There is no better way to learn the ins and outs of starting any small business than to talk with business owners who have done it—either successfully or not. In fact, sometimes those who have not been successful are the ones you can learn from the most!
The following specialty food businesses are still in operation. You will see that their owners are passionate about what they do. They will occasionally be mentioned in other parts of this book with tips in pertinent chapters specific to a topic. Therefore it seems appropriate that you meet them near the beginning of this book so when they are quoted later you’ll already be acquainted.
Susan Desjardins Burns’ husband’s aunt developed a toffee recipe in the ’70s in the Seattle area and sold it wholesale as well as in her candy store. In her 80s, she was still making the toffee which had become popular. But while the toffee was up to its usual standard, the 80-year-old candy maker started to let business-related things like licenses lapse. Aunt Lila was ready to give up the business and offered to let Susan and her husband take the recipe and continue the family tradition.
When it became clear that Susan would be the toffee maker, she began to get her arms around the business. “There was a little guilt factor,” Susan admits with a smile. “You have to do this or my toffee recipe will die with me.” Susan, a nurse by training, was not a baker, not a chef. Aunt Lila taught her everything. “I changed only one thing about the recipe,” she says. “I use agave nectar instead of high fructose corn syrup.”
That was in 2005. Five years passed and the toffee was making a profit and she was able to save a little money. Up to that point, Susan had been renting space in a commercial kitchen, which meant it was a shared space. “I found that hard,” she says. So she used her five years of success and savings and built her own commercial kitchen in a garage at their home.
In Washington State, the Department of Agriculture regulates wholesalers. Susan contacted them to look at her space before she spent the $24,000 it took to build the commercial kitchen. The representatives gave her some advice on how to do it. The kitchen was designed to be sealed from the garage and with its own entrance.
She filed her paperwork and design to the state. “There were fees, but I didn’t feel they were excessive,” she says. Susan feels this upfront interaction with the regulators prior to building seemed to make the process work better. Some of the regulations are a little vague and she was able to get clarifications—for instance, whether a floor drain was needed, which would require some excavation. Her plan was approved in record time, she built her kitchen, and she is now very pleased with that decision. “I know what is going on in my kitchen,” Susan says.
Confectionately Yours has no other employees besides Susan. “It is too much expense and I feel you lose quality,” she says. Her college-aged daughter created the company website. The only printed materials she has are business cards. Her main marketing is doing demos at each one of her retail outlets four times per year. This helps her remain on their minds in a competitive market where stores are trying new stuff all the time.
“I wasn’t keen on it at first,” Susan admits about taking on Confectionately Yours, “but now I love it. I love being self-employed.”
Kitchen Debauchery Jams and Jellies
The first time Joni Van Gelder cooked, it was at 12 years old as an au pair for five children. The only thing she knew how to cook were grilled Velveeta cheese sandwiches. She expanded her repertoire to spaghetti and meatballs and kept expanding it as the kids grew older.
Years later, she married a man who was raised in Holland and Mexico. Her mother-in-law was well-traveled and had culinary expectations of her daughter-in-law, showing her how to prepare meals and fancy appetizers. “This got me interested in learning about cooking,” Joni says.
The company she now works for has annual themed parties, and the first time she contributed food, the company got wind of Joni’s cooking skills. They started hiring her to cook for the party. Then she started getting catering jobs.
“My shortcoming,” she says about taking this catering gig further, “was that I did not have the kitchen to do a catering business from my home. I couldn’t do it above board [with the food licenses necessary] so I didn’t do it.”
At some point Joni added jam and jelly making to her growing list of food talents. “I started going to local farm stands and picking massive amounts of fruit.” She started making her own jam and giving it away as gifts. People loved it and asked for more. At one point Joni wondered, “Why the heck am I giving it away?” An accounting friend offered to do a pro forma business P & L, and Kitchen Debauchery was born.
The Homestead Act had just been passed allowing an easier entry into homebased food businesses that dealt in foods that were not considered risks and had other criteria for keeping businesses small. Joni documented everything so if anyone had questions she had plenty of backup.
A Kitchen Debauchery newsletter went out regularly. She created a price list. And mostly the business was a success. But a full-time job, a couple of new grandchildren, and the inability to expand the business without considerable expense has left Kitchen Debauchery on the sidelines for the time being.
The exciting news for Joni is that she is in the midst of designing a new house to put on her New Hampshire lakeside lot. While Joni isn’t building a new house just to have an expanded kitchen, it is definitely a benefit that would allow her to take the business to the next level. This is what is taking up her free time at the moment.
Besides truly believing in yourself and your product, Joni advises not starting out too big and not overwhelming yourself from the start. “Think as small as you can, then cut that in half,” Joni advises about starting a small specialty food business. “It’s like adding salt to soup—you can always expand.”
Lincoln Olive Oil Shop owner Rob Baker initially hooked up with some shop owners in Colorado for whom an olive oil shop was working well. They had shops in Fort Collins and Boulder. Using that model, Rob opened his shop in Lincoln, Nebraska, whose historic Haymarket district offered a similar venue to those in which the Colorado shops were doing so well. “We tweaked a few things for the local market,” Rob says, but otherwise the setup for his store is basically the same as the ones he learned from. Everything comes to them wholesale and they bottle in the store; 7 to 8 percent of their sales are from online orders and another 7 percent from offsite events.
The store itself is organized as a tasting bar—customers get a free guided tasting tour around the store, testing olive oils from traditional 18-year-aged to oils infused with things like garlic to dark chocolate and cranberry pear.
Rob advises specialty retail startups to never underestimate the importance of location. “On Saturdays, the largest farmers’ market in the Midwest wraps around the front and back door of the store,” he explains. “No matter what your business, location is critical.”
Rob tried a shop in Omaha in a mall location, but the sales were not good enough to pay for the costs associated with being in a mall. The Lincoln Haymarket location has worked perfectly.
In his kind of business, Rob also explains, you have to do more than just turn the “closed” sign to “open” each morning. At $20 per bottle, his olive oil is not an inexpensive purchase. It’s important to educate customers so that they are confident in buying your product and knowing how to use it. To that end, they have both public and private cooking classes at the store. They conduct off-site events as well to speak about their olive oils and the services the shop provides. And on top of all that, they have a nonprofit fundraising program. If that isn’t enough, to add to the shop’s appeal, Lincoln Olive Oil Shop also carries a wide variety of other gourmet items such as cheese, pasta, spices, and a wide variety of sauces focusing on Nebraska-made where possible.
A store like this is labor-intensive from a customer service standpoint, so staffing is key. “You need to provide customers with a total experience,” Rob explains. He has employees, especially over the busy holiday season and on the Saturday farmers’ market days.
Rob has a background in marketing and feels that marketing is not only something he is skilled at but is critical for the shop’s success. “For 12 years I opened new stores for Walmart,” he says. “When you open a Walmart store, people just come. That’s not true with a small specialty food business.” Surprisingly even to him, Rob has found newspapers to be the best advertising medium for Lincoln Olive Oil. He has joined a unique program with the Lincoln Journal Star where they offer a weekly deal to readers. For $25 consumers get a $50 gift certificate to the business featured that week. The consumer sends the money to the newspaper and the featured business gets dollar-for-dollar value in advertising in the paper. Lincoln Olive Oil honors the gift certificates and gets exposure to new customers and the potential of the customers redeeming the certificate buying more than the gift certificate’s value. And of course the net cost to him is much less than the retail value of the $50. It’s a win-win in Rob’s eyes.
They stopped radio advertising but continue advertising on TV only on the ABC affiliate during the daytime foodie show, The Chew. By focusing, Rob says, the results are tenfold over what he calls the “whack-a-mole approach.”
After all these marketing efforts and getting customers into your retail store and capturing them with your incredible product, enticing displays, and education, the final key is to get them coming back. To be successful, Rob warns, “You have to turn those people into repeat customers.”
Yummy Yammy of Vermont was born of owner Lisa Johnson’s desire to get the nutritious so-called “super food” sweet potato into her two young daughters’ diets more frequently and easily. U.S.-grown sweet potato salsa (with no tomato!) was her solution, and, as they say, the rest is history.
Lisa, who ran natural food stores for many years prior to starting Yummy Yammy, based her business on the premise that “products labeled ‘food’ should have nothing but food in them” and that food that is good for you can also be delicious. Her salsa has no fillers, preservatives, or chemicals.
Lisa is convinced that once people try her salsa they will be repeat customers and they will tell all their friends. To that end, while the thought of having a retail store never crossed her mind, she is often out doing demos in the stores that carry Yummy Yammy. If you are going to go to all the effort to do demos, Lisa says that you should make a point of telling people to spread the word. She also created the Yum-bassador program which gives you free shipping on your first Yummy Yammy order on Amazon.com. From there she is convinced you will be Yummy Yammy’s best advocate and spread that all-important word-of-mouth advertising. Lisa also does other unique things like giving jars as prizes to trailrunners, a good target market for her healthy product.
Like many specialty food startups, Yummy Yammy started in Lisa’s kitchen. Now she has a co-packer who bottles and labels, and she goes to every production run.
“It has taken me five years to find my target market,” Lisa explains. When you figure out who your target market is, she says, “figure out where they are, where their conversations are taking place, and join those conversations.”
Like most of the startup food businesses we talked with for this book, Lisa makes one point loud and clear: It takes a lot more money than you think to get a business like this off the ground and to the point of feeling like it is a success.
“I thought five to ten thousand dollars,” she says, “and I’m going to get started, reinvest, and grow. I really believed that.” She learned that you either have to realize it takes a lot of money or a long time to get beyond the startup phase. “Either plan to set aside a lot of money or find an investor right away. And don’t forget, not only is it very expensive to get into the specialty food market, but you don’t get paid right away; you have to make your product in advance and store it with an average of 90 days for the money on your sales [from wholesaling] to come in. In the meantime, there are a ton of expenses—things like promotions, demonstrations, and giving discounts.” And if you’ve invented a new food, like Yummy Yammy, it especially takes time. “It takes a lot to be the first,” Lisa says.
Another piece of advice Lisa has is that “it’s a great time to experiment while you are small.”
Jonathan and Sally Walpole of Wolfeboro, New Hampshire, started their chocolate business ten years ago, but it all started way before that. Jonathan’s courtship of Sally included a special Valentine’s Day box of chocolates that he had learned to make himself. She married him, of course, and he has been making chocolate ever since.
They moved to the Walpole family homestead and built a commercial kitchen on the property. There they make the chocolate bars that grace many retail countertops around the region. The home production center works out great. “We can take breaks when we want,” Sally says, who also has a pottery studio at their home. “It really suits our lifestyle.” And the day of this interview, their business had just become completely solar-powered.
“The first year,” Sally says, “we researched the kind of bars we wanted to make.” They chose a thick bar because it allowed for layers of chocolate with inclusions of nuts and berries that actually could be tasted in their entirety with each bite. They blend the chocolate to complement the flavors of the bars. Each chocolate base is a little different. It makes it a little more complicated, but it is just the kind of detail that puts the “specialty” in specialty food!
Just a year after starting the business, the Walpoles opened a retail storefront in downtown Wolfeboro, a resort town that has a large summer tourist influx. They thought the tourist aspect would make the store worth it but found on a day-to-day basis, people wanted to buy the more inexpensive candy bar with a local label to give as vacation gifts. And, ironically, local folks tended to look at the chocolate bars as tourist purchases. They began to feel like the retail store just took up too much time and tied them down, making it more difficult to visit children and grandchildren. They thought the retail shop would give them visibility in Wolfeboro with the skyrocketing summer population. And even though the shop has been busy during July and August and around the Christmas holiday, that just wasn’t enough to make it worthwhile. Unwilling to spend their profits on employees, the Walpoles had recently decided to close the retail shop—again, a business decision based on lifestyle choices—letting other retailers sell the bars while they once again focused exclusively on production. Wholesale orders make up 80 percent of their business along with large orders for special events and mail order.
Besides the chocolate and inclusives themselves, another unique aspect of Winnipesaukee Chocolates is a beautifully designed wrapper—three of the bars show original paintings by a local artist of local lakes and mountain scenery. They wanted their business to help support the local culture all around them, so they also try to use locally sourced ingredients like honey, and for other things like the printing of the wrappers whenever possible. And if that isn’t enough, Jonathan and Sally are highly conservation-minded and chose to donate a portion of their profits to local conservation groups, helping to preserve the landscape that they both love and in which they grew up.
They have lots of advice for those thinking about starting a specialty food business. But their focus of advice is related to that important time before you even make or sell that first product.
“Sit down with a business consultant and do a five-year plan,” says Sally. “The first year—or even three to four years—you aren’t going to make any money at it, or if you do, it will go back into the business. How will you deal with that?
“Think carefully before you get started. Make sure you think about how you really want to live your life and make sure your business fits into that quality of life. You want to have a living but you also want to have a life!”
Judy Gilliard sells her own signature blend of spices, but after a couple halting starts at selling it to a wider market, Judy now sells it through just one specialty store. She mostly enjoys making it to give as gifts to friends and family.
Judy’s life in food has included having both won and failed with restaurants and other food businesses. She has also been the guest chef on cruises, done product demos in specialty stores, and has written several books (The Flavor Secret: Using Herbs & Spices to Put Flavor Back into Low-Fat, Low-Calorie, Low-Cholesterol Cooking co-written with Joy Kirkpatrick, was the impetus for her spice blend) and has a longtime radio broadcasting career with a syndicated food program called Judy a la Carte. All of these experiences have given her lots of exposure to the specialty food market. Which leads Judy to reiterate the pre-startup advice that every other specialty foods producer has agreed on:
Make a plan.
Have funding for at least two years to support yourself while getting your business up and running.
If you can’t do the latter, start very very small with a limited product line.
And last, Judy feels that you need to really have a passion for the business you are starting. It’s such hard work that at the end of the day, the business needs to be very meaningful to keep you motivated.
These entrepreneurs have basically been there, done that. You would do yourself a favor by listening to their advice and thinking about how their experiences starting their specialty food businesses relate to your startup plans. Here are a half dozen take-aways from these mentors that came through loud and clear:
Plan ahead before you put a single food item for sale. And when you think you’ve planned enough, plan a little more.
Set aside a cash supply to carry you through the startup phase.
Assume that startup phase will be two or three times longer than you thought it might be.
Start a business for which you have a passion. In this business, it is hard to keep motivated to build something if you are just doing it for money. The money is likely slow to come.
Plan your business to suit the lifestyle you would like to lead. For example, if being stuck all day within four walls waiting around for customers to come in sounds like prison to you, don’t open your own retail outlet for your product. Make your product but leave the retail sales to someone else.
Carry your personal beliefs into your business—chemical-free foods, non-GMO ingredients, healthy choices, high-quality ingredients—and hang your toque (check the glossary!) on those beliefs. The people who share your beliefs will buy your product, and those who don’t know about these things will be intrigued and impressed by your devotion.