Many a worker ensconced in a business environment has harbored dreams of following their passion into the performing arts. For Paul Schlader the situation was reversed.
Encouraged by his parents to pursue acting, the Minnesota native had moved to New York City and attended the American Musical and Dramatic Academy. He’d graduated and begun making the audition rounds.
But his heart wasn’t in it. Growing up, he was “the 6-year-old who always wanted to play business” — as a teen, he’d begged his father to remortgage the family home to bankroll a video game store he wanted to open. Now in his mid-20s, he came to a realization.
“I wanted to own a business,” he says, now 34. “That’s what I wanted to be doing.”
Working as a loan processor for a mortgage firm, Schlader’s pal Jeremy Lyman was even more certain he wasn’t where he wanted to be.
“I hated it, from day one,” says Lyman, 32, who’d fallen into the job through a friend, after earning a degree from Queens College and spending a few years as a bartender.
Dreaming of an escape, he thought about opening a bar. But he was wary of getting back into the nightlife world, after living a bartender’s nocturnal, hard-partying life for a period “that went on too long.”
But he’d taken to hanging out in coffee shops for long hours, drawn by the sense of community he found there, and one day a light went on.
“I realized that’s what I wanted to do,” he says. “Hang out all day at a coffee shop and get paid for it.”
By then Schlader, a veteran bar and restaurant worker, was managing a restaurant. When Lyman called with the idea to open a coffee shop, he signed on immediately.
So they had a partnership, a vision for a shop that was “community focused” and buckets of drive. They had a bit of seed money: a bond Lyman’s grandparents had given him for his bar mitzvah, which he cashed in for $6,000. What they didn’t have was any actual entrepreneurial know-how.
“We were so green,” says Schlader. “I can’t stress enough that we didn’t know what we were doing.”
The two started attending coffee conventions and doing market research — Lyman spent an entire week sitting in a local coffee shop, “counting the number of people who came in and how much they spent.”
They also canvassed neighborhoods looking for the right location. Initially they were determined to be on the Lower East Side, but when they got an inside line on a space adjoining the Gershwin Hotel on East 27th Street, they went for it, spending nine weeks building the space from scratch. They used recycled and nontoxic building materials, following a commitment to green business practices that would eventually extend to rainforest-friendly coffee beans and corn-based, compostable to-go cups.
It wasn’t long before problems started piling up. Working in a landmarked space, they got mired in red tape at the Department of Buildings. Their inexperience led to a series of costly mistakes — such as hiring a Detroit-based architect without realizing they’d spend a fortune shipping plans back and forth.
To add considerably to their stress, the startup money they’d raised by tapping friends and family ran out quickly. The two started racking up “severe” debt, taking out a series of credit cards and maxing them out. It’s not an approach they’d recommend, they’re quick to say.
“It’s a really bad idea,” says Schlader. “But when you’ve got this thing half-built, what do you do? You can’t just abandon it.”
Plus, all they had to do was make it to their opening, then they could sit back and count the money as customers packed the place.
Only that’s not quite how it went. When Birch Coffee opened for business in October 2009, the first day’s haul was $100. And while things built steadily, it was a slow process; meanwhile they were saddled with a large staff they’d optimistically hired.
Business grew as the first year went on and they built a stable of regulars. But instead of enjoying the progress, the pair were stressed and overworked to the breaking point, clocking 100-hour weeks. Money remained tight and worker turnover was “insane,” says Lyman, who could tell staffers weren’t happy, but didn’t know how to fix it.
Hoping to boost morale, he hatched an idea to give massages as a Christmas bonus, and called a massage studio. As it happens, the owner, John O’Connor, was also a business coach, and when Lyman told him what he had in mind, O’Connor told him he was “putting a Band-Aid on a gaping wound,” as Lyman puts it.
What they needed, O’Connor told them after some consultation, was to train their employees properly and to communicate with them effectively.
And they needed to change in other ways. They were trying to do too much, and had to learn to delegate, O’Connor told them. For example, instead of Lyman keeping the books by hand, they needed an accountant who could do it using QuickBooks in a fraction of the time.
If it was an odd turn of fate to call a massage therapist and end up with an accidental business coach, it wasn’t the only time the pair felt that fate was looking out for them — that “there was something larger at work,” as Schlader puts it.
Divine intervention or no, when they followed O’Connor’s advice, they started to settle into a groove.
“The change was palpable,” says Schlader.
Before long, instead of stressing about holding things together day to day, the pair were growing their operation. They opened their own roasting plant in Union City, NJ. They started a service delivering growlers of their cold-brewed iced coffee, which has Lyman making weekly rounds on a bike. They’re plotting new ventures and partnerships. And they’re expanding — work begins next month on a new shop on the Upper West Side.
“What started as just this idea for a coffee shop has ended up going beyond where we could have imagined,” says Schlader (who’s given birth to a baby as well as a business: the Upper East Side resident and his wife have a 14-month-old).
As he speaks, the shop is a bustling scene. In an upstairs nook called the “library” a dozen people type on laptops or chat quietly; downstairs, counter workers do a brisk business doling out iced coffees and salads. In the morning, regulars line up out the door.
In short, their vision has finally been realized — and if it was “so much harder than we had ever anticipated,” that just makes it sweeter, says Schlader.
“We high-five each other a lot,” he says.
Given the long road full of obstacles, are they surprised to have made it this far?
Lyman smiles. “Every day,” he says.
A cup of counsel
Consider costs carefully: “You need to have a realistic budget of what you’re going to be spending,” says Jeremy Lyman. “There are still going to be surprises, but not as many.” And create a dedicated bank account for business use: “There’s something tangible about it.”
Get outside help: Having gotten invaluable help from a business coach, the Birch boys are proponents of seeking outside opinions. “It helped us see the bigger picture,” says Lyman.
Hire wisely: One mistake the pair made was hiring a full staff before they had a full clientele. So start slow. And when hiring help, such as contractors and expediters, shop around.
“We’d use the first person we met with,” says Lyman.
Pay yourself: Even if it’s $150 a week, budget in a paycheck for yourself. It communicates “that what you’re doing is of value,” says Paul Schlader.
And pace yourself: Working endless hours, Lyman wasn’t eating or sleeping properly, and he realized it was bad for the business as well as bad for him, he says.
Carve out time for yourself, says Schlader, who had to set limits to make sure he spent time with his wife. “You have to do other things to keep yourself sane.”