GARY: Next on "Start Up" we head to Gibsonia, Pennsylvania, to meet up with Kelley Costa, the founder of Churn, a business committed to coffee, community, and delicious homemade ice cream.

All of this and more is next on "Start Up."

♪ ANNOUNCER: Spectrum Business recognizes the importance of small businesses to local communities, so we're investing $21 million to help small businesses access funding to help them grow.

Spectrum Business.

More than an Internet, phone, and TV provider.

♪ The first time you made a sale online was also the first time you heard of a town named... MAN: Dinosaur.

We just got an order from Dinosaur, Colorado.

MAN: No way!

ANNOUNCER: Build a website to help reach more customers.

WOMAN: Wait, wait, wait, wait!

One more.

ANNOUNCER: GoDaddy.

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♪ My name is Gary Bredow.

I'm a documentary filmmaker and an entrepreneur.

As the country continues to recover, small business owners everywhere are doing all they can to keep their dream alive.

So we set out for our tenth consecutive season to talk with a wide range of diverse business owners to better understand how they've learned to adapt, innovate, and even completely reinvent themselves.

♪ This is "Start Up."

♪ The origins of frozen desserts are obscure, although several opinions exist about their possible history.

Some sources describe ice cream-like foods as originating in Persia as far back as 550 BC.

While other accounts say ice cream originated in the Mongol empire and first spread to China during its expansion.

Quaker colonists introduced ice cream to the United States, bringing their ice cream recipes with them.

Ben Franklin, George Washington and Thomas Jefferson were known to have regularly eaten and served ice cream.

Records kept by a New York merchant show George Washington spending $200 on ice cream in the summer of 1790.

Today I'm heading to Gibsonia, Pennsylvania, to meet up with Kelley Costa, the owner of Churn Homemade Ice Cream and Coffee.

From what I know, Kelley had to overcome several challenges to make Churn become a reality.

And being a fan of both coffee and ice cream, I can't wait to meet up and hear her story.

♪ ♪ ♪ Tell me how Churn came about.

KELLEY: I come from an extremely entrepreneurial family.

My father owned his own business.

My grandfather owned their own business.

Lots of people in my family have tried entrepreneurship.

GARY: Okay.

KELLEY: So we've always been encouraged to kind of follow what we want to do.

For me, when I turned 16, my dad was really adamant that we had to work, but he didn't really want us to work in a job that we weren't gonna learn anything from.

A small 400-square-foot ice cream store came up for sale in Bethel Park, which is neighboring to South Park.

And my dad asked me and my mom, he's like, "Hey, if I buy this, do you guys want to learn how to run it?"

We bought it in 1999.

GARY: Okay.

KELLEY: This is its 22nd season, it's still open.

Yeah.

And it's an old-school...

It's just a small little building.

You walk up to it, it's seasonal.

GARY: Okay.

KELLEY: So, when we first started, honestly, we just hired all my friends.

GARY: You were in high school?

KELLEY: Yeah, it was my last year of high school, and, um... GARY: Wow.

KELLEY: Yeah.

And it was my first experience, like, finding out what vendors were, because, you know, I didn't really know.

For all I know, we went to Giant Eagle and bought everything.

I didn't know there were big commercial warehouses.

GARY: Right.

KELLEY: So it was definitely a learning curve.

GARY: Yeah.

KELLEY: And then I will say sometimes what I think I did learn from that is, my dad is a very good businessman, but I think he could be stronger in numbers, and that's one of the reasons I chose accounting.

GARY: Oh.

So you went to college for accounting?

KELLEY: I did, yeah.

Accounting, marketing, and entrepreneurship.

GARY: Understanding like the mentality of myself when I was a sophomore in high school, to think about the level of responsibility it would take to run a business... NANCY: Right, right.

GARY: ...that's unfathomable to me.

How did it go?

NANCY: Ah.

It went excellent.

GARY: Okay.

NANCY: She enjoyed it.

The girls enjoyed it.

To this very day, they even come down to the store and say, "Mrs. Costa, you still have the store?"

And I says, "Yeah, Kelley's doing her own thing now, you know."

GARY: How long did you work as an accountant?

KELLEY: I worked as an accountant for about nine and a half years.

Right around 2010, I started getting, I don't know, more frequent migraines and headaches and stuff like that.

And I ended up right around that time getting diagnosed with a brain aneurysm.

And at that point, I really had no idea what I was in for.

GARY: Explain to people what's involved when you are diagnosed with a brain aneurysm.

KELLEY: An aneurysm is just a ball of blood in your brain somewhere.

But obviously, if it erupts, you're not-- I have a blood disorder, so I can't survive an aneurysm eruption regardless.

At the time, mine was, I want to say about 5.9 millimeters.

And so they told me like I'd pretty much have to have surgery within the next month.

GARY: Oh, wow.

KELLEY: Yeah.

GARY: How did that affect you?

KELLEY: I guess I was probably too naive at that point to be scared.

The actual surgery wasn't bad.

The recovery was, for that type of surgery, it was only about maybe a month.

And then I felt sort of normal.

The only thing that was different was my headaches were much more intense.

So instead of just like a throbbing pain, it would feel like someone was driving a stake through my brain.

GARY: Oh, my gosh.

KELLEY: And because of my work schedule, that's when I kind of realized, like, okay, I think this is gonna affect my performance, and I didn't want to do anything I couldn't be, like, the best at.

So that's when I started thinking, maybe I need to find something else to do.

And when I turned 30, I went to New York.

And me and one of my girlfriends walked into this old-style gelato place.

And they had, like, a little display that had about six ice creams that you could tell were recently made.

Then I thought in my head, like, "Okay, I'm gonna create a store where I can make ice cream, make it visual and create an experience instead of a product."

And then the reason I decided to do coffee was I knew I'd have to then input something to the store, because we're gonna have to start making the ice cream early because we make our ice cream every day.

GARY: Sell coffee while you're doing it.

KELLEY: Yeah.

So, I was like, "What can they do in the morning while we're just making ice cream so we still have a chance to make profit?"

And that's where the coffee shop came to me.

So then I started pulling the numbers together on what it would cost to just get the equipment and whatnot.

And I had $84,000 saved up from working and et cetera.

I happened to find a spot on Route 8 where the rent was reasonable and you had to do the full build-out, though.

Had I known now what that entailed, I don't know if I would have done that location.

But... GARY: Was it white-boxed already at least?

KELLEY: No, no, it was not.

Like, we had to saw cut the ground to put water lines in.

We had to get an electrician out to put an electrical box in.

I read online it's three to four months to do a build-out.

So I bought us a sign and stuck it in the parking lot, and we started, and that sign changed every month.

So it went from a three-month build-out to, like, a seven-month build-out.

GARY: Yeah.

KELLEY: We really were planning to open in August at the absolute latest.

We didn't get open until October 30.

GARY: Which is tough for ice cream.

KELLEY: Yeah, yeah.

And my dad was like, great, now we're opening in winter.

But I was like, "I got this.

I got this."

Someone from The Trib called me, which is a local paper around here.

And they were like, "Hey, we wanted to write an article.

We heard about your concept.

It sounds pretty cool."

And they did the article, and it went out the Friday before we opened, which we did our soft opening, and our opening weekend was great.

GARY: What year was this?

KELLEY: So we started, our first Churn opened in 2015.

And then in 2017, we started our build-out in Cranberry.

GARY: I mean, I have a child myself.

I have two kids, so to think of one of them having that sort of medical issue had to be very troublesome, worrisome for you.

NANCY: Oh, my god.

Worry is not the word.

I mean, there was a morning when she was in high school that I found her laying on the bathroom floor because she passed out, and we didn't know what was wrong.

So then we took her to a head doctor, and he looked at some of the old X-rays and he says, "Kelley, I don't know how to tell you this, but you have an aneurysm."

GARY: Yeah.

NANCY: You know?

And it was like, "What?"

GARY: Unimaginable.

NANCY: Yeah.

I mean, it was scary.

But she pulled through, my Energizer bunny.

[Nancy laughs] GARY: Right.

NANCY: She pulled through.

And she just keeps going and going and going.

She came down one day and says, "I've decided what I'm gonna do with my life."

Next thing you know, she's doing excellent.

"I'm gonna open up this place.

I'm gonna open up that place."

And I says, "Don't you think you're taking on a little too much?"

GARY: Yeah.

NANCY: And she says, "No, this is what I want to do."

♪ GARY: So the first location was obviously doing well, right?

KELLEY: Yes.

GARY: And what were the indicators at that time that told you it's time?

KELLEY: We had a lot of people coming in even from out of the area, like Wexford, Fox Chapel, things like that.

And the other indicator that we had was our location in Gibsonia had about eight parking spots which were full very quickly.

The other thing was, is we got a really good deal on a piece of property.

It was next to a pizza place and it already had, like, it wasn't like my first build-out, it had the HVAC system, it had a floor, it had, you know, it had an easy layout.

We would just have to tear stuff out.

GARY: How did it go?

KELLEY: Not great.

[laughs] We were on the wrong side of the road.

So if you're...you want to be on the side that people are driving into the city if you're a coffee shop.

And honestly I just didn't think it out enough in Cranberry.

GARY: You were on the driving out of the city... KELLEY: Yes, exactly.

GARY: Huge, huge thing.

It seems small, but can make a world of difference.

KELLEY: Yes, it's absolutely a huge thing.

GARY: People don't want to turn left.

KELLEY: No.

Especially, I mean, like those are busy roads in Cranberry.

So we quickly realized, well, I quickly realized like, "This is the wrong side of the road."

And then I was having to put in too much man time there and I didn't feel like I was getting enough out.

So that's when we decided we were gonna close out on the lease, move the equipment and go somewhere else.

GARY: That's a tough decision, but a lot of times you have to realize it's... it's not a failure, it's a pivot.

It's a move.

Because you want to keep things going you know, in the right direction.

Right?

But is it hard?

It is tough, right?

As a business owner, you put your heart into this stuff.

KELLEY: And the other thing was, too, is I was like, "Well, maybe this is gonna make people think Churn's a failure."

Like if we're closing... GARY: Right.

Perception.

KELLEY: Yeah, because I mean it was only our second location.

So if we close it, like, does it make us look like we're a failure?

So it was definitely a hard decision to make.

GARY: Sure.

KELLEY: But I definitely will tell you today, like, it was the right decision.

GARY: Good.

KELLEY: It absolutely allowed us to pivot in other areas, so it was what we needed to do.

♪ GARY: Alright, so heading to the south side location.

KELLEY: Alright.

GARY: Tell me a bit about that spot, if you could.

KELLEY: Okay, well, it's definitely our biggest build-out, and we painted the whole building pink because we wanted to, you know, make a statement.

And... GARY: Do you have to get approval from the city for allowing pink color like that?

KELLEY: Well, not only do you have to get approval from the city, but we're in the historical district, so we also had to get approval from the historical district.

GARY: Oh, wow.

KELLEY: Yeah.

So that was, that was a little harder than we initially expected.

But then our build-out actually went relatively smooth.

GARY: I noticed that your locations right now are all leases, correct?

KELLEY: Yes.

GARY: Why not own?

KELLEY: The other reason that we've decided to lease is A) you can negotiate terms, or when something does go bad, you know, you kind of have a landlord to lean on that kind of can help you out a little bit.

GARY: Yeah.

KELLEY: And also, we just were thinking, "Hey, what if at times they were gonna transfer ownership or something went wrong that we had to leave?"

So, for example, our first Churn ever, we just way underestimated the parking situation.

So if we would have bought that building, put all the renovations into it, then we kind of would be stuck there, and we only had eight spots, and it really was starting to impact our business.

GARY: And you were able to get out of the lease.

KELLEY: Yes.

♪ ♪ Alright, so this is our base.

So unless we're making dairy-free or vegan, this is pretty much the base we'll use for all of our mixes.

GARY: Okay.

KELLEY: So we open this and pour it in.

And this is gonna yield probably a gallon, maybe a little over a gallon.

So then we always have recipes and ingredients that we have to pull out in the process, okay?

So for this one, we use 24 of these cannolis.

GARY: Did you start with one of these machines?

KELLEY: Yep.

GARY: Okay.

From day one?

KELLEY: It was a little bit smaller.

GARY: Okay.

KELLEY: Yeah.

The machine we first started with, it was a tiny bit smaller, and it only yielded a good, like a gallon.

This one can yield up to three.

GARY: Okay.

KELLEY: Yeah, so we did go up a little bit just because our volume went up.

GARY: And out of curiosity, what does a machine like this run?

KELLEY: 20 grand.

GARY: 20,000?

KELLEY: Yeah.

GARY: Wow.

KELLEY: So to finish our recipe, we're gonna add in some chocolate chunks.

GARY: Okay.

♪ What's your most popular?

KELLEY: So every store it's a little bit different.

GARY: Yeah.

KELLEY: Oreo is Gibsonia's most popular since the day we opened.

GARY: Okay.

KELLEY: Cookie dough and mint chip are at Fox Chapel, they're the most popular.

But down here, it's more the sweeter stuff.

Cake batter is pretty popular.

The coffee flavors are pretty popular.

GARY: That's so interesting geographically, how certain flavors dominate.

KELLEY: Yeah.

Well, in Cranberry, we couldn't keep cake batter in the store.

Like, it wasn't worth opening if we didn't have cake batter.

So, yeah, they were, like, super sweet.

But here, the other thing here, the dairy-free are a lot more popular.

GARY: Okay.

More vegans and... KELLEY: But yeah.

More popular down here.

GARY: I gotcha.

KELLEY: Yeah.

♪ So now that our machine beeps and our time's up, we're gonna extract it.

♪ So now we're at the point that we're gonna to decorate it, prepare it to get frozen.

So for this, we always use what's in it to kind of decorate it.

GARY: Yeah.

KELLEY: A little bit.

So for this, we're going to use some cannolis.

Then we kind of use our bar here.

So we'll use some chocolate chips, since it's chocolate covered.

GARY: Makes it very appetizing-looking.

KELLEY: Exactly.

Many people buy with their eyes, so.

GARY: Exactly.

That's one thing, I've never seen the tops of the ice cream being served so highly decorated before.

KELLEY: Yes.

So now we're kind of done.

So now we'll blast freeze it for a couple hours, and then it'll be ready to serve.

♪ ♪ GARY: Tell us your name and when you started working here.

LEXI: So my name's Lexi, and I actually started working for Churn in October of 2015, when I was 15 years old.

GARY: So are you... is this sort of like a career option for you?

LEXI: Yes, and...

I don't want Churn to be my whole life, but I always will have Churn in my heart.

But I'm going to do my next step soon.

But Kelley is always gonna be like a huge mentor to me, and she's like another mom.

I'll be honest, she's just super important in my life.

So Churn is also important in my life, and I'll never leave.

I'll never leave Churn.

That's like when people ask me if they're like, "Oh, you're still working at Churn?"

Just like, I'll never leave.

GARY: What advice do you have for a young person who is considering going out into the workforce and getting a job right now?

LEXI: I'm all about working for what makes your passion grow or something that just like lights a fire inside you or something.

If you don't really love what you do, I feel like you're not really doing it to your best ability.

GARY: How do you approach social media for Churn?

KELLEY: We would not be where we are today without social media.

We've actually found it as a way to give incentives to staff.

So we have a lot of followers.

So a lot of our staff want to be on our social media because, you know, that's the thing.

So we can give incentives to staff.

"Hey, if you make me a good TikTok about something or an Instagram picture and we post it..." Like, you know, sometimes we'll run contests where, you know, the one with the most likes might get a cash prize or a gift card.

GARY: That's cool.

KELLEY: But yeah, we have done a lot with it, so we've tried to channel it, because here's the thing: These kids are way better at social media than me.

Then we can even do like, on social media, we can do polls and stuff to see, "Hey, do you like the coconut milk or the oat milk better?"

And it's the easiest way... GARY: Market research.

It's fantastic.

KELLEY: Yeah.

And people love doing it.

So, you know, so I will say like that's definitely helped us tremendously.

GARY: It's not often that you get the opportunity to make homemade ice cream, so of course I had to seize the moment and give it the old college try.

First, I poured in the cream base, and then two large stainless steel cups filled to the brim with crumbled Oreo cookies.

Next, I pressed the magic button, and then we wait, 8 minutes to be exact.

When I heard the beep, it was back to work.

I extracted the ice cream into a container and strategically placed a layer of crunchy pretzels.

A nice balance to my sweet and salty creation.

Another layer of cookie-filled ice cream and then more pretzels.

By this point, I'm like Pavlov's dog.

And now, the moment of truth.

Absolutely delicious and worth every calorie.

Are ice cream, homemade ice cream shops, coffee shops, is it profitable?

I mean, how are you doing in general?

KELLEY: Yeah, it is profitable.

GARY: It is?

KELLEY: Yeah.

We're doing well.

I won't lie.

2020 worried me a little bit because obviously our whole business is come inside and look at our stuff.

GARY: Right.

KELLEY: And then all of a sudden COVID happened and no one can come inside.

And we had to do everything takeout and through DoorDash and Grubhub apps.

So that worried me a little bit.

But we did pretty well.

We held our own.

We kept everyone staffed.

Every ice cream you make, we obviously have over a thousand different flavors.

GARY: Oh, my gosh.

KELLEY: Yes.

But we know, like, the input of the raw materials, so we pretty much can tell you the profit on, "We need to sell this many scoops until we hit break even on that gallon of ice cream."

GARY: What's the margin like?

KELLEY: So on some flavors, like, vanilla is like 70%.

GARY: 70% margin.

KELLEY: Yeah.

GARY: Okay.

KELLEY: But then there's other flavors, like peanut butter-M&M-pretzel, where we're gonna take it down a lot more... GARY: More ingredients.

Yeah.

KELLEY: Yeah.

You have more ingredients.

They're more expensive.

The thing we're having an issue with this year more than ever is, like, cup prices.

GARY: Cups?

KELLEY: We pay cups and spoons and like bags, things like that, we've seen like a 30% to 50% jump in price for like our raw materials.

So that's hurt us a lot.

Even our ice cream has, like, our basic materials have gone up a lot.

Those were kind of controllable because they were all about like 3% to 5%.

But, like, the cups, we've seen like cups double in price.

GARY: What's your, I guess, long-term growth strategy with Churn?

KELLEY: So my continuance plan was really, let's bring other people into it that would have a passion.

So I thought, like, "How could I do that?"

I love the build-out process, so, hey, I have no problem being a part of the build-out process, but I obviously can't run and manage all of these businesses, especially with so many teenagers under me.

Because I don't want to not be accessible to one.

And I don't want to seem like we're giving one Churn, like, you know, the lower end of the deal.

So that was what brought me into franchising.

And then I honestly started the FDD process at the end of 2020, and we only finished it and launched it in March of this year.

GARY: I understand it's a very expensive process as well, right?

KELLEY: Yes.

GARY: Getting that franchise document.

Around 100,000, something like that?

KELLEY: You could do it a little cheaper than that.

Depends how many parts you want to do yourself.

GARY: Okay.

KELLEY: There's, like, so many different tabs, so, I mean, you could easily get it done for, like, 50 or 60.

GARY: But still, it's a big expense.

KELLEY: Yes.

GARY: And has anyone been interested so far in doing a franchise?

KELLEY: Yes.

So we actually sold our first franchise, like, two weeks ago.

GARY: Congrats!

KELLEY: Yeah.

Thank you.

He is putting his franchise in Jeannette.

I've already been there.

So he's at the very start of his build-out, so, and he's got a little more to his build-out than I would probably recommend.

He's got to put in some water lines and stuff, which is always not fun.

But yeah, he probably has about, like, five months till he opens.

GARY: Fantastic.

That's really great to hear.

How does that feel as parents, when you see your kid... NANCY: Oh, my god.

GARY: ...create a goal, chase that goal, and then see it succeed?

NANCY: I'm so, so proud of her plus my son.

I mean, it's...

There's no words to explain it.

You just, you're just like, I'm just, like, in heaven.

I know that they are going to be taken care of when my husband and I leave this Earth.

GARY: Yeah.

Right, right.

NANCY: And that's what it's all about.

GARY: What would you say to those parents that have a kid that has a dream and wants to chase it?

NANCY: You got to believe in your child.

GARY: Believe in your child.

NANCY: For number one.

Believe in your child and what he can do.

If you can support him 100%, 110%, do it.

Because you got to let them know that the drive is there.

You want to be successful, we're going to help you.

If it works out, it works out.

If it don't, you just close up.

GARY: And then it's a huge lesson for the next time.

NANCY: Definitely.

GARY: How is your health today?

KELLEY: So we went in for my angiogram in 2020, and we found out that I had another aneurysm.

GARY: Oh, gosh.

KELLEY: And so this aneurysm, because it was, like, was right behind my eye, they had to do a craniotomy for, which I had never experienced.

My first one, they went through my carotid artery.

GARY: Is that brain surgery?

KELLEY: It is, yes.

So they remove part of your skull.

GARY: Wow.

And you had it done?

KELLEY: I did.

In 2020, yes.

GARY: Okay.

KELLEY: So the surgery was successful, but I guess when they were in there, they found another one, that like they wouldn't have had enough time to like operate on anyway, that was kind of, like, behind my head, so they couldn't see it in the pictures.

So, unfortunately, I, at some point, will have another brain surgery, because this one is on my left optic nerve.

That one probably will take the sight in my left eye.

So, I mean, pretty much we monitor it.

So I go in every year for an angiogram, and then we see like how much it's changing in size, what we could do.

And we just kind of work on it from there.

But, I mean, I guess if they had a prediction, I mean, people say, within five years I'd have to get the next one operated on.

GARY: Which means you will lose sight in your left eye.

KELLEY: I will.

GARY: You have such an optimistic, just a positive outlook on it, though.

KELLEY: Yeah.

I will say this.

I'm not gonna say that my health doesn't suck, but I will say it has definitely made me so much of a better person.

Like, it makes me take tons of risks that I would have probably not taken the other way around.

It makes me like live more for the day.

My dad always told us, like "Hey, you know, if you die tomorrow, what would you regret today?"

And I like think about that almost every day and like what I would change or what I wouldn't.

His other big thing was, like, "If you're sliding across home plate and you die, you want to be able to tell, you know, the big guy, you did everything you possibly could, like, you lived every moment and you did everything you wanted to do."

And I do.

I strongly believe in that, even now more than ever.

GARY: Some may think that this is an episode about starting an ice cream and coffee shop, but I believe there's a much deeper story here.

This is a story about living every single day like it might be your last.

It's about the challenges that exist with young people today and how we need to show them the importance of developing a strong work ethic.

It's about the need that many of us feel to make our family proud.

And regardless of any external expectations, you should always focus on paving your own path in life.

And what could be better than creating new and delicious flavors of ice cream?

Ice cream makes people happy.

But like most things in both life and business, it's best enjoyed in moderation.

For more information, visit our website and search episodes for Churn.

Next time on "Start Up," we head to Federal Hill in Baltimore, Maryland, to meet up with Colin Lang, the owner of Water Song, a restaurant that brings the traditions and flavors from his hometown of Yunnan Province, China.

Be sure to join us next time on "Start Up."

Would you like to learn more about the show or maybe nominate a business?

Visit our website at startup-usa.com and connect with us on social media.

♪ ♪ We got a long road ahead of us ♪ ♪ A long road ahead of us ♪ A long road ahead of us before we pay our dues ♪ ♪ We got a long road ahead of us ♪ ♪ A long road ahead of us ♪ A long road ahead of us before we pay our dues ♪ IAN: Awesome!

♪ WOMAN: Like, no, no, no.

GARY: Oh, for you?

Yeah.

Okay.

MAN: Ohh!

That's cheatin'!

ANNOUNCER: The first time you made a sale online was also the first time you heard of a town named... MAN: Dinosaur.

We just got an order from Dinosaur, Colorado.

MAN: No way!

ANNOUNCER: Build a website to help reach more customers.

WOMAN: Wait, wait, wait, wait!

One more.

ANNOUNCER: GoDaddy.

Tools and support for small business firsts.

Spectrum Business recognizes the importance of small businesses to local communities, so we're investing $21 million to help small businesses access funding to help them grow.

Spectrum Business.

More than an Internet, phone, and TV provider.

♪