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Living life sky-high as a pilot was everything Joe Townshend could have wished for, until coronavirus shut down his industry.
Not letting this deter him, Joe decided to put his own business ideas into flight.
With some phone calls to old friends and savings he had intended for a house extension, Altitude Coffee was ready to take off.
Get ready for a bumpy ride, as we explore what it takes to build a strong coffee brand, how to expand an e-commerce product and figuring out the best marketing strategy for your business.
Here’s what we cover:
Redundancy ignited my desire to start a business
I want to know, first of all, how long does it take to become an airline pilot?
It takes about two years, generally speaking, to go from zero experience to a qualified airline pilot.
So that must have been a bit of a wrench, when you spent two years becoming a pilot, becoming experienced and being able to use these controls, to then being like, “Right, I’m not going to do that any more. I’m going to do something completely different.”
Yeah, it was a huge decision for me to have to make.
I mean, you don’t really understand until you lose a job, how big a part of your life your job is.
It’s tough, it was really tough, that’s the only way to put it really.
But what can you do in these scenarios?
It’s not just my individual organisation that’s affected, it’s the entire industry. You sort of figure, “Well, I’ve got to do something because I don’t know when that opportunity will arise again, if ever.”
Did you always want to run your own thing, start a business?
Was it lurking in the back of your mind that that was something you’d like to do, or was it just purely the job was no longer what you hoped, and you just had to do something different?
No, 100%. I had thought of doing something involved with coffee four or five years ago, so the seed was planted then.
I had a few ideas. But it’s like most things, when you’re working full time, it’s hard to really focus on other projects.
Really, it was just, I suppose, fortuitous in some regards, that the situation allowed me to start from fresh really. Had the situation not have been what it was, I probably wouldn’t have actually gone down the route that I had done.
So what exactly happened? You were furloughed, or were you made redundant and that was a hard stop?
Or did you have some wiggle room where you could be on furlough and plan for a little while first?
How did it pan out for you?
Long story short, I spent 12 years working for Thomas Cook, the travel company. They had their own airline, who I was a pilot for. When Thomas Cook went under in September 2019, that was me redundant.
I spent three months looking for work, I managed to get another job and that was a full-time role, and I started that in January 2020.
So I’d only been out of work for three months, at that point it was fantastic, I thought, off we go again.
Then in March, the pandemic obviously hit and the entire industry, all of a sudden, had to just shut up shop. So I thought, well, there’s just no conceivable way I’m going to find another job now.
Where to start in order to get the ball rolling
And so what were the first steps that you took? What came first?
Was it a website or did you start looking for a coffee supply?
Break it down for me.
I think I basically sat down, and I thought, “Right, what is it that I want to do?”
I’d established that opening a coffee shop was probably not the best idea in a pandemic when everybody’s stuck at home.
I thought, “Well, I’ve always been interested in the production side as well. So why not go down that road?”
Purely coincidentally, my father owned some commercial properties, and one of his tenants who ran a catering company, was struggling, and he approached my dad and said, “Look, I don’t know if I’m going to survive, I’m looking to downsize.”
So there were pieces of the puzzle coming into place.
I was thinking, “Oh well, look, if he moves out, that could potentially be a perfect spot for me to set up a coffee production roastery.”
I thought, “Well, there’s that part of the puzzle that could fall into place.”
Then, it was just a case of looking, “Well, how do I get into this? Where do I buy coffee beans from? Where do I buy machinery from? How do I set up a brand?”
So I got in touch with a good friend of mine that I went to school with, he’s a fantastic graphic designer.
I hadn’t spoken to him for a number of years, but I called him and I said, “Look, I’ve got this idea. Do you want to come on board and help me realise the brand?”
He was like, “Yeah, absolutely.”
He went away, came up with some design ideas for logos, branding, and then we eventually came to what the brand is now. Then it was just going through the motions with everything else.
I found a company to build the production machine for me, I found companies to make all the packaging, and I found some to develop a website.
It was just getting everything in place, over probably a six to eight-month period, to get to a point where I could launch the brand.
You just have to find your way through and find all the aspects that you need to bring it all together harmoniously.
House extension or sustainable business opportunity?
But how did you even know what machinery you were going to need?
Are there books out there, like How To Start A Coffee Roasting Business 101, or is Google your best friend when it comes to this stuff?
I mean, I had some previous knowledge because as I alluded to, it was an industry that I was interested in, in general, but basically, it’s just doing a lot of research. I love that sort of thing.
So it literally is just the case of you have to go away and find stuff.
Given that you needed to buy machinery, I can imagine it was quite costly actually starting this business. This isn’t something that you can just be like, “Right, we’ll just shoestring budget.”
You must have had to make quite a sizeable investment really early on, before you were making any money.
Can you share anything about how much it cost to get going?
Part of the reason that I knew, or had the opportunity to start the business, was because I had some money set aside, originally for an extension on our house.
But with obviously the two job losses, I put that on hold.
So I had this pot of money sitting around and I thought, “Well, what can I do with this? We can extend the house and it’ll be bigger, and it’ll be lovely.
“But how about I invest it into something that could potentially sustain us as a family in the future?”
I had about £70,000 set aside, so I invested, the majority of that initially. I would say probably £50,000 or £60,000 of that probably went in over the first year, March 2020 until March 2021.
That was one of the biggest things that I hadn’t appreciated, was just how much money you need for capital. You go through thinking, “Oh, I need this and that’s going to cost that much, and I’m going to need that, it’ll be fine.”
It’s only when you get into things, you’re like, “Oh, I need that as well. Oh, I’m really going to need that too.”
Before you know it, the cost ramps up.
When people say, “Come up with a figure and then double it,” that probably is true, because cost is a never-ending thing, for sure.
Branding is one of the biggest challenges you will face
Talk me through some of the challenges that you faced in these early days, because presumably, you must have come across some barriers.
Some things that must have gone wrong, some things that you just didn’t realise were going to be as tricky as they were.
Tell us about those.
I built this factory, that you can see, pretty much from scratch, with the help of my dad, who’s a builder as well.
So we figured we’d go down that route to keep the cost down, but things like a new ceiling were required because of the way we were running some electricity cables.
To get the coffee roaster into the factory, we had to replace the whole front of the building with a brand-new roller shutter, because we couldn’t get the old one up, to get the coffee roaster in.
It’s just stuff like that, things you don’t really anticipate occurring.
There were a few issues like that.
Obviously, starting the company itself as a brand, that’s probably been my biggest revelation so far, learning how big of a proportion branding is when running a business, especially in e-commerce.
I sort of half-naively thought, “Well, it all looks really fancy and it’ll be great. I’ll set up a website and make it go live, and hey presto, there we go. I’ll be a millionaire by the end of the month,” type thing.
You soon come to realise that business is ferocious and, and there’s a lot of competition.
When you are an unknown brand, it doesn’t matter how much you believe in your product and your brand. It’s only when you get the customers and you get the customer feedback, that you know you’ve actually got something.
Previously, it was completely unknown to me. It’s not something I’d ever had to do or wanted to do. So that’s been probably the biggest factor affecting business as of now, as it’s up and running.
Not every business relies heavily on social media marketing
It’s funny you say about brand and marketing because I actually was looking around on Instagram, and I looked up Altitude Coffee trying to find you.
And there were 22 Altitude Coffees on there, and I just thought that must be a bit of a headache as well.
I mean, obviously it didn’t take too much to find the right one, and there was info about you on there, but I thought as a customer, that must be tricky.
So how do you stand out when there are 22 other Altitude Coffees on the main social media platform that you are advertising on?
With Instagram, about six months ago, I took on a small team of guys, and they run the account remotely for me.
So they’ve been a big help, and we’ve been doing a lot of live videos, which you may have come across if you went on the feed.
You’d see me talking about stuff to do with coffee, and just trying to do things that are engaging. So the customers or potential customers can see who I am and what we do, etcetera.
But obviously, that’s only one part of the marketing strategy, really.
We’re more heavily reliant on Google Ads and email marketing, than we are necessarily on Instagram.
It just seems to be the way that it is.
I don’t know if there’s a general trend moving away from buying stuff off of social media platforms, compared to things like Google Shopping.
It is a component of what we do, but probably not the biggest one.
I try not to spend too much time on it, because it does become a black hole getting involved, constantly trying to find a new post or new content for social media.
It’s good to have people that do that remotely because that’s one thing that you can offload, and you can then focus on other tasks.
Google Ads vs Facebook Ads—figuring out which works best for you
That was a really interesting point that you are more focused on Google and Google AdWords, than say on social media marketing because I was going to ask about your secrets for attracting new customers.
I don’t want you to tell me your entire online strategy because I know in every business, especially in a competitive industry, that is your secret sauce.
But can you just give me like one or two examples of things that have really worked well?
I mean, there’s not really much of a secret to what I’m doing at the moment.
But effectively, when I started, I was doing some Facebook advertising and Google advertising, and I just found that advertising on Facebook was a lot more difficult.
Obviously, with Facebook, you create the copy for an advert, whether it be a photo or a video, and you choose an audience that you want Facebook to pitch that advert too.
A lot of it is a shot in the dark really, because you write out this lovely advert, it’s humorous, it’s good content, it’s got a good video and you think, “Oh yeah, that’s going to go down really well.”
But really, all it’s doing is chucking the bait out and hoping that you get somebody to go, “Oh, what’s that?” And click on it, and get a sale from it.
And I found that a lot more difficult.
With Google Ads, the individual has already shown intent because they have effectively searched for the product that is displayed.
So as far as it seems to me, you’re already halfway there.
If somebody has searched for speciality coffee beans, or a speciality coffee roaster, and your product appears, it’s appeared because Google has obviously deemed your product, as being relevant to the search of the individual.
Exclusively at the moment, I use Google Shopping.
I don’t know if it’s something that you’re aware of, but effectively, if you search for something on Google, the pictures that pop up at the top, showing you the products, that’s Google Shopping.
Effectively all of your products are uploaded to Google’s server with the title, the pricing, basic parameters, if it’s clothing etcetera.
And then when someone searches for something, Google goes, “Ok, right. I think this product is what they’d like to see.”
So that’s where I spend most of my money, is Google Shopping.
Some of it can be fairly hands off. Once you get your head around Google feeds and spreadsheets and stuff like that. It seems to work better for at least my industry anyway.
What is speciality coffee and what makes it different?
It might be useful to tell our listeners what’s different about the coffee that you sell, because obviously this is a crowded market, but you do specialise in particular kinds of coffee, and obviously your promise is that it’s super fresh.
Tell us everything about what makes your brand unique.
We purely specialise in what’s known as speciality coffee.
So generally speaking, speciality coffee is still relatively unknown. What makes speciality coffee special is, the beans are grown by farmers that are paid way above the average rate that commodity coffee is paid.
That then enables them to produce better crops, gives them a better quality of life and, therefore, creates a better experience in general, for everybody, from the farmer to the end drinker.
Our beans come into us from a supplier that I use in the UK.
We store them in the traditional hessian sacks, that you may have seen on TV or on the internet. Then we roast the coffee fresh in our machines, so that the customer always receives freshly roasted coffee.
You will generally find that supermarket coffee is effectively stale.
It will be coffee that would’ve been roasted at least months prior to it being put on the shelf.
If I put four cups of coffee in front of you, would you be able to have a sniff and a sip and be like, “This is the most freshly roasted”?
It is so day and night, that you would be able to tell, straight away.
If I gave you two bowls of ground coffee, one that had been roasted a couple of days ago, and one that was off a supermarket shelf three months ago, instantaneously, you would go, “Right, that’s the fresh one and that’s the old one.”
It’s that day and night.
Market research can help you figure out your perfect price point
You said something that I would like to press you on about pricing, because obviously you are paying a much higher price for the coffee you buy in.
These aren’t commodity prices you’re paying, you’re actually paying over the odds.
So how on earth do you decide your pricing?
It’s like anything, you do a bit of market research, you see what your competitors are pricing themselves, or the level that they’re pricing themselves at.
And you work out if you can match that with your overheads, etcetera.
If you can, it really is just a case of, at the start of proceedings, you set your pricing, and see how it goes.
You set a price and you go, “Well, look, I believe this to be a fair price for the product.” Then you wait and see if the customers agree with you, and if nobody buys it, then you know that something’s clearly wrong.
Sometimes it is difficult for people to understand, and they go, “Well, why am I paying £10 for a bag of coffee from you, when I can go and get a bag for £4.25 in the supermarket, and it’s three times the size,” etcetera.
So I suppose it’s perceived value, isn’t it?
It’s like anything in life. If you perceive something to have value and you’re willing to pay for that value, then you will.
Well I’m convinced.
But then I’ve also seen the video of you painstakingly picking unripe coffee beans out of a huge bag of beans, after you’ve roasted them, to make sure that nobody gets a single bean that is not absolutely perfect.
So I feel like whatever you charge, it’ll probably be fair.
I think we did a post on Facebook ages ago, and the amount of people that were saying, “Rubbish, there is absolutely no way he is picking through beans.”
I don’t know why people thought that would be such a strange thing to do, but we do.
Often, there are beans that are unripe, and you can’t tell that they are, until they’re roasted. So we just pick them out as a bit of quality control.
But that was quite controversial it seemed.
How a subscription model can improve your business’s cash flow
Well, that’s interesting.
I wanted to pick up on what you said about having a subscription because I’m interested to know how you manage cash flow in your business.
When you said subscription, I was like, “Aha, that’s a nice way to have consistent revenue coming in month on month. And must give you a bit of peace of mind.”
So tell me about your cash flow.
Is it tricky? Are you always dancing with the devil, or have you got a model that’s pretty solid, and you know where you are financially in terms of cash, most of the time?
Cash flow has been a real issue at times, especially, buying expensive beans, and packaging, all that sort of stuff.
It is difficult, especially in the early days, when you’re trying to recruit customers, you’re a relative minnow, so your web traffic is low compared to those of an established competitor.
So I set up the subscription service as a way to entice existing customers or potential customers, to stick with us.
Anyone who runs an e-commerce store will know that the cost of recruiting a customer is expensive, especially if you are paying Google for the privilege.
I mean, at the moment, we sometimes pay between say £8 and £12 per customer, effectively, to recruit them.
You want them to remain a customer because once you’ve recruited them, you don’t have to recruit them again.
If you can swallow that one-off cost in the first purchase, you’ve potentially got a high lifetime revenue that you could receive from that particular individual, by enticing them to stay with you.
So the subscription service has been pretty successful.
Pesky post and fuel shortages— there will be things outside of your control
How straightforward is it to send coffee through the post? I mean, it sounds like it should be easy peasy, coffee isn’t something that can spoil.
If it gets a bit bashed around, it’s not the end of the world.
Is it straightforward or have there been headaches getting it sorted?
It’s relatively straightforward. The biggest issue at the moment is Covid causing issues with the postal service.
We send everything via a 24-hour system, so it’s supposed to be delivered within one to two working days.
We’ve had a lot more instances recently, of people emailing me two weeks later saying it still hasn’t turned up, and it’s so frustrating because as a business, I want to make sure the customer is getting a good experience.
So straight away, we always send out another bag of coffee for free.
And often, they’ll then send an email saying, “Oh, it’s just come through the post this afternoon.”
Then they’ve got an extra bag for nothing, but we want to ensure that they’re getting a good experience.
Unfortunately, it’s not of their doing, these things do occur. Thankfully it’s not that frequent, but it’s enough that it is a bind, especially at the moment.
That’s frustrating. So are there any other things in terms of circumstances outside your control that affect your success as a brand?
I suppose also supply, getting the right beans in at the right time.
Are there any other things that can be challenging and that you really have no control over?
It is just a case of just being pretty fastidious in staying on top of things really.
Ensuring that you know what you’re going to need, even things like gas bottles, our machine runs on LPG (liquefied petroleum gas), that you would run a caravan with.
So we have to get LPG bottles come in, so I have to make sure, “Oh, is one running out? Do I need another one? How long is that going to take?”
We did have an issue with that last year, actually, there was a fuel supply issue going on, and we couldn’t get any gas for about a week.
So we had to effectively close up because we couldn’t run the machine. Things like that can occur, but thankfully infrequently.
Oh well, that’s good. At least if you can plan for most of the changeable issues, then you’re ahead.
Software is an investment worth making
But that software you talked about, where you automated a lot of the stuff, where you’re measuring how many beans you have left, how many packaging materials do you have left, is that something you bought off the shelf, or did you build that yourself?
It’s a company called Cropster, and they are probably the industry leaders when it comes to coffee roasting.
They have a software that can do pretty much everything. It’s quite expensive, but I see it as pretty much a necessity. You have to accept, “I need that and I’ve got to pay for it.”
Expanding your business in the world of e-commerce
You said that when you first started Altitude, you decided to go down the e-commerce route because everything was closed, there was no point trying to open a coffee shop, when everyone was locked down.
Obviously, things are different now.
You always wanted to have a real-world coffee shop. Talk to me about that part of your plan.
How far along are you?
Well, nowhere other than in my head at the moment.
But I am desperate to open a coffee shop, absolutely desperate. It’s just funds that are the major issue, because that’s going to be another seriously significant outlay.
It’s definitely something that I want to do.
If there are any investors out there that would like to open a coffee shop, do get in touch.
But I feel we’ve got everything in place that could facilitate opening one, I think we’ve got the brand aspect. If we could open an Altitude Coffee shop, I think the customers would be there, we know that we’ve got a good product.
The coffee that we’re selling won the Great Taste Awards last year, so I know that if I’ve got industry professionals that are saying, “It’s good,” you think, “Well, you’re not starting from a completely blank canvas, opening a shop and you don’t know if anyone’s going to like your coffee or like your brand.”
I know that aspect is there.
So that sort of excites me, but it’s purely just down to, at the moment, cash in the business, and obviously whether or not I would like to take the hit to realise that.
I don’t know is the honest answer.
I would love to say, “Yeah, this time next year we’ve got at least one shop up and running, but we’ll have to see.”
Adapting your business to fulfil wholesale needs
But what about supplying other independent coffee shops?
Is that something that you’ve considered or do you feel like that would dilute your brand?
That’s actually something we’re doing at the minute as well.
I’ve got a number of places, businesses, and shops that I’m supplying to. It’s sort of a no-brainer really, because it’s a part of the business that can guarantee some good cash flow.
I’m working with some local places at the moment, which has been great.
It’s a part of the business that I’d like to expand more.
Again, it’s difficult with time because it’s a full-time role really, going around pitching yourselves to other shops. There’s a lot of coffee roasters out there, and a lot of places have got established relationships with other roasters already.
So trying to pitch in to these places is difficult. But we’re getting there slowly.
We’ve got a few on the books now, which is good.
That’s definitely an aspect to the business that I’d like to expand as well, this year.
If loads of shops were like, “Yeah, we want to stock you,” what is your capability in terms of scale?
Could you, with all the roasting equipment that you’ve got there, how long before you outgrow what you’ve got?
Pretty soon, realistically, with the machinery that I’ve got at the minute.
So the trouble with the machine that I’ve got, at the minute it’s fantastic, but it isn’t really designed for huge volumes.
So if we were to take on some more wholesale contracts, we would probably look to buy the bigger version of the machine that we’ve got there.
It feels like you are at a bit of a tipping point where you almost need to get some money in or make a decision about whether you stay the same size, or whether you really push and go for mega growth.
It must be quite an exciting, but quite a nerve-racking time.
I don’t know why I’m more reserved this time, because it’s no different to what I did two years ago, I suppose.
But I suppose now I’m here, you sort of feel a bit more, “Oh well, let’s walk before we can run.”
But I think it would just come down to being able to go, “Right. Ok, look, I think this is going to work. Let’s see what we can do, let’s see if we can find the money, and make it work.”
The only stumbling block is probably me, in all honesty.
And how gung-ho you can be.
Winning awards and dealing with negative reviews
So Joe, tell me, in terms of the two years on this crazy roller-coaster journey, I want to hear about the best moment.
So the absolute highlight in the Altitude journey, and I want to hear about your lowest, your darkest night of the soul moment.
The biggest highlight, I suppose, is when I won two awards at the Great Taste Awards last year, that was probably the highlight.
That was really good because I had to enter pretty much at the start of last year, and I’d only really been running the business for two months at that point, in the way of physically selling to customers.
Just because of the way that they do the entries, the entries are in February and the results come out in September.
So I thought, “Well, you’ve got to be in it to win it, type thing.”
So I thought, “Well, I’ll put some entries in. At worst, if it doesn’t win anything, at least I’ll get some feedback from industry professionals to see what it is they didn’t like.”
When the results came out in September, I was fully expecting nothing but negative feedback.
Then to win two awards and to get some really positive comments, I was like, “Oh wow, this is great.”
I couldn’t believe it really. There’s little old me winning the awards for coffee in our first year of operating.
So that was great, that was really good.
A low point would be the odd, and I say very, very sporadically, the odd bad review that you get.
I don’t often know what makes people tick, but I think in the early days, I had one pretty negative review and it hurt because I know it’s only coffee beans, but it’s something that you’ve made and you think, “Oh, this is really good,” and you want people to enjoy it.
Then when someone writes something negative and gives you one star, and you see something like “Oh, dreadful,”, it really cuts into my soul. I just think, “Oh God, that’s horrendous.”
What did you do? Did you reply to that person or did you try to get to the bottom of it?
Or did you just have to sort of draw a line under it and move on?
No, I did reply because I tend to reply to all the reviews we get, directly to the customer, either good or bad, thankfully it’s mostly good.
I just wrote to this customer and said, “Sorry to hear that you felt that way. What was the reason?”
When they responded, they were actually like, “Oh, well it just wasn’t really for me. I tend to like this type of bean and your one wasn’t really that great.”
So it probably wasn’t actually reflective of a one-star review, but it was just that initial moment when it came through, and I was like, “Oh God, that’s horrendous. I’ve never had one of those before.”
You have to roll with the punches sometimes.
Do you ever miss flying?
I do, yes. I don’t miss the jet lag.
Anybody that’s involved in aviation will tell you that it’s something that runs in your blood, and it is, it’s definitely an itch that I haven’t fully scratched yet.
So watch this space.
Well, this is it. You’ll make your millions and then you’ll have your own private plane and you’ll be able to go flying every weekend.
That would be the dream, wouldn’t it? That would be the dream.
The differences between being an employee to being an employer
In terms of your two careers, if you have to put them side by side, how does it feel to do something so different?
Has it been as rewarding? What have you learned?
What’s been the contrast for you between the two sides of the coin?
Very, very different.
Obviously, being an employee of an organisation and being the boss of an organisation is very different. I spent a long time working for somebody and I got paid every month and everything was great.
Then all of a sudden now, I’m making the decisions that directly impact the success or failure of the business.
So when something is yours, you’re a lot more passionate about it.
As much as I was passionate about flying, it does become a job to some degree. You go in and you do your job, and you go home again, and you get paid, and that’s the end of it.
Whereas this, you feel directly invested.
So you wake up every morning, and you’re like, “Oh, wow. Yeah, what am I going to do today?” Even if it’s standing in the cold factory, roasting beans, you feel, “Well, it’s mine.”
And I love that.
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