Starting a cafe and a wholesale coffee business was never on Kelly and Pavan Makker’s agenda. The two U.S. immigrants, a married couple, already co-owned two logistics companies. But in 2017, they started looking for a different business to get involved in. “Logistics is very aggressive,” Pavan said, “It’s a very tough business to be in.”

That summer while driving through Brazil, Kelly’s home country and the world’s top coffee producer, “we noticed these big, huge coffee farms and the idea came to us,” Pavan said. “Why don’t we indulge in a coffee business?” Neither knew a thing about coffee roasting at the time, but “we’re the kind of people who think if the chance of success is 50%, then we’ll jump right in and solve the problems as they come up,” Pavan said. “We’ll deal with the challenges and force our way through.” It’s the same attitude they’d taken in the logistics business.

For the next few years, Kelly and Pavan pursued relationships with coffee farmers in Brazil. They attended dozens of trade shows and talked to other specialty roasters. In 2019, they leased a 7,500-square-foot facility to roast coffee in Montclair, California. Their goal, at first, was two-pronged: They wanted to work directly with farmers and provide small-batch coffee to offices. “We wanted to service companies that wanted to give their employees a better product than Folgers, something they would really appreciate,” Kelly said. They also wanted to open a coffee shop so people could linger together over coffee and small bites — “We’ve always been big entertainers and hosts,” she said — and learn about the roots of the coffee they were drinking.

But then COVID hit, offices closed and the couple decided to pour all their energy into opening the cafe. Looking at numbers, Kelly and Pavan knew wholesale also would have to be a significant part of the business plan in the future. “Because of our logistics background, we are attracted to volume and number,” said Pavan. “Our mind-set is always volume derived.” And having a cafe, the couple realized, would be helpful overall, as its customers would “give us feedback on making a better recipe going forward,” Kelly said.

In October 2022, the duo opened Avatar Coffee Roasters in Santa Ana, California, to rave reviews. Kelly and Pavan talked to ICSC Small Business Center contributing editor Rebecca Meiser about how the cafe ended up located in a luxury apartment complex, what they wish they had known before settling on a location and tips for others looking to start a retail establishment.

How did you decide on your location, and how did you compete for it?

Pavan: Landlords wouldn’t really pay attention to us, considering this was going to be our first retail venture, but our brokers found several options. Some were in strip malls. Then, they presented the option of being embedded in a 1,400-unit apartment building that was still being built. We thought having the apartment complex above us would provide a little bit of security for our business. We also liked the location. It was in between Tustin, Irvine and Santa Ana. We really didn’t think we’d have a shot. We heard other bigger chains had applied for that same spot. We decided we were going to invest in a very flashy design to attract the landlord, considering we didn’t have any prior cafes to show him our experience and our model. We met with our designer, and they came up with a beautiful concept. We presented that to the landlord instead of just an application. We’re the only ones that presented with an actual concept, and he was floored, so he gave us the opportunity.

What was the concept?

Kelly: I’m from Brazil, and Pavan is from India, so our cafe we wanted to be a fusion of cultures because that’s what we are.

Pavan: Our name, Avatar, for instance, is a Sanskrit word. The direct translation in Sanskrit of an avatar is God in the form of a human, and our most popular blend is a nitro cold brew that we call Amrit, which means immortality. In our cafe, we really blend concepts.

Kelly: We started with the intention of bringing a warm feeling into the cafe. From the coffee to the [sunlit] design to the dozens of plants, we just wanted people to come inside and feel that warmth. We wanted them to think: “This is where I want to be. This is a nice place to sit down and have a good cup of coffee.” And that kind of grew into also having a nice little sandwich or grabbing a bite to eat.

How did you come up with the design?

Kelly: We had been dreaming of our cafe for a long time before it opened. When we met with our designers, I had a lot of ideas and pictures from Pinterest. Every time I would see something that I liked, I would save those pictures. When I was talking to the design team, I sent the photos to them, and they grasped the color scheme, what we wanted to achieve and what our ideas were.

What was the buildout process like?

Kelly: It was a little painful, to be honest. COVID delayed our opening by a lot. We had a time line for when we were going to open. That was pushed back for almost a year. A lot got delayed with supply chain issues and permits, and our cafe design was so unique. It’s not something that you can just walk into a Lowe’s or Home Depot and just order regular light fixtures. We had to change a few things around because things were not available anymore, but when we opened, everybody was in awe and we were very, very happy about the results.

How did you finance the opening of the business?

Pavan: We internally financed it. We drew from our two [logistics] businesses. Everything was from us. We didn’t have any bank or anybody behind us.

Kelly: All that we have in our savings, every single penny, is right there.

Today, how much of your business is wholesale and how much is from the store?

Pavan: Seventy percent of the business is coming from the cafe and about 30% wholesale, but we expect that to change. We’re redesigning our roastery. We’re putting together a whole new marketing strategy, developing fliers, and we’ve got some more sophisticated equipment that’s going to get installed between late May and early June. From that point on, we’re going to really work hard towards developing a much larger, wholesale footprint.

Where do you want to be in five years and 10 years?

Pavan: Our goal in five years is to have at least three to four more cafes and a healthy, steady wholesale business.

Kelly: I see us building a brand. Something that people will know by sight and say: “Oh my God, that’s Avatar Coffee. They are doing something different.” I want people to know more about what coffees we are bringing in, why we’re bringing them in, who you are helping by coming into Avatar and buying our coffee.

Looking back now, is there anything you would have done differently?

Kelly: There is one very, very important point that we missed. We have huge challenges with parking.  The streets around that complex — none of them have parking. And in the complex itself, the parking is very limited. Customers are constantly asking: “Where can I park?” So we lose a lot of sales due to that. If we go to open another cafe, the first thing I’m going to ask is about parking.

And I feel that it’s a very important point because it hurts every cafe owner out there: When we opened, we provided free internet to everybody without any controls, so people would park themselves there for five, six hours and think: “OK, well I bought a cup of coffee.” But at a cafe, you need to have turnaround. You need people to come and go. A lot of new people would come to the cafe and leave because they didn’t have a place to sit down. It hurt our business in the beginning, so we recently made the very hard decision of putting a control on the internet with a password. After every hour-and-a-half, it can be renewed with an additional purchase.

What advice would you give other entrepreneurs thinking of starting a retail business?

Kelly: You have to weigh the advantages and disadvantages of opening a business on your own. California is one of the worst states, we’ve learned, in terms of rules, regulations and taxes. Before opening a cafe, look at not only what you want to do but where you are, what is required and how much is it going to cost. We had another company that could give us the sustainability [of a safety net to fall back on], but a lot of people out there have only their savings and they have to be careful. You know, it’s not easy. It’s beautiful. It’s a dream come true, but it’s not as easy as it seems.