Overdraft: How This Army Vet Fought His Way out of a Financial Ambush

Portrait illustration of Carl Churchill, founder of Alpha Coffee, standing against a grey background in a yellow button down shirt.

In this series, I speak with people who know what desperate feels like. While now blooming into success, these founders share with me their deeply personal financial struggles and lessons learned on their way back to black.


Carl Churchill’s booming bean business launched on an “auspicious date” in 2010: September 11. For this U.S. Army vet, the date served as a reminder of his past and what he fought for. Carl’s deployment days are behind him and he’s instead working side by side with his wife, Lori, in their Salt Lake City cafe, Alpha Coffee. But their giving-back effort, Coffee for Troops—a program that’s already sent 16,000 bags of beans to overseas units—ensures that Carl’s heart is never far from the front lines.

 

Alpha Coffee started as a survival tactic. When the 2008 recession hit and Carl lost his job, his family lived on dwindling emergency savings, selling their possessions to stay afloat. Then, they changed their battle plan: they’d cash out their 401(k) and sell coffee beans. The Churchills slowly grew their online business out of their basement and into a thriving physical storefront. They’ve recovered much of their old lifestyle, too—and Carl and Lori hustle seven days a week to keep it that way.

Here, Carl explains the silver lining of losing almost everything, and how military life helped him put all of it into perspective.

In Carl’s words:

In 1979, I graduated a year early from high school and joined the Army. I’d grown up around Vietnam veterans—my father, my school teachers, my coaches. I received a scholarship and started as a 17-year-old private. I was in Desert Storm and Central America in the mid-1980s. I was in the Balkans and had lots of tours through the Middle East and North Africa. I ended up doing 21 total years in the military before I retired as a colonel. 

I don't come from a wealthy family. We had worked really, really hard to get where we were.

After getting off active duty, I found that because I had been in small highly specialized units where you were really close—literally your lives depended on people to your left and right—I was drawn to startup companies. I joined the tech and telecom sector and had a lot of success. A lot of companies ended up failing or being acquired but I was always like, “Hey, jump back on that horse.”

In 2004, I joined a startup software company that was in the construction mortgage industry. Our clients were all the major banks. We grew to about 150 people. We were just going crazy as the economy was booming and I was able to buy 10% ownership in the company for $75,000. At the time, my wife and I were doing extremely well. Nice house, kids in private schools. We had a Land Cruiser and a BMW. I don’t come from a wealthy family—we had worked really, really hard to get where we were.

Around 2008, we had a $10-million offer for the company, and I thought, “This is it. Here’s the exit.” Then, during negotiations, my partner, who owned 56%, decided to turn down the offer. About six months later, the recession started. We were actually on a trip in Dublin sitting in the airport when we found out. CNN was on the TVs and the sound was off, but you could read the subtitles: “Stock market crashed.” “Trading is ceased.” “Meltdown in subprime loans.” I looked at my wife and I said, “This is not good.”

I began immediately shopping out my résumé, but the recession was just gaining steam—downhill steam.

Within six months, the company was shut down. I began immediately shopping out my résumé, but the recession was just gaining steam—downhill steam. I interviewed for several positions, and I would make it through several rounds of interviews. Then they’d say, “You were our top candidate but there’s been a hiring freeze.” I started applying for lower-level jobs but everybody said, “You’re overqualified.” 

Luckily, we had an emergency savings fund, so we were able to pay the mortgage. We thought the savings would last six months. But after about three months with no paycheck, you start to realize things are not good. We were pulling our kids out of private schools and selling our cars. We were literally at a point where we were having yard sales just so that we’d have a little extra money. And there were times where I’d say, “Whatever we have in the pantry right now has to last us until next week, so let’s get creative.” Sometimes we were just making minimum payments on credit cards in order to buy groceries. We went about $100,000 in debt during that time trying to hold everything together and not lose the house. 

We did what I do not recommend anybody ever do: we cashed out our 401(k).

It was a financial ambush. In the military, if you’re in an ambush, you’ve got to move. If you get pinned down and just lay there, you’re going to die eventually. Your last option is to put your weapon on and charge into the teeth of the ambush. So, we did what I do not recommend anybody ever do: we cashed out our 401(k). After penalties and taxes, a pretty good chunk of change turns into not a lot of money. We decided that if I couldn’t find a job in the recession, then I'd create one. So, we started our company.

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I eventually found a job as a mortgage broker, which was really hard during the recession because nobody could qualify and nobody was buying new houses. It took me about six months before I got my first commission check. I did that during the day while Lori and the kids would take care of orders. And in the evenings, I would get online and try and build the business. We did that for several years.

There was this appearance that we were this large company with a warehouse but we were operating out of the basement. And we weren’t making enough money for me to quit my other jobs. But we kept at it, and we never gave up. Then, in 2017, we opened a coffee shop and I quit my full-time job. We're at a point now where this year we'll do a million dollars in revenue.

Once you've been to combat, everything else is an inconvenience.

Going through the process of basically losing everything was really impactful for us. Our kids were teenagers at the time. There were times where they were really mad and be like, “We're poor, and it sucks that we can't do these things that all of our friends can do.” A lot of the kids that they went to school with were fairly affluent so I think the contrast really played out for them. Looking back on it, though, it was a really great experience. I see both kids now are very careful with their money. 

It’s been a long and convoluted journey. It’s not like as a business owner you ever feel like you have arrived to where you can relax. You’ve just got to keep fighting every day. But once you’ve been to combat, everything else is an inconvenience. We feel really good about where we are now. We’re paying off our mortgage. We’re adding benefits for our employees. We’re doing good for the community. Our kids look up to us, and are very proud of the business that we’ve built as a family. And yeah, that’s a great thing.

Illustration by German Gonzalez