductionjunkremoval]

@@tagndash01 especially hard to understand if the business is doing well but doesn’t mean the owners are. Really have to scale to be making $$$. Once overhead goes up, owner pay goes down

[@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!

[@UpFlip]

Absolutely! We definitely need more of that positive mindset spreading around! 🙏

[@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 🤘

[@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.

[@AB-fq4mr]

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.

[@jayrobelo9877]

To each their own, some find happiness in dealing with others and providing a livelihood for others. I believe it has to do with something more than just money/providing for a family at that point

[@honor9lite1337]

​For me, it's simply because I don't work for someone else. @@jayrobelo9877

[@Freewithtwoe]

What do you do

[@startingtech3900]

Thats starting dude, he has so much upside

[@jtcash44]

Having to not deal with people (staff) sounds like a dream. Dying to get out of my business. So over it.

[@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

[@UpFlip]

You've made a great point! Tough beginnings often lay the groundwork for strong foundations.

[@riffpad]

@@UpFlip Thank you!

[@CHEFPKR]

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

[@UpFlip]

Lucky guy! ☕

[@startingtech3900]

LETS GOO BROOO

[@surge337]

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

[@fvr12345]

Is it really a 5% profit margin?

[@mg-united2189]

@@fvr12345Lies

[@yogayoggie2209]

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.

[@ChalkboardMom]

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

[@UpFlip]

Thanks for watching and supporting our channel! ☺️

[@UpFlip]

Join us for the long-awaited launch of UpFlip Academy, happening this month. Reserve your spot now: www.upflip.com/academy

[@downey416Toronto]

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

[@UpFlip]

Absolutely! That's why they're branching out into different ventures, so it would be lighter one day.

[@sutats]

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

[@pj9902]

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”.

[@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.

[@aadams5864]

That was gold. Thank you for covering their story!

[@UpFlip]

Glad you enjoyed it!

[@EcomCarl]

Jake's story at Anchorhead is a fantastic example of how agility and strategic cost management can fuel rapid business growth. It's a reminder that sometimes, the simplest cost-saving measures, like switching to a cheaper milk, can significantly boost the bottom line without compromising quality. ☕

[@UpFlip]

A friendly reminder not to overlook the little details!

[@halams3772]

he has 5% net margin, what cost management are you talking about?

[@ChonchoMiyantDaGr8]

Definitely Taking The Gems In This Vid💯🔥

[@plokkum]

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

[@UpFlip]

When starting out, it's crucial not to be solely driven by money. Passion should always come first!

[@fvr12345]

@@UpFlipHow many plumbers, janitors, window washers, etc…. had passion?

[@favoriteemail]

Yeah, but I don't think he said how much he's paying himself, how much debt they are paying off and how much is being invested back in the business. Profit margin would be calculated after all of that.

[@dannywelbeck8800]

This whole ep is so awesome and wholesome, love it. Imma start my own coffee shop in 2025

[@UpFlip]

That's fantastic news! We wish you nothing but the best! 💪

[@dannywelbeck8800]

@@UpFlip many thanks! And thank you too for what you do ❤️

[@thuvarakan2]

congrats on the 1 million subs, been here from the start :)

[@UpFlip]

Thank you! We truly appreciate your support! 🙏

[@BenJohnston1993]

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.

[@iamanovercomer3253]

As someone who is starting a coffee business, 95% of people have no clue on the coffee they drink ❗️ You get what you pay for......coffee on store shelves is pure garbage. ( farmers are NOT getting paid fairly and coffee is NOT quality coffee) ......specialty coffee is true coffee ❗️

[@akemegbebu7807]

Where can I learn about coffee? I'm interested in importing and roasting and selling...

[@UpFlip]

Quality comes with a price, especially when you're paying for top-notch equipment like they use in coffee shops.

[@MatthewHall-p5u]

As a coffee grower in Costa Rica, I agree with you 100%, 95% of people that drink coffee don't know what good coffee taste like

[@deanwhite6980]

Really grounded guy, honest and sincere .A very inteligent Man, I wish you continued success, love from the UK❤

[@makaelyrois6939]

Such a great interview, video is so helpful with smart questions and concise intelligent, explanitory answers. Kudos Jake for your accomplishments!! thanks for sharing!

[@studiolut]

His advide was the best. Just do and if it fails is not gonna be the end of the world

[@UpFlip]

When fear of failure doesn't hold you back, you're ready to conquer the world!

[@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

[@blackhistoryonsteroids8196]

Love how he accepted his failures.

[@UpFlip]

Taking that first step is always the most important! 🙏

[@RedCymbals]

Love this episode - so cool! Have you done one on a musical instrument manufacturer?

[@UpFlip]

Not yet, but that sounds like an amazing idea! Any recommendations?

[@RedCymbals]

Vertical Drum Co in Eugene Oregon are a drum maker that we work with and admire for their incredible drums as well as growth and tenacity. Josh started making drums during COVID when his professional photography work stopped. We are also a cymbal brand based in Melbourne Australia. We make cymbals in Istanbul Turkey and sell them worldwide. Our mission is to use cymbals to promote positive mental health by running drumming events and encourage people to play the drums together to gain confidence and overcome mental health concerns such as anxiety and depression. We be in Oregon in May doing a drummer’s hangout with Vertical Drum Co.

[@watsonlow22]

I really enjoyed this one,He's humble and very real about everything

[@aryaa.6487]

that is the beauty of America. You can scale so fast

[@600DoubleRR]

So let me get this straight, your profit margins are 5% on 5.6 million a year roughly, so you're netting around 280k, split between you and your partner that's 140k each, which isn't bad but holy shit this seems like a ton of risk and work and hassle. Hope it works for this guy but not sure this is a business I would want to get into unless you're able to scale it into the 100s of millions in gross rev. Really seems like a headache. Again not knocking this guy at all, it's cool regardless, Im sure if he scales it it'll make it all worth it.

[@UpFlip]

They're very conscious of their margins, which is why they're scaling up. It's clear they're not just in it for the money; they genuinely love what they do. 😉

[@600DoubleRR]

@@UpFlip Yeah no thats cool. Again not knocking them at all. This is a really interesting one regardless.

[@whatwhat9004]

If 40% of that $5.6 million is going to their investors then their take home pay is probably a bit lower than that.

[@600DoubleRR]

@@whatwhat9004 Yea thats a good point. Business ain't easy.

[@Abel-z9e]

Could be 5% after paying themselves as employees

[@sortamaybe]

2 minutes in and I know the secret, BE THE FIRST IN YOUR MARKET and dominate, stay consistent and soak up all the luck you can!

[@UpFlip]

Don't forget to stick around till the end-there are more golden nuggets waiting for you! 😉

[@balance3201]

Most people would have given up on the work involved. Kudos to these guys.

[@UpFlip]

That's why starting a business that aligns with your passion is crucial. It helps ensure that challenges like these won't deter you from moving forward. 🔥

[@grischawillrich590]

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

[@shift_crew]

Congrats on 1mil 🔥

[@JoshHitti]

Anchorhead rocks! Really loved this episode

[@UpFlip]

Thank you! ✨

[@BizBob2]

We love the start up videos. Ones like this are so inspiring.

[@UpFlip]

Glad to hear! Hope he inspired you to kickstart your own business venture! 🔥

[@CanalOtro]

Awesome story, very cool brand. Was shocked by those margins though.

[@jackglassmusic1514]

A coffee shop that has its own bakery is always going to go down well!

[@UpFlip]

A coffee shop with its own bakery is a winning combination. Freshly baked treats paired with great coffee make for a perfect experience. ☕

[@mustachesandcoffee]

This is incredible story! Impressive to say the least

[@wendyshoowaiching4161]

A good coffee. 1. Condensed Milk. 2. Carnation Milk. My Cup just simple. 1. Sugar (2 Tsp) 2. Full cream milk powder (Nestle Everyday) 2 Tbsp. 3. Creamer (2 Tbsp). Coffee must come with a good cake. I love what secret recepi (Malaysia) cake. Their cakes lines best. Their carrot cake with cheese toppings. I love fruit cake, portugese egg tarts, calzone pizza, toast butter with 2 half boiled eggs on top (Malaysians style), curry puffs....a tradition spegethi with signature made tomato sauce

[@UpFlip]

Thanks for sharing this recipe! 🙌

[@tiahknoxstoriestoldphenome8536]

Thank you. This helped me a lot, I got some good re-affirmed words which I am implementing. JUST DO IT, if it works great, if not do it again or do something else… I am opening my coffee shop November 2024 and this is September 😂😂😂😂My anxiety has had me hospitalized so now I have accepted that, it’s ok. IF IT WORKS, good! If not then we try again!!!! I cannot ki myself 😂😂😂

[@Avatar711Wizard]

'Cause everyone should get into hospo and coffee roasting right now. Rents are cheap, cost of goods are cheap. Margins are great. Plenty of skilled staff around that don't cost that much. Not many bakery's around either. Everyone should go for it.

[@g0ttesh4nd]

Pure gold!

[@UpFlip]

Hope he inspired you to kickstart your own business venture!

[@BlackWidowRazors]

JUST GET UP AND DO IT - THATS THE TRUTH

[@SoulQs1111]

Very cool episode This guy is a rock star, literally 🏆

[@UpFlip]

Appreciate the support! ☺️

[@BonganiMojakhomo]

Thank you for this epidose ❤

[@jedimasterham2]

My wife and I were the first to can cold brew in the state. Bottles are good too.

[@Selinnaguz]

What's the name ??

[@Mathewmartialart]

or just buy the cups unprinted, buy a printing machine, and save a lot of money

[@UpFlip]

That's certainly one approach!

[@craig_drummond]

Curious, is the 5% profit margin before or after paying himself? Is that before or after paying his investor 40% Was that number only from the three shops or does that include the wholesale roastery as well?

[@PauloMzima]

Great one, thanks for this..

[@adamneusbaum3749]

I Loved that Starbucks slam.!!

[@dxk2466]

Is it milk..and he didn't answered..theirs something to hide or why someone can't tell if it's milk or not?

[@topcoffeebar]

Fantastic story!

[@wendyshoowaiching4161]

Best Milk For Coffee is Nestle Everyday (Full Cream Milk Powder). Any hot beverages adding desire amount according to individual's preferences

[@RogueCylon]

It’s why I would never ever buy coffee from a shop that doesn’t use proper fresh milk. I’ve made my own with organic milk and sometimes a half and half mix. Never ever powder.

[@SergeiSudakov]

5% only? How come. profit margin on a cup of coffee is generally estimated to be around 60% to 70%.

[@UpFlip]

We'd love to learn about the regions where a cup of coffee generates 60-70% profit margin!

[@josephs4044]

It's actually 90% profit on every cup of coffee you sell, if you just consider material cost. And then comes the overheads, salary, rent, which easy up all your profit.

[@SirLuLzDalot]

Great interview, thank you for sharing

[@chronicmango]

JAKE! Love Anchorhead.

[@UpFlip]

Glad to see an OG!

[@KiyaArrigo]

You got to remember that he lives in the coffee capitol, it is very saturated in Seattle. Coffee is abundant and hard to be unique his 5% makes sense for how saturated

[@UpFlip]

You've got great point!

[@Eric-qh7is]

This motivates me. Thanks

[@UpFlip]

Glad to hear it! 💪 Thanks for letting us know-it’s awesome to inspire you!

[@DejaBond]

I love your videos so much

[@UpFlip]

Thank you! That's music to our ears! 🎶

[@DejaBond]

Soon I'll be on this show!@@UpFlip

[@LarryGipson96]

5%. Man that’s rough. I haven’t been to one of their shops. Spent 13 years in seattle. Love it. Hard to believe what it’s become with the homelessness.

[@thestig560]

Fine, I'll subscribe

[@UpFlip]

Thank you, it means a lot 🙏

[@starr4781]

How did get it to the grocery stores

[@UpFlip]

That's awesome to hear! ✨

[@des7638]

great! THANK YOU

[@TalesOfTrillions]

Who knew milk could be the unsung hero of a multi-million dollar business? 😄

[@FasiuddinSajjad-c8x]

Idk which one is best video quality or shop design😅

[@UpFlip]

Their shop design is absolutely dope!

[@FasiuddinSajjad-c8x]

@@UpFlip absolutely

[@LIL-MAN_theOG]

I know the pandemic hit them hard because they closed a shop near me in the burbs during it....I miss that location

[@-pagebooklipraly8352]

thank you for this perfect chanel

[@halams3772]

Without looking at financials, I can tell you COGS are way too high for this business. Yes you can reduce costs by bringing things in house (bakery) but you need to have enough scale to start compounding returns above fixed costs (kitchen equipment) - I doubt you are generating enough bakery revenue to make any profit on this portion. Next think is going to be amortization - this is a massive coffee shop and $350K reno is HUGE. Im going to assume EBITDA is ~$600K, so ~$1.5M value of the business. At 5% net margin, if he matched the 16 listings in Canada I see showing SDE margins of 26% (geo median), he could 4-5x the value. Prob at $0 or less FCF so need to do this anyways before expanding any more (look at the risk of no one showing up to a given shop). Given equity was sold earlier on as well, prob very little value for the founder unless this is done.

[@MrWnw]

Bro could you put this in simple language? 😅 You seem like a knowledgeable person and I'm interested to know, I just don't understand these terms

[@halams3772]

@@MrWnw focus on the top expenses (divide each expense by revenue to see which one eats it the most) and set your target margins based on other coffee shops you can find information on (Starbucks, public business listings, etc.). This is a good start. Do you have a coffee shop / business?

[@MrWnw]

@@halams3772 I see, thanks a lot for your explanation and asking! I want to open na chocolate shop, but the hight of starting expenses and rent keep me scared. And forcing me to make it more like a coffee shop with momre regular flow of customers. You for sure run 2 or more shops

[@halams3772]

@@MrWnw you don’t need a store to start selling, you could start online or sell out of your house to avoid any rent; if you lower your upfront costs then you lower your risk

[@MrWnw]

@@halams3772 Thanks! That is what I am mgoing to do

[@yonasmisghina8261]

Is 6M gross or net ?

[@JetsentJ]

Interviewer always has backhanded comments “it’s not that big” Last video : “you aren’t a millionaire yet”

[@Wideolink]

$50,000 profit approximate per location. not too shabby.

[@ErnDogg209]

Sounds like i need to get a building and charge a business rent.

[@UpFlip]

That's just one of many strategies out there! 😉

[@UpFlip]

That's just one of many strategies out there! 😉

[@RJG86X]

Summary, pioneered the retail sale of cold brew coffee.

[@NarutoUzumaki-fy6fo]

KZbin show me more channels like this

[@dionb112]

that buy back thing is crazy..

[@UpFlip]

The buy-back option is such a game changer!

[@DoctorOfProduct]

Great video. Can I ask why your profit margins are so low despite doing so much in-house? Common industry benchmark suggests coffee shops aim for a profit margin of 15% to 25% on their sales, and 4%-6.8% on the lower end. I'd like to see you beat the industry average 🙂Do you have a very high CAC or cost of goods? I'd like to know what you've tried to increase your margins. End-of-day pricing on baked goods, "coffee flight" tastings, 6 and 12-pack pastries, etc.?

[@UpFlip]

That's an interesting question. We're curious too-could you share which countries are included in the data? Here in the US, industry margins typically hover around 10%, so reaching 12% is considered higher than usual.

[@javamochafrap]

whats their NET?

[@UpFlip]

Be sure to watch the whole video so you don't miss any info! 😉

[@Johnpassing1989]

Super cool success story but damn making 5.6mil to only take home 280k it kinda wild to me feel like the risk to reward isn’t worth it IMO

[@domainsshop]

22.27 WOW

[@brasilsoccer0]

5% profit margin that’s it wow that’s a whole Lotta work and liability and labor and headache for just 5%😮😮😮

[@RogueCylon]

“Is it milk?” Owner - “I’m not going to tell you” then laughs Me - not a chance I will try your coffee drinks

[@surebrecdnuoh2774]

1:24 🤔

[@blackopsrocks]

You got screwed hard on your build out cost but did good on your equipment costs.

[@ibrarali3974]

Is it milk? I'm not gonna tell you😂😂

[@PizzaMike]

Wish I could grow my hair out like that.

[@UpFlip]

Isn't it just gorgeous?

[@studiolut]

Greetings from Brazil. I alway watch all the episodes. Be sure you guys are making difference in my life. I have a videomaker business in BR and thinking about get into coffee world. There`s a great opportunity in my city and this episode definately cleared my mind. Thank you @UpFlip You do a great work

[@UpFlip]

Thank you for being a valued member of the UpFlip family! Wishing you the very best of luck on your coffee endeavor! ☕

[@alex98b627]

$360,000 to build a cafe is sooo cheap!!

[@freedomring3022]

he can make 6 mil a year on coffee because millenials and gen z'ers are freaking terrible with money. They spend $5 to $6 a day on coffee. They should be banking that money in an index fund so that when they get older their older self can retire early. With that said, kudos to this guy for creating a successful business. I hope he doubles it to $12mil per year.

[@Economics70]

$2000 a month on rent is a much greater burden than coffee.

[@BudandBloomWithBlossom]

Gen z'ers?? There are a lot of other people who make good money, and that includes some retirees.

[@freedomring3022]

@@Economics70 this response is so profoundly stupid my head hurts from reading it

[@bushidonation7835]

okay Dave Ramsey shut up

[@alexforget]

5% meaning you would need 2 000 000$ to get a 100K return per year? You churn a lot stuff, money, salaries and hassle for that!

[@iamanovercomer3253]

If you love what you do, it's not work.....life has its challenges no matter what.....so if you got to work to live, it's better to have your own business than working a job ( Just Over Broke) ❗️

[@gnome2024]

Seriously. I make far more than that with passive high yield dividends and a simple sector rotation strategy that does 5% profit a month. Hell no way Im working my ass off to deal with dozens of low IQ employees and government bureaucracy.

[@fvr12345]

@@iamanovercomer3253For $100k you’re better off with a 9 to 5. You have benefits, a regular schedule, and aren’t responsible to all of your employees

[@Cali4rniadreaming]

noway is only 5% across the board some stuff he makes a lot more ​@@fvr12345

[@caphillres]

Hint: Wilcox milk

[@Ryan-kr4bq]

REALLY curious what sh*t he’s using instead of milk. Not cool for the consumers health. But hey MILLYUN DOLLA YO! 🤑🤑🤑 And “even if somebody smelled it they don’t know where it was coming from”. Sounds like really successful honest business all round!

[@BBoyBFit]

If his most popular drink is Honey bunches of oats, its probably oat milk, or something along those lines.

[@SolowSports]

We should do a video together :)) We are quite one of a kind and would be different that the businesses you show currently 😀

[@SheraliErmatov-dj9yj]

Ok

[@niikolful]

Please set up shop in Houston. Don't sleep on Houston.

[@Destroythekyle]

Audio engineer: high IQ. Not surprised he is successful.

[@UpFlip]

He's incredibly smart, yet so down-to-earth!

[@millersharp5443]

Leveraging a half-mil $$$ just seems far too risky. I'd like to do like Dave Ramsey says and let my business grow at the speed of cash.

[@UpFlip]

We totally get where you're coming from! 🔥