754: He Sold $3M in Coffee From a Bike

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1:16Relatively low startup costs, flexible timing, and how about this for scale? Over a million cups of coffee sold, translating into more than$3 million dollars in revenue from coffeebike.ca, Vlad Priyatko. Welcome to the Side Hustle Show. Nice to meet you, Nick, and thank you so much for having me. You bet. Stick around. We're covering how this business works, the most profitable events to sell out, and how you might start something similar in your own area. So, Vlad, my understanding is you like coffee, you like the margins in selling coffee, you don't like the overhead and commitment in opening a retail space, your own coffee shop type of thing.

1:54So you decided to go mobile, which is really unique. But the first version of the mobile coffee business doesn't really work, does it? Well, to be frankly honest with you, I didn't even drink coffee when I was just coming up with an idea. For me, I'm like very mathematical mindset. I just calculated the margins on the coffee. I was like, okay, back in the time, the retail price is$5, cost me around one dollar for the ingredients and the mobility part of it as you mentioned it kind of deducts most of the overhead so my profit margin as a solo operator would be in like 70 to 80 percent uh range which is crazy if you would compare it to like you know 10 15 at the best 20 percent at the retail but majority of them being in a 5 to 10 range to be honest based on my research and having quite a lot of fellows so yeah the first card i actually ordered some something from overseas and i didn't have too much knowledge i just gained the coffee margins and then the overall look of it was attractive to me i received the concept uh the card which was absolutely not non-compatible with local regulations which of course i haven't researched as a 21 year old back in the time, 22-year-old pressing the accelerator pedal all the time, kind of without too much of the additional thoughts to what I'm doing.

3:16I received the card and then I brought it to the local health departments. They were like laughing at me in a way that's, well, there is no way this gets approved. After like one year of research of YouTube, different talks with handyman, I managed to put additional equipment to this card, which finally got approval. but the cart was so overweight it could only travel decline like otherwise i i would i would just have to push it around and the idea of this enterprise from the very beginning was scalability like i never saw myself as an operator of a single unit as a barista i just wanted something that i can scale and i have multiple locations without too much overhead i just didn't see this type of cart scalable okay however in two to three months of operations locally in montgomery bc i received so much, you know, support, validation of the concept that I realized that the concept is great, just the execution is completely old.

4:14I saw those kind of carts riding around Vancouver delivery trikes. It's like a bicycle where the whole weight is behind you and there's a big cargo box. My cart was kind of opposite direction. You sit on the kind of pedal bike and the whole weight is in front of your face, blocking your vision, you know, not being able to go uphill, etc. So I still have this notebook where I just took a pen and I draw this delivery trike on it. And I try to fit all of my coffee equipment using this cargo box behind my back. Okay. And that's the origin of the coffee bike. I kind of reinvented the wheel and just flipped the direction of the rider, making the concept much more mobile.

4:56Got it. So the first version, too heavy, not compliant with the local regulations. But it was kind of validation. When you did get it out on site and started serving customers, they liked it. They absolutely loved it. The Vancouver community is very supportive, especially in different areas of Vancouver. And me seeing a lot of different communities across Canada and states, I understand that this type of support exists all over North America. But again, the setup portion of this and the wrapping up, it took me two hours to set up in the morning. I had to park my car next to my service location and I would bring espresso machine and other equipment from my car to the cart back and forth.

5:41And yeah, again, looking back, not scalable at all, but nice looking, serving the purpose, you know, attracting attention, et cetera. Did you fall under like food truck regulations or restaurant regulations? Like I'm trying to think, and it's going to vary city by city and location by location, but curious just what the broad scopes in bureaucracy or regulation look like for you. On average across North America and in Vancouver specifically, that would be like a food cart regulation. In Vancouver, it's the same type of rules as for the food truck when it comes down to health. Some counties across North America, they have a little bit less requirements for the smaller carts as opposed to bigger food trucks.

6:25The challenge was I had to fit the bare minimum requirements of the big food truck to the small food coffee bike. And I managed to do this. So we are food truck technically in Vancouver, but across the North America, there is a separate categories for food carts as well, which is a little bit less than food truck. Got it. So make sure to study your local laws and regulations before you get into this. 100%. Now, was anybody else doing this in Vancouver, the mobile coffee business? Or was this kind of like, I think this could be a thing. I'm going to test it out. Yes, there was another few people doing it.

7:02There was even one guy who we became good friends with who was doing specifically a coffee bike. But let's call his unit like a grandfather of my unit. So the actual bike was not motorized, not electrically assisted. So he had to really push it around because pedal power wasn't something that you could do with this type of weight. Just the espresso machine, the commercial grade espresso machine alone is usually like 100 to 200 pounds. There are definitely and there are still some coffee trucks, coffee trailers. But this specific footprint concept, apart from this guy who kind of closed his business down at some point and just switched careers, we have been the only kind of mobile concept in our area.

7:47And there is always people who like telling that they're about to start something, etc, etc, etc. et cetera. But we've been operating for like eight years now. There's multiple units. We haven't had anyone sort of like trying to interfere with our operation with their own similar concept. So yeah, there are some, but we've been bulletproof the past eight years serving a lot of coffees. The reason I bring it up is coffee is somewhat commoditized. You can make it at home. You can get it at Tim Hortons. You can get it at Starbucks. You can get it all over the place. You can get it at the gas station, but bringing it to the people, like getting in front of a crowd is maybe the unlock here where, yeah, there's existing competition all over the place, but you didn't let that deter you and say, I think I can slice off a little bit of this market, still make good margins and scale it and have some fun along the way.

8:43Ultimately, like all in, do you have an estimate of the startup costs by the time you got the fully working version here? Or if you're just someone who just want to do something like mobile coffee shop, if you just want to put it together yourself, you can probably have a budget of like$10 ,000. Just it's not going to be as perfect as you wish, but you can build something with a very low key espresso machine for like this type of range of money. And I think a lot of people are probably comfortable with that level of investment if they have a path, a clear path to break even and profitability. And it's one thing to say, okay, I could sell a product for$5 that cost me one to make.

9:20But where do you go to find your first customers for this stuff? Where do you go to start selling the coffee? Well, one thing I always tell, planning is good. But whatever you're going to plan before making a commitment, most likely the real life is going to be completely different. Like I have a lot of people who would be like, specifically thinking that this location is going to be the best in their life. and it's going to recruit the investment super quick. And I was one of those, like I intentionally was building the unit for this one specific location in Vancouver, which was a complete disaster.

9:54So it was thousands of people crossing every few hours. It was between a subway and a bus station. But the issue was people are so much in a rush that none of them were actually willing to stop in between switching from subway to the bus. I even put a big like slow down, enjoy the cup of coffee, The bus is coming every one minute, 45 seconds. I couldn't break the mindset of these specific people. I just moved a couple blocks down to the next subway station where people were coming out and going to their offices. And that was like X5 of sales just by switching two blocks. More with Vlad in just a moment, including building his regular office route to$400 to$500 per morning and scaling his profitability by getting booked for private events.

10:43Coming up right after this.

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12:46Use code SIDEHUSTLE at Monarch.com to get your first year of Monarch Core half off at just 50 bucks. That's 50 % off your first year at monarch.com with code SIDEHUSTLE. So to answer your question, the flexibility of the concept allows you to play around with so many different variables, with so many different locations that you will 100 % find a winner if you are actually committed to finding one. I switched locations and it was good. Then I was like, what else can I do to make it work? So in this specific office area, I went to like 10 different offices and I told them, hey guys, I'm going to come to each of you.

13:26Like, let's say the first three offices, Monday, Wednesday, Friday, then office number one, 10 to 11. Then office number two, 11 to 12. Office number three, 12 to 1. And this kind of scarcity of my presence would push people to come out and get excited about me coming. I had some extra new pastries, some drinks. After that, I started to receive recognition and I started to be invited for events. That opened up me a huge revenue stream, which actually contributes to more than half of our revenue in Vancouver, Canada right now. This is my personally owned coffee bikes. Okay. Did you do anything?

14:05I love this approach of going to the office buildings. You're trying to approach the building manager or who do you talk to to say, like, I'm going to park out here Monday, Wednesday, Friday from 9 to 10 in the morning. Just being nice, entering the first person I see, I'm trying to kind of dig who's in charge. Usually it would be just a reception desk. She has like some sort of internal communication system, like a Slack or Discord or something similar. And she would just like send a quick message. Hey, now this coffee guy gonna come serve Monday, Wednesdays, Fridays. And slowly, slowly I would build up my recruitment customer base.

14:39I would also spend every single evening with my laptop, researching, getting emails like LinkedIn, Facebook, even kind of like a FBI creep sort of situation. I would just try to find the best people in different industries and approach them with my little enterprise. This is how a small business startup works. You grind in the morning and you keep on grinding in the evening if you really want to make the best out of it. Yeah, it's trying to find where there's a large concentration of people who might want your product and how can I kind of shortcut my way in front of them oh I can go to the subway station oh I can go to these office managers or these receptionists they can send out a slack message to everybody in the building like that's pretty powerful to say like and I like this scarcity I'm only going to be here for a couple hours if you want it come and get it otherwise I'm moving to the next building and the mobility of the business lends itself well to that 100 % yes and the social media is also a huge part which I kind of underrated back in the time but like build your your community with your social media, post your locations on the stories, post your weekly schedule, etc.

15:46This is the best way to build a long-term returning customer base. It seems to be the thing with any mobile food business is they have a place that they park with some regularity because they want to have, I mean, it's so much easier to sell more to an existing customer than it is to find a new customer. And it's like, if I don't know where you're going to be, it's hard for me to do business with you. And so having some kind of regular cadence or schedule makes a lot of sense. So you're doing coffee, you're doing pastries. Do you have any barista experience at this point? Are you just kind of like learning to make these different drinks as you go?

16:20As I mentioned, I didn't even drink coffee before starting the coffee business, but I'm a very constructive person. So before actually starting to deal with coffee making, I went to like, it was, I believe, two weeks courses, Barista Academy in Vancouver. Okay, nice. They gave me the base understanding of what is latte, what is cappuccino, what is espresso, americano, how to steam milk, difference between arabica and robusta, coffee beans, and other type of knowledge. At the end of the day, I want to believe, and this is my personal opinion, coffee is subjective. The cup of coffee which one person would tell that this is the best coffee in their life, 10 minutes after the same person will say this is the worst coffee that they've tried in their life.

17:05You can learn to be a barista. You can teach yourself about all kinds of things coffee. Some people spend their entire lives dedicating to this craft, but you don't need to think that it's going to take you your entire life to do this. You can learn how to be a good barista in one week. And I think people are primed to have a somewhat unique and non-chain experience when they're doing business with you. They understand like, look, I'm supporting a small business. I understand this is going to be kind of a craft roast and it's going to taste how it's going to taste. And I think people are kind of primed to enjoy that type of experience.

17:44They feel good about it. They feel supportive about it. Well, apart from the actual unique concept and very attractive concept of the actual coffee bag that we have, the number one thing is our espresso machines. You can see online, they like liver. So you kind of extract the shot by actually applying human power to it. So from the perspective of the customer, when you take a portafilter, you grind your coffee, you put the portafilter to the tamping station, you do the tamping, then you insert it to the espresso machine, and then you extract the shot, and then you steam the milk, you go into almost like eight to ten steps before giving the cup to the customer.

18:23So the customer is actually witnessing you crafting your drink in front of you. So you're putting the effort as opposed to like automatic machines in the most of the coffee shops where you just press the button and the coffee drops to your cup and then it's still$7 somehow. I believe that our approach is more like craft approach towards coffee making. And then the energy, because one person represents the coffee bike when it's serving. It's not like there is no like front end, back end manager. There's just one person. The energy that you give to the customer when you serve the coffee also plays a crucial role in the customer experience.

18:57It's always positive energy. Yeah, absolutely. And then that hopefully dictates whether or not they come back for a second or third cup or they become a regular of yours every time that you're at the building. I was going to ask, in these early months, what was a good day or week worth of sales? Have you tracked that? And just what might be possible here prior to getting into the private events? So I think my good day would be weekdays and weekends differ a lot. But if, for example, we talk about my little office runaround, like one hour at each offices, three offices, I would do like$150 per office, something like that.

19:36So I would be like at around$450,$500 of sales. That's within four, five hours of collective sales. If you break it down on the hourly, let's call it$100 an hour. which is like a relatively slower pace for the coffee bike efficiency. You can go like up to$300 an hour in the very high-paced serving environment. But$100, if you're the solar operator, after you pay all your coffee beans, cups, milks, you pocket around$70 profit. So you can break it down on$70 an hour kind of barista position, right? And your regular barista in the coffee shop gets like, what, 15 or 20 something? Right, right. No, that's cool.

20:20Thanks for breaking that down. Now, tell me about the events, because I think this is something where you're going to collect a flat fee up front, and we're going to serve however many cups. How does this work? We specifically charge hourly fee for the experience. I provide realistic expectations to the client saying, hey, with one unit, we can serve 50 cups an hour, maybe 60, depending on the drinks choice. But we keep it at 50 just to be super realistic. We charge$275 per hour, which comes down to$5.5 per drink. Very reasonable at the top capacity. Doesn't matter if it's going to be five cups served per hour or 50 cups.

20:59We're charging for the experience of bringing this$20 ,000,$25 ,000 worth of asset, unique concept to your doorstep or to your venue. And then we also charge a delivery fee depending on the distance to cover our gas, like parking, etc. Because for the longer distance, we use trailer to transfer the coffee bikes. If it's a shorter distance, the delivery fee will be just us biking over there. It's going to be just less. So the profit margins is incredible over there. So 275, depending on how many drinks, but it would be anywhere between, if you're the solar operator, anywhere between like 70 % all the way to 95 % if it's like very VIP event where they just want you for like, I had events where they would hire me for five hours, pay me like$1 ,500 and it's going to be 10 people only.

21:47Wow. Just because it's a high profile event, they would come, mingle, each person would grab like three drinks or something. And then, you know, for me, three drinks, 30 drinks over five hours that would cost me like$30 in expenses. I would pocket like almost the entire amount as a profit. Yeah. What type of events are a good fit for this or anything like proactive that you did to kind of get on their radar or offer that as your menu of services? So we serve and are still serving anything from like small bridal shower or baby shower of like 25 people to the birthday party of 100 people to the wedding of 200 people, all the way to rock festivals of 5 ,000 people.

22:33We're just being very realistic with efficiency. And for example, if it's a rock festival of 5 ,000 people, we would bring like four coffee bikes there, placing them in a different areas and serve for eight hours. Oh, okay. Like corporate, real estate, open houses, staff appreciation days, teacher appreciation days in schools and educational institutes. Also a big one for us would be, it's a big contracts, usually like two to three of those per year, but some big brand would reach out to us to fully custom brand our coffee bikes, like a white label situation. And we would just give out complimentary drinks to all people in the specific areas that they want us to be.

23:18And they prepay everything. So that's like high six-figure contracts from business that cost like 20 ,000 to start. We worked with big AI companies. Recently, we worked with DoorDash. The uniqueness of the bikes, we wrapped the bikes in their custom branding. We didn't even serve coffee. We were giving out FIFA merch. from the bikes, which they also provided. It's just the actual concept of mobile, very nice looking bikes that attracted their marketing team. And we made it work, but they compensated us as if we were serving coffees because the opportunity cost for us would be serving coffees. Got it.

23:57Got it. And it's, yeah, it's easier because you're in one spot and yeah, it makes a lot of sense. And so it sounds like there's great margin to be made and, you know, doing a little route and having regular customers in front of these office buildings or going to the farmer's market on Saturdays. But the real money is in doing these private events, these corporate events where you're getting paid by the hour, providing this custom experience. I was just at a conference last month and it was the same. It was in a building, so I don't know if it was a mobile cart situation, but it was like, yeah, the company paid them to be there and it was free for everybody to go grab a coffee and they kind of like would sprinkle their logo in cinnamon or whatever on the latte art on the top.

24:35I was like, okay, this is cool. But is that the main focus or that's a big piece of the business right now? It's the biggest piece of the business, but it would never work out without me and my team being out there on the regular routes. My slogan of the business, coffee bike, always on your route. So before being noticed, right now there are a lot of options and we also use Google ads, Facebook ads, Instagram ads. But to be honest, the biggest contracts and the biggest returning clients would come to me from my local communities. I would just be in the park, and then I would never know that one of my regular customers is actually CEO of Vancouver Airport.

25:13And then after being my customer for one year, she actually invited us for the big series of events inside the Vancouver Airport. And essentially, they even gave us the spot to be a retail coffee shop inside the Vancouver Airport with three coffee bikes. That was a big fortune. But it only happened because rain or shine, I would come to my park location on that specific days, and she would be my customer a few times a week. Then when there is a need of the mobile coffee, I would be the first one that would come to her mind. How many bikes are you running in Vancouver at this point? I have four of my bikes.

25:49My pick was like eight bikes, but then I start to sell them. And I just, just like these four bikes, I covered enough area. And I also have six more espresso bars, like a smaller ones, probably similar to what you've seen on the conference. just because I saw the needs for those, just to get to more tighter spaces. So yeah, 10 units altogether under operations. We have anywhere between like 10 to 30 baristas on the team at the time. That's pretty big, starting with one bike, but kind of having this vision of, oh, it could be much bigger, where there may be a Starbucks on every corner. If I want to sell this product, I need to be in more places at once.

26:28Yeah, I'm always trying to kind of think what's next, what's next, what's next, which is not specifically the best option for everyone. I think even having one of those would be a good side hustle or like even a full-time perk. But for me, I'm kind of a sick entrepreneur where I'm always trying to think about the next level, more revenue, more ideas, etc. But again, that's just my life choice. More with Vlad in just a moment, including rolling a coffee bike onto the set of Dragon's Den, the investable idea he pitched him, and what's happened since. All that and more coming up right after this.

27:05It took Bryn and I a few years to fully appreciate that as a couple, as a family, our finances really are a team sport. And for a long time, we'd have these every so often money check-ins where I would dutifully log into what felt like a dozen different accounts and update my overly complex spreadsheet to get a look at our financial picture. Today, all that lives inside Monarch, and it's given us a clear one-stop visual dashboard for our net worth, for our investment performance, our account balances. and it's just made those money conversations so much easier. One of the coolest features is on the cash flow tab.