Canteen Coffee

In Burleigh Heads is an alleyway with several boutiques, Canteen and Canteen Kitchen, both started (and recently relinquished) by Brendan Elcham.

StartUp Creative meets – for what else! – coffee, to chat about starting a business from scratch, building it up and selling it – rocketing from zero to over a million dollars in three years.

This magazine is for inspiring young people to take the jump and start their own business. Brendan you’ve just turned thirty, have built a thriving business, and now sold it – all in three years. That’s pretty impressive. How the hell did you do that?

B. Thank you, it was pretty amazing. I had a clear intention of what I wanted to do: build a business, run it, master it, and then sell it. And that’s what I did.

Did you have a timeline for how it would all unfold?

B. I didn’t, no. The first six months were very quiet and it took a while to build the clientele up. Then it started to get consistent and we had a lot of growth after that first six months. To be honest, we didn’t really have the infrastructure when it took off– we had one coffee machine and a small team. But at the twelve-month point I knew my goals would be realised and business really boomed.

What was your reasoning for starting a business involving coffee?

B. It was a skill I had. Coffee for me was something that I was initially reluctant about, because it’s in my family and I’ve grown up around it with my Dad. I was actually halfway through a law degree when I decided law really wasn’t my thing.

How did you get into coffee on the Gold Coast?

B. I heard a business was using Campos coffee, which I knew about because I was living in Sydney when Campos started in Newtown. I went there for my coffee, and one thing led to another and I started working there.

Do you think working for someone else and observing them build their business is a good idea?

B. When you work for someone else you get the luxury of learning lessons and not risking anything. You’re watching the process and the teething problems. That gave me more confidence to start. But watching, being involved as a staff member, you don’t get the rewards. I realised instead of building someone else’s dream, I’d build my own.

What was your process from, ‘Yeah, I’m working in this industry,’ to ‘Now I’m starting my own business’?

B. I’ve always been taught that no matter what you do, do it the best you can. I grew up with stories about people not necessarily having many talents or gifts, but always making the most of them. I was initially reluctant to open a coffee shop, because I wasn’t 100% sure that I wanted to be in the hospitality industry. But then that’s what I was doing anyway, and working for someone else. I thought I may as well be working for myself doing what I know. I decided to go ahead and do it to the best of my abilities, really commit and focus, and see how far I could go with my own business.

With that decision, did you have a vision that you would be successful?

B. Yeah, I watched other businesses grow and realised how having a good environment for coffee would be the key to success. I saw the potential for that through working for others. I saw the beginnings of the current coffee culture emerging and at twenty-seven I decided I was going to do the best with the skills I had and coffee was my greatest skill.

Did you have the capital in the bank to go for it?

B. No, I had nothing! What I did have was a car loan. I sold the car, and kept the money, even though you’re not supposed to do that. (Laughs.) So that’s how I raised the funds. I also borrowed some money from my dad, but I paid that back in the first few months. I didn’t have a lot of expenses and that was the key in the beginning. And I think that’s what you need to look at when you’re starting out in any business – how to minimise expenses. Think about ways to do that: Can I do my business from home before renting? Can I remain at work part-time to help financially? For us, here, this location is great now. But three years ago it wasn’t the case. The rent was really cheap, and I could see how the space had potential, how this location and area might be used. So it was a conscious decision to start in a less-glamorous location.

Did other people in the community support your vision?

B.  People generally don’t like change, and feel confronted by the idea. Some people were very positive and some were not. You don’t get anywhere without fighting for what you want, even when there’s opposition. We were quite fortunate here – there were no great dramas. But nothing is easy. If it was easy, everyone would be doing it!

Did you factor in the possibility of failure?

B. In the first six months I did question if I’d done the right thing. I expected the business to grow a lot quicker than it did, and turnover was quite slow in those first months. But then this wasn’t a location where a lot of people walked past. They had to be told where we were. The only marketing we did was through newspapers or magazines wanting to do features on us. Then not long after that it just started to grow at a rate that we almost couldn’t keep up with. We had to get more staff and a new coffee machine. It was a solid two years of literally building this business, not giving in, chopping and changing things. We expanded the seating area. Then another space came up and we wanted to build Canteen Kitchen. But that’s when the business was already paying for itself, so I didn’t have to borrow funds. It was a slow and steady process.

How important is your product?

B. Number one, the most important aspect. That’s the one thing that I’ve always been able to rely on. Sometimes you have bad staff experiences, or bad atmosphere, and those things are difficult to control. That was my angle – our customers knew the coffee would always be great. I know a lot of people don’t work that way – they rely on hype and marketing but I think that’s short lived.

A lot of people mask their product with hype and location.

B. Yes, absolutely. The Gold Coast is renowned for places that aren’t great, but the great location keeps them. I’d seen places in Melbourne and Sydney where successful businesses are in hidden laneways. I knew that could be done here, away from all the bullshit – develop a following of people who come for the coffee. We cultivated the idea that we were a coffee destination.

When did you feel comfortable stepping away from working your usual eighty-hour week?

B. That was a hard decision. I was never comfortable about the idea! But it was just time to do it. I had to find great management with great communication skills because I’m a perfectionist – I like to micro-manage! (Laughs.) The biggest thing was letting go and trusting the people I had hired to do their job. It’s funny because in doing that, the business was running better then when I was trying to do everything. And now of course I get to enjoy the result of all that! Ultimately, you get into business to work towards a better life.

Are you comfortable talking finances? What’s the difference between what your bank balance was like when you started, and now?

B. (Laughs.) A lot!

What are we talking about?

B. We did over a hundred kilos of coffee a week. Most coffee shops, as an example, do around twenty. Our profit margins were really good. A lot of steps were taken to make sure the business would be successful. (Pauses.) You can say we’re talking over a million. (Laughs.) I started with nothing and now I get to enjoy a lovely lifestyle!

Thanks for your time Brendan.

B. My pleasure.

*This interview was featured in Issue #1 of StartUp Creative Magazine