Eleven months after it went “anti-profit”, Muddy Waters coffeeshop on SE Belmont says it will have to close its doors unless it can raise $10,000 by the end of the week.
Four co-owners/baristas took over the shop last February (more on that here), aiming to turn the sofa-laden cafe into a community center run on an “anti-profit” model that would pour any income other than their own four salaries back into good causes. In the last year, the cafe’s calendar has been packed with open mic nights, movie nights and open jam sessions.
But things haven’t gone according to the financial plan. Co-owner Sarah Dread says the cafe owners have been working for free since opening last February, supporting themselves with second jobs. “For the last few months, we’ve gotten to the point where we’re losing money every day we’re open. Business has been slowly declining,” says Dread. The cafe has failed to claim 501(c)3 non-profit status as it originally planned.
Though Dread says Muddy Waters’ landlords have been very accommodating, the building owners as well as the cafe co-owners have reached a breaking point. “It’s been a long time coming. We’re almost always out of at least some things because we can’t afford to buy it,” says Dread. The cafe is hosting fundraiser events daily through Sunday at the shop (2908 SE Belmont), including a pancake brunch this Saturday at 11 am.
Update 1/7: Muddy Waters says it will now be open 24/7 until Sunday and, as of Wednesday night, they’ve raised $1,800.
sounds like their attempt at “anti-profit” was a smashing success!
I would put forth that things are going exactly as they planned. (also failed to plan in this case with the 501c3)
Where did these children go to business school?
Was it a place where words have no meaning and anti-profit (profit=making money) does not mean losing money?
@D – That was my first reaction, too. The original article talked about the complete lack of experience of the 4 co-owners…
But even so, I do have to give them compliments on the number of events they’ve had, and how successfully they’ve promoted the place, and how much interest and public involvement they’ve been able to drum up. I might be able to draft a better monthly financial report or something, but I’m sure I couldn’t have gotten as many people in the door as they did.
I think the word I’d want to use here would be “schadenfruede”
Now if you could get them in the door and spend a buck, heckyeah
I remember the original post on this. Sounded like nice people giving it a try.
But I am a little confused on how a cafe can’t break even with four dedicated people working pro bono…
I love Muddy Waters and am sad to hear about this. As cool of a coffee shop as it is, it was never run very well. Many times it would be closed when the hours would claim it would be open. Either they were forgetful or they just thought that people didn’t want coffee earlier than 10am on weekdays. That said, I certainly enjoyed the place while it lasted.
i can’t get down on someone with genuine good intention. kudos to anyone who has dared to chase a noble dream in the face of naysayers. true patriots. it’s a bummer intentions don’t pay the bills. good luck.
Oh God, now where will we go in Portland to get Coffee? PS- I need $10,000 too!
yea, that was the ONLY coffeshop in Portland where free loading hippies hung out like they owned the place! oh, wait- they DO! Oh, my, goodness. WHAT a predicament. I would really like to add that the statement “working for free” is a flat out lie, in case anyone cares. They all had their bills PAID for each month by the profits the store made, and got TIPS to boot- for smokes and booze etc. Their kindhearted naive VOLUNTEERS, however, DID work for ONLY TIPS, UNINSURED, and taken utter advantage of. There are vagrant, thieving hippies LIVING in the shop, eating away the merchandise. The term “second job” is also a loosely used term. But i will refrain from even going there. Fundraisers they have had go to pay the co-owners bills, because they cannot grasp the idea of a professionally run, for-profit, legally occuring business. If a homeless refuge is what they wanted, they could have just done that, without the circle jerk title:”community anti-profit coffeehouse”.
How arrogant and childish can these comments be?
For what it’s worth Muddy Waters isn’t the only coffee shop to be struggling. Chance of Rain just off Hawthorne also went out of business a couple months again…..and they’ve been open and well established for several years!!
It is not just the people running it. Businesses including coffee shops and restaurants all over town are struggling right now. Go walk down nearly every business sector and you’ll find businesses that are massively down or closed in recent months.
Wake up, it’s far more than a business model that’s the issue…..it’s called “the economy.”
Nah, it’s called “Starbucks”. The encroachments of big chains on Portland is taking its toll, and unfortunately under the cover of a “shaky economy”.
i am actually friends with a “chance of rain” ex-owner. Completely different situation. Starbucks is delicious, and not full of free-loaders with no respect. Suddenly the line between douche-bag and hippie is gone. Now the the two words are an inseperable pair. I’m not a hippie-hater- just a Portland Hippie Hater. Since when does being self-absorbed- mentally ill -hypocritical- lying -snakes make you a good person who believes in community and peace and love? They are no better than the government. In fact, I’d rather suck ALL of congress off than get a free hug from such “patriots.”
The reason for the failure is simple. Profits not only provide money to operate but information. When you run a business for profit it forces you to evaluate and analyze the aspects of the business that help keep costs low and sales high.
It makes management more effective because there is a reward for that effort. One of the key things you do is make sure you are providing your customers with value. The way you know you are doing all of these things is the profit you have left.
There is a common assumption that non-profits can provide goods or services at a lower cost because there is no markup so they can keep prices lower. This is usually not the case however as inefficiencies creep into the operation as there is no incentive to economize. There is also less incentive to provide good customer service. Think of any government agency you have dealt with for examples.
[COMMENT DELETED: UNNECESSARILY ABUSIVE LANGUAGE.]
…they must have gone to Harvard!
They must have gone to Harvard!
This was a common “business plan” in the Haight Ashbury area in the 60’s and they didn’t fair any better. While I was a real hippie and not one of these pseudo hippies like today, I was smart enough to know that these types of business plans do not work.
Profit needs to be stored up in the good times so that they can be used to get through the bad times. If profit is given away then in hard times there is nothing to fall back on.
“The cafe is hosting fundraiser events daily through Sunday at the shop (2908 SE Belmont), including a pancake brunch this Saturday at 11 am.
… they’ve raised $1,800″
Stop donating!!! It’s going against their policy!!!!
The problem is, there was ZERO ACCOUNTABILITY with the money that was made. Owner Mike Lynn had a blank check to do whatever he wanted. ‘Anti-profit’ and ‘community involvement’ sound really good on the outside, but that really was all a giant facade. Plenty of money was pumped thru muddies, but bad stewardship and lack of vision is what did them in. This isn’t the first ‘bail muddy waters out’ event that had taken place. it was constantly muddy waters asking the community to contribute to their needs and never the other way around. It was a hang out, but never a community group. Muddy Waters Coffee Shop on Belmont was simply a place to buy drugs, and hook up with dirty hippies. I am personally glad it failed. One less coffee shop in Portland. who cares!