We are here with my friend Erin Erdman, and her business Page Roasting, and I'm drinking a cup of her delicious roasted coffee right here. And I want to talk with Erin about some of the legal aspects of forming your own business. She just started this business recently and it's taken off and it's awesome. She makes some of the world's best coffee. There's Robins in bags, there's her roasting machine here you can't see, but this is a super cool local business, and I'm super thankful for Erin that she took the time to talk with us a little bit about her business and some of the legal issues that impacted. So, Erin thanks so much for taking some time. Yes, you are welcome. Maybe just start by telling us a little bit about how did you get involved with roasting coffee beans and what's your background? So, when I was about 14, I got my first job working at a local coffee shop in the north suburbs of Chicago, and while I had many academic interest and I actually went to the U of I for philosophy, I always worked with coffee on the side. After some time here working in coffee shops, I moved to Austin Texas where I spent two and a half years working at a kind of specialty coffee business, and when I decided to move back the first place that I went to look for a job was at another local coffee roasting company, where I kind of served as jack of all trades, I answered phones, how to retail customers, roasted coffee eventually, and that was what I did four and a half years. And at a certain point I just decided that I wanted to create something that was sustainable for my own life and something that could have longevity beyond just a job like a job working for somebody else. So I decided to go out on my own which was certainly helped by marrying somebody who had just opened his own coffee shop here in town. So, that's how we ended up here. So you mentioned that your husband Josh at the same time you were starting your new business had just opened up a coffee shop of his own. And so actually the building we're in, we are in your roasting company but it's housed within this larger building. So, tell us a little bit about how this whole situation works. Well, so, originally, four and a half years ago Josh opened flying machine on main street in Havana. The first week he opened was the first week we started dating in fact. And fast forward, when we got married in June of 2016. And then pretty soon after that we were approached about this space which was called Cracked Glass, was a stain glass distributing company, and we loved this space we saw a lot of potential here. So, we decided basically to go in together on renovating the space and putting both of our best businesses in design. The way that worked was somewhat arbitrary like in terms of numbers because we are married, and so, it all goes the same partner of course different couples, do finances differently. So, our businesses are like completely distinct. But, when we were doing, no doubt, it was kind of who would get along, how are we going to divide this, but at the end of the day, it all worked out because it's all the same honeypot anyway, but we're two separate businesses one space. Josh's is on the primary leads as my machine coffee. Essentially, I have a sublease with Josh as a sub letter, and I pay a certain percentage of the rent that we have for this entire space. Okay. So your business pays rent to. Flying machine. Flying machine which is the main leasee of the space. Right. And then your business paid roasting company pageroastingcompany.com, all spelled out. Check it out, they have terrific coffee. So Page Roasting Company, roast the beans and then you sell them to Josh's business flying machine. Right. And so, the coffee shop buys the beans from you, and then they brew the coffee and sell it to consumers, right? Exactly, right. And so, I sell two different types of coffee to Josh, or many kinds but wholesale and retail. Wholesale coffee is the coffee that he buys in bulk, that is used for brewing coffee, whereas retail, 12 ounce packages that are sold directly to customers. Okay, awesome. So, as we go through the lessons in this course, we're going to talk about contracts and sales of goods and things like that, and this is a really cool situation because Erin deals with this kind of stuff. She sells goods from her business, Page Roasting Company, to flying machine coffee, her husband's business but there are contracts involved. How much are we going to purchase from you? What's the price? All those sorts of things, and this is just like, I think it is a really interesting application of the law of contracts. So, besides just selling to fly machine coffee, you sell your coffee to local grocery stores, other restaurants, things like that, how does that work? So, with those arrangements, pricing is slightly different because for us, any money that is made between our two businesses which are completely distinct. We have different tax id numbers, we exist as separate entities, but we're married. So, the incentive is to make money overall and for our households, whereas when I sell coffee to a grocery store, it's important that they be profiting off of that, at a higher rate, because they need to pay their employees by the time that is taken to stock items, price them, label them, bar codes, all these things. So, they place an order, I deliver. Sometimes we have an inventory, so I pop in and I see like, there's five of this type of coffee and you want to have eight, so for the next delivery, I'll take note of that and make that delivery in a few days. Okay, so when a grocery store places an order, do you send them an acknowledgment or out of here? Yes. There's always, I think that there is a certain degree of professionalism that has to be involved in placing orders and receiving orders. So, I always to send out a letter every Monday that has a list of all of our offerings, all the pricing, all of the information that they need for ordering. They respond and I deliver, and I always acknowledge it. If you don't acknowledge it, then, no deal. All right. Very cool. So, I want to talk for a minute about when you first decided to start this new business, did you go to an attorney and say, hey how do I start a new business? Or did you have someone else giving you advice? Or did you just know it yourself? How did that work? Also we're really lucky here in Champaign County because we have an organization called the Small Business Development Center, and they offer free services to the public for anybody that's looking to open a business or can have an existing business and have questions. So, I actually set up an appointment on more and there who is the director, and he basically gave me a very comprehensive to-do list, what I should do. One of the things that he informed me of was the small businesses on a program which we have here in Champaign County, and that's where the city of Champaign essentially is incentivizing new businesses to go into certain geographic areas within the town, just for the sake of economic development. And they will match up to 75 percent of up to $10,000 of expenses. So, if you spend 10 grand, they all pay 7,500, and all that money is applied to your use of local services. So, I immediately found a lawyer, and I found an accountant, and a local designer to help me with some of these initial startup things, and it was really great. The city of Champaign was able to incentivize that by tipping me off some of the money. Okay. Terrific. Now, when you hired that lawyer, you went to see the lawyer, I'm guessing you were advised you need to start a corporation or an LLC, or something like that, what sort of advice did you receive about that? Well, I am in a position of advantage because I have a husband who has gone through all of this before. And I went in there and basically had a hunch that what I wanted to do was be a sole provider for the time being, because my ability isn't very high, and I don't have any employees. Also, people don't really enter the roast room, so there isn't a very high risk of something bad happening to you while you're in here. I'll do my best not to try and trip in the right place mindful of all your insight. But, in the end he reaffirmed to me and said that for now, it is a perfectly good idea to remain the sole proprietor as I'm getting established, but that as l expand, should I move into a larger space? Should I hire employees? Should I start doing regular events in my space? There's lots of conditions in which it would be appropriate for me to incorporate, either into an escort or else. Okay. Yes and as we go through the lessons in this class, we're going to see that there are pros and cons to various different forms of business entities in the sole partnership, is like the most basic form a business entity. There is, and if your liability risk is low then it works because it's super cheap it's free, and it's really easy to administer. But as Erin said, as things get more complicated, you hire employees, you start dealing with the public, your risk increases for liability and you might want to think about a different form of business organization. Liability I think is one of the most important things to think about when you're opening a business, because essentially when you are sole proprietor, and lets say somebody comes in here and the machine explodes and they are injured. Very small chance of that happening but if it does, and they sue you, they can go after everything you have. Your home, your car, anything that's yours because as a sole proprietor, you are one continuous entity, there is no distinction between Page Roasting company and me for the time being. Right. So, just out of curiosity, how did you decide on the name Page roasting company, where did that come from? Well, so that's a funny story. I don't know anything about Tarot cards but I have a friend who collects them and one day I was going through some of docs, and there was one cart that was the page cups, as a young person holding up a cup, and I basically have the idea right then that it would be a really great image to have do a caricature of myself, and have me holding out a hand brewing piece of coffee equipment in this case. So that's where your logo come about? Yes. We have a bag of Page Roasting Company roasted beans here, that's the logo with Erin holding out the. Chemex. Chemex on there, for Page Roasting Company. That's a super cool logo, you can get stickers and things at Page Roasting Company. So, that's cool, that's a good origin story. So, in your business you're roasting beans, you are dealing with food products and things like that, what sort of governmental regulations do you have to abide by, inspections, permits, that sort of thing, how do you handle those? Because I'm a wholesale distributor and I don't have a retail counter where I sell directly to customers, I deal with the state health department as opposed to the local county health department. Before we opened, we had inspector come here, he basically looked at everything, looked inside the machine, evaluated the storm situation, asked me several questions, and then he gave me a permit at that time. And so fairly simple, coffee is, I would say one of the more low liability food products because there is a lot of things consumers can do to make a dangerous product at home. If you brew a pot of coffee and leave it sitting on your counter at room temperature for a week and then drink it, I can't be held accountable for the illness that you may suffer from drinking raw coffee. Right, and not to mention the fact that I'm putting the raw coffee through such intensive high temperatures, anything that's on there is going to get killed. I immediately package the coffee and seal one way bounce back. So the coffee is very sterile in that state, other than that really it's basic things like washing your hands. Okay. And even then most people are putting the coffee through very high temperatures when they're brewing it anyway. So, it's a very low liability food product as opposed to meat, dairy, even vegetables. And you mentioned to me earlier that one benefit of having your roasting business separate from Joshes coffee shop is that, in the coffee shop they serve food, and they have a kitchen, and they are subject to some very high scrutiny by the Champaign County health department, but by having your business separated out from that in your own little room here that you sublease from the coffee shop, you get to avoid all that. Exactly, yes. I get to just essentially be a wholesale distributor, that is conveniently located inside the coffee shop or some of the sort. Awesome. So Erin I just want to say thank you again. Welcome. This has been such a treat to be able to talk to you about your business and starting it up, and you make the best coffee in town by far. Thank you. So, thank you again for taking the time out to talk to us. Of course my pleasure.
