Do you love hearing how other small business owners from brick and mortar locations are getting new customers in the door?
Would you like to learn how one juice bar owner in a brick and mortar location is making big bucks in his juicing business?
Below is the transcript of an interview with Matt Shook, owner of Juice Land.
Speaker 1: Walk me through first what year did you found Juice Land and why did you create it?
Matt: 2011 Juice Land was founded, but I started a juice company in 2003, so I’ve been making juice since 2001, so 15 years in the business, three different names, Juice Land is the latest and last incarnation of my creative ability.
Speaker 1: You’re a bit unique. You’re dealing with real estate, you’re dealing with ingredients, you’re dealing with costs. Break down the economics on that.
Matt: Well the 4th Street location’s been open for about a month and today it’s set a record for company sales, demolished the previous record. We used to do like 520 tickets in a day, that would be super busy at one of our shops and today we did around 800 already.
Speaker 1: Is it ticket to individual drinks?
Matt: Tickets like one person with their friend maybe, so it’s like maybe three drinks or four drinks, but just say like 2,000 drinks served today.
Speaker 1: Wow, just today.
Matt: Just today, just at this point in the day.
Speaker 1: In this one location?
Matt: In this one location, so yeah, it’s kind of a milestone for me. Let’s check my, I don’t have MapMyFitness but I have MapMySales.
Speaker 1: You have the updated sales dashboard right here.
Speaker 1: Can we read these out loud?
Matt: Yeah, we can, well yeah. So Frost Tower, $7,000 in sales today.
Speaker 1: Okay, so Frost Tower was $7,000.
Matt: Then the next best store is $3,800.
Speaker 1: Help us understand total size. In 2015. How many total employees?
Matt: We had 275 employees, 14 locations in Austin, one in Houston, one in Brooklyn.
Speaker 1: Okay, and total revenue 2015.
Matt: 2015, I think we did something like around, I don’t know, maybe $10 million in sales between all 14 stores, 15 stores.
Speaker 1: Okay, and we start looking at margin and just the hard cost of the actual juice, what was gross margin on that?
Matt: Oh, the gross margin is really, really low, that’s why nobody else is doing what I’m doing, really. I mean, you don’t really see people with organic vegetables, you know what I’m saying?
Speaker 1: The costs are super high.
Matt: Oh, the costs are incredibly high compared to other restaurants. Everybody pays for enchiladas and it’s like flour tortillas, rice, and beans, and it’s $8, right? I’m importing $3 a pound organic cucumbers. There’s a reason that prices are so high for that stuff so yeah, the margins are really low. If you can do 5% for a whole company wide.
Speaker 1: Gross or net?
Matt: Net, yeah. The average drink, actually the average ticket is exactly $10.
Speaker 1: Okay, so on a $10 drink ticket sale, what’s just the total cost to make it?
Matt: The cost of goods is about 40%.
Speaker 1: 40%.
Matt: It’s nuts, it scares a lot of people off of the industry, and I like that, you know what I mean?
Speaker 1: Well that’s good, keeps them away.
Matt: The only way that we can do it is volume. We just have so many people coming by, but we make a small amount.
Speaker 1: 10 bucks, minus the 4 of the cost of goods sold, you got 6 left over. What goes to the bottom line, then, about 40 cents?
Matt: Yeah, I mean, you got your labor and your rent and then you got the consultants and the marketing and the next thing I know, I’m just happy to go on vacation a couple times a year.
Speaker 1: When was the last time you went to vacation?
Matt: The last time I went on vacation, I took my wife to New York last week for our 20th anniversary.
Speaker 1: Congratulations, that’s exciting.
Matt: Yeah, 20 years, we left the kids at home, we went to the Broadway play and a jazz club and that whole thing.
Speaker 1: Very cool, very cool.
Matt: Yeah, but the last real vacation we went on, we took the nonstop flight from Austin to Cabo San Lucas with the kids and it was great. It’s like find me a nonstop with the kids and I’m on it.
Speaker 1: Totally you get your economics. Walk us through that Frost Bank location. To get that location, what is the, I mean, do you have to sign a 10-year rent on that?
Matt: You sign a five-year lease with a five-year option. Most industry standards is that, five years.
Speaker 1: What does that cost per month?
Matt: It’s almost like $5,000 or $6,000, it’s really expensive for us.
Speaker 1: How many square foot?
Matt: It’s about 1,400 square foot, so that’s like $40 a square foot, whereas a Jamba Juice in Manhattan I looked at was $375 a square foot.
Speaker 1: Jeez.
Matt: $60,000 a month rent in Manhattan.
Speaker 1: You strike me, Matt, as a competitive guy. How are you going to kick the hell out of Jamba Juice?
Matt: Okay, well Jamba Juice is like, it’s like the Taco Bell to the Mexican food, you know what I mean? You got brands that excel and I think we’ve already proven to the industry that we’re that top shelf tier. You got your Shake Shacks and your McDonald’s, you got your Jamba Juices and your Juice Lands, you know what I’m saying?
Speaker 1: Yep.
Speaker 1: Have you raised any capital or is it all bootstrapped?
Matt: I’ve never raised any capital from an outside source, it’s all bootstrapped.
Speaker 1: Did you put a bunch of your own money in?
Matt: I didn’t have a bunch of my own money, no.
Speaker 1: How much did you put in when you first started?
Matt: My first shop I opened for $15,000 with a friend of mine. Our moms gave us money.
Speaker 1: Very cool, so what’s coming up in 2016.
Matt: 2016 we’re going to, let’s see here, we’re going to open a store in North Austin and another store in North Austin, and maybe another store in North Austin, because North Austin is now like Central Austin.
Speaker 1: Are you looking at metrics like density of foot traffic or anything? What is that metric to decide to open a store?
Matt: I’ll be honest with you, every shop I’ve ever opened has been a thumb in the air stand around for 20 minutes and see if there’s anybody around.
Speaker 1: You just watch.
Matt: Yeah, it’s like you just kind of know. I’ve never looked at demographics once.
Speaker 1: Okay, great. You think you’ll be at about maybe 20 stores, 24 stores by the end of the year.
Matt: No, no, no, no, no. I would hope to be at 20 by the end of the year.
Speaker 1: 20.
Speaker 1: Is there a franchise model in your future?
Matt: There’s no franchise model.
Speaker 1: How do you juice that up?
Matt: How do I juice it up?
Speaker 1: Was that bad?
Matt: No, no, no. The way you do it is you increase your volume through quality. You want more people that come through the door so the better you can serve them and the better the product can be and the consistency of the product, more and more people will find out, and so that’s all we do is we just hope that someone says, “Damn, that was way better than the other place.” Then more people show up.
Speaker 1: I got to tell you, folks. I researched the heck out of folks before they come on the show, I’ve drank the juice, it’s extremely, extremely good. He’s drinking it now, his muscles are getting built as he drinks it. What the hell is in this stuff? It’s so good.
Matt: It’s just called raw nutrients.
Speaker 1: Raw nutrients.
Matt: Raw nutrients.
Speaker 1: It’s time for the Famous Five. Are you ready?
Matt: I’m ready.
Speaker 1: Number one, Matt, what’s your favorite business book?
Matt: My favorite business book? A book about business? Shit.
Speaker 1: Or other books, I don’t know what books you’re reading. What other books?
Matt: Well I’ll tell you my favorite book of all time is Prometheus Rising by Robert Anton Wilson, one of the major currents is that belief is the depth of thought. Having an open mind has always led me to be able to do business more effectively, I think, because I’m always looking for a different angle as opposed to that’s the way it is.
Speaker 1: It has to be that way.
Matt: Yeah, yeah, so I love Prometheus Rising.
Speaker 1: Number two, is there a CEO that you’re following or studying right now?
Matt: Okay, so the CEO that I love and admire the most, oh, it’s a tie between Tim League at the Alamo Drafthouse and Tito Beveridge at Tito’s. Those two guys I admire the most, I think.
Speaker 1: All right, number three, is there a favorite online tool you have like Evernote?
Matt: No. I don’t really have that, nope. I think Gmail is amazing.
Speaker 1: What is it, Juma?
Speaker 1: Oh, G. What’s Gmail.
Matt: Gmail, you can search for something that you said to someone five years ago and it pops up.
Speaker 1: Sorry, folks. Google paid a lot of money for that placement, let me tell you, so we had to sneak it in.
Matt: I’m just saying, I’m not a tech person but that shit is really amazing, yeah, I love Gmail.
Speaker 1: Number four. Yes or no, you have two kids, you said?
Matt: I have three kids.
Speaker 1: Three kids, you’re married, yes or no, do you get eight hours of sleep every night?
Matt: I go to bed about 9:30 and get up about 6:00, so yeah, eight and a half.
Speaker 1: Close, all right. Fair enough.
Speaker 1: Last, question, how old are you now?
Matt: I’m 38.
Speaker 1: Take us back 28 years, sorry. Hold on. 18 years.
Matt: 18 years.
Speaker 1: What do you wish your 20-year-old self knew?
Matt: I think what I wish my 20-year-old self knew. Don’t be so afraid of other people and what they think ever. Really just don’t, just don’t get too caught up in caring too much about what other people think.