When Lucas Spinosa opened Black Sheep Coffee Roasters in Welland, Ontario, in 2015, he was only 21 and had no experience in the world of coffee, but he loved talking to people.
Little did he know he’d become a pioneer in bringing ethically sourced, freshly roasted specialty coffee to the Niagara region – building a community hub and even meeting his wife and now co-owner, Katie Spinosa, in that very store when she walked in as a customer.
For the first two years, Black Sheep didn’t roast its own coffee and instead sourced its beans from Monigram Coffee Roasters in Cambridge, Ontario. Monigram’s co-founder, the late Graham Braun, became Lucas’ mentor, teaching him how to roast coffee and taking him on his first trip to Nicaragua to meet with suppliers, a tradition he has maintained yearly since then.
Today, Black Sheep includes a full-fledged roasting facility and two cafés, with the roastery and second location sharing a space on a 100-acre farm in Fenwick, Ontario, as well as wholesaler and retail offerings. From easy-drinking coffees to dark roasts, there’s something to satisfy everyone’s caffeine craving – and baked goods for those looking for an extra treat. The business also caters to coffee lovers online with products ranging from standalone coffee bags to a full bucket of beans.
But one thing has remained the same from day one: A focus on people, from creating direct relationships with farmers to making everyone who walks through the door feel like they belong.
That said, there’s a lot that goes into serving each cup of coffee. Bringing in green coffee from places like the mountains of Dipilto in Nicaragua and roasting it in-house means big upfront inventory costs and razor-thin margins. Black Sheep turned to Square tools to help finance orders, optimize operations and keep growing with intention.
Balancing craft, community and cash flow
Black Sheep prides itself on working directly with coffee farmers across the globe. The goal? Sourcing coffee responsibly and bringing the highest-quality beans back to Canada to roast in-house.
“We often meet these farmers through Instagram. They’re the grandchildren of historical farmers – they speak English and they’re tech savvy,” says Lucas. “They’ll say ‘Hey, I see on your website you guys don’t have anything from El Salvador. We’d love to send you a sample’.”
But between rising costs – from milk and baking supplies to transportation – and the need to place large orders of green coffee upfront with revenue from the sales of drinks, retail bags and wholesale orders coming in gradually throughout the year, smart cash flow management is crucial to turn these conversations into long-term relationships.
“Three years ago, getting a pallet of green coffee would have cost me $140 to ship from Mississauga to Welland. That same pallet is now over $400,” says Lucas. “The more frequently you have to ship it, it just really eats at the bottom line.”
With margins ranging between 5–7%, protecting the bottom line is essential to sustain operations. Black Sheep needed financing for large inventory purchases, access to the right data to maximize profitability and tools to maintain its strong sense of community at scale.
How Square Loans and POS help Black Sheep finance green coffee and grow its roastery in Canada
Enter Square, which helps Black Sheep stay true to its focus on people, high-quality coffee and sustainability with tools like Square Loans, Dashboard, Loyalty and Invoices.
Confidently saying yes to big orders
Black Sheep often starts a relationship by purchasing a micro lot from a farmer, then commits to bigger orders over time. Ordering a small lot of coffee beans for $10,000 is one thing, but twice a year, the business needs to fund major coffee shipments worth three to four times that amount. The roastery has relied on Square Loans, which consists of invite-only loan offers based on sales history, to confidently fund these purchases.
“Square Loans saves our lives. In three, four months, we can have a loan paid off until we need one again,” says Lucas, who also uses the loan offers as a quick benchmark to assess whether the business is financially healthy.
“I know I’m doing okay when I get an email from Square Loans,” he says, noting that he’s been offered bigger loan amounts. Lucas can choose how much to accept depending on the business’s needs, and repayment is also flexible since it’s tied to a percentage of daily card sales.
Leading data-driven pivots
Being financially savvy also means making decisions based on data, even if they don’t match the original vision. The first iteration of the business, Black Sheep Lounge, was a late-night restaurant open until midnight.
But Square Dashboard revealed a game-changing insight: 80% of revenue was generated between 10 a.m. and 2 p.m. As a result, Lucas and Katie pivoted their focus to coffee, dropped the food program, changed the opening hours to 8 a.m. – 4 p.m. and rebranded to Black Sheep Coffee Roasters. “We’re able to track so much because of how integrated Square is into the business. We now know everything from peak times to days of the week,” says Lucas.
Measuring community
In the early years, Lucas was the only person behind the espresso machine. He got to know regulars by name.
As the business grew and he turned his focus to operations, his team continued delivering personalized service, offering freebies on the house to guests they saw regularly. But those untracked efforts often added up to hundreds of dollars a week and left behind people Lucas calls “invisible regulars”.
With Square Loyalty, Black Sheep Coffee created a six-tier loyalty program featuring rewards ranging from discounted/free drinks to discounted/free retail coffee and $50/$100 gift cards.
There’s now clear data to identify guests with tens of thousands of points who have been quietly supporting the business for years. And the human touch is still there – the team uses loyalty program insights to deliver gift cards on birthdays and give out hundreds of $10 gift cards to regulars at Christmas.
Streamlining systems
Even though it’s not a big part of the business, Black Sheep works with a handful of wholesale partners and Square Invoices has eliminated the need for extra invoicing tools and subscriptions. Instead of juggling a number of platforms to stay on top of wholesale and café sales, Black Sheep Coffee is equipped with a single, integrated system. Whether the team wants to invoice a wholesale partner or zoom in on the sales performance of one location, everything lives in one place.
Making service smoother
Square Register eliminated another friction point for the team: The potential awkwardness of swiveling an iPad screen towards guests to ask for a tip, something that shy baristas don’t love doing.
Being able to add images to menu items right on the POS screen has also made things smoother for staff, whether they’re entering a custom latte order into the system or adding a pastry to someone’s order. “When we bring on new hires, even if they’re not totally familiar with everything yet, they can usually figure it out just by looking at the images. It’s made training a lot easier.”
As Black Sheep’s volume increased to 250–300 drinks a day, the team is now testing Square KDS combined with Epson printers to replace pen-and-paper workflows with clear tickets and screens.
Streamlined, intentional growth
Square tools help Black Sheep balance financial realities with purpose. Equipped with the confidence that he can borrow and repay Square Loans funds based on sales performance, Lucas can continue the tradition his late mentor, Graham Braun, passed on: Building relationships with farmers, investing in quality and bringing out each bean’s unique character through the roasting process.
That level of intention extends to business operations. “By having a streamlined and consolidated business, which we can create through the metrics that we’re tracking through Square, we’re able to invest more energy, time and money in having a great product because we’re not wasting it elsewhere,” says Lucas.
The decision to drop the restaurant model has not only improved margins but also made the business as community-focused as ever.
“It’s actually easier to be a community hub when you’re a café. People take it more casually and come more frequently,” adds Lucas. “This is a place where you could have a first date, a business meeting, come with a group of friends or work solo. You can host and organize all sorts of community events here. That has really been the soul for us.”
Square Loyalty helps Black Sheep connect with its diverse, loyal base of customers even when Lucas isn’t on site, and the team leverages perks like gift cards and points to amplify the human element of the experience, like giving graduation treats to guests.
For Lucas, it has always been about people, after all. “As much as I’m passionate about coffee, I’m far more passionate about the community and that person-to-person relationship. Whatever the future holds, it’s going to involve some level of face-to-face community building,” he says.
