Sometimes, on an episode of "Shark Tank," Mark Cuban or one of the other Sharks might congratulate someone on the show for building a nice business.
It's a sort of code for saying they have created something that should produce a living for them but not the outsized profits that make a company investable.
It's not an insult: Most businesses are considered a success if their owners can live decent lives, pay some employees, and add to the economy.
Related: Struggling whiskey brand files for Chapter 11 bankruptcy
Building this type of business is even more impressive when it's done in an area where people have a passion. It's really hard to make your yoga studio, photography business or other passion plays successful.
That's also true for coffee-related and brewery-based businesses. There's a lot of competition in these spaces because so many people are passionate about beer and coffee.
During the Covid pandemic many people who'd built successful breweries, roasteries and cafes saw their dreams crushed. They lost business or had to fully close for months, which forced them to take on added debt at high interest rates.
Now, while Covid is largely an unpleasant memory, it has left a deep path of destruction in the cafe, roastery and brewery spaces. In most cases, that's because these were nice, modestly profitable businesses that could not afford added expenses.
Now, debt, higher costs and increased labor rates have forced another popular roastery and cafe chain into Chapter 11 bankruptcy.
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Switchback built a strong reputation
Switchback Coffee Roasters had a modest start when Brandon DelGrosso and a friend started the company back in 2010. The pair started by roasting coffee in a garage with the humble goal of becoming a catalyst for specialty coffee in Colorado Springs.
It was a slow path to success for the pair.
"While there were already some great local roasters, we felt a lack of emphasis on exploring the nuances of acidity and the true potential that coffee had," DelGrosso shared. "With determination, we acquired a small eight-pound roaster and set up operations in a garage, focusing on roasting for our immediate circle of family and friends."
Those efforts paid off as Switchback received the Bronze award in the Colorado Springs Independent.
"The following year, we received the Silver award, and by 2013, in just our third year, we proudly achieved the Gold award," he added.
Switchback now operates two cafes and its roastery. It sells beans nationally and has an outsized reputation for quality in the coffee space.
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Switchback Coffee brand files Chapter 11 bankruptcy
Switchback Coffee did not address its Chapter 11 bankruptcy filing on its website or its Facebook and Instagram pages. The company is still taking online orders and appears to be operating fully.
The company filed for Chapter 11 bankruptcy protection on Aug. 19 in U.S. Bankruptcy Court for the District of Colorado. Switchback Coffee reported having $50,000 to $100,000 in assets and $500,000 to $1 million in liabilities.
In the filing, the company said that funds would be available for unsecured creditors. Switchback also noted that its assets "include perishable goods or assets that could quickly deteriorate or lose value without attention."
More bankruptcy:
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- Popular Italian restaurant chain files for Chapter 11 bankruptcy
- Another distressed trucking company files Chapter 11 bankruptcy
The coffee roastery and cafe company reported that it has between 1 and 49 creditors. Switchback Coffee had under $1,000 in its bank accounts at the time of the filing.
Switchback's biggest creditor is the city of Colorado Springs, which it owes just over $55,000. it also reported an "unknown" level of debt to the IRS.
The company did not file a plan to fund its continued operations as part of its initial filing.
