Teaching and Learning, Part 1 of 2

We speak of the joys of small business much the way we speak of the joys of parenting: we acknowledge nocturnal vomit and bad SAT scores and the occasional visit from a nice local police officer, but by and large, we are almost serious about such joys.  For honestly...what else do we really have?

One of the joys of Kaladi Coffee is that we are almost always in the process of helping other people get into the coffee business.  We assist independent operators start five to ten small businesses per year.  With regard to formal instruction, we limit ourselves to coffee knowledge and barista training; we provide our clients' point-people with the skills they need to prepare perfect drinks and to speak authoritatively about the coffee they sell.

But as time has gone on, we have identified other significant and specific aspects of small business management that get neglected...often to the detriment of the operation, its employees, and its owners.

Next up: Spreading the Love

Be careful what you work for...

This weekend we're in Portland at the SCAA show.  While waiting for the expo to open this morning, I went with our singularly well-favored client Johnny J to the national semi-finals of the World Barista Championship. 

It is indisputable that all of the contestants had honed some esoteric skills.  I would not ever say that I can do what they do so well.  For those unfamiliar with formal barista competition, the parameters are strict, the judges are omniscient, and the competition is fierce.

But at the same time, I had to ask myself: if a chihuahua wins first place in a dog show, does that make it a good pet?  Does it make it a good friend?  Does it make it a lovable family member?  Does winning a dog show make a show dog anything beyond a dog show winner?  Would I want to live with a show-winning chihuahua?  Would I trade my deformed (defective?) Basset Hound for it?

I have no problem with competing or with hard work or with sacrifice.  On the contrary, I love work because to me it is the tangible, visceral cost of building and improving and of making my life meaningful.  But I like to keep track of the connection between "winning" and "meaning", both for myself AND for my business.

What we choose to work for defines us every single day of our lives: it shows us and others what we believe to be important.

Is there anything more tragic than working hard for many years, and finally succeeding at great personal expense...at something that ultimately doesn't really matter to us?  Whose competition have we entered, and why?

What do we work for in our businesses?  In our relationships?  In our lives?

A time to be fat, a time to be lean...

So it was brought to my attention that I haven't posted in a bit.  In short order I was beset by pangs of guilt and regret...and then I remembered that pointless guilt and regret are native to my own Jewish species. 

If I had to pick my one favorite part of owning a business, it would be that, when we all get lucky,  the line between work and the rest of life disappears.  The fact that I go to the shop early every morning is due more to the fact that the COFFEE is there than out of any abstract notion of obligation or duty.  My daily tasks of fixing the motorcycle, consulting with the gardener, and visiting my kid's 4th grade class on Career Day all blend seamlessly with Kaladi Coffee jobs like answering phones, plunging toilets, fixing coffee machinery for customers, and doing the books. 

Sometimes the balance of time tilts toward work at the shop.

And sometimes it doesn't.

And for the past few weeks, it hasn't.  At least not with regard to "showing up" (in the corporeal sense of the term) online.  But comfortingly enough, the pendulum swings back...

A Penny Saved, Part II: Smart Questions

So here's the business analogy of the day: you go to a nice restaurant with a friend.  Your friend (after all, I wouldn't make YOU out to be such a boor...) asks for the trout...but with the sauce off of the veal, hold the dairy, and add a side of fries. 

Come on.  Nobody does things like that.  Well, actually, I used to date someone who DID do things like that, but I'm very sorry I did, and we've all agreed not to bring that up any more, right?

When you go to a nice restaurant, you are presumably paying a talented, thoughtful, and trained chef to come up with an interesting menu.  You are paying to have that chef train a detail-oriented culinary staff such that they may properly execute the chef's vision.  Ideally speaking, fine dining is not a transaction in which you give your money for something specific that you demand.  It's more like commissioning a sculpture from a great artist: you put yourself in the artist's hands, and most often, you open your mind (or stomach, or some other organ for that fact...) to experience something beautiful and new.

You don't have to be completely literal-minded about all that, of course, but when you speak to a Sharp Knife in the Drawer, it is sometimes a very good idea to leave your questions open ended.  For instance, instead of asking Drew how to make QuickBooks' backup utility work and how to make Outlook's backup utility work, and how to make Firefox's settings backup utility work (all of which are easily enough answered, by the way), the RIGHT way to approach that deal is to simply ask "what is the best way for me to backup all of my system's important data in a way that requires little to no input from me, and keeps updating the backup files regularly?"

The answers that come back may surprise you.  They may not be what you had in mind.  Of course, they may suck.  But as often as not, or perhaps even a little more often, if you have chosen your resources properly and have communicated your needs accurately, you will get yourself some edu-ma-cation.  You can still be the boss, but you can grow both your mind and your business with the enlightened input of others.

As a business owner, it's your job to be the visionary...to keep the big picture in mind.  However, when soliciting the advice of intelligent people, it is often best to give them enough free rein to actually SOLVE a problem with their own skill set, rather than chaining them to your own underdeveloped understanding of some specialized slice of your operation.

A Penny Saved...Smart Guys Chapter One.

Like it's news to any of us, I say some of those old business adages were lies.  One of the worst is "a penny saved is a penny earned".  The only thing that comes out of that saying is a bunch of cheap-ass bottom feeders racing to new lows in product quality and service.  A pithy proverb that stinks less is "value the relationships in your business".  It sounds like a lot of hot air.  But it bears remembering, and it is most important when you are reminded that "value" isn't just about warm fuzzy feelings in your heart. 

Value is about money.

Last week I got so tired of hearing Mark complain about his computer that I actually went over and took a look at it.  You know...to see if I could, like, fix it or something.  And go figure: Mark wasn't just bellyaching in order to torture me.  The End Was Near.  Old computers nearing The End do some pretty tell-tale things.  This patient presented with all of the fateful symptoms.

Computers are cheap these days.  You can get a good desktop machine for a few hundred bucks, less if you take the time to assemble it yourself.  But data systems infrastructure is one of those business areas in which I truly believe that, quite often, a penny saved is a dollar in the toilet.  I called on Drew.  Drew owns an IT support business called basupport.  Yes.  basupport.  With a small "b". 

Drew epitomizes my Smart Guy theory: ten minutes with a Smart Guy are worth more than a week with a dullard.  You know the other (more valid) old saying "price, quality, and speed...you can choose any two of the three"?  Well Drew is fast, and Drew is competent.  You can draw your own conclusions from there.  But as much as his hourly rate is a little terrifying, Drew fixes most problems so quickly and so seamlessly that his work winds up being less expensive than other folks that are...well...less expensive. 

Next up: Smart Guys part Two...which questions to ask.

The Price of Doing Business

Ain't That Some Shit?

What we pay at Kaladi Coffee

(minus differential, shipping, and a few other charges...)

There's an odd perspective you need to keep as a business owner.  The vast majority of your countrymen here in the U.S. of A. think you're at the top of the heap: business ownership is one of the main "someday I will..." statements for many people.  And with good cause.  Owning your business, as far as I'm concerned, is truly the way to go.

But when supply prices follow the chart above, well, there ain't anyone or anything to absorb the blow except the calloused hide of the principals.  Like most small businesses, we run a pretty tight ship at Kaladi: we don't have huge reserves of cash, and can't really sell out of any particularly liquid positions.  So the current price fiasco has left us with two options...and we took both.  One, we raised the retail and wholesale prices we charge to partially offset higher COGS and inbound shipping charges (mostly fuel surcharges on trucking fees), and (now the ugly part), Mark and I have (with dark humor and puckered parts) accepted the fact that we're simply going to make significantly less money this year than we did last year. 

It's hot dogs for dinner tonight.  And wennie-water soup tomorrow.


I regret nothing about owning my own business (yet).  I'm glad that we're not leveraged, and that we don't have any long-term debt to pay down.  I'm glad that our bills are manageable.  I'm glad that we've paid our bills in the past and that we have a credit advantage over many other coffee buyers.  And while there may not be much gravy on my plate this year, I'm glad that there will at least be grits.

As Nina Simone so wisely sang: "it also be's that way sometimes".

Don't Bring a Knife to a Gunfight

Analogies between business are war run rampant in our culture.  Some of them deserve some merit.  I do believe that Sun Tzu's Art of War is a great bona-fide business book.  Most of those analogies, however, make a terrible distortion on the nature of business.  If you do things right, business is most often NOT a cut-throat dog-eat-dog world.  Kaladi Coffee is all about finding a niche (preferably with fun clients, honest vendors, and a livable profit margin) and then letting the rest of the coffee world go its own way.

But still...if you're serious about your business, if you intend that it should pay you and your people and provide your clients with a great experience, there are certain harsh realities you need to face.  The core people, systems, and equipment for your business are CRITICAL.  If we're discussing coffee joints, we're not talking about plastic water cups and toilet paper dispensers here.  We're talking about your coffee machine, your espresso machine, and your grinders.  The same thing could be said for your brake, shear, punch, etc. in a metal fabrication business or the cleaning and imaging apparatus in a dental practice.  Identify the equipment that is critical to your work and focus your spending ability there.

Don't buy cheap equipment for the core of your business.  That's like bringing a knife to a gunfight.  Or entering your Corolla in an F1 race.  Those comparisons are funny, I guess...until you realize that it costs you a couple of hundred grand to enter the race in the first place. 

Winning is tricky even when you have the right tools.  To run the race of business with anything but the best stuff, though, is truly challenging fate.