Food

Small Food Business

Jennifer Lewis

The Soup to Nuts Resource for Artisan Food Entrepreuers

Episodes

Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)
26:14
2017-09-23 00:45:12 UTC 26:14
Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)

Finding and effectively working in a shared kitchen space can be one of the hardest aspects of food business entrepreneurship. We talk with Rachael Miller of The Food Corridor in this podcast for tips on how to find a space to work in as well as what you can do to work happily and efficiently in that space.

TRANSCRIPT:

Jennifer: We’re talking with Rachael Miller today of The Food Corridor. The Food Corridor connects commercial kitchen spaces with food entrepreneurs seeking rentable, licensed kitchen spaces. The platform includes tools like scheduling and booking, payment processing, and communication to support the ongoing relationship. Rachael, thank you so much for coming on today.

Rachael: Great, thanks for having me, it’s good to be here.

Jennifer: So, I want to start with as we begin today, I want to talk a little bit about the Food Corridor, how it works to solve a very real problem in the food industry. You know, what was the impetus for starting it, can you just give us a little bit of background behind it?

Rachael: Sure. One of my favorite parts about the Food Corridor is our story, it was started out of some academic research, which is I think really exciting to show the merger between academic life and real world, so our founder and CEO, Ashley Colpaart was doing PhD research at Colorado State University and she ended up getting into researching shared use kitchens and community kitchens and the history of them, and stumbling upon this really significant gap that we have in the US and actually around the world, and she found that there are so many … she actually found a couple things. So, there’s this enormous market gap, we found that there are often underutilized kitchen assets in a community that people don’t know about for a variety of reasons and we also found that kitchens that do exist are spending up to half a person’s salary a year managing kitchen clients, doing pretty noxious tasks doing things like invoicing often on paper, calendar management often still on paper, and then chasing down client documents like business licenses and health and safety certifications and really it just seemed like a little archaic and really inefficient, so Ashley was going through her research she really did see this enormous business opportunity.

And so, we started a couple years ago and we launched officially June of 2016 and we’ve been working to connect commercial kitchen spaces that are licensed in communities with food companies who need to rent out this space to prepare their goods.

Jennifer: So, you mentioned the term shared use kitchen, so let’s kind of, since we’re going to be talking about shared use kitchens and other components of that today, can we clear up some terminology first, because I get a lot of questions from listeners. What’s the difference between a shared use kitchen, an incubator kitchen, an accelerator kitchen, what do these mean?

Rachael: That’s a great question, especially for a food entrepreneur who’s looking to jump into a space and maybe they know they need a couple things but they don’t know what they should be looking for, and that’s really common from what we’ve seen. So, the three terms just to break it down, a shared use kitchen is really any kitchen that people can rent out to use or even collaboratively use as a co-op. So these are what we would call co-working spaces. Pretty simple, straight forward, there’s not a lot of bells and whistles. In a simple shared use kitchen, people rent out space, they control their own business, they manage their own market access and they go rent out the space, make their pizza, make their jams and jellies, wash their dishes, and then the kitchen bills them and that’s a pretty standard shared use kitchen model. Once it starts to get a little more integrated with programming, that’s where you start to use terms like incubator and accelerator.

An accelerator kitchen is shorter term, and this does translate into the general business start up world, too. An accelerator is usually for earlier stage companies they need a lot of hands on touching, they need a lot of coaching to get through the process, this might be someone who has done really well with their salsas, and by doing well, their friends love it and their families love it and they make it really well, but they don’t know exactly how to write a business plan or how to access a larger market or even how to get into that flirts farmer’s market. So that’s what you’re looking for in accelerator, is very defined programming and it’s really time bound. This is often a three to six month program that you’ll see entrepreneurs often graduate from at the end. So, you go in, it’s very intense, you work with professionals to get you to the next level and then you’re done and you might graduate into a shared use kitchen space or maybe you’ll go into an incubator.

That brings us to our third term, we talked about shared used kitchens, accelerators, and then incubators, which these are for growing and earlier stage companies as well, there is an element of programming and usually one of the greater benefits of being a member of an incubator is there’s an element of credibility that you get from being accepted into this community so you also are exposed to mentors and mentorship. And please know that this varies widely between kitchens, which is why it’s important when a food entrepreneur is touring a kitchen to see if this is the right fit for them that they do ask about resources that are offered by the kitchen and how the kitchen defines itself, really. So, does the kitchen think it’s an incubator, accelerator, and then how does each party define that?

Jennifer: And so then, kind of back to the previous question, so via the Food Corridor, would you say that most of the kitchens that are listed there and showcased there, are they shared use, are they incubator or a combination?

Rachael: It is across the board, it really is. We’re working with everyone from a restaurant or a bakery who has some underutilized kitchen space that they’re not running 24 hours a day, and they rent that out to someone who has figured out their business model, they’ve figured out their market, they just need a licensed space to rent and we’re working with some wonderful programs who are full incubators or accelerators. One of my favorite ones that I just blogged about recently is Hot Bread Kitchen in New York, and they work with a defined demographic in New York and it’s people who are still building to eventually find jobs and it’s often in bakeries, so they’re not only figuring out these culinary skills but really life skills as well. So, there’s a social component to it. And that’s, again, that’s not every kitchen. So it just depends on the mission of each kitchen.

Jennifer: And then just to be clear for listeners, you’re also nationwide, right? So, if there’s somebody listening here who’s from one side of the country and somebody from the other side of the country, they can utilize the Food Corridor. Obviously, there’s no guarantee, but they can utilize the food corridor to try and find kitchen space in their area.

Rachael: We are nationwide, and we’re also working in Canada.

Jennifer: Okay.

Rachael: So that’s an exciting expansion for us, we are not yet caught up to geographically search for kitchens, however I do have a lot of companies, we have a network on Facebook, it’s a private group called the network for incubator and commissary kitchens for shared use kitchen professionals asking questions and kind of collectively answering questions and I have a lot of food entrepreneurs who want to join that group, and it’s really not the right space for them, bu it’s interesting that their primary focus or reason for wanting to join the NICK is they’re looking for a kitchen in their area, which goes back to our first point in that there are so many underutilized kitchens around the country, we’re just trying to be that connector piece. So, at this point I would say yeah, reach out to us, we’re connecting kitchens and entrepreneurs every day. And it is nationwide.

Jennifer: That’s one of – just to have that resource, because I talk to folks, the biggest hurdle is … I mean you can’t get any of your licensing, you can’t get health permits, you can’t get anything and you can’t figure out your production until you have that space. And so, to be able to figure out that component of it is a huge piece of the puzzle for folks.

Rachael: Oh I think so, I think that it’s really daunting as well, because food law changes depending on where you are, state wise, county wise, and so to have a kitchen that can facilitate that relationship with the health inspector, to build out a commercial kitchen we’re talking anywhere from 250 thousand dollars upward, and it can go significantly upward. So, it really does help entrepreneurs get on their feet with the lowest startup cost.

Jennifer: I’m going to ask you a very open ended question because we talked about how there are different types of kitchen spaces but also even within those kitchens, they might have different resources available, and then we’re also comparing different state, county, country health laws. On the whole though, are there any recommendations you have as to what food entrepreneurs should be looking for or asking questions about the kitchen managers as they research to find the best kitchen rental for their business?

Rachael: Sure, this, boy, this really does depend on what a food company wants out of the relationship and what a kitchen can realistically offer. So, again a lot of these kitchens require a tour before they will take you on as a client, there’s often an application process, there’s a reason for that. If a food entrepreneur is trying a kitchen and they’re trying to figure out what a kitchen could offer them, definitely look at the relationship the kitchen has with their local health inspector. I think that everyone freaks out when you think about food health inspection, it is scary because your business is literally riding on that relationship. They’re not as scary as they seem, health inspectors are there for a reason and it’s a really good reason, it’s to keep your consumers safe and to protect you as a business owner.

If your kitchen and the kitchen manager can help facilitate that relationship, I think that that is something that is a huge plus for a company. If the kitchen is on good terms with the health inspector, that’s a great sign. If they’re a little maybe skittish about talking about it, or they are not … the health inspector is seen as kind of this evil entity, that might be a red flag for food entrepreneurs. Let’s see, another things is again, looking at what a food business would like to have in a slate of offerings from a kitchen, look at access to information. Is the kitchen manager uncertain about Cottage law or food temperature or sanitation resources. They should at least know where to point you. If they aren’t really sure about food safety resources, you should dig a little deeper and find out why. and then I would, let’s see … if you’re a food company that’s just jumping in, you’re going to ask about business programming, you’re going to ask about relationships in the community, do ask about kitchen growth. See where the kitchen wants to go, are they going to stay the same size they are, or do they have plans for expansion?

Jennifer: Oh that’s a good question!

Rachael: That might dictate how long you see yourself in that space. Look at programming, do they invite food entrepreneurs in to do classes for the community? Do they offer business programming for the entrepreneur? We’ve seen some shared use kitchens that have wonderful farmer’s markets, Hope & Main is a kitchen out in Rhode Island, and they have this great farmer’s market and their food entrepreneurs get additional exposure if they also go to the food market. And then resource buying. So, we just had a great question a couple days ago from a food entrepreneur who’s in the Midwest looking for some vegan ingredients, looking for some organic ingredients, which as we all know can be really expensive. And so does your kitchen offer a potential buying co-op option? Can you go in with the other baker who runs the kitchen out for the other hours and all buy your flower together?

And again, these aren’t all necessities, but that formula depends on what you’re looking for. Honestly, as a food entrepreneur who might just be starting out, you might not know what you need, which is I think very common and that’s okay. It’s awesome that you’re just taking the first step and touring a kitchen to expand your business. So ask about the other clients, see who else is working in that space.

Jennifer: You know, and I would add, because you talked about for example partnering from a buying perspective with the baker who uses the kitchen in the other hours, and that made me think to the scheduling, what hours is that kitchen or is that table that you would be renting, what hours is it available? Because that may dictate whether it’s going to work for you or not, if the only hours it’s available are between two AM and five AM, that may not work for your lifestyle.

Rachael: Definitely, yes thank you. That’s really pragmatic. When can you access the space? And some … how do I want to say this. Some kitchens have keyless entry keypads, some actually have hard keys which is a little scary id you lose your key, then you have to replace the whole system for the company. But do ask when you are allowed to be at the kitchen. The kitchens with 24 hour access are a great community asset, and we’re seeing more and more of those, so do ask about that.

Jennifer: So, you had mentioned … first of all, I want to just bring up, I loved the point that you brought up about health inspectors shouldn’t necessarily be seen as this real evil because they are providing the community with a huge asset with regards to safety, but it does also protect you as a business owner. I’ve always welcomed health inspectors into my kitchens, but I had never thought about it from that standpoint of no, having them in actually protects me as a business owner as well, so thank you for bringing that up, too.

Rachael: Oh, definitely. Again, it can be really daunting, but the sooner you just jump in and rip that band aid off and talk to your health inspector, the less scary it becomes, and I think that kind of business liability perspective, it’s an essential component to your risk and liability plan. And your insurance company who’s covering your business, this is important to them as well, so this is really a win, win, win.

Jennifer: Yeah. That’s a great way to look at it, thanks. You had mentioned obviously via the Food Corridor and via the Facebook group, NICK, you spent a lot of time interacting with kitchen space owners of all types. Based off of those interactions that you’ve had, what do you think that food entrepreneurs can do to really help solidify their relationship with the kitchen, the kitchen manager, the kitchen staff … if they find that kitchen they love, what can they do to really build and solidify that relationship?

Rachael: Sure, this list is so big but it’s so easy. It’s so easy, this is a working business relationship, but it’s also really personal. You’re co-sharing this space and it does get really intimate, right? You’re creating your livelihood as a business owner, and you’re doing it in someone else’s space. So, I would say for you as a food entrepreneur, have your business in order to the degree that you are aware of. So, if you know that you need your business licensing in order, come with your folder of documents ready to show the kitchen manager when you’re touring the space. Be aware of what you’re going to need to offer in that phone call with the kitchen manager, come with your documents, be ready to show that you are ready to cook and ready to sell to the public. And if you don’t know that, come with the questions to ask.

That’s a good starting point for that relationship. So, again I just think it’s important to understand that this is transactional, you’re paying someone to rent a space, but it is so much more than that. Shared use kitchens are such a key component of community building and of local entrepreneur growth and keeping local dollars in your community, and you can be a part of that if you’re really good tenants of your shared use kitchen. So, I think being as self sufficient as possible within your boundaries is helpful. And I think that the biggest point that has come up from talking to so many kitchen managers is that cleanliness goes a long way. We can talk pie in the sky about community and networking all we want, but you really need to wipe down your countertops. You really need to sweep up your space and be a humble and aware tenant. It’s really going to increase everybody’s experience.

Jennifer: You know, as you said that I flashed back to this … when I was working a shared use kitchen and it was one of these kitchens where, for example, there’s be multiple businesses in the space at the same time and we basically each had our own little tables to be working on. And just coming in one day with this huge list of stuff that had to get accomplished during my timeframe, and coming in to find out that the person who had been in that space right before me hadn’t cleaned it, I mean there was stuff all over the floor, the countertops, not just for the kitchen managers but for other people who might be working in that space with you and to build good relationships with them. I was ticked off that I had to spend half an hour cleaning this space before I could begin working in it. Yeah I guess it made me think, it’s not just the kitchen managers, it’s the other folks that you’ll be interacting with on a daily basis.

Rachael: Oh my gosh, that is a great example, yeah. It matters, right? Other people do affect you, and I think we’ve all worked in enough kitchens, or at least a lot of us have if you’re listening to this podcast, it’s really easy to get pretty aggro in the kitchen. We all know there’s really strong personality. But, sometimes you’ve just got to wipe that countertop that somebody didn’t clean up before you and it’s awful. But, then be that responsible tenant, talk to your kitchen manager, you suck it up that day, you wipe it down but as long as you … we’re all adults, right?

Jennifer: Act like it.

Rachael: Yeah. So, act like it, exactly. There was a kitchen I just toured in Cleveland, Ohio. The Cleveland Culinary … oh jeez. I’m going to forget their name. Cleveland Culinary Launching Kitchen. And they had several kitchen cooking spaces and there were entrepreneurs there at the same time and it just had such a nice flow about the kitchen. All the entrepreneurs knew about each other, they were excited about each other’s success stories, some of them had graduated recently out of the space, and it really did feel like everyone was kind of high fiving all day long. I think that speaks a lot to the caliber of the food entrepreneurs, as well as the kitchen manager, you can get that sort of culture in your kitchen.

Jennifer: You know, that’s a good point, the piece about culture because I feel now that I might scare folks away from the multi use kitchen simultaneous use. But also in the kitchen that I worked in, they didn’t have a buying program but basically the entrepreneurs all got together and said, “okay, we’re going to buy from this distributor, it’s a thousand dollar minimum for each order, let’s all go in on this,” so none of us had to shell out a thousand dollars, we could just buy what we needed and then get the delivery. And so kind of created a co-op model ourselves. And it was a wonderful community, you know of course anytime you interact with other people there will always be hiccups that happen along the way, but for the most part, getting into a kitchen like that that has a great culture can do a lot for you as a business owner in terms of resources and getting information, but also it’s nice not to always be working by yourself as an entrepreneur.

Rachael: Yes. Oh gosh, that’s a great point. I think that anyone who’s launched a business knows that it can be pretty lonely. You’re stuck in spreadsheets at three in the morning or you’re trying to get this business plan out or you’re trying to figure out the best copacker to use, I agree I think that just having those other people in your life who know what you’re going through can get you through to the next step. That’s a great point.

Jennifer: So we talked about some of the things to avoid, as well as some of the things to do, is there anything else that you can think of like, “hey this really helps.” It sounds like be clean, be courteous are the two big takeaways, is there anything else that food entrepreneurs need to know? I guess and be prepared, which was the other point you brought up of when you go in to talk to folks, be prepared either with your paperwork or with the questions that you know you need to get answers to.

Rachael: Definitely, I think there are some key offense that really can rub kitchen managers the wrong way and a lot of it is just about inappropriately stretching that relationship, right? It’s very communal, and you might know this person, it might be your aunt, it might be your best friend from the seventh grade who is making quinoa bars now, but really don’t stretch that relationship, this is a working relationship, so if you have a kid policy, a lot of kitchens have an age limit. You can’t bring any kids under 12 or under 16 or none, unless they work for your company. So, don’t let your kids come in and run around the walk-in. Paying late is something that we have tried to alleviate through the Food Corridor through we facilitate invoicing, so all of our invoicing is automated, so we try to help kitchens get their payment on time, so it all goes through our app so it’s all very easy to access.

And then hogging supplies in the kitchen if there are shared supplies, pots and colanders, and again this is not a resource every kitchen offers but at some point there will be a shared resource such as trash bags or paper towels, or countertop cleaner. And just be cognizant that everyone is working as hard as they can to get their food out the door. Make sure you know your boundaries, so read your contract, I would say that’s probably the number one way to keep things in good order is read your contract, confirm what you’re allowed to use in the kitchen and how much of it and when you’re allowed to use it and just make sure that you’re on the up and up. I think probably a good way to just generally do that is check in, check in with your kitchen manager and say, “hey, we’ve been here a couple months, we love the space, how do you think things are going?” Or, “hey we’ve been here a couple months, you know the company before us isn’t pulling their weight, how do we address this?”

Jennifer: Yeah, that is, again, that’s a great point. It’s one of those that seems so simple and so obvious, but yet, having worked in kitchen spaces, you can sometimes let those issues get under your skin and get aggro as opposed to trying to address them. Or, I just also love that idea of just approaching the kitchen manager proactively, and saying, “hey we love it, we’re super happy, what do you think, is there anything else we need to be doing or thinking about?” And that goes back to that earlier point of just building and solidifying that relationship with them.

Rachael: Exactly, yep, it goes a long way.

Jennifer: Well Rachael, I really appreciate this today, again as we talked about in the very beginning, having this kitchen space to work out of is critical for those food entrepreneurs who are not operating under Cottage Food Laws, it is probably the biggest piece of the puzzle, like everything else can kind of get figured out if not immediately, eventually it can get figured out from packaging and production, processes and all of that, but you need to have that kitchen space, like I said, in order to get your licenses so that you can actually begin selling to the public like you want to. So thank you so much, both for taking the time to talk to us, but also for you working with the Food Corridor to create this resource for food entrepreneurs.

Rachael: Absolutely, it’s fun to talk about this. If anyone ever has any questions about shared use kitchens or they’re not quite sure where to go, we are happy to talk to you, so even if it’s just a little Facebook chat, or shoot us an email, and we’re ready to talk.

Jennifer: Well, and again for the folks who are listening, as always in the transcript I will include links to the Food Corridor’s website, and to Facebook so that you will be able to get in touch with them and ask questions and find that kitchen space that you need for your business.

Rachael: Wonderful, and just a last bit of info, we’re working on a shared use kitchen toolkit to increase resources and kind of templating what shared use kitchen managers might need for documents moving forward if they’re just launching or growing, so stay tuned.

Jennifer: Excellent, that sounds like exactly what the industry needs, so I’m very excited to hear that.

Rachael: Great.

Jennifer: Well again, Rachael, thank you so much for your time, really appreciate it.

Rachael: Thanks, Jennifer.

For more great podcasts in this series, check out www.smallfoodbiz.com/podcasts.

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The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)
6:43
2017-09-23 00:45:12 UTC 6:43
The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)

We’re doing things a little differently today with a short podcast about something I noticed recently at my farmers’ market. It’s was a simple, yet effective, way to generate return customers.

TRANSCRIPT:
The dirty little secret about Seattle, where I live, is that while yes, it rains a tremendous amount of the time – the Summers here are truly glorious. At some point in June (or, in really bad years, in July), the rain tapers off and we don’t see another drop until late September or October. What’s more, every single day is, on average, sunny and 74-degrees with no humidity. I am convinced this is the only reason why the first settlers to Seattle actually stuck around. The Summers are glorious!

This means that our farmers’ markets in the Summers are also outstanding. There is a tremendous amount of produce that’s brought in from family-farms that operate less than an hour outside the city and we have a ton of artisans who are doing really unique, interesting thigns with new products. Seattleittes love their farmers’ markets (remember, our famous Pike’s Place Market was one of the first official farmers’ markets in the country!) and for many a trip to the market is a weekly tradition.

While our markets generate big crowds, the downside from the point of view of the vendor, is that there is also ample competition at the market for those consumers’ dollars. There’s not just one person selling radishes – there are 5 different local and organic farms at my neighborhood farmers market that sell, amongst other things, radishes of all different types and varieties. There is not just one or two people selling desserts – there’s an ice cream vendor, an ice pop vendor, a handpie vendor, a cookie vendor, a gluten-free bakery, and someone selling vegan baked goods. And, right now with berries at the height of their growing season, there are literally 8 different vendors selling raspberries, blueberries, and blackberries. The completion is fierce.

So the other day I was looking for berries – and honestly was a bit overwhelmed about which farm vendor to choose from. Ultimately I chose one for no particular purpose and made my purchase – thinking that next time I would make a purchase from another one and spread my money around a bit. However, as I was checking out the person working that market stand told me to hold onto the berry boxes because if I brought them back next time I would get a $1 off per box my next purchase.

That caught my attention. From a consumer standpoint, organic berries aren’t cheap so I’ll take a dollar off where I can get it. This also reminded me though that this is a small operation I was purchasing from as the fact that their ability to recycle their boxes would help their bottom line and the reinforced for me personallyt hat this was the type of small farm I wanted to buying from. Lastly though, in order to get my $1 off I actually have to go back to that exact same market stall to purchase my berries – there’s a very real reason for me to return there and since the anme of the farm is printed on the berry boxes I currently have in my hosue, I know exactly where I need to go.

This is just one example of great marketing. So often when we talk about marketing we think about things like social media strategies or television ads but essentially marketing is all about getting the customer to remember your name and to come back and purchase from you again. In this case the family farm is achieving this in the simplest of ways by encouraging me to bring my boxes back to them for a future discount.

Marketing doesn’t have to complicated or convoluted – good marketing is that which is fairly easy for you to execute, is within your budget, and stands out to your customers.

I’d love to know what simple things you do to keep your customers coming back. Share your thougths and experiences by emailing me at info (at) smallfoodbiz (dot) com. And until next time, thanks, as always, for listening.

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Breaking Through The Crickets With Food Videos (PODCAST)
26:35
2017-09-23 00:45:12 UTC 26:35
Breaking Through The Crickets With Food Videos (PODCAST)

You already know that pictures tell a thousand words – especially when it comes to your food products – but what about video? We talk with Brooke Lark about how and why food entrepreneurs should be adding food videos to their marketing strategy as well as how to actually make it happen on a tight budget.

RESOURCES MENTIONED IN THIS PODCAST ARE LISTED BELOW THE TRANSCRIPT

TRANSCRIPT:
Brooke Lark has worked as a professional food photographer and videographer for 10+ years. Her clients include General Mills, Nature Nates, Good Cook and KitchenAid, and she’s become one of the most well-connected and trusted foodies in the industry. Her work has appeared in dozens of cookbooks, magazines and digital publications. When she’s not playing with her food, you’ll find her mountain biking steep canyon trails in stunning Salt Lake City, Utah.

Jennifer: Brooke, thank you so much for joining us today.

Brooke: Thank you for having me Jennifer. I’m so glad to be here.

Jennifer: I’m so excited to be talking about the video side of the food world, because that’s just one way that we can all make our food products look amazing. I’m going to be really upfront at the beginning here and let you, and let all the listeners know that I am an absolute total neophyte when it comes to video. Just, again, start at the ground level. For a long time food entrepreneurs, we know that food photography’s really important, but what about this added component of video. Why should we be thinking about adding this to our marketing bag of tricks?

Brooke: Good question and I’m so glad that you’re a neophyte, because those are my favorite kinds of videographers to talk to. The first and foremost answer to that is that you should be thinking, you shouldn’t even be thinking about adding food video. You should be adding food video period is the single most powerful way to get your brand in front of people, because every single algorithm on every single channel is designed to capture the attention economy. The algorithm is weighted more heavily to benefit food videos, or videos in general, but, of course, we’re in the market, the business of food. So, adding food video to every single one of your social channels is not only a way to expand the messaging to your audience, but it’s a way to beat the algorithm that sometimes feel like they’re working against us.

Jennifer: This sounds so obvious, but now in my head I’m like, “Oh, so that’s when I go on Facebook now all I see are videos coming up.”

Brooke: Yes.

Jennifer: That seems so obvious, but, okay. That makes sense.

Brooke: There are so many food videos in the Facebook feed, because people love them. I always tell students of my classes that food video is the ultimate opportunity to give people both an escape from their regular work-a-day lives and a voyeuristic experience of being in our kitchen and having this experience that they are not having, because they’re sitting in a cubicle. We know that most food video, well that most video is watched with the sound turned off. The assumption is that most people are sitting at work, wiling time away. You’ll see a lot of videos on Facebook particularly will have the lower thirds, they’ll run captions so that you never have to turn up the sound. Food is such an obvious way to peek into another world without ever needing to turn on any kind of sound. It’s become just a hugely popular format, but it’s also a hugely successful way to boost your metrics, to boost your reach and to really get people, your brand in front of people in a way that food photography doesn’t even touch.

Jennifer: I can see also how food video, and again, based on your experiences, correct me if I’m wrong, but how food video would, could also make let’s say that your food product used in a recipe, if you’re showcasing that in a video it makes it more approachable than … I mean, food photography, don’t get me wrong done well is absolutely gorgeous, but is sometimes doesn’t look like I could ever attain that when I make it at home for my toddler versus some of the food videos that I’ve seen, it makes it look tangible. Like, “Okay, there’s basically six steps and I can do this too.”

Brooke: Yes. I think as brands too there’s this extension of what you’re saying, which is as a brand almost always one of the most important things that you are trying to do with your brand is educate people. How do you use it? Why do you need it? How do you work it into your life? Conveying that in a photo is often significantly more tricky than just inviting people into an idea that suddenly becomes incredibly accessible, because like you said, “I am sitting here watching it, in 30 to 60 seconds there is this meal.” Now, what’s at the front of your brain is this idea that was made with your brand. Instead of this picture with your brand popped up next to it and that tends to feel a little more advertisey than video.

So, video is a really organic way to say, “Hey, look at how approachable this is. Look at how much you need this in your life. Look at how fun this,” and you’re entertaining along the way. Lots of buckets are being checked from a marketing standpoint, from a social media, and a conversation standpoint, and from an education standpoint for your brand as well.

Jennifer: It’s like the trifecta for brands. It’s like what we all-

Brooke: It is.

Jennifer: … aspire for.

Brooke: Yes. It really is.

Jennifer: I’d love to know a little bit from you, about how did you get into doing video and when did you realize that this was something that you needed to add to your repertoire?

Brooke: Great question. I have been a food photographer for nine years and I work with a variety of brands and about a year and a half ago I kept noticing, in several food photography forums that food photographers would pop in and say, “I have a food video going viral.” In the world of photography and content creation virality is really what we use to educate and drive our creative and editorial decisions. It became really interesting to me that it was turning less and less about just posts going viral and more and more about video going viral. About the same time Facebook had updated their algorithm and it was clear that video was really the way to start reaching a mass number of your page fan. I panicked, because I am not, I mean, I can wield a camera, but I am not, I do not consider myself a filmographer or a video person. Tech just absolutely, I’d rather be laying catatonic on the floor than learn new tech.

I said, “Okay, I know that I have to do this. It feels scary and impossible and overwhelming. My life was already so busy with a full client list.” I just did not know how I was going to do it, but I actually have a 19 year old son who had taken several Adobe courses and become certified in them during high school. He was actually leaving for his job in 15 minutes and I said, and I knew that I would not have the attention span to actually pick this up if I had to sit down for a long course, because those workshops can be two, or three, or four weeks and I just, I cannot learn that way.

I said, “Go get your uniform on and I want you to teach me everything I need to know to film this video.” So we did in 15 minutes, we shot 2 videos, we pulled them onto my laptop. He said, “Click here, click here, click here.” Just unlocking the basics made it feel at least accessible. From there, I really fell in love. It ended up being just an even more profound form of creative control and being able to create messaging and a story.

Then, of course, you put it on your social media channels and people respond to it. So, it’s so much more satisfying to get a video up than a post or photo up. So, there we go. Now, every single post that I put in my own site and on the majority of client’s sites are combined photography and video, because it’s almost a waste to just do photos anymore. If we are going to do a recipe, or run a new product, or a new idea, or if we are trying to educate we will always consider video first over just photography.

Jennifer: That leads me to my next question. It sounds like, obviously if you’re considering them both in tandem at the very least that there are some real results with this. For example, when you put a video up on social media, you’re seeing likes and eyeballs on it more so than potentially just your average photo-

Brooke: Yes and it’s not just likes. You’re going to see immediate increase in reach. You’re going to see an immediate increase in shares. Video naturally, again it beats the algorithm, so you’re naturally going to get in front of more people, but the question that I find a lot of people ask is, “Then what does it do for my brand and is there even click through?” And yes, there is. From every single video that I have posted on my own site and on client sites that has gone viral, the attrition rate of click throughs has remained steady for up to two years.

Jennifer: Wow.

Brooke: For instance, last year for one of the brands that I work for we created one pot pasta. We knew that one pot pastas were trending. They wanted to feature a pan, so I said, “Let’s take this pot that you guys want to feature, we’ll throw it together, we’ll create an Amazon link to this product, and a link to your blog so that people can come and get the recipe.” We created the food video so that it would say, “Chicken,” but it wouldn’t say how much. We encouraged people in the way that the video was created to need to click through to print the recipe. That post to, was bringing in so before this time their blog would maybe have 1,200 to 1,800 views a day and as soon as that video went viral, we were seeing anywhere from 10,000 to 20,000 click throughs for a week straight.

Jennifer: Wow.

Brooke: Then, that number has paired down about a week and a half in to somewhere around 5,000 and that 5,000 stayed strong for another month. From one video, right?

Jennifer: Yeah.

Brooke: To this day it’s still the top viewed post every single day. I’ve seen those same numbers on my own site where I’ll see 3,000% increase in numbers of views and those numbers will remain steady for several days if not several weeks depending on how I’m sharing it and where I’m sharing it. It’s almost like you can’t afford not to do video. It’s such a profoundly more accessible way to get your ideas and your product in front of people’s eyes. The results are phenomenal.

Jennifer: Honestly, perfect segue into my next question, because the listeners for this podcast series, most are smaller food entrepreneurs who don’t have millions in marketing budget and when we hear video we automatically think dollar signs and even if you’re saying we can’t afford not to do, but the reality is we’re also constrained by our budgets. Somebody might be wondering, how are we going to afford to pay a team to create this video for us? Is this something that we have to outsource to an expert? I mean, once I have the money I’d love to outsource it to an expert who can do this for me, but in the short term if the budget isn’t there, is this something that food entrepreneurs can learn to do themselves?

Brooke: Yes, really good questions. I would say that the first thing is yes, video can feel really terrifying and the going industry rate, budget wise is about $2,000 per minute of video. You’ll see that most video, food videos, if you’re running them on social media than the need to be under 60 seconds. Maybe you would assume that you have a $2,000 budget; however, one of the best things about food video is it doesn’t require a team. It doesn’t require a significantly high level of after effects or special effects. The actual base cost of most food video is quite affordable and you can find food photographers and food bloggers and I would never hire someone to shoot a recipe video that is not recipe centric in their art. That is the first thing, do not Craig’s List this. Do not just look for a film graduate down the road that has a fancy camera. That’s not what you need. You need someone who can style food, who understands the metrics behind the kinds of recipes that are worth developing, that are typically assumed to be going viral. There is a little bit of an art to it.

You can actually outsource for anywhere from $500 to $1,200 for just a standard tasty style video. It’s not as inaccessible, I think price wise as you might guess, especially considering that you can share and share and share across multiple channels and it will work for you. Now, with that said, if you want to do it yourself it’s surprisingly possible. You need a table. You need a really beautiful source of diffused directional light from a window and you need at least one camera. The Cannon, lower end T2is, and T3is, and T5is, and T6is. Those you can actually purchase at Costco for under $1,000 with a standard lens and you’re going to come away with great video.

I actually run a food photography group where several people have come up with some beautiful iPhone videography. It is possible to make it incredibly accessible. I think that there’s always a learning curve. That’s the benefit of outsourcing, is someone can walk you through and hold your hand and make it go away. If you have time for a learning curve and you don’t have time to hire someone to do your video for you, oh yeah, it’s a totally doable learning curve.

Jennifer: So, actually, something back for a second for the outsource piece. Question about, because you had mentioned the, both the importance of photography and the videos. If you were looking to hire somebody to do a video for you, would you also, and assuming you had the budget for it, would you also look for somebody to do photographs of that same-

Brooke: Yes.

Jennifer: … recipe, plate, whatever you’re doing and combine it all into one afternoon.

Brooke: Yes. Absolutely. I am a huge fan of cycling and recycling through content. I feel like if you were going to pay someone to go into the studio for you, you get video and you get photo and you have them get all of the angles. I can actually send you a list if you’d like of the specific angles that I think are really important in a shoot. Maybe you’re going to pay $100 or $200 more, but you are then going to have enough content to run ads, to run, excuse me, images on a variety of different social channels from Pinterest to Instagram. All of these tools that we have that are really, if not free, they’re very, very low cost ways to start building a visual image for your brand and interacting with fans and getting your brand and again, the education of your brand in front of people. Yes, I think that combining … If you are going to pay someone to create a food video, then make sure that you also get photography from that shoot.

Jennifer: Perfect. I’ll just make a note for folks who are listening, I’ll include, when you go to the transcript for today’s podcast, which you can find at smallfoodbiz.com, I’ll include that information that Brooke just mentioned about the different angles. I’ll also make a call out for, some of the cameras that she just mentioned. You’ll be able to find it in the transcript, but if you’re just looking for real quick, “I just need to get this info.” Obviously, there will also be a link to her website as well.

Because I did want to mention, speaking of learning curve and trying to learn something well, but learn it within a manageable time period, because most of us as food entrepreneurs don’t have weeks to dedicate to learning an entirely new craft. I did want to mention that you offer a 90 minute, I love that you call it a crash course, it just seems like … Again, the listeners know this, it’s like I’m a mom. I have a toddler. I’m running a business. I do not have hours, 90 minutes.

Brooke: I know. That was the whole thing is when I started, I managed this food photography group. It is growing so quickly. The only way that people had, they had all of these questions in food videography and food photography can feel so hard, so confusing and far off. Like you said, when you’re a neophyte it’s, it feels so far away. Just, again, going back to my own learning curve it’s like, “I am a busy person. I don’t have weeks to dedicate.” I was like, Let’s just create this really, really accessible way where it is the hot, quick, and dirty guide to get up and running and it is created for brand new videographers and food photographers. If you have never purchased a camera, I will walk you through. You are welcome to come in and talk to me on my, in my Facebook group, because it’s … If I didn’t have someone to hold my hand I would have not been able to even access this skill. It really is surprisingly accessible. Yeah, 90 minutes, done.

Jennifer: Perfect. Again, there’ll be a link to that course on this site. As always, I just want to make it clear that this is not an affiliate link and I’m not getting compensated for this. I just think this is a really good resource for food entrepreneurs, especially those who are looking to include food video into their marketing repertoire, but may not yet be at the point where you can afford to outsource it to somebody else. They’ll also be a coupon code. That coupon code is SmallFoodBiz with the S, the F, and the B all capitalized and then the number 50 after it. I’ll include that in the transcript as well.

Brooke: That’s $50 off, so …

Jennifer: Great. Thank you.

Brooke: Pop through.

Jennifer: Thank you. Brooke, you talked a little bit about obviously, you had your 19 year old son help you, but again going back to this learning curve, was there one or two mistakes when you started in the video piece that still stand out to you as great lessons learned?

Brooke: Oh, yeah. Those are some great questions. Yeah, I would say that I did not realize how much of, I had to learn how much of the video needed to be fixed in post. Once you video it, I would pull it in and then go through all of the process of editing it and exporting it and then I would say, “Well, I pushed it live and it’s not very clear, or it’s not very bright.” Learning that there is actually a significant amount of post processing required and just like you would filter a picture to get the right look or to pop the colors that you need popped or whatever. Video is the very, very same. Learning that process and learning what I needed to apply to make my videos look really high quality, I would say that that was one of the mistakes that I made from the beginning just because I didn’t know.

The other mistake is filming in the winter is just a pain in the head, because you have the cloudy day and the light will come in and come out. I had to learn … how to either … check the, my exposure, so that the shots were the same from shot to shot to shot and/or set up an artificial light setting, which I tend to shoot only natural light. I really recommend it. The coloring is just so much more beautiful, but finally saying, “Okay, I need an artificial light thing,” was the answer to the winter shooting mistakes.

Jennifer: I’m thinking as you talk about cloudy days, I’m based in Seattle, that gives us maybe two and a half months where we can shoot anything here.

Brooke: I know. Well, you might be okay, because diffused is okay as long as it stays diffused, but it’s when the sun will start blinking in and out. Your shots, you know, you’ll be pouring milk and all of a sudden the sun will come out as you’re pouring and all of a sudden you can’t see anything, but a totally bright screen, because the exposure just gone. Diffused stays good you may be-

Jennifer: I’m golden.

Brooke: … in the best place ever.

Jennifer: Yeah, we never see the sun. We’ll be fine.

Brooke: Okay, good. You’re stoked.

Jennifer: Brooke, I really want to thank you. For me personally, you’ve made this seem a little less scary and a little bit more approachable. Also, I think just reinforced for me the importance of doing this, because you’re right, this is all I’m seeing when I’m going on social media so shouldn’t I be doing something similar if I want those same type of results?

Brooke: Yes, for sure. I think that that’s one of those things too where you see it. You always see the front side of things coming through your feed, but you don’t necessarily see the backside. For instance, there are a couple of bloggers last year who just started adding video to their pages on Facebook. So, this is Facebook specific, but again, every single social media platform is designed to support video and to boost your video. Anyway, several of them who just started adding video last year grew their multitudes of stories where they grew from 10,000 followers to more than 1,000,000 followers in less than year. The results are quick and fast. The results are generally, fairly sustainable, especially compared to that feeling of sometimes you put so much out into the void and you just never hear crickets back. Through video’s one of the fastest ways to really break through the crickets.

Jennifer: That’s perfect. I love that, breaking through the crickets. That’s what the folks … that I talk to that’s our struggle, because as smaller food producers who don’t have the millions of dollars it’s, how do we break through the crickets and how do we get noticed by our target audiences? Thank you for sharing this.

Brooke: Yes, absolutely. Please you or your listeners, I am always available. It is a passion of mine to get people up and running to help answer questions. I’m an open book. I will send you a link to my food photography group, so if someone does want to get started and need help, I’m absolutely here to support.

Jennifer: Great and you know I will say, I personally joined that group, just because I wanted to see what was going on and I found it, I have found it really interesting to read about what folks are doing on the food photography world. It’s just giving me, even though I don’t ever plan to go out and professionally photograph food, it’s just given me some really interesting insight into things to be thinking about and how to do it and different ways to do it.

Brooke: Good. I think that anything that gives you more fluency in a topic helps you understand better what to ask for, what you really need, what you don’t need. I’m glad. I’m glad that you’re finding it useful.

Jennifer: Yeah, so thank you Brooke. I appreciate it. Again, to the folks listening, I’ll have it broken out on the transcript where we’ll have the transcript for this podcast, but then I’ll also breakout some of these resources that Brooke was talking about and call them out so they’re really obvious if you just want to go over there and quickly click on those and get that information.

Brooke: Wonderful.

Jennifer: Brooke, thank you for your time today.

Brooke: Thank you. I look so forward to continuing to work with you guys. This is so fun.

Jennifer: Great, thank you Brooke.

RESOURCES MENTIONED IN THE PODCAST:

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The Cottage Food Industry – Today & Tomorrow (PODCAST)
38:07
2017-09-23 00:45:12 UTC 38:07
The Cottage Food Industry – Today & Tomorrow (PODCAST)

David Crabill of Forrager.com, an expert on home-based food businesses, and I talk about where the cottage food industry in the US stands today and where he thinks it’ll go in the future.

David Crabill is the co-founder of Forrager.com, a website solely focused on the cottage food industry, which is a term used to describe home food businesses. Since the cottage food industry was created via a collection of state laws, there is no official government organization to help organize or improve it. Forrager seeks to organize and improve the resources available for this growing group of small, independent cooks.

On the culinary front, David has been making chocolate chip cookies since he was eight years old. While trying to start his cookie business in 2011, he learned about the cottage food industry and created Forrager to help others get their home food businesses off the ground. When he’s not developing websites, perfecting recipes, or answering cottage food questions, you can find him solving puzzles, traveling, and speaking at a Toastmasters meeting.

TRANSCRIPT:
Jennifer: So, welcome, David. Thank you for being on today.

David: Oh, thank you so much for having me.

Jennifer: So, we’re talking about cottage food and the cottage food industry today, but just to, again, lay the foundation, let’s start with basic terminology and basically, what does this phrase, cottage food, actually mean?

David: Cottage food is an interesting term because there’s no technical definition for it. It’s just the term that people have started using over time. But generally, when I use the term cottage food, I’m referring to somebody’s homemade food that they’re selling. So, that’s pretty much.

Jennifer: Okay. So, the home-based food producers, basically.

David: Yeah. I mean, there’s a commercial food space where people are selling food that’s made out of a commercial kitchen and then the cottage food is basically for people who are selling out of a home kitchen.

Jennifer: Okay. Now, within the cottage food industry, can you talk a little bit about how there is not federal oversight of this law? We’re talking here in the U.S., I just want to make that clear, for folks who are talking in the U.S. today. Other countries might have very different rules and regulations when it comes to home-based food production for sale. So, there’s no federal oversight in terms of cottage food, correct David?

David: Right. Many people don’t know, but the Food and Drug Association, the FDA, produces a food code, but states adopt whatever laws they want when it comes to food loss.

Jennifer: So, for this cottage food industry, it’s a state by state basis, right?

David: Right. So, in the food code that the FDA publishes, there actually is no allowance for selling homemade food. It’s illegal in that document. So, states have to override the food code that they adopt and specifically allow these homemade food sales on a state by state basis.

Jennifer: Can you share with us at a high level like what you’ve seen changed in the cottage food landscape in the last couple of years? Because as you and I have talked prior to today’s interview, you know, you’ve mentioned that there’s been a lot of changes in cottage food over the last probably five or seven years.

David: Right, and it keeps evolving. I’d say that the cottage food industry started to develop about a decade ago when the economy went downhill. A lot of states started to enact these cottage food laws to enable homemade food sales to actually allow people in their community to use something that they had, their own kitchen, and make some money by selling food. So, that’s what got the ball rolling, I’d say, probably the recession in the United States and since that time, most states have enacted a cottage food law to allow some form of homemade food sales, although those laws run a gamut. There’s all different types of ways that states allow the law.

Jennifer: So, within that, what have some of the most liberal things that you’ve seen states allow and then the counterpoint, what are some more would be considered conservative or restrictions that are placed on cottage food entrepreneurs?

David: Right. So, in terms of liberal things, that reflects back to the last question in terms of how cottage food laws have been changing, so even though a lot of states have enacted a cottage food law, in the past few years, we’ve seen yet another transition into what’s been termed food freedom and that is basically people openly questioning the government’s right to have any say over whether people can sell homemade food. So, to give a little bit of background, the cottage food laws typically come with restrictions. You can only make certain types of foods, you can only sell in certain types of places, but the Food Freedom Movement is really trying to take all the red tape away and prevent the government from being able to stop someone from selling their homemade lasagna to a neighbor.

Wyoming is the first state that implemented a state-wide food freedom law. So, in Wyoming, you can sell almost anything with the exception of red meat. You could even sell chicken pot pie or something that would be banned in almost every other state and that’s got to be one of the most liberal things that has come out over the past 10 years. But at the same time, a lot of the liberal things that I’ve seen, such as Alaska, allows a lot of different kinds of food and they don’t have very much government oversight. But those laws, Wyoming and Alaska also have very few people who are using the laws. So, it’s possible that the most liberal things that have actually happened come from states like California and Colorado that have added a lot of allowances still with government oversight, but they also affect thousands of people.

Jennifer: Mm-hmm (affirmative). Yeah, you know I was thinking as you were talking twofold. One is that I’m originally from Wyoming and so as you were talking, you know, I’m like, “Wow,” when I go home to Wyoming I want to talk to some more folks back there and see what they’re thinking and how that impacts them, but you’re right. I mean, the joke in Wyoming is that four-legged animals outnumber humans in four to one ratio. But as you’re talking about California and Colorado and allowing allowances, like here in Washington State where I’m currently based, when our cottage food law was first enacted it was really restrictive and over the last couple of years, they keep evolving it and keep opening up what types of products you’re allowed to sell, how much revenue you’re allowed to make. So it’s been interesting to watch that rule evolve over time, which is another thing, you know, for folks to just be aware of that hat you see written down today might not necessarily be the same thing next year.

David: Right. It’s great when food laws keep getting amended. That’s been most clear in Colorado. They’ve amended their cottage food law I think each year for the past three years and they’re really one of the standards now for cottage food very recently because they’ve removed a lot of the restrictions that were initially in their law whereas Washington, while their law has evolved, I’d say it’s still very restricted. Washington is one of those places that could make huge strides in the cottage food space because it would impact so many people, but the reality is that very few people are actually using Washington’s cottage food law because it just doesn’t make that much sense for people to do it because of how restricted, and expensive, and complicated it is.

Jennifer: Oh, absolutely, especially again speaking personally when compared to our neighboring state Oregon, which at least looking at it from the perspective of a Washington resident, Oregon is pretty liberal in comparison in terms of how much they allow their residents to make as cottage food entrepreneurs where they can sell their products and how they can sell their products.

David: Right.

Jennifer:So, for some folks, the idea of starting a food business out of your home versus finding and renting kitchen space really sounds ideal. Based on your experiences and your conversations with home-based food business owners, what are some of the benefits of using a home kitchen for your food business?

David: I think that people can pretty readily see some of the benefits. For instance, if you’re a stay-at-home mom or dad, just being able to stay at home with your kids is a massive benefit. Just being able to work at home and also be able to be with your family is a huge, huge advantage of the cottage food laws. Also, most people have a home kitchen that they can work from, they already paid for it. So, the fact that it’s free is a massive advantage because a commercial kitchen can sometimes run $20 to $30 per hour to rent it out.

Jennifer:So while that all sounds great, are there challenges in working out of a home kitchen?

David: There are definitely challenges. I mean, for one, the home kitchen is built for residential use. It’s not built for … it’s built to make food for a family, it’s not built to make food for 100 people at a farmer’s market. So, just the fact that it’s a very small kitchen severely limits people into how much they can make and also the laws themselves had a lot of restrictions on the home kitchen simply because the cottage laws typically come with restrictions about what you can make. So, a lot of times people will choose to forego the cottage food laws and use a commercial kitchen if they want to make a certain item or if they want to sell in a certain way.

Jennifer:So, speaking of challenges, I’m also wondering about … so those products that are allowed to be produced in a home kitchen are produced in a home kitchen. How does the average consumer respond to this? Do you find either historically or has this changed over time, has there been challenges in home-based food entrepreneurs gaining the trust of consumers if the consumers know that the product is produced in a home kitchen?

David: It’s so funny because that’s what I would have initially expected and I’ve noticed a lot of people who are diving into the space and starting up their own cottage food operations. They also are concerned that people will not trust their products because they’re using their own home kitchen. In reality though, I’ve noticed that it’s typically an advantage for people to advertise that they’re using their home kitchen because most of us do eat homemade food. We make it ourselves at home or someone else makes it for us and we don’t get sick. You know, it’s perfectly safe. So, I think that most people want to help small business, small producers, people in their own community and the actual consumer perception, there’s not a level of distress that people often think is going to be associated with producing from someone’s home.

Jennifer:Well, that’s great news.

David:I would also add that it actually is pretty safe. I mean, there are horror stories about commercial kitchen sometimes and I don’t know if you’ve seen commercial spaces, but I’ve certainly heard from a number of people who have worked in commercial kitchens that were rented and it’s not necessarily safer or cleaner or any of that than a home kitchen space would be.

Jennifer:Yeah. I’m sitting here nodding my head because I’ve worked both in restaurant and bakery settings and then I’ve also worked in shared kitchen spaces or kitchen incubators and of course, everyone is different, but there you definitely see things that raise eyebrows and make you a little bit concerned from time to time. So, absolutely.

David:Right. It’s interesting because people like to hide the fact that they’re using their own home kitchen, but I think that’s generally just advantageous for a cottage food operation.

Jennifer:Again, that’s great to hear because that’s the one question that I get asked a lot about is, should this be something I advertise or not? Again, here in Washington State, we actually have restrictions that you have to advertise it on your packaging and not every state has that, but folks are concerned when they have to disclose that. So, it’s good to hear when you don’t see that as being a disadvantage.

David:Yeah, and it’s funny how, I think, people’s perceptions of what they need to do are oftentimes to what is actually important. I’d see a lot of cottage food operations who think they need to be really thorough about what they put their labels and I need to think about every single ingredient that’s listed out and in reality, when most people come to the market, maybe unless you’re living in a certain area like the bay area or Los Angeles or something, but for the most part, people are pretty trusting. They come to the market, they try something, try a sample. They don’t look at the label. I think that people can get really anal about what they are doing when they’re trying to start a food business, but a lot of those things just don’t matter in the big picture.

Jennifer:So, you just mentioned, for example, farmer’s markets being one sales channel that you see cottage food entrepreneurs use and again, the caveat here being that every state has different regulations around where cottage food entrepreneurs are allowed to sell their products. But do you see certain sales channels used with success amongst cottage food operators at a high level across the U.S.?

David: Yeah. Certainly, the cottage food laws have been successful for some people, so we know that there are sales channels that work. I’d say that it’s not a blanket answer of one sales channel is better than the other. It completely depends on what someone is selling. So, for instance, if someone is producing custom cakes, the best sales channel for that is typically doing direct sales out your home and using Facebook to promote your business and getting referrals from friends and that has been probably the most successful type of cottage food operation in terms of how much they’re selling, but if you’re doing something like selling peanut butter or nuts, then a farmer’s market might be a better place for you to be selling those things because you’re in front of a known audience or a known market and you have people coming by and buying those things.

So, I’ve seen a variety of different sales channel work well. I would say, I’d actually add to this, that a lot of times, people want to sell online and they think that that’s going to be the secret key to their success in business and I think people overestimate the capabilities of their online presence. I think that people think that they’re going to sell a whole bunch of stuff if they can put their product online, but I actually see that as being one of the least successful sales channels for people who are just starting out.

Jennifer:Yeah. I’ll concur with you there, not just from a cottage food standpoint, but I see this a lot with, you know, those products that are made in commercial kitchens and they’ll say, “Oh, my sales strategy is that I’m going to be selling online.” It’s like, then do you have a really strong online marketing strategy to support that? At least at farmer’s market, as you mentioned, folks are going to walk by your both and see you, but how are you going to get people to find you on the internet and in amongst millions of websites that are out there? It can just be really hard if not impossible.

David: Wait, and it’s not just a matter of getting eyes because I’m a website developer, I know that there are people who will just somehow find a website. I don’t know how, but you put a website up and you’ll get traffic to it. So, you can generally get traffic in many ways through advertising or what have you, but it’s a matter of developing trust with people. Typically, people have to have a strong sense of trust towards a person or a brand before they’re willing to pay for something and this concept is someone’s just going to run across your product and buy it is hard to do if you don’t have some level of trust established either through your own presence in your community or through maybe online reviews on Etsy or something like that.

Jennifer: So, with you then say, my next question was going to be for you, what do you think the key thing is for home-based food entrepreneurs to build successful business? You just mentioned trust. Do you think that that trust component is … is that key to success or are there other things that you see as being really critical?

David: Yeah, my answer to this question has changed quite a bit over the last few years. I think initially, I thought the key to success of business would be what product do you have? How good is it? How good is your recipe or what’s your marketing like? How’s your product packaged? That’s going to be the key to success, but I’d realized that the key to success, I mean, it ties in with the trust concept, but it’s really the entrepreneur themselves that are the key to the success of the business. I say this because I see a lot of people make the same mistake over and over again.

I think, generally, people who try to enter this space and become a cottage food entrepreneur, they like doing their own thing and they also don’t [technically 00:18:59] want to be the face of their business. They want to hide behind the scenes, they just want to make their food and however it gets sold is great, but they don’t really want to be on the center stage. I think that’s actually the exact opposite approach that someone needs to take when they’re starting a home food business. People will hide behind a curtain and say, “Oh, I’m working on this secret thing and I’m not going to tell you what it is until it’s ready,” and then even when it is ready, they won’t actually take ownership of their business. They’ll put on their website the ubiquitous we-word like we believe in blah, blah, blah. When you’re starting a business, it’s all about you. It’s all about that entrepreneur and when people are buying a product, they’re not buying a product, they’re buying part of your experience.

So, that’s the biggest key I’ve seen in terms of people who are successful is that they take ownership of their business and they develop relationships with people and those relationships are what boosts their business. In terms of their product, but product doesn’t matter as much. You need to find what they call product market fits. You need to make sure there is demand for what you’re selling, but if you have the right entrepreneur who’s willing to take ownership of their business, they’ll eventually find the right product for their market.

Jennifer: Yeah. Thank you for sharing that because so often people see it as being that the product has to take center stage and again, it ties back to that piece that you’re talking about with trust that people need to trust the person and the story behind it, behind that product before they want to spend money on that product.

David: Yeah, and it’s really hard too because typically, a product is the impetus. It’s like your grandmother had this really great apple pie that everyone loves and it’s the talk of every Thanksgiving, you know. So, it’s like, “Oh, I want to start this business to sell my grandma’s apple pie,” and I think that’s generally where I see people get caught into a trap because their business is revolving around the product instead of revolving around their desire to start a business.

So, a lot of times, when that product doesn’t catch on or maybe the market isn’t willing to pay a fair price for it, that’s when people’s business will close. But if someone is starting from the standpoint of wanting to start a food business and they’re really passionate about making and selling food and sharing it with their community no matter what form that takes, then they’ll be able to make adjustments over time to ensure the success of their business and they won’t get caught up on, “Well, if I can’t sell these cookies, then why bother?”

Jennifer: Yup. That’s one of those statement words like it’s so obvious and yet it’s something we so often overlook because you’re right, we go into it and myself included because I’ve toyed with the idea of starting up a cottage food business in addition to a small food biz and it’s always been around the product, not necessarily around the business.

David: Right. Yeah, it’s very hard. I mean, it took me years to learn this because I initially got into the space because I want to sell chocolate chip cookies that everybody raved about or sell my grandfather’s fudge that is always a staple around the holidays. So that’s what got me into this space. So I think it’s important to recognize that products can get people into the space but ultimately, the people who I see thriving are the people who are willing to adapt their business to whatever the market is asking for. For instance, I tried selling my fudge but it just so happens that selling really unhealthy things these days is not a huge hit at farmer’s markets. Most people are interested in more healthy choices for their families. So, it’s not really a viable business for me unless I was trying to sell in an area to market. It’s like a farmer’s market would not be the right choice for selling a product like that because it’s just not what people are looking for at a farmer’s market.

Jennifer: Yeah, especially not on a week in, week out basis. One thing for a one-time purchase because it’s for a special event, but you’re right, it’s not something that … and I say this being a professional pastry chef, I hate to say it, but it’s true. Desserts and the like are not necessarily something that most consumers, especially like you said, at farmer’s markets are looking to purchase every single week.

David: Right.

Jennifer: As we talked about there’s being a lot of changes in the cottage food industry over the last few years and given your insight, take a look into the crystal ball and where do you think that the cottage food industry in the United States will go in let’s say five years from now?

David: Well, of course, I can’t know exactly where it’s going to go. I mean, if you’d asked me that five years ago, I probably wouldn’t have been able to tell you where it is today, but I know where I’d like it to go and that’s …

Jennifer:I’d love to hear that.

David: There are a couple different things I’d like to see. One is in expense of the Food of Freedom Movement and it just makes sense to me that selling homemade food is something that people have done for pretty much all of human history. It’s a fundamental part of our lives that we make food and we share it with other people. We don’t usually get compensated for it, but I think that we should be able to if people want to make that their livelihood and most food is perfectly safe, but the reason why homemade food is disallowed is because there’s a lot of concern about if you don’t have a sanitary work environment and everything, then you might get someone sick and certainly, that does happen on a rare basis.

So, in order help prevent a few problems, we disallowed an entire ecosystem of homemade food entrepreneurs so I’d like to see the Food Freedom Movement bring a little bit more awareness to how much government oversight there is in the food space and allow people to question whether that should be the case. The other thing that I’d like to see in the future is perhaps a nationally recognized cottage food law because right now, the cottage food laws, they’re on a state by state basis and some of them are actually quite good. They allow people to run lucrative businesses out of their homes. But the problem is that because they’re on a state by state basis, those people cannot sell to other states, so they wouldn’t be able to list their product on a website like Etsy, and sell online, and then ship it to somebody in another state because there isn’t recognition between states of the other state’s food laws.

So, if there were some sort of national recognition on cottage food, for instance, in the food code that would allow cottage food to act a lot more like commercially produced food, I think that would be highly beneficial to people because it’s one of the biggest limitations that I see currently in the cottage food industry.

Jennifer: Yeah. Again, speaking from a state that is still decently restrictive, I know in talking to cottage entrepreneurs here locally that they just say, “Why can’t we do what Oregon is doing?” Even if you might live just across the bridge from Oregon, it’s like I’m sorry, you can’t. You know, talking about your concern over sanitary conditions and food borne illnesses, the reality is even in highly regulated environments like commercial kitchens that are regularly overseen by either USDA and/or county health officials, you still run into issues of food borne health issues.

David: Yeah, I know and it’s interesting because there’s always a concern about the health and safety of a home kitchen. It’s always brought up when a cottage food law is being discussed or enacted and yet, I still have not heard to this day and I’ve been in the industry for quite a few years and I talked with thousands of people about how cottage food, I still have not heard to this day one instance where a cottage food operation was the cause of a health concern. Usually, the health department gets called about illnesses, food borne illnesses all the time, but they’re usually out of these commercial, inspected, approved kitchens and to be fair, that’s also part of just the fact that cottage food is restricted to usually very safe foods that don’t need to be refrigerated, but it’s just like even the commercial kitchens are always producing things that are totally safe. So, it’s just interesting to me that there’s so much skepticism that comes through when you’re talking about a home kitchen.

Jennifer: Absolutely.

David: I wanted to go back to the last point where you’re talking about people who … like if I am in Washington right over the bridge, why can’t I sell in Oregon? I’ve heard that a lot too and I think we did have to question that because the state laws are so across the map literally and figuratively, yet people’s actual … I don’t know how to put it, but you know people are living the same lives in each state. People are subject to the same health laws in each state in terms of what’s going to make them ill and so it’s funny how some states allow certain things and other states don’t. We have to wonder, is there a really good reason why that should be the case?

Jennifer: No, I agree with you. Like you, I would love to see a national ruling on this if for no other reason also just for clarity because I think it oftentimes makes it harder for home-based food entrepreneurs to start up because they have to figure out exactly what is allowed in their state and potentially, also their county and what business licenses they need and they don’t need, and it can throw a lot of people off of the course because it can be so frustrating.

David: Yeah. It’s really confusing. It’s extremely confusing, hence the reason why people have to spend so much time just figuring out how to do. That’s something that I think should be very simple, you know. You want to go down the street and sell something at the farmer’s market and yet that can sometimes take months to get approved in certain areas. But it is important to recognize that it’s improved a lot. Back 10 years ago, 15 years ago, homemade food sales were almost universally banned in the United States and I think you’d see it across all thousands of life where there is kind of a waiver, a spectrum and you got from one side to another and we were in a state of being just totally disallowing and distressing of homemade food and that was totally on one end of the spectrum.

The cottage food laws had brought that way back and pulled back a lot of the control that the government imposed on food sales and it seems like it’s continuing to be pulled back. So, it’s definitely been a huge improvement and we continue to see states improve their laws and today, there are hardly any state that don’t allow any kind of homemade food.

Jennifer: That’s a great note to end on. We might not be at the cottage food utopia yet, but the industry has come a long way. I want to just quickly mention that a lot of this has also been driven by average civilians. There’s an article on my site from a couple of years ago about the woman who really pushed through the cottage food law in Louisiana and it’s a grandmother who was frustrated by this law. So, a lot of times it is just an average civilian who’s frustrated by it who decides to take it to their lawmakers, get a bill passed and does all the work to do that and to gain momentum behind it. So it’s really exciting to also see, again, the average civilian just saying, “This is really important to us,” and building the from the ground up.

David: Right, and that’s an important thing to note because a lot of people ask me, “I can’t do X, Y, Z. When is my state going to change this law?” Just given that we do live in a democracy, it’s like well, you might have to be the person who changes the law, you know. That’s how these bills and laws get started. Quite frankly, before I got into this space, I had no idea how a bill or a low got passed, so it does take a lot of learning and diligence. But I’ve seen time and time again where a regular citizen will say, “Hey, I’d like to sell my homemade food or I’d like to sell this item and it’s not allowed in my cottage food law,” and they’ll take the initiative to contact the congressman and make it happen and that’s the way that our political system runs.

Jennifer: Well, you know, it’ll be exciting as you mentioned nobody can sit here and 100% accurately forecast where the industry will go, but it will be really interesting to see what happens in the next 5, 10, 15 years and where we are then compared to where we are now.

David: Yeah. I believe that just having seen the past few years that it will be an improvement over what it is today because certainly, these cottage food laws have been very popular and I don’t think it’s happened to-date where a cottage food law has been redacted or made worse through an amendment. So, there’s certainly a lot of desire among people to do this, to sell their homemade food without having to go through a bunch of loopholes and I would expect that that inherit desire amongst the people of our country will continue to provide the path forward to make the laws better.

Jennifer: Great. Well, I’m excited to see what happens in the coming years and David, I want to thank you for coming on today and sharing your thoughts and your experience having been in the … you’re really looking at the cottage food industry like no other has for the last 10 plus years, so thank you.

David: Thank you so much for having me.

Jennifer: Absolutely. Thanks.

Related Articles:

  • Baking Up A Home-Based Food Business (PODCAST)
  • How Do You Start A Food Business With Little To No Capital
  • 6 Things Home Cooks Need To Know Before Starting A Cottage Food Business
  • Collecting Market Research When You Have No Budget
    2017-09-23 00:45:12 UTC
    Collecting Market Research When You Have No Budget

    You know that it’s important to understand what you can about your target consumer. The large companies dedicate millions of dollars to market research but that’s just not an option for companies like ours. That doesn’t mean market research is still impossible to do though. In this podcast I share some ideas on ways you can conduct market research even when your budget is $0.

    TRANSCRIPT:
    Understanding everything you can about your target market is one of the most critical components of business ownership. And it’s not just one of those things that can be done when you’re in startup mode and never looked at again. Since the marketplace and consumer needs/tastes/desires are constantly changing, so too is what your audience wants and needs from you. A business that doesn’t spend time doing market research is one that runs the risk of being quickly left behind as consumers move on to the next thing.

    Doing market research is something large consumer product goods companies spend thousands, if not millions, on every year. They have internal teams working on this fulltime or they outsource this task to market research experts. That, unfortunately, is not a reality to most small and medium-sized food companies. So how do smaller companies conduct market research when their budgets are already stretched thin? Here are a few ideas:

    1.If you can afford it and have specific questions you want answered about what consumers know/don’t know about your brand or how they interact with your products, hiring a market research firm to do a one-time focus group (either in person or online) can be a good use of resources. The caveat is that this can cost upwards of $10,000 or more depending on your needs and the complexity of the research.

    2.Try asking your customers yourself. You may not be able to hire a market research firm but you can still ask your customers what they like/don’t like/need/want/etc. Unless you have a background in market research, your results may not be as scientific as those that you can get by hiring a market research firm. But asking customers as you interact with them in-person or online, or even by sending out a short survey for them to answer (adding in the chance that survey recipients can win a great reward can help spur responses), can give you insight into who your customers are and how your product and brand are a part of their life.

    3.There is a tremendous amount of research available online for free or low cost if you know where to look. Industry publications like the Specialty Food Association and my site, Small Food Business, publish food industry-specific statistics as those are made available. Your local library can also be an excellent research source as many libraries offer to their patrons free access to industry databases/statistics that would cost an individual thousands of dollars to subscribe to. Talk with your local research librarian to see what may be available through your library system.

    4.For information about demographics, the US Census Bureau (www.census.gov) maintains an online census report that can be drilled down to a zip code level for insight about median age, income, children in the home, etc. within that local area.

    5.Ethnographic research – the study of someone in their natural space – can give you real insight into why consumers make the buying choices that they do. When you ask someone why they made the choice they did to purchase Brand A over Brand B, they will likely give you a lot of rational answers for their purchase. But when you spend time watching how customers shop they may tell a different story. Do consumers seem to price point comparison shop when it comes to products like yours? Are they reading the ingredients labels and/or the nutrition facts? Do they seem to be driven by particular packaging designs? You’ll be amazed with what you can learn when you watch customers.

    6.Lastly, especially if you’re looking to grow your customer base, it can be helpful to talk to people who aren’t currently your customers to get a sense of what they think about your products and what your brand offers to them. One of the best examples of doing this on a small budget that I’ve heard of was a small food company who sent their goodies with friends to those friends’ workplaces. Along with the goodies (and who in office settings doesn’t love free food!), the company also sent along an anonymous survey with key questions they wanted answers to. The feedback they received from that survey, they later said, was more beneficial than anything their friends and family had ever told them – in part because the coworkers felt more comfortable being totally honest. Critical feedback like that can really help propel your business strategy forward.

    7. Another thing you may want to consider is contacting your local college or university as sometimes they may offer courses in Market Research and require their students to do case studies with real companies. The schools that offer this oftentimes maintain a database of companies their students can reach out to.

    Related Articles:

  • Finding Your Target Market
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  • Full-Time Job + New Food Business + Newborn Baby (PODCAST)
    2017-09-23 00:45:12 UTC
    Full-Time Job + New Food Business + Newborn Baby (PODCAST)

    Starting your food business is hard enough.  Doing it while also maintaining your full-time job makes it that much harder.  But what happens when your first child is born the week before your first farmers’ market?  Visas Taskar of Bombay Bitez shares his experiences juggling it all in his first year of business.

    TRANSCRIPT:

    Jennifer: Today we’re talking to somebody who is working full time while also building and creating. He started his business last year as you’ll hear, and he’s working to continue to grow that business. And there’s some other really interesting things that he’s also juggling as well that we’re going to talk about.

     

    So, want to introduce you today to Vikas Taskar. He is an engineer by profession and foodie at heart. His introduction to the culinary world started, as it does for many of us, in the home kitchen while he was growing up in Bombay, which is now known as Mumbai, India. He started by learning about traditional Indian recipes as well as trying out variations of those recipes on weekends. Last year, he decided to transform his hobby into a business and started Bombay Bitez which serves authentic Western Indian snacks and beverages handmade from scratch with locally sourced ingredients, freshly ground spice mixes, and fresh herbs.

     

    The company, which started as a Farmer’s Market business last summer and expanded into catering in the fall, is starting their second year of business this month.

     

    So thanks so much for joining us.

     

    Vikas: Thank you, Jennifer for having me in the show.

     

    Jennifer: I wanted to start out by talking about the fact that, you know, you are not, you’re not coming into this entrepreneurial endeavor as somebody who has been working in the culinary industry their entire life. And you, like many of us, are coming from a, coming from a different profession. So tell us a little bit about what you’re, what you’re, you know, your professional background is?

     

    Vikas: Yeah, so, I grew up starting engineering as my major. And I got my undergraduate degree in electrical engineering. This is when I was back in India. And during the time I developed an interest for computers so I ended up following that passion. Ended up getting a job in software development right after graduation. After working for a few years, I came to the U.S. I got my Master’s degree. And I continued to work in the tech industry afterwards. So overall, my background is almost entirely science and engineering based.

     

    Jennifer: Which is, know it’s funny. I was about to say, which is different than the food industry, but obviously as you know there’s a lot of cross over. And we’ll talk about how you’ve been able to take a lot of what you use in your daily, professional career and transport it over into your food business. But to start with, what made you want to open up a food business? And then as you start to think about opening up this food business, what were some to the challenges that you knew, even before you started, that you were going to have to overcome?

     

    Vikas: Yes, so my interest in food and cooking actually came about at a very early age when I was growing up in India in the city of Bombay. This was a time when I happened to get very deeply interested in all types of food. Whether it was home cooked food, street food, as well as just about any cuisine that I might try out. And this interest actually remained a hobby for several years, but while it was a hobby, I definitely had the intonation to start something out on my own in the food business at some point. This was driven partly by a couple of, you know, factors.

     

    One is that … and this is true even today. I actually find that cooking is a great stress reliever for me. Particularly cooking for large groups. And this was something I discovered several, several years ago. I also sort of like the feedback aspect of getting, you know, positive feedback or just feedback of any kind on dishes that I had made with an opportunity to kind of go and improve them over time. So, it was finally these factors which led to my venturing into the food industry when I finally did last year.

     

    Jennifer: So what made you determine ultimately, you know, as you, as you realize you want to start up a food business, and, you know, there’s all these different ways you can take it. You can go into packaged food and try to get onto retail shelves. You could open up a restaurant. What, ultimately, made you decide to, at least to start, by becoming a Farmer’s Market business in the first year? And also, by focusing only on one market and not multiple Farmer’s Markets in your first year?

     

    Vikas: So, once I’d made up my mind that I wanted to start a food business, I was fairly clear on a few things which I wanted would assure would happen as part of my business goals. One of these was that I had a fairly low cost plan with low capital outlay. I didn’t want to spend a lot of money. It was going to remain a part time commitment at roughly one to one and half day a week where Farmer’s Market for one day a week with about a half day of prep time behind that one day and then some overheads kind of fit that schedule.

     

    I also liked the aspect that Farmer’s Markets provided me the opportunity to get additional feedback on the food that I was putting out. As well as an opportunity to get revenue, but in sort of an informal scheme which is not perhaps as trying as having a full time business that operates six or possibly even seven days a week. So I looked upon Farmer’s Markets as a combination of a friendly, neighborhood environment, a place which I could use as an experimentation platform for my food, albeit food which had to be of good quality. And an environment where I could essentially put out my business with a relatively low capital cost.

     

    Jennifer: You know, one thing that is evident in talking to you now, and just so that listeners know, I mean you and I have talked. We’ve known each other for about, probably, probably going on two years now. I think about a year before you started your business, we’d been talking. And you’ve always been very focused on not just providing a quality product, but also providing a quality customer experience through having seamless operations. And it always struck me, and correct me if I’m wrong, is that that’s one of those pieces, that I felt really carried over from your professional career as an engineer in that you are very focused on “how can we make the processes as efficient as possible. Whether it’s how I collect money from a consumer or how I, you know, cook this, cook this item.” So why was it … well, again, I guess the first question is “Am I right in that?”

     

    Vikas: Yes, that is definitely true.

     

    Jennifer: On operations?

     

    Vikas: Yes, that is definitely true. So, my, my, I mean, I definitely was very operations focused at the start of my business.

     

    Jennifer: And why was it important for you, like why did you see that as being an important thing to focus on because in talking to a lot of food entrepreneurs, not that they don’t see it as important, but it’s not necessarily kind of the top three that they focus on. So why did you see that as being such an important thing to be concerned with in addition to, again, having really quality product that you’re putting out to consumers.

     

    Vikas: Yes, so one of the things which happened as part of my plans to start a food business was that I set capital constraints on myself and decided that the whole thing was going to start out as a very low cost venture. So given that I had set those constraints, the need to function with efficiency came about almost immediately, right off the bat. I decided to go with this low cost, and relatively operationally efficient, as operationally efficient as possible, approach because I, sort of, always have felt that being efficient is useful at the beginning because it helps when you work with constraints. You might have less money, and you might need to work harder and do more innovative things, but it helps you, sort of, be more frugal and scrappy, and actually to be start up like. And as a result, I ended up being fairly minimalistic when it came to what I perceived as some of the nonessential aspects of the business. Some of which, I realized, potentially were places I could spend more money in. But that was really the genesis of what drove my push toward operational efficiency right from the beginning.

     

    Jennifer: So, I’m curious, what for you in looking at your business, like, can you give us an example of what you viewed as one of those nonessential pieces? And again, this is obviously specific to your business and your business model.

     

    Vikas: Right. So one of the things which I was grappling with, and I should say, right until about a couple of weeks before launching, was I didn’t have a logo. I had thought through all the licenses and [inaudible 00:09:11] and I had gone into a farmer’s market and decided my menu and practiced my recipes and scaled them up and everything. But I didn’t have a logo and I didn’t have a banner. And I just suddenly started to feel that okay, I have a thing that I’m going to, you know, go out to the market, but I don’t actually have something which is going to tell people about who I am. And so I ended up just getting a very minimalistic logo made off the internet using, you know, a combination of the freelance sites. You know, to bring the banner along with it, and then just the standard logo sizes that are available. And, sort of, went with that. So the logo and brand was definitely something which I did as something of a very, very low cost initiative when I did start.

     

    Jennifer: Great! Thanks for sharing that. I appreciate that. You know, the other thing that I, that we want to talk about today, it’s kind of part of today’s theme for the podcast, is the fact that, you know, you mentioned that you’re working full time, and this was kind of a one and a half day venture. But almost exactly the same time you started the Farmer’s Markets you had another huge life event occur. Can you tell us about that?

     

    Vikas: Yes. So, our baby boy was born last year in June. It was actually exactly one week before the start of the Farmer’s Market. So, for a little bit of preface on that, it didn’t come as a surprise because, you know, we had known about this for a while and it was during the planning phase of the business that I was fully aware that there’s a possibility that the business might launch right around the time that he’s born. But of course, when it actually happens, it’s very different from when you think it might happen. So I was presented with this situation last year in June where he was born in the first week of June. We came back from the hospital a couple of days later, and roughly six days after that was, I was at the promotion kitchen getting ready for our first day at the Farmer’s Market.

     

    Jennifer: And of course the birth of any child into the family is a huge event, but I think especially, I mean, this was your first child. And so that’s becoming a parent for the first time can be overwhelming. So how did you manage to juggle being an employee for your, the employer that you worked for, being an entrepreneur, and being a new father all the same time?

     

    Vikas: So, it’s an interesting question. It was actually very difficult for the first 15 months. I will say that I was extremely fortunate to have family support. My wife’s parents were here and so we had help at home in the form of, you know, being able to take [inaudible 00:12:13] responsibilities when I was away. For example in the kitchen, or when I was at work, or when I was getting ready for the Farmer’s Market over the weekend. One of the, I did a couple of things to help me, sort of juggle through these aspects.

     

    The first thing is I decided very much early on that I just had to keep business priorities for the first year. I decided to focus on product quality, customer service, and customer satisfaction, and operational efficiency which is a piece I talked about a little bit. And what I basically did was that I didn’t end up doing a lot of marketing, and I didn’t end up doing a lot of analytics based off our sales data. I didn’t end up maybe expanding my menu a whole lot during the season. And I basically got out a lot of things which I might have done had the time been different. But just the thought of having a laser focus and trying to get whatever I was trying to put out really well done.

     

    The other thing which I, sort of, did is I tried to make sure … and this was partly true because of the background I was coming from. I realized that when I started at market that it’s extremely physically strenuous to work at a Farmer’s Market, let alone just work over the weekend. And so I made sure that I was being physically fit and staying fully prepared for the Saturday and Sunday rituals full of work as opposed to being a relaxing weekend that it might otherwise be.

     

    Jennifer: That’s a great point because it is, working in the kitchen and then, you know, going out. And not just the physical piece of interacting, you know, of preparing the food and serving it to customers, but also the, well it can be uplifting and exciting, interacting with the consumers you have to always be on when the Farmer’s Market’s there. So there’s no time for either physical rest or a mental rest. Especially when, like you said, you’re doing, working full time and then also working Saturdays and Sundays. So taking that time, or figuring out somehow to take care of yourself within that so that you can enter into the weekends rejuvenated and excited about going in for the farmer’s market is huge. Over the course, especially over the course of a full season.

     

    Vikas: Yes, that is definite. I would say that some of the aspect of just of feeling relieved of stress and cooking being a stress reliever that definitely helped in this regard because the weekend activities then came to me a little more naturally than they would by comparison with, you know, taking on something as additional duty.

     

    Jennifer: That’s a great point. Yeah. You know, we talked about, just a minute ago, that you approach year one with that laser focus that you talked about. Which is a great way to phrase it, but it’s also a great thing for, I think, food entrepreneurs whether or not you’re also working full time and or becoming a new parent simultaneously. It is really hard for us as small business owners to try to do everything. Yet we always try to do. You know, most of us try to do everything and ultimately, like you don’t necessarily do all of it well, as opposed to having two or three things you’re really focused on in that first year. I’d be interested in hearing from you. Were there any, kind of, big lessons learned for you with regards to one or all of those pieces that you were focused on for your first year?

     

    Vikas: Yes. Definitely. Actually there were three big lessons I learned as part of the first year in business. The first and most important lesson I learned was the importance of execution in bringing a product to market. This was true for a couple of reasons. One is that I spent the better part of 2015, roughly the latter half, on weekends, kind of [inaudible 00:16:15], thinking through what I might build. Thinking through what I need to do to get started. But 2016, roughly February 2016, was the first time I actually got started with the nitty gritty of what’s actually involved to start a business. And I realized there were gaps in my understanding. There were potential things I had not considered. There were roadblocks that I had. And so I realized that execution is really important, you know, it’s said quite popularly that ideas are a dime a dozen, but execution is what matters. And I really felt that firsthand.

     

    The other, the second lesson that I learned was the importance of cash flow. Because I was keeping his business very low cost and I tried to make it self-sustaining as much as possible, I had a close eye on our costs, on revenues. Making sure they aren’t going over at any point of time. From the perspective that I realized that, you know, I could look at my business as something that’s promising with a lot of potential for the long term. But in the near term, I still have to be able to pay the next month’s rent. I still have to be about to get inventory for the next week. And I still need to basically manage the rhythm of running the business, regardless of how it might pan out in the long term.

     

    And then, my final lesson, what I would say, the third most important lesson, was that there is actually a lot power of observation when it comes to the food business. And this, I felt was somewhat specific to my experience in the food business because while I was trying to start up a food business, I talked to a lot of food businesses, a lot of entrepreneurs. And in some cases, particularly while approaching a small business, I found that maybe they don’t always have the time to talk to you, or they don’t always, you know, they can’t always [inaudible 00:18:10] you in with what you’re asking them. But sometimes just being observant. You know, standing alongside a chef who’s cooking in an open kitchen, or a food cart at farmer’s market, or a food truck. You know, watching them take orders, and watching customer behavior. Some of these things actually tended to answer over half of my questions. And so over all this time I just realized that being observant actually answers so many questions for me.

     

    Jennifer: Oh, I love that idea! I also, I feel like it might also answers questions you didn’t even know you had.

     

    Vikas: That is absolutely right. In fact, it gave me learnings right from the fact, that I actually, hadn’t gotten my city business license until two weeks before starting in business because I didn’t know that I needed a city license. But then, you know, you see the licenses which are displayed at a business and then I realized, “Hey! Maybe I need one.”

     

    Jennifer: That’s great!

     

    Vikas: And then, down to little things like, you know, somebody serving, let’s say, a roll. What kind of aluminum foil are they using? Or what brand of vinyl gloves are they using? Now these things might actually appear as very mundane and day to day to an average business owner, but being new, I realized there was value in observing and, sort of, making most of all these things because when you go to the store, you’re presented with so many brands that you really do need to make a quick choice.

     

    Jennifer: Yeah, it allows you almost to let somebody else vet the products for you. So that you can just go in and say, “Okay. These are the ones that XYZ are using. I trust that they are going to be better than if I just come in and blindly choose.”

     

    Vikas: That is correct.

     

    Jennifer: What about, you mentioned that you didn’t necessarily spend the time, a bunch of time or energy or money, on marketing. There’s nothing wrong with that, but what about the customer education piece? And I kind of roll that into marketing because often times people will say, “Marketing and customer education go hand in hand.” But in your case, you know, your menu doesn’t necessarily consist of what Americans are always familiar with when it come to quote typical Indian cuisine. Your menu is authentic, but maybe not mainstream for, especially for Caucasian Americans.

     

    Vikas: That is right.

     

    Jennifer: Did, so … I guess a couple questions: Did the demographics in the area that, in your farmer’s market area, did it necessitate that you had to educate the public about your menu items? And if so, what did you do to help with that education process?

     

    Vikas: So, good question. I definitely did need to do a lot of customer education. For some background, the food that I started out serving, both the snacks and the beverages, these are extremely popular in the western states of India, but they really haven’t penetrated into a lot of American cities. Definitely not in Seattle. And so, what I found that, what I found is that the demographic of the farmer’s market was such that I had people who hadn’t even tried the food, let alone hadn’t even heard of them. And so they would come up and ask me, say, “Hey. What is this?” So for example, we had a tapioca patty and they had sort of tapioca starch in their mind whereas this is actually tapioca that we use. And so I had to, sort of, educate them about how we put this together, and the tradition of how we cook it and prepare it. And there was definitely a lot of face to face time spent talking with customers at the stall.

     

    I also had resources ready and, sort of, handy for them, in case they had more questions or needed more information. In some cases, those resources were really as simple as Wikipedia articles or maybe a link to a recipe on the internet.

     

    It was overall an eye opening experience because what I realized out of having this sort of different menu from the standard what you might see in Indian restaurants or quick service restaurants, is that we got a lot of polarized opinions from some of our traditional items. On the one hand, there were people who thought, “Wow. This is something that I’ve never tasted before.” But on the other hand, there were people who maybe hadn’t even tasted all of those flavors coming together. Like tapioca, peanut, and potato with cumin seed and salt, and a few other spices. And they kind of took a little time to warm up. So in terms of how we adjusted and who we, sort of, got the consumer education going, it was a combination of face to face time spent with the consumer and, you know, it did mean, in some cases, that, you know, maybe you spend an extra minute or two in processing that order.

     

    We did give away complementary samples initially where maybe a customer would order a more familiar item off the menu. Or they might just order a beverage. And I’d say, “Hey! We have this traditional item on our menu today. Would you like try something?” Or would they like to try it, and then, you know, maybe you give them a piece or a small sample.

     

    And towards the latter half of the season we definitely found that people had warmed up to these items.

     

    Jennifer: Interesting. I like that idea of doing the sampler. I mean, certainly, you know, if you can afford it to do the sampler.

     

    What about, you’d also told me in a prior conversation that you put together a menu item that basically, kind of was a sampler platter if you will. A little bit of everything to help encourage, encourage people to try an assortment of items offered from your, from your farmer’s market booth. Can you tell us about that?

     

    Vikas: Yes. That is correct. So one of the things we realized was because a lot this menu was new to the customer at the farmer’s market there might be some apprehension with regards to trying a specific item. Particularly if the customer is not sure about what it tastes like. And, you know, although we were giving out complementary samples, along with, you know, to paying customers who would buy some other product. Not everyone might stop by for a sample and so on. So what we actually did was we put together a sampler which was a small quantity of every item on our menu and we actually sold that as a full menu item.

     

    Now what ended up happening as a result was that there was a little bit of a hit we took in terms of our margins because the sampler was discounted relative to the combined price of the individual items. But what it did allow is that it gave the customers the opportunity to sort of get a feel for each of the different items. We actually found that a lot of the customers who tried the sampler for a couple of weeks actually came back and bought the individual items in future weeks.

     

    Jennifer: That’s fantastic! And you know, sometimes it is those short term, you know, you never want to have a crazy, crazy discount on your margin, but to be able to get customers to trust and learn about those other products ends up being a much better long term revenue idea then simply hoping that one day they might choose something different off the menu.

     

    Vikas: Yes.

     

    Jennifer: What, you know, we’ve been talking mainly about the farmer’s market arm of your business, but as I mentioned in the introduction, starting last fall you also started offering catering services. So can you tell us a little bit about the catering piece of your business? Why you ultimately decided to go that route? Had you planned that as part of your initial business plan? You know, and again, I know throwing a bunch of questions at you, but you know, what, what did you find different, or what did you learn in comparison to being the farmer’s market when it came to catering?

     

    Vikas: Yeah, so, catering was an arm of the business that started out in the early fall of 2016. So roughly about three and a half months into the farmer’s market season. Catering was definitely something which I had thought about as something I wanted to do when I started the business, but then keeping a tight set of priorities, being busy with everything else that was going on in life, I decided, you know, maybe I should just give it a few months to see how the farmer’s market takes off before I get into catering. So in about the third month, we got into catering. The catering angle of the business is actually fairly different. In the sense that we have an expanded menu. We have a very different clientele and the orders schedule tends to be very different than the farmer’s market.

     

    So speaking through each of these, what tends to happen is that we’re based on the east side of Seattle and so the clientele tends to be fairly local. Which is very different from the farmer’s market which is people who live in the city and actually, just might walk to the market or walk down the hill, you know, to the nearest stall depending on where they live. As I learned demographic of people who were coming to our catering business was almost the, you know, 180 degrees opposite of what the demographic was at the farmer’s market. We needed to prioritize a lot more on a lot of traditional Indian foods which might not have been things we sold at the farmer’s market, but have started to become popular among the local circles here. And so that was one angle of catering which, you know we needed to adapt and build.

     

    There was a benefit of catering in that, catering orders seemed to be fairly well defined. And so we knew exactly when the order was coming in how much food was to be prepared and so, the situation of having food left over or having, you know, inventory that is being, kind of, just kept in the kitchen and doesn’t have a use for was really not there.

     

    And then finally, and this is actually an interesting place where perhaps the farmer’s market was beneficial. Catering orders given my full time job, and given the fact that there are family commitments, catering orders, in essence, do tend to be fairly sporadic where we’ve done catering orders ranging from birthday party, baby shower, holiday party, you know, small gatherings at home. But over a period of time I realized that a catering order is great if the caterer is available to service the order on that day. Very different from a farmer’s market where you decide to go out on the day that you are available and then you can service any customer.

     

    The reason I mention this is because in catering orders, we did have two or three situations where the order came in and then, you know, we were just way too busy on that weekend and we couldn’t take that order. Now I don’t know if that person going to order again after three months or after six months, or maybe after a month. Whereas at the farmer’s market even if we would run out of food, the customer could potentially come back the next weekend, you know, come a little earlier and try our food.

     

    So I think in balance there’s definitely been a lot of learnings as well as understandings of key differences in the whole experience of getting into the catering business.

     

    Jennifer: So then, you know, as, again, as I mentioned, like, you are starting your second farmer’s market season now. Are you continuing catering simultaneously? As you also do the farmer’s markets or how are you going to work that this summer?

     

    Vikas: So, yes. We will be doing catering along with farmer’s markets this summer. One of the things that I realized which experienced caterers do and which I didn’t do actually the first year is they ask for a significant amount of lead time to prepare for an event. They typically sign contracts. They have some sort of formalized relationship with the customer well ahead of the event. So yes, we’ll definitely be doing catering in our second year as well.

     

    This is a small business, and so we aren’t set up to do, for example, full service catering like some other caterers are set up to do. But we’re looking to expand as we go along.

     

    Jennifer: So that actually fits perfectly in with my next question. So, as you head into this second year of business, do you have those, do you have those three priorities again like you did last year that you’re really focused on this year? What are you, what are you focusing on, what do you hope to learn, what, where are areas of strategic growth that you’re really looking towards for your business? Or essentially, what are you thinking? Like if you and I are talking a year from now, what would you love to be telling me about your second year of business?

     

    Vikas: Yes. So, as we enter the second year of business in June, I’m looking at a few things that I’d like to do in the second year. The first is sales growth. So look at growing our sales year over year. Two, an expanded menu. We had a fairly limited menu at the farmer’s market last year primarily because we were just starting out. Looking to have better analytics on some of our sales data. So we didn’t really keep a lot of cash analytics. We didn’t really keep close track of sales as in the break down of sales week to week because we were just so busy, kind of, in the whole production process that, you know, we were just very tired at the end of it.

     

    Another goal which I have for the second year is starting to explore more social media channels. And expanding marketing presence because that was one of the places where I couldn’t make it a core priority in the first year. But now with the second year feeling more of an implement for it over the first, I do want to expand in that space.

     

    I also have the goal of essentially growing the business. So scaling up. We currently have a size limit on catering orders. We aren’t exactly set up to do very large, for example, 300 or 500 person orders. I’d like to start scaling up on the catering front, and then also scaling up on the farmer’s market front. It’s kind of an interesting challenge given the fact that everything in life remains the same. And our baby boy is going to be one year old very soon, so that takes up time, too. So I’m definitely looking at this as growing over the first year and then trying to start to do new things in the second year where I’m sort of building on the first year of experiences.

     

    Jennifer: You know, and so, working towards building on, like you said, your first year experiences, you’re still working full time? Correct?

     

    Vikas: Yes. That is correct.

     

    Jennifer: And then you now have an almost, I mean, you know, coming up any day now, one year old. So I’ll ask you. How are you planning, or how are you hoping to manage all that? And still enter into the weekends feeling revitalized and excited about being at the farmer’s market?

     

    Vikas: That’s a great question. So, one of the things which I have done in the down time that we had … and it’s not exactly down time because we stared catering in fall. But we didn’t do a farmer’s market in the winter season. And so there was down time to that extent. Is, I worked on improving our processes. I worked on improving how we manage inventory. And overall just streamlining our prep time, so that we have a better picture on, we feel better about how we’re going into the market prepared for the next, prepared for the next season. So definitely improved efficiency is going to play a big role.

     

    The other thing which I’ll say is that as we sort of enter the second year of business, you know, I’ve taken time to become more efficient at household tasks. I will say that this is starting from mundane tasks like filling milk bottles and, you know, making sure that everything is neat and tidy around the home kitchen and making sure that home chores are taken care of. Because over a period of time, managing a family as well as managing a business necessitates that, you know, you really have to, kind of, take this on as two jobs. And more than two jobs actually. I think the thing that has kind of helped me and this is a discussion we used to have even last year is the business is, in a sense, a second child. And so when the business is viewed upon as a second child it really takes upon a responsibility of its own.

     

    And in terms of energy and staying vitalized, this was a part that really came to mind last year as well. Which is how will I have the energy to work nearly 22 to 24 hours over the weekend when I’ve worked a full week Monday through Friday? I realized in the end that food and cooking, cooking in particular being a stress reliever, and the whole experience of seeing a satisfied customer at the market who has eaten your product and praises it or gives you positive feedback in a different way, is really so powerful. That really sometimes it’s not the energy but the adrenaline rush which comes from seeing those satisfied customers which keeps me going.

     

    Jennifer: Yeah. I can identify with that, that it’s the, those experiences, I feel like they give you energy. Even though you are working on your feet, you know, all weekend long. You still kind of walk away more jazzed and more excited. I remember that when I worked in a professional kitchen, for hotels, I would be so excited by the end of the day, I would have to come home and there would be like two hours of wind down afterwards before I could go to sleep even though I wasn’t getting off until two AM. Just because it is the adrenaline. It’s coursing through you and you’re excited and you’re loving what you’re doing and that does provide you with a certain amount of energy.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, thank you so much for talking to us and sharing, sharing your story! You know what I love about it, like I said in the beginning is the fact that you are, you are doing what is not necessarily uncommon in the food industry which is trying to juggle this balance of professional, full time career with starting up a food business, or growing the food business like you’re doing now in addition to family responsibilities. And that, you know, sometimes that can be a tough act to juggle, so I love talking to folks like you who are doing it.

     

    I also love your focus on operational efficiency. It’s one of those things that outside of this podcast in talking to other food entrepreneurs I’ve been hearing come up more and more. And whether it’s streamlining a business process or a cooking method, or something, that that’s really what’s helping a lot of food entrepreneurs become more successful because time is, time is our biggest constraint. So how can you maximize your time when it’s in the kitchen or when you’re focused on your business, and a lot of that is by taking a look at the processes you have and making sure they are as efficient as possible.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, again, thank you so much! I will put a link to the Bombay Bitez Facebook page on the transcripts for this podcast which will be on the Small Food Biz website. And again, thank you! I really appreciate it.

     

    Vikas: Thank you so much, Jennifer, for having me on the show.

     

    Jennifer: Yeah! Thank you.

     

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    Building Successful Food Service Relationships (PODCAST)
    27:03
    2017-09-23 00:45:13 UTC 27:03
    Building Successful Food Service Relationships (PODCAST)

    When I asked on the Small Food Business Facebook page, what types of topics podcast listeners would like to learn about, several people mentioned an interest in knowing more about selling to food service accounts.  With that in mind and armed with questions sourced from listeners about this topic, I reached out to Allison Ball, of Alli Ball Consulting, to find out more about what food producers should be doing if they’re interested in getting food service accounts.

    Alli has offered listeners to today’s podcast a discount of $25 on her e-coures.  For more information, click here and use the promo code smallfoodbiz.

    TRANSCRIPT:

    Jennifer: Allison, thank you so much for being here today. I really appreciate it.

     

    Allison: You’re welcome. I’m excited to chat with you.

     

    Jennifer: So we’re going to start with a really basic question because we’re talking about food service today, but want to make sure that everybody listening is on the same page. So what exactly do we mean when we talk about just the word food service in general, because we’re going to be talking about how to get food service accounts, or some tips and ideas. But what does food service mean? What types of businesses does that comprise of?

     

    Allison: Yeah, that’s a great question. So food service is essentially the opposite of retail. So it’s when a producer sells to a wholesale account, then uses their product either as an ingredient or as an item on the menu. So it’s establishments where food is served over the counter rather than off the shelf. So food service accounts could be restaurants, bars, schools with cafeterias, businesses where they provide meals for their employees, coffee shops, things like that.

     

    As a producer you can sell to both retail stores and food service accounts. Say you make something like a Bloody Mary mix. You could sell it in a quart container on a retail shelf, or you could sell it in bulk to a bar. Does that make sense?

     

    Jennifer: Yeah, that makes great sense. And I love the example, too. I mean some of the ones that you mentioned, things like school cafeterias and food that’s sold within a corporate setting, which certainly up here in Seattle a number of our tech firms do that. Yeah, those are ones that I hadn’t really thought of but, yeah, those are food service accounts. It’s great to think that it’s a pretty wide-ranging types of businesses.

     

    Allison: It really is. I’ve had clients who have had really, really great success in nursing homes and hospitals and things like that, so it really is a broad category.

     

    Jennifer: Oh, that’s excellent. So you know I know that over the course of our interview today we’re going probably dive into this next question in more detail, but again, kind of like at a high level. So what are some of the things that make selling to food service establishments different than selling to a retail store buyer?

     

    Allison: Yep. So like I mentioned in that past example, number one is it’s usually sold in bulk or in bigger quantities. So again, using that Bloody Mary example, you might sell a 16 ounce Bloody Mary mix on a retail store shelf, on a grocery store shelf, but you might sell your Bloody Mary mix in one gallon jugs to your food service account. So usually bulk. So usually the packaging is a little bit different. And typically it’s higher volume as well. So if you make a really small batch product or something that’s really seasonal, that might not be a great fit for food service.

     

    And then there’s two other things, too. The pricing is slightly different. And then lastly, when you sell food service, you don’t necessarily get the brand recognition that you would on a grocery shelf. So the end user might not know that the restaurant or the cafeteria or the golf course, whatever it is, is using a particular brand in their cafeteria, right? So if you make pickled onions, or you make, I don’t know, a type of cheese, a particular farmstead cheese, that end user might not know it’s your brand of pickled onions or your dairy’s cheese because it’s not highlighted on that food service’s menu.

     

    Jennifer: Okay. So we’ll talk about the packaging and the pricing piece in a minute. But what you were just talking about with regards to brand, just in your experience, is that really important to some food entrepreneurs and so they might determine that going into food service is not the right avenue for them because they want to build that brand recognition?

     

    Allison: Yeah. I do think that that’s really important. Especially if you are a brand that is higher end and your story helps sell your product or helps justify the higher price point on your product. For example, if you make really, really high end chocolates, and you are all about the story of foraging the inclusions that you put in your high end truffles, and they all come from within 20 miles of your home and you’re doing everything by hand and on and on and on, when that food service account buys your truffles and has to pay that really high price point for that, and then they just put a single truffle on a dessert plate, they’re not going to highlight your brand and maybe can’t justify paying the expensive price because of that.

     

    So yeah, for some producers who really want to build the brand following, food service may not be the way to go. Alternatively, some food service accounts do highlight brands. Right? If you do have a great story to tell, they might want to partner with you because your brand following. It just depends on the account.

     

    Jennifer: Again, that’s a good reminder for folks not just to be looking at the sales because somebody might be listening to this today and think, wow, this is a great potential channel to get into. I can really drive sales through this. That would be wonderful for the bottom line, but if it’s not in alignment for what you want for you brand awareness, then it might not be a good fit for you.

     

    Allison: Exactly. Exactly. If it’s essential that you have the brand awareness to sell your product, then food service might not necessarily be the right channel for you.

     

    Jennifer: So stepping back, you were talking about packaging and you mentioned about bulk sizes, bigger sizes. Is there other things that food entrepreneurs should take into account when it comes to selling to food service? I mean a lot of food entrepreneurs spend a lot of time and a lot of money on their packaging. Is that as important when you’re talking about food service accounts? [crosstalk 00:06:31]

     

    Allison: No, it’s definitely not as important because that end user doesn’t see the packaging. Or rarely, rarely sees the packaging. So like we said, selling it in bulk to food service accounts is much more typical than selling your smaller retail packaging. But the most important thing is that that packaging for food service accounts is that it’s sturdy, that it’s stackable, that it’s going to protect your product from transport or in storage. So there’s no need for that really beautiful packaging that’s ready for the retail shelf, but it must be able to protect your product.

     

    And then furthermore, you want to make sure that you still have all of your information on the outside of that packaging so that it has your brand name, that it has the product. You still want to put your ingredients on the packaging. That is really important, especially as consumers are more and more concerned with ingredients. So you want that, and then you always want to have your best by date on your food service package because food service establishments are buying lots and lots of ingredients and they want to be able to quickly look at the outside of your packaging and know how to properly rotate and use their products from their inventory.

     

    Jennifer: Oh, that’s a great tip.

     

    Allison: Yeah.

     

    Jennifer: I was thinking back to the days when I was working as a pastry chef for a big hotel and just the quantity of ingredients that we would get in on orders, and then it’s just going into storage.

     

    Allison: Exactly.

     

    Jennifer: And you’re right, I mean we’re kind of throwing it back into the walk-in.

     

    Allison: Yeah, exactly. Exactly. And you know if you’re ordering 200 pounds of sugar at a time, and they’re coming in 20 pound bags, you want to make sure that you’re keeping your back stock rotated. So in my mind, like the bigger the better for the size of the expiration date on your food service packaging.

     

    Jennifer: Great. You know, I had mentioned to you Allison, that prior to this interview, I put it out on Facebook that you and I were going to be talking. We were going to be talking about food service and wanted to know what questions folks had. And without a doubt, and I know this is not … there’s no easy answer to this, but without a doubt the number one question that came up again and again was with regards to pricing. Is there a secret or is there anything to know about when it comes to pricing your products for food service versus when you’re pricing them for grocery stores and retail buyers?

     

    Allison: Yeah. It’s a really good question, and it’s one that I do get all the time. And sadly, there is not a magic number that you can just punch into your spreadsheet. So it is similar to retail in the way that margins vary from category to category. They vary from type of establishment. A coffee shop that’s buying your pastries is going to pay a different price than a tech company who’s buying your pastries. So there aren’t rules that are set in stone.

     

    The easiest way for you to approach the conversation of pricing is to be really honest and straightforward with your accounts. So I’ve seen margins that range from 30% all the way to 60%. Typically it’s about a 35% margin that they’re looking for in food service. But above all, producers need to figure out their own pricing, compare it with the competitors, and have an honest conversation with your accounts about pricing. And realize that pricing is negotiable from both sides. You can negotiate pricing on your terms as a vendor, and then also that food service account is going to want to negotiate pricing as well.

     

    Jennifer: You mentioned comparing it with competitors, and that’s one thing to do let’s say, when you’re trying to get it onto a store shelf because you can just go to stores and do a little bit of competitive analysis from a price standpoint, but when selling food service, I mean that’s a little harder because you can’t just [crosstalk 00:10:47]

     

    Allison: It’s a little harder.

     

    Jennifer: Is there any-

     

    Allison: One of the things that I talk about so often is realizing that as a vendor starting into the food industry, realizing that when you gain new accounts and whether you’re selling direct to an establishment through an in house buyer or you’re starting to have those conversations about picking up distribution, or maybe you’re adding a broker, it’s all about relationships.

     

    So the more you can start those relationships from a place of mutual understanding and trust, the better. So once you establish those relationships, I mean they happen over time, and they grow slowly, but once you have those trusted relationships, and you have those key people in your network, you can ask them questions like that. You could say, “Hey, distributor. What target margins are catering companies looking for as they’re buying bulk ingredients?” “What do you think of my packaging for food service?” “How do you like my sell sheet?” All things like that.

     

    Certainly like I said, those relationships happen over time, and I wouldn’t necessarily start asking all those questions in your first meeting as you’re interviewing a new broker, or in your first sales pitch to a new wholesale account. But over time, once you have that relationship established, you can lean on your accounts for feedback and advice.

     

    Jennifer: That’s great advice. So it can be a two way street.

     

    Allison: Yeah. Yeah, I guess that was a long-winded way of saying that you can ask about your competitors’ pricing. You can say, “Hey, are we the most expensive mustard on your list?” Or, “We want to be the value mustard in your deli. What would it take for us to get there in terms of pricing? What price do you want to see?”

     

    So yeah. Just ask. I feel like over and over again, my clients are surprised with how much information they can get just by asking.

     

    Jennifer: Yeah that’s great. I’m thinking about the fact that I feel so often that when I talk to food entrepreneurs, they’re always so nervous about the pricing discussion and afraid like they just say one wrong thing and the whole deal blows up. So I love what you’re sharing about, obviously it is you have to build the relationship. It’s not something you want to ask the first time you meet them, but ask them and see if you can get feedback from them.

     

    Allison: Yeah, and I think that it is important to realize that you don’t want to be a high maintenance vendor. Right? So it is important to realize you don’t want to ask all those questions in the first meeting. That first meeting you do want to seem prepared and confident and like you know what you’re doing. You put some thought into your pricing. When you seem unprepared for those meetings, whether it is food service or a meeting with a broker or a meeting with a retail account, if you seem unprepared you seem unprofessional. But down the line, you can ask for feedback and get some suggestions on your product or your pricing or your packaging. Whatever you’re looking for.

     

    Jennifer: So in terms of that first meeting, or actually we’ll kind of step even before that, you’ve talked a little bit about brokers, you’ve talked a little bit about distributors, and you also mentioned just potentially talking to like the buyer at the food service organization, how does one find food service accounts? And is it better to go with a broker? Maybe there is no better, maybe it depends, but that’s another question. It’s like okay, I’m interested in going into food service, but now how do I … do I literally just look up all the cafes in my neighborhood and start knocking on their door?

     

    Allison: Yeah, it depends. And it depends what type of accounts you’re looking for. If you are looking for corporate accounts, and you’re really looking to get into all the little kiosks and little like … shoot, what are they called? I’m going to have to have you edit this out. Why can’t I think of the name of it? Like oh, the break rooms.

     

    Okay. I’ll start over there. So let’s see. So it depends on which type of food service account you’re looking to get into. If you’re looking to get into big companies and you’re looking to get your product in all of the break rooms in all of their offices, you might need to go through a food service distributor. It might not work if you roll up to the office and try to figure out who does the purchasing at Google or Facebook. Right? That might be challenging. So larger accounts like that, use distribution.

     

    That’s not to say that cold calling and knocking on doors doesn’t work, but that tends to work with smaller accounts. Certainly cafes in your neighborhood. Sometimes schools, too, if you know of a parent who is heavily involved in the school you can get an introduction through someone in the community. Sometimes the cold calling does work, but with food service, it tends to more often it works through distribution.

     

    Jennifer: Okay. And I just want to tell one of my very favorite stories is actually speaking of a big company that begins with the letter G in the San Francisco area. There was a story about a food entrepreneur that I know who, she would always have samples with her and was just standing at the bus stop waiting to go into the city, happened to chat up the person next to her because they were always on the bus, and gave this person samples. The person loved it and was like, here, I’m going to put you in contact with the purchasing manager at said big company. And that’s actually how they got in, was just literally by hanging out and talking. And she had no idea this woman worked for this company, had no idea this woman had any connections, but that networking piece is sometimes also surprising how powerful it can be.

     

    Allison: It really is, and if you have a great product and you happen to be in the right place at the right time, sometimes those really wonderful connections happen and you never know where they’re going to lead. I also think that it’s important to realize that trade shows are still really important in the food service space. People, like larger companies who are looking for food service or for bulk products often do the bigger shows, like Fancy Food, and pick up big accounts there. So trade shows are great.

     

    Also I forgot to mention, when looking for a distributor for food service, oftentimes there are distributors who specialize in retail accounts and distributors who specialize in food service accounts. So if you specifically want to do food service, it could be worthwhile to find a distributor who specializes in that. It isn’t necessarily the same distributor who’s going to get you on the retail shelves.

     

    Jennifer: Okay. Yeah, that’s another great tip to know.

     

    So let’s say that you found this contact, whether it’s a distributor, whether it’s the purchasing manager, is the sales process any different than when you go in for a retail account? I mean I guess I’m just wondering because the brand isn’t necessarily as important in terms of end facing to the consumer. Does your story matter as much, or is it more nuts and bolts and numbers? Do you [crosstalk 00:19:07]-

     

    Allison: Yeah, those are great questions. Ultimately it comes back to the why. Why would that food service buyer purchase your product instead of making it in house? So does your product save them time? Does it save them labor costs? Do you have equipment where you can make your product that they don’t own that equipment in their kitchen? Maybe your product guarantees consistency on their menu. So again going back to that Bloody Mary mix example, it takes a ton of work to make a really high quality Bloody Mary mix.

     

    We’re talking about a Bloody Mary mix that is not just V8 out of a can with horseradish mixed in and some sriracha. Right? Like if you want to make a really high quality Bloody Mary mix, you are roasting those tomatoes. You are blending them, straining them. All of that. So it takes a ton of prep work. For my client who’s making this Bloody Mary mix, he goes in and his sales pitch is all about how it takes that labor off the bar staff, their pricing is then super controlled, with the portion size. That Bloody Mary mix costs the same every single time they order it. It tastes the same every single time they serve it. Year round, right? So it allows that bar to really, really control their numbers. And, like I said, gain efficiencies on the prep side of things.

     

    So think about if your product can somehow benefit that food service establishment. Whether it is from a consistency point of view, or a labor point of view or a quality point of view. Something they can’t do in house.

     

    Jennifer: Okay so it’s thinking about it through their eyes and coming up where their pain points are it sounds like.

     

    Allison: Exactly. Exactly. What can you provide that they can’t do themselves?

     

    Jennifer: Right. You know another thing-

     

    Allison: So-

     

    Jennifer: Oh, I’m sorry.

     

    Allison: I was going to say, in addition to that, you and I talked a bit about sales sheets and if you would, in addition to having a different verbal pitch to that buyer, you would want to make sure that you have a different sell sheet as well. You don’t want to hand over your sell sheet that talks about the dimensions of your retail product when really you want them to buy it in those five gallon pails or in the five pound boxes or whatever it is.

     

    Jennifer: Yeah. Again, like I keep saying, thank you that’s great. But like really, that’s another great point. You’re selling to a different audience so to speak, so all those other components have to line up.

     

    Allison: Exactly. And at the end of the day, the food service buyer doesn’t care if your product looks really great on a Metro shelf because they want to know how does it perform in the kitchen? How does it play with the other items on their menu? How does it work for their business? They don’t care about the retail story of your product.

     

    Jennifer: To that end, is it ever recommended that the producers come up with recipes or suggestions so that the buyer can start to see how the product can be used in different ingredients? Or is it pretty much like the food service folks know what they’re doing and you don’t-

     

    Allison: No, I think it’s a great idea to do recipe suggestions. And certainly you would want to assess the individual account before you go in making suggestions, right? You might have a buyer who is really confident and knows exactly why they would want your product, and doesn’t really have the time or the interest in hearing your suggestions. But there are some buyers who are really open to that and would love to hear how to use your shrub in their cocktail recipes for brunch. It just depends on your product and if it makes sense with the account that you’re pitching to.

     

    Jennifer: Yeah. I envisioned like, “Oh, Thomas [Koller 00:23:43] here’s how you could use my [crosstalk 00:23:47].

     

    Allison: Yeah. Exactly. He doesn’t care. He doesn’t need suggestions on how to use your ketchup, right?

     

    Jennifer: No.

     

    Allison: Yeah. He’s like, “I got it.”

     

    So it depends. If your product’s unique, it might make sense. It also I think it can help to brag on who else uses your product. If you do have a really great account, say you were selling your salt to the French Laundry, then you wanted to go pitch at a high end restaurant in Portland, you could say, “We are the number one used salt at the French Laundry. Like wouldn’t you love to use the same salt that they do?”

     

    So it depends. If you already have a reputation and have some of those accounts that might help increase sales or help gain new accounts, you can certainly mention it.

     

    Jennifer: That’s a great point.

     

    Allison: Yeah. It could be highlighted on your sell sheet. I guess that’s where I would do it. Yeah.

     

    Jennifer: One question that I got when I asked again the folks on the Small Food Business Facebook page, do food brands need to have a contract in place with food service buyers? And if so, what is that going to look like? Or is a purchase order all that’s really needed and used?

     

    Allison: Yeah so it depends if you’re going direct or through a distributor. If you go through a distributor, then they already have contracts and terms and everything set up with that account. If you go direct, you’re going to want all that information that’s typically put on a purchase order. So your payment terms, your order and delivery days or process, you might have a return process outlined or guaranteed sales buy backs if you do anything like that. Just like you would on a retail purchase order.

     

    But I think beyond that it’s hard to get buyers to commit to longer contracts, because again they’re placing a bet on your product. They are betting that it’s going to sell, that it’s going to work with their current menu. That you are going to be easy to work with.

     

    So at the beginning, you’re testing the waters. You’re testing them out and they’re testing your product out. They’re testing you out. You’re entering into a relationship with with them. So it would be rare to expect them to sign a contract that would really lock them into that relationship.

     

    Jennifer: Okay. And then my last question for you, because we’ve covered a bunch of different things today, is there anything else when we talk about food service sales that you think based on your experience is important to discuss or food producers to be thinking about?

     

    Allison: Yes. I’ve definitely touched on this throughout the conversation today, but I can’t emphasize enough how important it is to realize that you as a producer, you’re the face of your business. You are your brand. And this is something that there is no direct cost associated with this. But the more warm and easy going and trustworthy and low maintenance that you are, the more likely you are to gain a following and to pick up these relationships with people in the food industry and to really grow your business.

     

    No one wants to work with someone who is high maintenance, right? You can have the best product, and if you yourself are challenging to work with, it might not be worth it for that buyer to establish a relationship with you. So whether you are thinking about your product for food service or direct to consumer at a farmers market or through specialty retail accounts, whichever channel you’re going through, it’s important to realize that above all, you as a person need to be really lovely to work with.

     

    Does that make sense?

     

    Jennifer: Yeah. Absolutely. And that made me think too also about making sure that you don’t put the cart before the horse. You might have a great product and you might be great to work with, but if you don’t say have your production process in place, your operations in place, and you approach a big account and they go through all the red tape on their end and then want to place an order with you, if you can’t deliver on that order, they’re not going to want to take a risk on you. Why go through that hassle again? So they can tell if you’re ready.

     

    Allison: Absolutely. And buyers are really busy. They’re doing a million things and so you have one chance to make an impression, and if you’re in that conversation and it’s going well and all of a sudden they say, “Yeah sure, we want you to deliver to all 18 of our stores up and down the west coast, and you’re not ready to do that? It puts both of you in a really challenging situation. You don’t want to say yes and then not be able to fulfill those orders. But at the same time, that’s the one chance you got. That buyer’s not going to wait for you to sort out your production and come back in a year and ask again to be put on the shelf.

     

    Jennifer: Mm-hmm (affirmative).

     

    Well, you’ve given us lots of great things to think about. I’m like okay, so be a good person to work with, have a great product and be ready, production wise.

     

    Allison: Yeah. Exactly. Exactly. I guess we can sum it up by saying just be thoughtful and intentional in your business. I see a lot of people who just grasp at things. We call it the shiny object syndrome. Where you see an opportunity and drop what you’re doing and go after that opportunity. Maybe it’s a new food service account, or maybe it’s a fancy new trade show, or maybe you’re going to be put in the gift bags at the Emmy’s. There are all these shiny things going on in life and it’s really important to not get distracted by those as you’re building your food business, and really be intentional with your growth strategy.

     

    Jennifer: I love that. Yeah, that sums it up perfectly.

     

    Allison: Thank you.

     

    Jennifer: Ally, thank you so much.

     

    Allison: Oh, this was so fun.

     

    Jennifer: Thank you. And obviously again to everybody listening, on the transcript of this page I will have links to Ally’s website. She also has a wonderful course as I mentioned in the introduction that might be interesting to many of you about getting both your company, your product, all those pieces ready to go after buyers and successfully get those buyers and get those accounts. So I’ll include a link to all of that on the transcript page for today’s podcast.

     

    Allison: Wonderful. Thanks for having me Jennifer. This was wonderful.

     

    Jennifer: Yeah, thank you again Ally. Really appreciate it.

     

    For more information about Allison Ball check out her website at alliball.com.  Additionally, Alli has downloadable e-courses on her website that help you understand how to connect with Wholesale Buyers and maximize your sell sheets.  She has generously offered podcast listeners a $25 savings if you use the code smallfoodbiz when checking out.  For more information, click here.

    Click here to listen to other podcasts in the Small Food Business podcast series.

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    Getting Out Of The Kitchen (MICROPOD)
    2017-09-23 00:45:13 UTC
    Getting Out Of The Kitchen (MICROPOD)

    Today I have a little micro-pod for you, if you will. A short podcast where I’m going to share with you something that’s been on my mind as an entrepreneur. In part, today’s podcast is short because I’m exhausted – but not in the way you problely think.

    TRANSCRIPT:

    This past Saturday I ran my very first ultra trail marathon. It was a 50K which, to those of us in the US, equates to about 31 miles and it had approximately 5000 feet of elevation gain throughout the course – there was a lot of hills! It was a long, hot, dry day and my body is utterly worn out right now.

    While my body is tired – and very sore – my mind has never felt better though.   In doing the race I gave myself permission to not focus on work for an entire weekend. Study after study shows that taking time away from work can be one of the best things for entrepreneurs yet it’s so very hard to do.   This isn’t to say that I didn’t think about work while running – when you have multiple hours with not much to keep you company but your own thoughts it’s natural that some of the things you’re working through at work will come up. But I just let them come up and let my brain mull over them as I worked on putting one foot in front of the other. For some things I came up with some potential new creative solutions and there were other issues where nothing seemed to simmer to the surface so I filed it away as something to focus on for another day.

    In addition to not focusing on work, this race also gave me time away from being a mother. That may sound incredibly harsh and it’s not meant to – I adore with every fiber of my being my daughter and the time I spend with her. But if you are a parent you know how easy it is to want to spend every moment of your nonworking time with your child. As good as that is for your bond, it doesn’t always leave a lot of time for you to focus on who you are outside of being an entrepreneur and a parent. This race was a chance for me to be incredibly selfish with my time and just focus on me. In doing the race it reclaimed for me a little bit of who I am at my core when you strip away the titles of parent and business owner. It felt good to get back to that core for a little bit and made the joy of running down the finishing chute with my daughter even sweeter.

    One thing I thought about a lot while running and that’s the fact that being a business owner is a lot like running an ultramarathon. The reality is that it’s a long slog. We’re not in this as a sprint – there’s little in terms of easy cash when it comes to the food industry. You have to be willing to be in this business day in and day out – albeit with taking some time now and again to get your brain out of the business – just putting one foot in front of the other thousands of times over.   There are moments of euphoria along your journey and moments of utter despair where you’re sure you’ll never finish. You will undoubtably stumble along the way – we all do – but you’ve got to pick yourself up, dust yourself off, and keep going.  The journey will make you stronger and smarter as a business person.

    You know one of my new years goals this year was to do something that really pushed me outside my comfort zone. Lining up at the start of the 50K was a little terrifying, but it was also exhilarating and sometimes the best experiences in life come from those times we push ourselves – both in business and in life – so that we’re standing just outside our comfort zones.

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    What To Know When Selling Your Food Business (PODCAST)
    2017-09-23 00:45:13 UTC
    What To Know When Selling Your Food Business (PODCAST)

    Some of us start food businesses and never give a thought to selling it while others enter the business with an exit strategy in mind.  Regardless of which camp you fall into, knowing what buyers are looking for can help you make the decisions now that keep your options open in the future no matter what you ultimately decide.

    TRANSCRIPT:

    Jennifer: Today we are talking to Bryce Hansen of Hansen Business Advisory who helps owners of privately held businesses navigate the challenges of selling their business. Specializing in privately held business of one million to twenty million in annual revenue in the Pacific Northwest, Hansen Business Advisory bridges the gap between the buyer and the seller’s unique needs, acting as a quarterback for the process. After identifying the clients goals, Hansen Business Advisory helps repair the business for sale, locating qualified potential buyers and finally negotiate and close the sale.

     

    I realize that many of the listeners may not have businesses that are in the one million to twenty million dollar annual revenue range, however, Bryce is able to share a lot of information with us that is applicable to you if you are thinking either now or some point down the road you might look to sell your business.

     

    Jennifer: So Bryce, as we get started today, I was hoping that you could tell me, based on your experience, what have you found that entrepreneurs think about as they think about selling their business? What drives this motivation to sell something that they dreamt about and were so passionate about and have worked so hard to build?

     

    Bryce : The priority reason that I come across and it depends on the size of the businesses you work on, but in the space that I work in, a primary driver is business retirement. They have been working on these business their whole life, they really love it, it’s their baby, but they may not have kids who are interesting in taking over the business or they may have kids, quite frankly, that they aren’t sure should be taking over the business or they can’t afford to take it over and the parent who is wanting to retire needs the money for retirement.

     

    Sometimes we see people who are exhausted, they’ve just been working in their business a long time and they’re, quite frankly, exhausted and so sometimes that’s a reason. Occasionally, they’re entrepreneurs that have lots of ideas. I don’t want to use the clinical term of ADD, but they tend to be, they’re really all over the place and so they occasionally are bored with the project and they have a new project that they want to work on and sometimes larger companies, they just want to cash out or maybe it’s beyond the skills that they have and they know that they need additional skills to keep it growing.

     

    Jennifer: Oh, absolutely.

     

    Bryce : But, retirement is a big part of it.

     

    Jennifer: Okay, that’s interesting. With regards to new project ideas, I like to joke that that’s called “Shiny Object Syndrome.”

     

    Bryce : Absolutely, absolutely.

     

    Jennifer: A new thing to do.

     

    Bryce : Yeah, yeah. They just find something new or the business they started has morphed into a place that they didn’t originally think that it was going to be and it works. It works really well, but they’re maybe more passionate about one part of it that the business didn’t morph into.

     

    Jennifer: That’s a good point. In talking to some entrepreneurs who have sold their businesses, sometimes, at least what I’ve seen is that these are people who like starting the businesses, but once it gets to that point where it’s really smooth sailing and the processes are down and everything else, it’s not necessarily as exciting to the entrepreneur anymore.

     

    Bryce : That’s absolutely true.

     

    Jennifer: To cut to the chase, the biggest question most entrepreneurs have when they’re thinking about selling their business is, how do I determine what price to put on this? How much should I be asking for this? I know that this is not necessarily a question that you can answer easily and succinctly and tell everybody, just do X and you’ll get Y, but what are some the steps you go through to determine a business’s worth?

     

    Bryce : Well, we say that valuing a business is an art. There are certainly mathematical steps that you can take to evaluate a business, but it’s a big part an art. We also say that the value is in the eye of the beholder, so what I mean by that is, the seller might have an idea of what they want for it and how they came up with that could be based on an amount of time they’ve put into the business, could be based on the amount of energy they put in, the dollars and then it could be as straight forward as sentimental value. It’s been with the family for a hundred years or 50 years, so they really think it’s worth a lot and those are usually what people think that it is worth and occasionally we find people who actually think it’s worth based on the cash flow of the business, which is one way of measuring the value of a business, but it’s pretty rare that they actually start that place.

     

    Usually it’s something else that they say, well this business is worth X because of Y and then on the other side of the coin is, what is a buyer willing to pay? The value of a business is only what the market’s willing to bear, so somebody can say it’s worth … I want X for it, but you might not be able to sell it for that, so you really need to see what the market is going to bear for it and the market is really determined by how many people are looking at the business.

     

    If you have a family member who says, I want to pay this much for it, you’re not really seeing what the outside world’s looking and if you’re working with an MNA Advisor or broker and they only have a certain reach, a geographical reach or a certain industry reach, they may only get certain people to weigh in on the value. If you’re working nationally or internationally, you are going to get the whole world to value in on it. Now, those may not be the buyers you’re looking for, but it really does come down to, who’s looking at it and who wants it? Sometimes people are willing to pay more than the math says and sometimes they’re willing to pay less for it.

     

    Jennifer: So, what happens ’cause I imagine if it’s somebody wants to pay more than, let’s say, the math says, that’s a great position to be in, but what happens if, again, the entrepreneur has a, or the business owner has a price in their mind based off of some of those intangibles that you talked about and what if the reality of what the market will bear and is willing to pay for that isn’t necessarily what the business owner had been hoping for, then what?

     

    Bryce : Yeah, yeah, so usually as an intermediary like myself, or other folks who are helping people sell, we try to work with the business owner to explain the math side and I didn’t really mention that, so I’ll mention it briefly and it can get fairly complicated and detailed, so I’ll keep it very high level in the sense that there’s three approaches that we use to value a business. One is call the asset approach. One is called the income approach and one is called the market approach. Assets is basically, what are the assets of the business minus what are the liabilities for the business and that would be a value. That’s usually used for businesses that aren’t producing or have a whole lot of assets, but aren’t producing much cash flow.

     

    The next step is the income method and that’s really based on cash flow of the business and that’s where a lot of businesses are valued that way and then the third is the market approach. What are other businesses like that business sold for, so we look around and say, this is a similar business to X that recently sold or here’s ten businesses that were in the same realm and they recently sold for this, so we can expect roughly X for the business and so we work with the owners to explain that and say, this is kind of where we are coming from, even if it’s not what you were looking for and what we’re finding in the market, we start with that a benchmark.

     

    If that doesn’t help and if they still say, we need more than that from this business or we think it’s worth more. If we think it’s worth more, then that’s usually a time when we say, okay, we’re going to have to maybe try a different strategy and often it’s maybe just the right fit. We need to find a different broker who does think it’s worth that much. If it’s just not enough for their needs, for their retirement and their other interests, then we come back to, how do we grow value? How do grow the business to be worth what they need? Sometimes it’s tweaking the business to improve profitability or top line revenue and other times it may be bringing on a partner or merging with someone else.

     

    Jennifer: So, it sounds like sometimes it may be the case of, I don’t want to say going back to the drawing board completely, but saying, okay, let’s rework some stuff and potentially revisit selling the business six months, a year, at some point down the timeline a little bit, is that right?

     

    Bryce : Yeah, absolutely. Ideally, we’re talking with a client three to five years before they’re ready to sell.

     

    Jennifer: Oh wow, interesting.

     

    Bryce : Yeah, that’s ideal. It’s like with any tax planner or with a wealth manager, sometimes banking, legal, the more time you have, the more time you have to plan and so when we’re putting together financials for the business, we want a least three years of good history to be able to work off of and so if they don’t have that … We’ll get a call, hey I just bought a house in Palm Springs and I’m ready to retire, I want to sell my business and sometimes it works. Sometimes the business is ready to go, but more often then not there are some things that need to be done and we’ll work with them to improve the business. Sometimes there’s a missing employee, a key person in that business, there’s a variety of different things. There could be a complete dependency on the owner and it’s not really sellable at this point because if the owner goes away, all the relationships go away, things like that.

     

    Jennifer: Yeah, I think that last point, I feel especially with food entrepreneurs, I know I’m guilty of that myself, where the business is all … Yes, you have business plans and you have things documented, but really the business is all in your head and if you go away, there’s not always necessarily a lot left there, so getting the business to the point where it can be transitioned to another person or another team can take some time.

     

    Bryce : There’s a lot of things we do prior to listing the business for sale and most of that is around figuring out, well we are just trying to get in the head of a buyer and say what would a buyer want and if they’re looking at a business that the owner is everything, they’re all the relationships, all the accounting is in their head, the contracts, everything, there’s not a ton of value to that business for a new buyer. There is a value to the owner, but not to a new buyer because they can’t come in and realize that same cash flow and that same business so it’s going to be a tremendous amount of work in which case they don’t want to pay that much for the business.

     

    We look at suppliers, do they have many different suppliers they’re working with or do they just stuck with one person who is supplying their business? That’s a pretty big risk. Are their customers … Around the northwest here, we have a lot of Boeing customers and I could imagine in your line of work, maybe Food Services of America or something, someone who’s selling just to one person and if that relationship goes away, the business goes away, so we’re looking for, do they have diversification of their suppliers and their customers and can the business run a month without the owner? That’s a test we always ask, if you went on vacation and couldn’t talk to the business, would it survive a month with you being away?

     

    Jennifer: Alright, now a month away, definitely could not be done on my end, but that just sounds so wonderful.

     

    Bryce : It depends for every business. Not every business needs that. There’s a lot of different structures out there and how they operate.

     

    Jennifer: You had mentioned a little bit about three years of financials and then some of these processes in place so that, let’s say, that key person could be away from the business, are there any other things that the business owner or entrepreneur should be thinking about in terms of documentation as they get ready to sell their business, so before they’ve even gone out and tried to find a buyer, what other things do they need to basically have ready to go?

     

    Bryce : Well, I think the first and most important part is the financials. That is kind of the bedrock of selling a business. Many people are in business to make money and to do that. A lot of people are in business because they are really passionate about what they do and they enjoy it and maybe the cause that they are going for, but when they turn to sell a business it really is often about the numbers unless they get really lucky and find someone who’s super passionate and willing to pay whatever they’re asking for, for their business, so having strong financial statements that have been looked at by a CPA, hopefully, with a review or an audit, that’s not as common in these size businesses, but potentially an audit. Documentation on how people operate. Job descriptions are great, processes and procedures around establishing new products and what margins should be and some of the performance indicators of the business, so the new owner can have an idea as to what they’re getting into.

     

    Jennifer: So, I assume and correct me if I’m wrong, but if you’re going to be sharing all this information with the potential buyer that there’s an NDA or a nondisclosure agreement that’s in place?

     

    Bryce : Absolutely.

     

    Jennifer: Okay.

     

    Bryce : Absolutely and the way we operate is that we prescreen potential buyers before we even share anything with them, so we will set up an NDA and then we really have a conversation, a deep conversation about what they’re looking for and why this business may work. We’re looking at their financial ability to pay. Are they bankable? Is the business bankable, we look at prior to even taking on the engagement, but is the buyer able to finance the business? That’s a big part of what we are doing and finally we run it by the owner and say, hey, it’s this type of person or it’s this business that’s looking at you, are you comfortable because in our space, the owners often care more about who it is they’re selling to and what they’re about then necessarily the person that will pay the absolute most.

     

    Jennifer: So, yeah, you fed perfectly into my next question, which was going to be around this idea of fit for the new buyer, so you just stated to many buyers that is a big deal and that is part of their process in choosing the right buyer, so what sort of things should the seller be asking questions about or be thinking about with regards to potentially where the buyer sees the business going in the future so they have the best chance of getting that right fit for their business?

     

    Bryce : Absolutely. One of the things that we like to do is set up weekly meetings with the buyer and seller once we get to a point, once we have a letter of intent, we actually want them to talk to each other and I know that’s not common on the larger sale businesses or sometimes is not common, let’s put it that way, but we want them to have those conversations. How do you handle your employees? How do you treat your employees? What are your benefits like? What’s your working culture like? How do you look to work? Are you outgoing and out talking to the people on the floor or are you more kept to yourself? Do you want this business as just an investment and it’s just churning dollars for you or are you actually going to be actively working in it? What are you passions and why would you get into this business? What’s your background?

     

    We have people who have come from executive backgrounds and sometimes the owner will go, well what do they know about my business and it turns out that they have some sort of hobby or incredible interest in that area and they’re passionate about it and they’re not looking at this as a goldmine for them, they are actually looking at it as a second career to their life and they’re really more looking for enjoyment out of it.

     

    Jennifer: Interesting. Again, that’s a good point that you bring up that it’s not just about the financials for many people and for some people it may by and again that’s great, but for a lot of entrepreneurs who have built this business up from the ground up a lot of it is being driven by passion, so you want somebody who can carry that on and potentially even carry it further and beyond where you were ready to.

     

    Bryce : Sometimes we get … People say, I want to be able to have my grandchildren be able to see this business and know that I used to know that business. I started that business and look at it today. Certainly financials are important and like I said, having a solid accounting system in place there and then having solid financial recording to come out of the business is really important because a bank is not going to help support you depending on what the buyer’s financial abilities are. Most often they are going to be bringing in a bank and the bank’s not going to loan on a business that doesn’t have a strong financial backing, so there is certainly that component to it, but often there’s a lot more of a soft side to the transaction then most people think.

     

    Jennifer: So Hansen Business Advisory works with businesses primarily that have over a million dollars in cash flow, which is not necessarily where all of our listeners are, so my question then is, can those businesses that have less cash flow than that, is there still a market for them to be sold, or are buyers only interested in businesses that have bigger revenue streams?

     

    Bryce : No, absolutely. There is definitely a market for businesses with less than a million dollars in cash flow. The challenge is often how are those businesses set up and how do we find the right buyer for those businesses? The banks often will have more challenges times, again it comes back to reporting and some of the numbers oriented things to lend on a smaller business and the SBA, Small Business Administration, has great programs out there for people to be able to borrow in those situations.

     

    There’s certainly business opportunities out there for those sellers and for buyers because not everybody has that kind of money to buy a business and I think even more so those businesses are around passion and the buyer and seller are just like, hey this is really neat business that has a great opportunity to grow and maybe it doesn’t, but it’s just fun and I really enjoy it and I like the cause that it goes toward. A lot of people are very interested these days in cause-oriented businesses that don’t necessarily make a lot of money, but they fulfill a need within the community or within the world, so certainly opportunities out there. I would have to say they do become more challenging to sell in a traditional business sense, but they can be done for sure.

     

    Jennifer: That’s great to hear because like I said, I think that there’s potentially some listeners who would be under that one million dollar revenue mark who might be thinking of exiting their businesses, hopefully to your point earlier in this podcast, be thinking out, pushing out that timeline and saying, okay, maybe three, five or plus years beyond that and preparing their businesses for sale at that point.

     

    Bryce : Yeah and I would encourage the listeners to think about, don’t think about your business as a small business, think about your business as a big business and howw are you treating things like a big business would? Are you getting financial looked at? Are you having someone prepare you taxes and review them? Are getting professional advice from attorneys and from CPA’s and from bankers? Are you doing all those things that will help you to grow and be an established sophisticated business because that’s really where someone will be interested in buying.

     

    If the cash flow is smaller and total revenues are smaller, but the business is really well set up and it’s a unique business and maybe the owner just hasn’t got there yet, they just haven’t got to that size yet, there’s a wonderful opportunity for someone to come in and for whatever reason they’ve decided to get out, it may be a great opportunity for someone to step in and take it to the next level.

     

    Jennifer: I love that idea of, you know, we always talk about that we’ve a small food businesses, but yeah, we should be thinking like we’re big businesses and putting the things in place that need to be put in place, so that we are thinking of ourselves as a big business.

     

    Bryce : Yeah, I have a client who the first thing they were talking about was, well, I haven’t really got to that yet and they’ve been in business for ten years and haven’t really got to the whole financial … Getting good financial statements and reporting and it’s a big business now and it’s one of those things, I think everybody needs to take seriously early on and a lot of people start businesses without even thinking whether some day they want to sell it, but then they get to the point that they need to sell it or they changed their mind and say, actually I do want to sell the business and it sometimes takes a few years to readjust the business to become sellable, but they didn’t really have that intention in the first place, they just said, well let’s just see how this goes.

     

    Jennifer: Oh absolutely, so my last question for you then, around this idea of selling a business, so selling something that you’ve built can be really rewarding, but it can also be strange to wake up one day and no longer be the owner of that business and I say that having sold a business myself, that you wake up the next morning and you’re like, not only what do I do, but so much of your identity is tied up in that you were the owner or the founder or entrepreneur of said business, so what do you recommend to your clients that they do that first day or that first week after sale’s been completed?

     

    Bryce : That’s a great question. We want to actually have that conversation before we even engage with them, so we’re asking them early on, what is your plan? What do you want to do? We want to engage spouse, whether it’s husband or wife that runs the business, if the significant other is not involved in the business, bring them into the conversation and say, what are you guys going to do? Where do you want to go and what are you hobbies? What are your interests? Because there is only so much golf that someone can play before they kind of get bored and especially a lot of the clients I work with who are in the retirement years, they’ve been involved in this business their whole life and don’t really have a life outside of it and same thing with their relationship and their marriage or their significant other, they don’t really know how they are going to work together, so occasionally we honestly bring up if there needs to be counseling involved. I’ve had spouses say, I don’t know what I’m going to do when he’s around the house that much?

     

    Jennifer: I laugh because, personal story, but when my dad first retired, I think it was about two weeks before my mom told him he had to go back to work.

     

    Bryce : Yeah, absolutely. Absolutely. We try to have that conversation very early on to get them thinking about it and make sure that they have a plan in place and then when it finally comes down to the week after, we’re hoping that they’re implementing on that plan, whether it’s starting a new business or a hobby or getting involved in the community or working on boards, those type of people of have owned a business for a long time and have that entrepreneur spirit just don’t sit around well and so we suggest that they get involved in activities and keep themselves busy and entertained and keep their mind sharp and so we say, may as well get started on it. Maybe take a vacation or two to get started, but then really start implementing that plan that we’ve worked on.

     

    Jennifer: Perfect, that’s great advice. That’s really great advice. In fact, I’ll kind of pause for a minute, all of it. I keep thinking to sum everything you’ve said today up, it’s having this long range vision. That long range vision for your business. The long range vision for your life and how do you make all of that interconnect in a way that’s going to keep you happy and keep your business growing and thriving and potentially sellable if that’s ultimately where you decide that they business needs to go.

     

    Bryce : Yeah, and I say, big or small, you should take a moment if you can’t regularly do it, take some portion of the week and try to work on your business not in your business. Think about those activities about selling the business, about the capital structure as far as your loans are concerned and how’s the business preforming and is it headed the direction you want it to be and is your life fulfilled by it? Sort of take a step back, I don’t know, at least once a month and really look at that so you know where the business is headed.

     

    Jennifer: That’s such great council because it is so easy especially for those of us on the smaller spectrum to get so caught up in just the frenetic, day-to-day of the business. I often tell people, but if you don’t step back to that 10,000 foot level and see, is that frenetic work you’re doing, is it getting you where you want? All you’re doing is spinning your wheel, kind of like a hamster.

     

    Bryce : Absolutely.

     

    Jennifer: Well Bryce, I really appreciate your time today. Thank you so much for sharing your expertise with us.

     

    Bryce : Jennifer, it was my pleasure. I really enjoyed it and I hope it was helpful to your clients.

     

    Jennifer: Great, thank you so much.

     

    Bryce : Take care.

     

    Speaker 1: Thanks for listening to today’s podcast and I hope it gave you some food for thought as you think long term about your business and whether or not you may want to sell it one day.

     

    Speaking of this podcast series, I would love to hear from listeners about what topics you’d like to see covered. Our next podcast which will air on Tuesday, May 30th, right after Memorial Day, is focused on food service sales. This is a great example of a topic idea that was brought to me by a listener. So what questions to do you have or topics you’d like to see covered?

     

    Let me know by emailing info@smallfoodbiz, that’s biz.com or leave a message on the Small Food Business Facebook page at facebook.com/smallfoodbiz.

     

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    Insurance Needs With Food Businesses In Mind (PODCAST)
    2017-09-23 00:45:13 UTC
    Insurance Needs With Food Businesses In Mind (PODCAST)

    Most food entrepreneurs know they need business insurance but beyond that may not know exactly what to be looking for or asking about.  So in today’s podcast we talked with Joel Paprocki of Insuremyfood.com to find out more about this important topic.

    TRANSCRIPT:

    Jennifer: I often tell people when I’m talking to food entrepreneurs that, other than knowing that I need to have insurance for my business, I don’t really know much more beyond that, which is why we have Joel Paprocki on our podcast today. He is the owner of insuremyfood.com, and he’s a founding member of the local Austin Food Trailer Chamber and a passionate supporter of the mobile food movement and the eat local food movement. Working together with insurance companies and underwriters, he designed insurance programs specifically addressing the needs of food trucks, food trailers, caterers, and micro food manufacturers.

     

    Shortly after rolling out the program in Austin, to much success, he expanded the program to a national level in 2011 and now represents food vendors of every type in nearly every state. Joel, who started the Paprocki Insurance Agency in 2004, is a certified insurance counselor and a charter property and casualty underwriter. Joel, thanks so much for being on with us today.

     

    Joel Paprocki: Thank you, Jennifer, for having me.

     

    Jennifer: Like I said, this is not my area of expertise, which is why I’m really excited that you’re here. Let’s start with a really basic question. That is, why do food businesses need to have insurance?

     

    Joel Paprocki: It’s a good question, and a common question. It helps to take a step back. I feel like insurance gets a little misunderstood. There’s a multi-billion-dollar auto industry for insurance that markets that. Cost is what the consideration is, but especially for business, insurance that you look at as more of a tool, and it’s a vital tool of any economy and business. Some of the reasons for having insurance can be varied and all work together.

     

    Most other people you deal with, whether it’s a landlord, a commissary, kitchen, an event, etc., are unwilling to take on the risks that you bring to them, so by having insurance, you can demonstrate that you have the means to pay and protect, and a lot of those entities will go a step further and ask to be listed as an additional insured on your policy, so it opens up business opportunities and kind of looks like a cost of doing business from one perspective. Another way that it’s a tool, it opens up opportunities to finance your company so, if you need to get a piece of equipment, you can get insurance on that, and that will allow you to get a loan on that equipment, so that’s another way it can be used as a tool.

     

    I also really like the social responsibility of it. You may be willing, as a business, a startup business, to take many risks. You’re already taking a risk and jumping off starting a business, but there’s a sense of social responsibility. If a customer did get sick, maybe I don’t have assets, from that perspective, but I would feel responsible and want to have the means to compensate and take care of my customer if something tragic like that did happen.

     

    Also, there’s a tool that frees up your capital in your business so, if you didn’t have insurance, you may have to store capital in case something did happen and pay that out of your own pocket. This way, you can transfer the risk to the insurance company for a premium, and then you don’t have to maintain as much savings to save for that rainy day or that scenario. You can transfer that. Of course, the more obvious that many people think about is, it does protect, make a wall around your assets, a layer of protection there, as well.

     

    Jennifer: Which is important. If you’re working really hard to start up this business, that’s critical. To that point that you also mentioned about working in commissaries, kitchens, events, things like that, I know that a lot of food entrepreneurs I talk to, when they get to that point where they’re going out for their first “bigger” retail relationship, and the retailer won’t bring them on unless they have a certain amount of insurance and add them as an additional insured, like you said, to protect that store who’s buying your product, as well.

     

    Joel Paprocki: Exactly. A large business may have millions and millions in assets, and to bring on a potential risk that you bring by doing business with them, they’re not willing to risk that even if in the startup phase, small businesses, so they’re going to require that of them.

     

    Jennifer: A lot of what we talk about at Small Food Business, both on the podcast and on the website, is some of the differences and some of things that make food business a little bit different and unique from, let’s say, any other business that somebody might create. Are there differences also in insurance that, for things that food businesses need to be thinking about that might be specific to the food industry versus if you were talking to an entrepreneur of a hair salon, for example?

     

    Joel Paprocki: There are some things that are similar. Everyone has a premises that they invite customers onto. Even if you’re a mobile vendor, where you end up locating, that is still your premises, and things can happen, and that’s pretty similar. Slip-and-fall, most people think of that when they think of needing a liability insurance.

     

    Beyond that, the uniqueness to food vendors is going to be their product, so there’s product liability on most all insurance policies. Food vendors’ product is a little unique. It’s perishable. They have a lot of volume turnover. Compared to a hair salon, there’s really no product that they’re distributing. They’re doing more of a professional service, so that’s what is unique to the food industry is their product liability that they’re exposed to.

     

    Jennifer: That’s interesting. I hadn’t thought about that, so you’re saying even for … Sorry, I’m going back to the first part of your answer. Even for like a mobile food vendor, even though you’re not bringing people, let’s say, into your store, into your restaurant, there are still potential, like you said, slip-and-fall and things that they need to be considering?

     

    Joel Paprocki: Definitely. Actually, the truth is, those claims are probably 50-100 more likely than a food-related claim, so the reason they have liability in those areas is, whether they’re setting up a tent or they’re parking their truck next to an area, they can be found liable, even if they park next to a curb. Attorneys get creative so, if they turn around and slip over a curb or a divot in the sidewalk, and this is a real scenario I’m thinking of that was in Portland.

     

    The city has a wording that says, “We’re not responsible for anything,” so that came back to the food truck that that person hurt their ankle on the divot in the sidewalk, which you would think the food truck had no responsibility over but, because of the way municipalities are and they worded it, that that goes back to the vendor because, as a business owner, unlike inviting someone into your house, you have a much higher risk when you invite a paying customer to do business with you and you have to go beyond just doing the normal.

     

    We have to go a step further and predict and prevent risks from happening, and that’s where you see those claims where you see in the news that seem ridiculous, but you almost have to be the protector of the customer because you have the extra duty that you’re inviting them onto your premises and area. In that same category, people don’t often think about, and this is a common scenario, you put up a tent, and you put up a “We’re Open” flag or sign and the wind comes, blows it over, and it could injure someone, more likely the claim we see is it causes property damage to a car. It scratches the car of a customer next to it, and those area also under that same category or premises liability, but property damage versus injury.

     

    Jennifer: Just as we’ve been talking, you’ve mentioned a couple of different types of, I guess, insurance coverage, whether it’s product, you had mentioned the premises. With all of these different options that are available, and I’m sure that’s just touching the surface, how does a food entrepreneur really start to understand what they need for their business and, yet, not get too much and pay too much? How would somebody work with you or work with another insurance company? What questions do they need to be prepared to both answer, and what questions should they be asking?

     

    Joel Paprocki: I would start from the point of being able to work and trust their agent. I call it in our agency, “Love your agency.” That’s how you can provide the most benefit to the customer to get the coverages they need. If they’re going to a broker, it would be to be truthful on the application, be up front with what they’re doing so that the broker can properly analyze and offer the coverages.

     

    Starting from a point of, “Let’s look at coverages, options, and then back from there if it’s not within cost or if you’re willing to take on the risk in that category,” and say, “That’s not a concern of mine, but I know it’s available.” This is the cost, and just approach it as open mind and open conversation and ask questions to clarify it so you can understand and ask examples of claim scenarios you may be concerned about, and then ask for advice on things that you might not be thinking about that may be a risk to you to explore all the options.

     

    Jennifer: Without going, and I’m sure this is one of those things where you go super deep on, but at a high level … Again, we’ve kind of touched on the premises, and if I’m not using the right terminology, let me know, but we’ve touched on premises and product liability, what other big umbrella pieces should food businesses be thinking about? In my head, I’m envisioning, let’s say you’re working in a commissary kitchen and there’s a fire and you lose $10,000 worth of packaging, where does that fall under?

     

    Joel Paprocki: What we’ve been talking about thus far is general liability, and then that encompasses bodily injury and property damage to, essentially, others or customer and look at it that way, the public. The other major pieces would be property coverage, like you mentioned, so your equipment, your business property, but it also could mean auto insurance if that property’s a vehicle.

     

    There’s other coverages that are not as available, and people might not think about in the normal thought process, but there’s food spoilage, so if you were to lose your food due to spoilage. There’s loss of business income due to an insurance loss, and that’s one of the things I think is very important and overlooked in the industry but, if you have a truck or another piece of equipment in your commissary that you need to operate and make income, if that is damaged and you don’t have that income during that time while you’re trying to get it back up and running, that will put most small businesses out of business, and that’s also an important coverage.

     

    Jennifer: That is something that you don’t really think about. You just assume that … It’s like you plan for the business worst case scenarios, but you don’t think that something might stop the business for a piece of time.

     

    Joel Paprocki: Especially if you rely on that income as your primary income, your business from the food vending, obviously, that can be pretty devastating to not have a month or two months or whatever it might be, so it’s something to think through as a worst case scenario. Would you be able to absorb that or do you need to transfer that with an insurance policy?

     

    Jennifer: If you had to say that there’s one big question that you always get from food entrepreneurs, or a consistent thing that you keep hearing that you always hear come up, is there one topic that food entrepreneurs are really curious about or have a lot of questions when it comes to insurance?

     

    Joel Paprocki: It can vary. For the most part, the most small businesses just starting off are starting from scratch and just kind of learning what general liability is and what that means, so that’s probably the most common question. Beyond that is, how do I cover my property that’s moving around constantly?

     

    That’s a little bit of a challenge for the insurance industry. They’re like, “Do you have a property that’s either a building or property located inside that building?” They don’t necessarily like to cover equipment that can be anywhere at any time and follow it. I get questions on that a lot because they’ll start with their agent who has their home and auto, and they’re just stumped on how to cover this property that’s moving around, so that’s a common question, as well as how to cover property that doesn’t stay in one spot.

     

    Jennifer: That’s an interesting point. I imagine both for … Would folks who are going to farmers markets and festivals and, again, putting up tents that could fall down and things like that, would those … When we talked about moving around, my first thought is going to mobile food trucks. Somebody who is kind of moving their location, would that sort of also be that same type of concern?

     

    Joel Paprocki: Exactly. The general liability policies are also, oftentimes, tied to an address, like an address on the policy. That’s kind of the way insurance is designed to do it, so even if they don’t have property, liability still needs to be able to follow you at the locations you’re going to, in addition to how property follows you.

     

    Jennifer: I’m going to ask you a question that I know is not one you’re really going to be able to answer, which is going to sound odd. One of the biggest hurdles, I think, for food businesses, especially those who are starting up, is cost. I’ve heard from folks in the past, like, “Oh, well. I’ll get insurance for my business when my business hits X point.” What sort of things go into the consideration to kind of outline what the cost will be? I don’t expect that you can sit here and tell me, “Oh, a food business can expect to spend X a year,” but what sort of things might increase or decrease their insurance policy?

     

    We’ve talked about some of the different kind of categories that they might be thinking about and, obviously, if you have one of those or don’t have one of those, that would decrease cost. Does the type of food that you’re producing, let’s say if you’re working with meat versus if you’re working with jams, does that impact cost at all?

     

    Joel Paprocki: The cost is pretty flat and stable as far as types of food being vended. There are some exclusions that they’re unwilling to look at, and I’ll go over those in a second. General liability policies will start around $300, and they’re primarily based on your sales, so an insurance company, if you’re selling $100,000 worth of food, you’re turning over more product, more chance for a risk, so that’s really what they look at on general liability to rate the policy if it fails, so that’s that piece.

     

    As far as certain categories, like you mentioned meat, if it’s directly importing meat from another country, that’s one that’s probably not going to be able to be looked at on most policies. Certain things that make health claims or dietary supplements that fall into those categories are areas where it’d be much more challenging to find a policy that would be affordable for someone starting off.

     

    Jennifer: The amount of equipment that you have and truck and all of that, does that, again, go into the equation?

     

    Joel Paprocki: It does. Initially, they’re just focused on general liability and what they look at. When you add property to it, the coverages will go up proportional to the value of the equipment, etc., so that would be added on top of that. There’s things like, if it’s a truck, like a food truck, you have automobile liability, which is separate from general liability, so those can add cost, as well.

     

    Jennifer: This is, like I said, not an area that I’m an expert in, but an area that I, personally, have always … I always joke with food entrepreneurs that I’m as risk-adversant as you can be as an entrepreneur, so insurance for me, like I said, is one of those things that I need to have for my business to protect this business that I’m trying to build and, ultimately, to protect me, too, and protect my assets, as well. I know that this will be something that’s of interest to a lot of people who are out there.

     

    I’m going to include a link to your website, the insuremyfood.com website that folks will be able to link to from the transcript from this podcast to find out more information because I know that you have some more information on the website and some more resources on there, too, to help guide people if they’re in either the beginning of this process or, after listening to this podcast, realize that they need to potentially take a closer look at their insurance policy and either add things, subtract things, whatever it is, to make it work for them, but insurance is definitely a critical issue, especially for food these days.

     

    Joel Paprocki: Definitely. I appreciate that, and I’m always happy to answer any questions if anyone reaches out.

     

    Jennifer: Perfect. I appreciate that. Joel, thank you so much for taking a little bit of time today to talk with us.

     

    Joel Paprocki: Thank you, Jennifer.

     

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    Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)
    26:14
    2017-10-07 11:04:46 UTC 26:14
    Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)

    Finding and effectively working in a shared kitchen space can be one of the hardest aspects of food business entrepreneurship. We talk with Rachael Miller of The Food Corridor in this podcast for tips on how to find a space to work in as well as what you can do to work happily and efficiently in that space.

    TRANSCRIPT:

    Jennifer: We’re talking with Rachael Miller today of The Food Corridor. The Food Corridor connects commercial kitchen spaces with food entrepreneurs seeking rentable, licensed kitchen spaces. The platform includes tools like scheduling and booking, payment processing, and communication to support the ongoing relationship. Rachael, thank you so much for coming on today.

    Rachael: Great, thanks for having me, it’s good to be here.

    Jennifer: So, I want to start with as we begin today, I want to talk a little bit about the Food Corridor, how it works to solve a very real problem in the food industry. You know, what was the impetus for starting it, can you just give us a little bit of background behind it?

    Rachael: Sure. One of my favorite parts about the Food Corridor is our story, it was started out of some academic research, which is I think really exciting to show the merger between academic life and real world, so our founder and CEO, Ashley Colpaart was doing PhD research at Colorado State University and she ended up getting into researching shared use kitchens and community kitchens and the history of them, and stumbling upon this really significant gap that we have in the US and actually around the world, and she found that there are so many … she actually found a couple things. So, there’s this enormous market gap, we found that there are often underutilized kitchen assets in a community that people don’t know about for a variety of reasons and we also found that kitchens that do exist are spending up to half a person’s salary a year managing kitchen clients, doing pretty noxious tasks doing things like invoicing often on paper, calendar management often still on paper, and then chasing down client documents like business licenses and health and safety certifications and really it just seemed like a little archaic and really inefficient, so Ashley was going through her research she really did see this enormous business opportunity.

    And so, we started a couple years ago and we launched officially June of 2016 and we’ve been working to connect commercial kitchen spaces that are licensed in communities with food companies who need to rent out this space to prepare their goods.

    Jennifer: So, you mentioned the term shared use kitchen, so let’s kind of, since we’re going to be talking about shared use kitchens and other components of that today, can we clear up some terminology first, because I get a lot of questions from listeners. What’s the difference between a shared use kitchen, an incubator kitchen, an accelerator kitchen, what do these mean?

    Rachael: That’s a great question, especially for a food entrepreneur who’s looking to jump into a space and maybe they know they need a couple things but they don’t know what they should be looking for, and that’s really common from what we’ve seen. So, the three terms just to break it down, a shared use kitchen is really any kitchen that people can rent out to use or even collaboratively use as a co-op. So these are what we would call co-working spaces. Pretty simple, straight forward, there’s not a lot of bells and whistles. In a simple shared use kitchen, people rent out space, they control their own business, they manage their own market access and they go rent out the space, make their pizza, make their jams and jellies, wash their dishes, and then the kitchen bills them and that’s a pretty standard shared use kitchen model. Once it starts to get a little more integrated with programming, that’s where you start to use terms like incubator and accelerator.

    An accelerator kitchen is shorter term, and this does translate into the general business start up world, too. An accelerator is usually for earlier stage companies they need a lot of hands on touching, they need a lot of coaching to get through the process, this might be someone who has done really well with their salsas, and by doing well, their friends love it and their families love it and they make it really well, but they don’t know exactly how to write a business plan or how to access a larger market or even how to get into that flirts farmer’s market. So that’s what you’re looking for in accelerator, is very defined programming and it’s really time bound. This is often a three to six month program that you’ll see entrepreneurs often graduate from at the end. So, you go in, it’s very intense, you work with professionals to get you to the next level and then you’re done and you might graduate into a shared use kitchen space or maybe you’ll go into an incubator.

    That brings us to our third term, we talked about shared used kitchens, accelerators, and then incubators, which these are for growing and earlier stage companies as well, there is an element of programming and usually one of the greater benefits of being a member of an incubator is there’s an element of credibility that you get from being accepted into this community so you also are exposed to mentors and mentorship. And please know that this varies widely between kitchens, which is why it’s important when a food entrepreneur is touring a kitchen to see if this is the right fit for them that they do ask about resources that are offered by the kitchen and how the kitchen defines itself, really. So, does the kitchen think it’s an incubator, accelerator, and then how does each party define that?

    Jennifer: And so then, kind of back to the previous question, so via the Food Corridor, would you say that most of the kitchens that are listed there and showcased there, are they shared use, are they incubator or a combination?

    Rachael: It is across the board, it really is. We’re working with everyone from a restaurant or a bakery who has some underutilized kitchen space that they’re not running 24 hours a day, and they rent that out to someone who has figured out their business model, they’ve figured out their market, they just need a licensed space to rent and we’re working with some wonderful programs who are full incubators or accelerators. One of my favorite ones that I just blogged about recently is Hot Bread Kitchen in New York, and they work with a defined demographic in New York and it’s people who are still building to eventually find jobs and it’s often in bakeries, so they’re not only figuring out these culinary skills but really life skills as well. So, there’s a social component to it. And that’s, again, that’s not every kitchen. So it just depends on the mission of each kitchen.

    Jennifer: And then just to be clear for listeners, you’re also nationwide, right? So, if there’s somebody listening here who’s from one side of the country and somebody from the other side of the country, they can utilize the Food Corridor. Obviously, there’s no guarantee, but they can utilize the food corridor to try and find kitchen space in their area.

    Rachael: We are nationwide, and we’re also working in Canada.

    Jennifer: Okay.

    Rachael: So that’s an exciting expansion for us, we are not yet caught up to geographically search for kitchens, however I do have a lot of companies, we have a network on Facebook, it’s a private group called the network for incubator and commissary kitchens for shared use kitchen professionals asking questions and kind of collectively answering questions and I have a lot of food entrepreneurs who want to join that group, and it’s really not the right space for them, bu it’s interesting that their primary focus or reason for wanting to join the NICK is they’re looking for a kitchen in their area, which goes back to our first point in that there are so many underutilized kitchens around the country, we’re just trying to be that connector piece. So, at this point I would say yeah, reach out to us, we’re connecting kitchens and entrepreneurs every day. And it is nationwide.

    Jennifer: That’s one of – just to have that resource, because I talk to folks, the biggest hurdle is … I mean you can’t get any of your licensing, you can’t get health permits, you can’t get anything and you can’t figure out your production until you have that space. And so, to be able to figure out that component of it is a huge piece of the puzzle for folks.

    Rachael: Oh I think so, I think that it’s really daunting as well, because food law changes depending on where you are, state wise, county wise, and so to have a kitchen that can facilitate that relationship with the health inspector, to build out a commercial kitchen we’re talking anywhere from 250 thousand dollars upward, and it can go significantly upward. So, it really does help entrepreneurs get on their feet with the lowest startup cost.

    Jennifer: I’m going to ask you a very open ended question because we talked about how there are different types of kitchen spaces but also even within those kitchens, they might have different resources available, and then we’re also comparing different state, county, country health laws. On the whole though, are there any recommendations you have as to what food entrepreneurs should be looking for or asking questions about the kitchen managers as they research to find the best kitchen rental for their business?

    Rachael: Sure, this, boy, this really does depend on what a food company wants out of the relationship and what a kitchen can realistically offer. So, again a lot of these kitchens require a tour before they will take you on as a client, there’s often an application process, there’s a reason for that. If a food entrepreneur is trying a kitchen and they’re trying to figure out what a kitchen could offer them, definitely look at the relationship the kitchen has with their local health inspector. I think that everyone freaks out when you think about food health inspection, it is scary because your business is literally riding on that relationship. They’re not as scary as they seem, health inspectors are there for a reason and it’s a really good reason, it’s to keep your consumers safe and to protect you as a business owner.

    If your kitchen and the kitchen manager can help facilitate that relationship, I think that that is something that is a huge plus for a company. If the kitchen is on good terms with the health inspector, that’s a great sign. If they’re a little maybe skittish about talking about it, or they are not … the health inspector is seen as kind of this evil entity, that might be a red flag for food entrepreneurs. Let’s see, another things is again, looking at what a food business would like to have in a slate of offerings from a kitchen, look at access to information. Is the kitchen manager uncertain about Cottage law or food temperature or sanitation resources. They should at least know where to point you. If they aren’t really sure about food safety resources, you should dig a little deeper and find out why. and then I would, let’s see … if you’re a food company that’s just jumping in, you’re going to ask about business programming, you’re going to ask about relationships in the community, do ask about kitchen growth. See where the kitchen wants to go, are they going to stay the same size they are, or do they have plans for expansion?

    Jennifer: Oh that’s a good question!

    Rachael: That might dictate how long you see yourself in that space. Look at programming, do they invite food entrepreneurs in to do classes for the community? Do they offer business programming for the entrepreneur? We’ve seen some shared use kitchens that have wonderful farmer’s markets, Hope & Main is a kitchen out in Rhode Island, and they have this great farmer’s market and their food entrepreneurs get additional exposure if they also go to the food market. And then resource buying. So, we just had a great question a couple days ago from a food entrepreneur who’s in the Midwest looking for some vegan ingredients, looking for some organic ingredients, which as we all know can be really expensive. And so does your kitchen offer a potential buying co-op option? Can you go in with the other baker who runs the kitchen out for the other hours and all buy your flower together?

    And again, these aren’t all necessities, but that formula depends on what you’re looking for. Honestly, as a food entrepreneur who might just be starting out, you might not know what you need, which is I think very common and that’s okay. It’s awesome that you’re just taking the first step and touring a kitchen to expand your business. So ask about the other clients, see who else is working in that space.

    Jennifer: You know, and I would add, because you talked about for example partnering from a buying perspective with the baker who uses the kitchen in the other hours, and that made me think to the scheduling, what hours is that kitchen or is that table that you would be renting, what hours is it available? Because that may dictate whether it’s going to work for you or not, if the only hours it’s available are between two AM and five AM, that may not work for your lifestyle.

    Rachael: Definitely, yes thank you. That’s really pragmatic. When can you access the space? And some … how do I want to say this. Some kitchens have keyless entry keypads, some actually have hard keys which is a little scary id you lose your key, then you have to replace the whole system for the company. But do ask when you are allowed to be at the kitchen. The kitchens with 24 hour access are a great community asset, and we’re seeing more and more of those, so do ask about that.

    Jennifer: So, you had mentioned … first of all, I want to just bring up, I loved the point that you brought up about health inspectors shouldn’t necessarily be seen as this real evil because they are providing the community with a huge asset with regards to safety, but it does also protect you as a business owner. I’ve always welcomed health inspectors into my kitchens, but I had never thought about it from that standpoint of no, having them in actually protects me as a business owner as well, so thank you for bringing that up, too.

    Rachael: Oh, definitely. Again, it can be really daunting, but the sooner you just jump in and rip that band aid off and talk to your health inspector, the less scary it becomes, and I think that kind of business liability perspective, it’s an essential component to your risk and liability plan. And your insurance company who’s covering your business, this is important to them as well, so this is really a win, win, win.

    Jennifer: Yeah. That’s a great way to look at it, thanks. You had mentioned obviously via the Food Corridor and via the Facebook group, NICK, you spent a lot of time interacting with kitchen space owners of all types. Based off of those interactions that you’ve had, what do you think that food entrepreneurs can do to really help solidify their relationship with the kitchen, the kitchen manager, the kitchen staff … if they find that kitchen they love, what can they do to really build and solidify that relationship?

    Rachael: Sure, this list is so big but it’s so easy. It’s so easy, this is a working business relationship, but it’s also really personal. You’re co-sharing this space and it does get really intimate, right? You’re creating your livelihood as a business owner, and you’re doing it in someone else’s space. So, I would say for you as a food entrepreneur, have your business in order to the degree that you are aware of. So, if you know that you need your business licensing in order, come with your folder of documents ready to show the kitchen manager when you’re touring the space. Be aware of what you’re going to need to offer in that phone call with the kitchen manager, come with your documents, be ready to show that you are ready to cook and ready to sell to the public. And if you don’t know that, come with the questions to ask.

    That’s a good starting point for that relationship. So, again I just think it’s important to understand that this is transactional, you’re paying someone to rent a space, but it is so much more than that. Shared use kitchens are such a key component of community building and of local entrepreneur growth and keeping local dollars in your community, and you can be a part of that if you’re really good tenants of your shared use kitchen. So, I think being as self sufficient as possible within your boundaries is helpful. And I think that the biggest point that has come up from talking to so many kitchen managers is that cleanliness goes a long way. We can talk pie in the sky about community and networking all we want, but you really need to wipe down your countertops. You really need to sweep up your space and be a humble and aware tenant. It’s really going to increase everybody’s experience.

    Jennifer: You know, as you said that I flashed back to this … when I was working a shared use kitchen and it was one of these kitchens where, for example, there’s be multiple businesses in the space at the same time and we basically each had our own little tables to be working on. And just coming in one day with this huge list of stuff that had to get accomplished during my timeframe, and coming in to find out that the person who had been in that space right before me hadn’t cleaned it, I mean there was stuff all over the floor, the countertops, not just for the kitchen managers but for other people who might be working in that space with you and to build good relationships with them. I was ticked off that I had to spend half an hour cleaning this space before I could begin working in it. Yeah I guess it made me think, it’s not just the kitchen managers, it’s the other folks that you’ll be interacting with on a daily basis.

    Rachael: Oh my gosh, that is a great example, yeah. It matters, right? Other people do affect you, and I think we’ve all worked in enough kitchens, or at least a lot of us have if you’re listening to this podcast, it’s really easy to get pretty aggro in the kitchen. We all know there’s really strong personality. But, sometimes you’ve just got to wipe that countertop that somebody didn’t clean up before you and it’s awful. But, then be that responsible tenant, talk to your kitchen manager, you suck it up that day, you wipe it down but as long as you … we’re all adults, right?

    Jennifer: Act like it.

    Rachael: Yeah. So, act like it, exactly. There was a kitchen I just toured in Cleveland, Ohio. The Cleveland Culinary … oh jeez. I’m going to forget their name. Cleveland Culinary Launching Kitchen. And they had several kitchen cooking spaces and there were entrepreneurs there at the same time and it just had such a nice flow about the kitchen. All the entrepreneurs knew about each other, they were excited about each other’s success stories, some of them had graduated recently out of the space, and it really did feel like everyone was kind of high fiving all day long. I think that speaks a lot to the caliber of the food entrepreneurs, as well as the kitchen manager, you can get that sort of culture in your kitchen.

    Jennifer: You know, that’s a good point, the piece about culture because I feel now that I might scare folks away from the multi use kitchen simultaneous use. But also in the kitchen that I worked in, they didn’t have a buying program but basically the entrepreneurs all got together and said, “okay, we’re going to buy from this distributor, it’s a thousand dollar minimum for each order, let’s all go in on this,” so none of us had to shell out a thousand dollars, we could just buy what we needed and then get the delivery. And so kind of created a co-op model ourselves. And it was a wonderful community, you know of course anytime you interact with other people there will always be hiccups that happen along the way, but for the most part, getting into a kitchen like that that has a great culture can do a lot for you as a business owner in terms of resources and getting information, but also it’s nice not to always be working by yourself as an entrepreneur.

    Rachael: Yes. Oh gosh, that’s a great point. I think that anyone who’s launched a business knows that it can be pretty lonely. You’re stuck in spreadsheets at three in the morning or you’re trying to get this business plan out or you’re trying to figure out the best copacker to use, I agree I think that just having those other people in your life who know what you’re going through can get you through to the next step. That’s a great point.

    Jennifer: So we talked about some of the things to avoid, as well as some of the things to do, is there anything else that you can think of like, “hey this really helps.” It sounds like be clean, be courteous are the two big takeaways, is there anything else that food entrepreneurs need to know? I guess and be prepared, which was the other point you brought up of when you go in to talk to folks, be prepared either with your paperwork or with the questions that you know you need to get answers to.

    Rachael: Definitely, I think there are some key offense that really can rub kitchen managers the wrong way and a lot of it is just about inappropriately stretching that relationship, right? It’s very communal, and you might know this person, it might be your aunt, it might be your best friend from the seventh grade who is making quinoa bars now, but really don’t stretch that relationship, this is a working relationship, so if you have a kid policy, a lot of kitchens have an age limit. You can’t bring any kids under 12 or under 16 or none, unless they work for your company. So, don’t let your kids come in and run around the walk-in. Paying late is something that we have tried to alleviate through the Food Corridor through we facilitate invoicing, so all of our invoicing is automated, so we try to help kitchens get their payment on time, so it all goes through our app so it’s all very easy to access.

    And then hogging supplies in the kitchen if there are shared supplies, pots and colanders, and again this is not a resource every kitchen offers but at some point there will be a shared resource such as trash bags or paper towels, or countertop cleaner. And just be cognizant that everyone is working as hard as they can to get their food out the door. Make sure you know your boundaries, so read your contract, I would say that’s probably the number one way to keep things in good order is read your contract, confirm what you’re allowed to use in the kitchen and how much of it and when you’re allowed to use it and just make sure that you’re on the up and up. I think probably a good way to just generally do that is check in, check in with your kitchen manager and say, “hey, we’ve been here a couple months, we love the space, how do you think things are going?” Or, “hey we’ve been here a couple months, you know the company before us isn’t pulling their weight, how do we address this?”

    Jennifer: Yeah, that is, again, that’s a great point. It’s one of those that seems so simple and so obvious, but yet, having worked in kitchen spaces, you can sometimes let those issues get under your skin and get aggro as opposed to trying to address them. Or, I just also love that idea of just approaching the kitchen manager proactively, and saying, “hey we love it, we’re super happy, what do you think, is there anything else we need to be doing or thinking about?” And that goes back to that earlier point of just building and solidifying that relationship with them.

    Rachael: Exactly, yep, it goes a long way.

    Jennifer: Well Rachael, I really appreciate this today, again as we talked about in the very beginning, having this kitchen space to work out of is critical for those food entrepreneurs who are not operating under Cottage Food Laws, it is probably the biggest piece of the puzzle, like everything else can kind of get figured out if not immediately, eventually it can get figured out from packaging and production, processes and all of that, but you need to have that kitchen space, like I said, in order to get your licenses so that you can actually begin selling to the public like you want to. So thank you so much, both for taking the time to talk to us, but also for you working with the Food Corridor to create this resource for food entrepreneurs.

    Rachael: Absolutely, it’s fun to talk about this. If anyone ever has any questions about shared use kitchens or they’re not quite sure where to go, we are happy to talk to you, so even if it’s just a little Facebook chat, or shoot us an email, and we’re ready to talk.

    Jennifer: Well, and again for the folks who are listening, as always in the transcript I will include links to the Food Corridor’s website, and to Facebook so that you will be able to get in touch with them and ask questions and find that kitchen space that you need for your business.

    Rachael: Wonderful, and just a last bit of info, we’re working on a shared use kitchen toolkit to increase resources and kind of templating what shared use kitchen managers might need for documents moving forward if they’re just launching or growing, so stay tuned.

    Jennifer: Excellent, that sounds like exactly what the industry needs, so I’m very excited to hear that.

    Rachael: Great.

    Jennifer: Well again, Rachael, thank you so much for your time, really appreciate it.

    Rachael: Thanks, Jennifer.

    For more great podcasts in this series, check out www.smallfoodbiz.com/podcasts.

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    The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)
    6:43
    2017-10-07 11:04:46 UTC 6:43
    The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)

    We’re doing things a little differently today with a short podcast about something I noticed recently at my farmers’ market. It’s was a simple, yet effective, way to generate return customers.

    TRANSCRIPT:
    The dirty little secret about Seattle, where I live, is that while yes, it rains a tremendous amount of the time – the Summers here are truly glorious. At some point in June (or, in really bad years, in July), the rain tapers off and we don’t see another drop until late September or October. What’s more, every single day is, on average, sunny and 74-degrees with no humidity. I am convinced this is the only reason why the first settlers to Seattle actually stuck around. The Summers are glorious!

    This means that our farmers’ markets in the Summers are also outstanding. There is a tremendous amount of produce that’s brought in from family-farms that operate less than an hour outside the city and we have a ton of artisans who are doing really unique, interesting thigns with new products. Seattleittes love their farmers’ markets (remember, our famous Pike’s Place Market was one of the first official farmers’ markets in the country!) and for many a trip to the market is a weekly tradition.

    While our markets generate big crowds, the downside from the point of view of the vendor, is that there is also ample competition at the market for those consumers’ dollars. There’s not just one person selling radishes – there are 5 different local and organic farms at my neighborhood farmers market that sell, amongst other things, radishes of all different types and varieties. There is not just one or two people selling desserts – there’s an ice cream vendor, an ice pop vendor, a handpie vendor, a cookie vendor, a gluten-free bakery, and someone selling vegan baked goods. And, right now with berries at the height of their growing season, there are literally 8 different vendors selling raspberries, blueberries, and blackberries. The completion is fierce.

    So the other day I was looking for berries – and honestly was a bit overwhelmed about which farm vendor to choose from. Ultimately I chose one for no particular purpose and made my purchase – thinking that next time I would make a purchase from another one and spread my money around a bit. However, as I was checking out the person working that market stand told me to hold onto the berry boxes because if I brought them back next time I would get a $1 off per box my next purchase.

    That caught my attention. From a consumer standpoint, organic berries aren’t cheap so I’ll take a dollar off where I can get it. This also reminded me though that this is a small operation I was purchasing from as the fact that their ability to recycle their boxes would help their bottom line and the reinforced for me personallyt hat this was the type of small farm I wanted to buying from. Lastly though, in order to get my $1 off I actually have to go back to that exact same market stall to purchase my berries – there’s a very real reason for me to return there and since the anme of the farm is printed on the berry boxes I currently have in my hosue, I know exactly where I need to go.

    This is just one example of great marketing. So often when we talk about marketing we think about things like social media strategies or television ads but essentially marketing is all about getting the customer to remember your name and to come back and purchase from you again. In this case the family farm is achieving this in the simplest of ways by encouraging me to bring my boxes back to them for a future discount.

    Marketing doesn’t have to complicated or convoluted – good marketing is that which is fairly easy for you to execute, is within your budget, and stands out to your customers.

    I’d love to know what simple things you do to keep your customers coming back. Share your thougths and experiences by emailing me at info (at) smallfoodbiz (dot) com. And until next time, thanks, as always, for listening.

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    Breaking Through The Crickets With Food Videos (PODCAST)
    26:35
    2017-10-07 11:04:46 UTC 26:35
    Breaking Through The Crickets With Food Videos (PODCAST)

    You already know that pictures tell a thousand words – especially when it comes to your food products – but what about video? We talk with Brooke Lark about how and why food entrepreneurs should be adding food videos to their marketing strategy as well as how to actually make it happen on a tight budget.

    RESOURCES MENTIONED IN THIS PODCAST ARE LISTED BELOW THE TRANSCRIPT

    TRANSCRIPT:
    Brooke Lark has worked as a professional food photographer and videographer for 10+ years. Her clients include General Mills, Nature Nates, Good Cook and KitchenAid, and she’s become one of the most well-connected and trusted foodies in the industry. Her work has appeared in dozens of cookbooks, magazines and digital publications. When she’s not playing with her food, you’ll find her mountain biking steep canyon trails in stunning Salt Lake City, Utah.

    Jennifer: Brooke, thank you so much for joining us today.

    Brooke: Thank you for having me Jennifer. I’m so glad to be here.

    Jennifer: I’m so excited to be talking about the video side of the food world, because that’s just one way that we can all make our food products look amazing. I’m going to be really upfront at the beginning here and let you, and let all the listeners know that I am an absolute total neophyte when it comes to video. Just, again, start at the ground level. For a long time food entrepreneurs, we know that food photography’s really important, but what about this added component of video. Why should we be thinking about adding this to our marketing bag of tricks?

    Brooke: Good question and I’m so glad that you’re a neophyte, because those are my favorite kinds of videographers to talk to. The first and foremost answer to that is that you should be thinking, you shouldn’t even be thinking about adding food video. You should be adding food video period is the single most powerful way to get your brand in front of people, because every single algorithm on every single channel is designed to capture the attention economy. The algorithm is weighted more heavily to benefit food videos, or videos in general, but, of course, we’re in the market, the business of food. So, adding food video to every single one of your social channels is not only a way to expand the messaging to your audience, but it’s a way to beat the algorithm that sometimes feel like they’re working against us.

    Jennifer: This sounds so obvious, but now in my head I’m like, “Oh, so that’s when I go on Facebook now all I see are videos coming up.”

    Brooke: Yes.

    Jennifer: That seems so obvious, but, okay. That makes sense.

    Brooke: There are so many food videos in the Facebook feed, because people love them. I always tell students of my classes that food video is the ultimate opportunity to give people both an escape from their regular work-a-day lives and a voyeuristic experience of being in our kitchen and having this experience that they are not having, because they’re sitting in a cubicle. We know that most food video, well that most video is watched with the sound turned off. The assumption is that most people are sitting at work, wiling time away. You’ll see a lot of videos on Facebook particularly will have the lower thirds, they’ll run captions so that you never have to turn up the sound. Food is such an obvious way to peek into another world without ever needing to turn on any kind of sound. It’s become just a hugely popular format, but it’s also a hugely successful way to boost your metrics, to boost your reach and to really get people, your brand in front of people in a way that food photography doesn’t even touch.

    Jennifer: I can see also how food video, and again, based on your experiences, correct me if I’m wrong, but how food video would, could also make let’s say that your food product used in a recipe, if you’re showcasing that in a video it makes it more approachable than … I mean, food photography, don’t get me wrong done well is absolutely gorgeous, but is sometimes doesn’t look like I could ever attain that when I make it at home for my toddler versus some of the food videos that I’ve seen, it makes it look tangible. Like, “Okay, there’s basically six steps and I can do this too.”

    Brooke: Yes. I think as brands too there’s this extension of what you’re saying, which is as a brand almost always one of the most important things that you are trying to do with your brand is educate people. How do you use it? Why do you need it? How do you work it into your life? Conveying that in a photo is often significantly more tricky than just inviting people into an idea that suddenly becomes incredibly accessible, because like you said, “I am sitting here watching it, in 30 to 60 seconds there is this meal.” Now, what’s at the front of your brain is this idea that was made with your brand. Instead of this picture with your brand popped up next to it and that tends to feel a little more advertisey than video.

    So, video is a really organic way to say, “Hey, look at how approachable this is. Look at how much you need this in your life. Look at how fun this,” and you’re entertaining along the way. Lots of buckets are being checked from a marketing standpoint, from a social media, and a conversation standpoint, and from an education standpoint for your brand as well.

    Jennifer: It’s like the trifecta for brands. It’s like what we all-

    Brooke: It is.

    Jennifer: … aspire for.

    Brooke: Yes. It really is.

    Jennifer: I’d love to know a little bit from you, about how did you get into doing video and when did you realize that this was something that you needed to add to your repertoire?

    Brooke: Great question. I have been a food photographer for nine years and I work with a variety of brands and about a year and a half ago I kept noticing, in several food photography forums that food photographers would pop in and say, “I have a food video going viral.” In the world of photography and content creation virality is really what we use to educate and drive our creative and editorial decisions. It became really interesting to me that it was turning less and less about just posts going viral and more and more about video going viral. About the same time Facebook had updated their algorithm and it was clear that video was really the way to start reaching a mass number of your page fan. I panicked, because I am not, I mean, I can wield a camera, but I am not, I do not consider myself a filmographer or a video person. Tech just absolutely, I’d rather be laying catatonic on the floor than learn new tech.

    I said, “Okay, I know that I have to do this. It feels scary and impossible and overwhelming. My life was already so busy with a full client list.” I just did not know how I was going to do it, but I actually have a 19 year old son who had taken several Adobe courses and become certified in them during high school. He was actually leaving for his job in 15 minutes and I said, and I knew that I would not have the attention span to actually pick this up if I had to sit down for a long course, because those workshops can be two, or three, or four weeks and I just, I cannot learn that way.

    I said, “Go get your uniform on and I want you to teach me everything I need to know to film this video.” So we did in 15 minutes, we shot 2 videos, we pulled them onto my laptop. He said, “Click here, click here, click here.” Just unlocking the basics made it feel at least accessible. From there, I really fell in love. It ended up being just an even more profound form of creative control and being able to create messaging and a story.

    Then, of course, you put it on your social media channels and people respond to it. So, it’s so much more satisfying to get a video up than a post or photo up. So, there we go. Now, every single post that I put in my own site and on the majority of client’s sites are combined photography and video, because it’s almost a waste to just do photos anymore. If we are going to do a recipe, or run a new product, or a new idea, or if we are trying to educate we will always consider video first over just photography.

    Jennifer: That leads me to my next question. It sounds like, obviously if you’re considering them both in tandem at the very least that there are some real results with this. For example, when you put a video up on social media, you’re seeing likes and eyeballs on it more so than potentially just your average photo-

    Brooke: Yes and it’s not just likes. You’re going to see immediate increase in reach. You’re going to see an immediate increase in shares. Video naturally, again it beats the algorithm, so you’re naturally going to get in front of more people, but the question that I find a lot of people ask is, “Then what does it do for my brand and is there even click through?” And yes, there is. From every single video that I have posted on my own site and on client sites that has gone viral, the attrition rate of click throughs has remained steady for up to two years.

    Jennifer: Wow.

    Brooke: For instance, last year for one of the brands that I work for we created one pot pasta. We knew that one pot pastas were trending. They wanted to feature a pan, so I said, “Let’s take this pot that you guys want to feature, we’ll throw it together, we’ll create an Amazon link to this product, and a link to your blog so that people can come and get the recipe.” We created the food video so that it would say, “Chicken,” but it wouldn’t say how much. We encouraged people in the way that the video was created to need to click through to print the recipe. That post to, was bringing in so before this time their blog would maybe have 1,200 to 1,800 views a day and as soon as that video went viral, we were seeing anywhere from 10,000 to 20,000 click throughs for a week straight.

    Jennifer: Wow.

    Brooke: Then, that number has paired down about a week and a half in to somewhere around 5,000 and that 5,000 stayed strong for another month. From one video, right?

    Jennifer: Yeah.

    Brooke: To this day it’s still the top viewed post every single day. I’ve seen those same numbers on my own site where I’ll see 3,000% increase in numbers of views and those numbers will remain steady for several days if not several weeks depending on how I’m sharing it and where I’m sharing it. It’s almost like you can’t afford not to do video. It’s such a profoundly more accessible way to get your ideas and your product in front of people’s eyes. The results are phenomenal.

    Jennifer: Honestly, perfect segue into my next question, because the listeners for this podcast series, most are smaller food entrepreneurs who don’t have millions in marketing budget and when we hear video we automatically think dollar signs and even if you’re saying we can’t afford not to do, but the reality is we’re also constrained by our budgets. Somebody might be wondering, how are we going to afford to pay a team to create this video for us? Is this something that we have to outsource to an expert? I mean, once I have the money I’d love to outsource it to an expert who can do this for me, but in the short term if the budget isn’t there, is this something that food entrepreneurs can learn to do themselves?

    Brooke: Yes, really good questions. I would say that the first thing is yes, video can feel really terrifying and the going industry rate, budget wise is about $2,000 per minute of video. You’ll see that most video, food videos, if you’re running them on social media than the need to be under 60 seconds. Maybe you would assume that you have a $2,000 budget; however, one of the best things about food video is it doesn’t require a team. It doesn’t require a significantly high level of after effects or special effects. The actual base cost of most food video is quite affordable and you can find food photographers and food bloggers and I would never hire someone to shoot a recipe video that is not recipe centric in their art. That is the first thing, do not Craig’s List this. Do not just look for a film graduate down the road that has a fancy camera. That’s not what you need. You need someone who can style food, who understands the metrics behind the kinds of recipes that are worth developing, that are typically assumed to be going viral. There is a little bit of an art to it.

    You can actually outsource for anywhere from $500 to $1,200 for just a standard tasty style video. It’s not as inaccessible, I think price wise as you might guess, especially considering that you can share and share and share across multiple channels and it will work for you. Now, with that said, if you want to do it yourself it’s surprisingly possible. You need a table. You need a really beautiful source of diffused directional light from a window and you need at least one camera. The Cannon, lower end T2is, and T3is, and T5is, and T6is. Those you can actually purchase at Costco for under $1,000 with a standard lens and you’re going to come away with great video.

    I actually run a food photography group where several people have come up with some beautiful iPhone videography. It is possible to make it incredibly accessible. I think that there’s always a learning curve. That’s the benefit of outsourcing, is someone can walk you through and hold your hand and make it go away. If you have time for a learning curve and you don’t have time to hire someone to do your video for you, oh yeah, it’s a totally doable learning curve.

    Jennifer: So, actually, something back for a second for the outsource piece. Question about, because you had mentioned the, both the importance of photography and the videos. If you were looking to hire somebody to do a video for you, would you also, and assuming you had the budget for it, would you also look for somebody to do photographs of that same-

    Brooke: Yes.

    Jennifer: … recipe, plate, whatever you’re doing and combine it all into one afternoon.

    Brooke: Yes. Absolutely. I am a huge fan of cycling and recycling through content. I feel like if you were going to pay someone to go into the studio for you, you get video and you get photo and you have them get all of the angles. I can actually send you a list if you’d like of the specific angles that I think are really important in a shoot. Maybe you’re going to pay $100 or $200 more, but you are then going to have enough content to run ads, to run, excuse me, images on a variety of different social channels from Pinterest to Instagram. All of these tools that we have that are really, if not free, they’re very, very low cost ways to start building a visual image for your brand and interacting with fans and getting your brand and again, the education of your brand in front of people. Yes, I think that combining … If you are going to pay someone to create a food video, then make sure that you also get photography from that shoot.

    Jennifer: Perfect. I’ll just make a note for folks who are listening, I’ll include, when you go to the transcript for today’s podcast, which you can find at smallfoodbiz.com, I’ll include that information that Brooke just mentioned about the different angles. I’ll also make a call out for, some of the cameras that she just mentioned. You’ll be able to find it in the transcript, but if you’re just looking for real quick, “I just need to get this info.” Obviously, there will also be a link to her website as well.

    Because I did want to mention, speaking of learning curve and trying to learn something well, but learn it within a manageable time period, because most of us as food entrepreneurs don’t have weeks to dedicate to learning an entirely new craft. I did want to mention that you offer a 90 minute, I love that you call it a crash course, it just seems like … Again, the listeners know this, it’s like I’m a mom. I have a toddler. I’m running a business. I do not have hours, 90 minutes.

    Brooke: I know. That was the whole thing is when I started, I managed this food photography group. It is growing so quickly. The only way that people had, they had all of these questions in food videography and food photography can feel so hard, so confusing and far off. Like you said, when you’re a neophyte it’s, it feels so far away. Just, again, going back to my own learning curve it’s like, “I am a busy person. I don’t have weeks to dedicate.” I was like, Let’s just create this really, really accessible way where it is the hot, quick, and dirty guide to get up and running and it is created for brand new videographers and food photographers. If you have never purchased a camera, I will walk you through. You are welcome to come in and talk to me on my, in my Facebook group, because it’s … If I didn’t have someone to hold my hand I would have not been able to even access this skill. It really is surprisingly accessible. Yeah, 90 minutes, done.

    Jennifer: Perfect. Again, there’ll be a link to that course on this site. As always, I just want to make it clear that this is not an affiliate link and I’m not getting compensated for this. I just think this is a really good resource for food entrepreneurs, especially those who are looking to include food video into their marketing repertoire, but may not yet be at the point where you can afford to outsource it to somebody else. They’ll also be a coupon code. That coupon code is SmallFoodBiz with the S, the F, and the B all capitalized and then the number 50 after it. I’ll include that in the transcript as well.

    Brooke: That’s $50 off, so …

    Jennifer: Great. Thank you.

    Brooke: Pop through.

    Jennifer: Thank you. Brooke, you talked a little bit about obviously, you had your 19 year old son help you, but again going back to this learning curve, was there one or two mistakes when you started in the video piece that still stand out to you as great lessons learned?

    Brooke: Oh, yeah. Those are some great questions. Yeah, I would say that I did not realize how much of, I had to learn how much of the video needed to be fixed in post. Once you video it, I would pull it in and then go through all of the process of editing it and exporting it and then I would say, “Well, I pushed it live and it’s not very clear, or it’s not very bright.” Learning that there is actually a significant amount of post processing required and just like you would filter a picture to get the right look or to pop the colors that you need popped or whatever. Video is the very, very same. Learning that process and learning what I needed to apply to make my videos look really high quality, I would say that that was one of the mistakes that I made from the beginning just because I didn’t know.

    The other mistake is filming in the winter is just a pain in the head, because you have the cloudy day and the light will come in and come out. I had to learn … how to either … check the, my exposure, so that the shots were the same from shot to shot to shot and/or set up an artificial light setting, which I tend to shoot only natural light. I really recommend it. The coloring is just so much more beautiful, but finally saying, “Okay, I need an artificial light thing,” was the answer to the winter shooting mistakes.

    Jennifer: I’m thinking as you talk about cloudy days, I’m based in Seattle, that gives us maybe two and a half months where we can shoot anything here.

    Brooke: I know. Well, you might be okay, because diffused is okay as long as it stays diffused, but it’s when the sun will start blinking in and out. Your shots, you know, you’ll be pouring milk and all of a sudden the sun will come out as you’re pouring and all of a sudden you can’t see anything, but a totally bright screen, because the exposure just gone. Diffused stays good you may be-

    Jennifer: I’m golden.

    Brooke: … in the best place ever.

    Jennifer: Yeah, we never see the sun. We’ll be fine.

    Brooke: Okay, good. You’re stoked.

    Jennifer: Brooke, I really want to thank you. For me personally, you’ve made this seem a little less scary and a little bit more approachable. Also, I think just reinforced for me the importance of doing this, because you’re right, this is all I’m seeing when I’m going on social media so shouldn’t I be doing something similar if I want those same type of results?

    Brooke: Yes, for sure. I think that that’s one of those things too where you see it. You always see the front side of things coming through your feed, but you don’t necessarily see the backside. For instance, there are a couple of bloggers last year who just started adding video to their pages on Facebook. So, this is Facebook specific, but again, every single social media platform is designed to support video and to boost your video. Anyway, several of them who just started adding video last year grew their multitudes of stories where they grew from 10,000 followers to more than 1,000,000 followers in less than year. The results are quick and fast. The results are generally, fairly sustainable, especially compared to that feeling of sometimes you put so much out into the void and you just never hear crickets back. Through video’s one of the fastest ways to really break through the crickets.

    Jennifer: That’s perfect. I love that, breaking through the crickets. That’s what the folks … that I talk to that’s our struggle, because as smaller food producers who don’t have the millions of dollars it’s, how do we break through the crickets and how do we get noticed by our target audiences? Thank you for sharing this.

    Brooke: Yes, absolutely. Please you or your listeners, I am always available. It is a passion of mine to get people up and running to help answer questions. I’m an open book. I will send you a link to my food photography group, so if someone does want to get started and need help, I’m absolutely here to support.

    Jennifer: Great and you know I will say, I personally joined that group, just because I wanted to see what was going on and I found it, I have found it really interesting to read about what folks are doing on the food photography world. It’s just giving me, even though I don’t ever plan to go out and professionally photograph food, it’s just given me some really interesting insight into things to be thinking about and how to do it and different ways to do it.

    Brooke: Good. I think that anything that gives you more fluency in a topic helps you understand better what to ask for, what you really need, what you don’t need. I’m glad. I’m glad that you’re finding it useful.

    Jennifer: Yeah, so thank you Brooke. I appreciate it. Again, to the folks listening, I’ll have it broken out on the transcript where we’ll have the transcript for this podcast, but then I’ll also breakout some of these resources that Brooke was talking about and call them out so they’re really obvious if you just want to go over there and quickly click on those and get that information.

    Brooke: Wonderful.

    Jennifer: Brooke, thank you for your time today.

    Brooke: Thank you. I look so forward to continuing to work with you guys. This is so fun.

    Jennifer: Great, thank you Brooke.

    RESOURCES MENTIONED IN THE PODCAST:

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    The Cottage Food Industry – Today & Tomorrow (PODCAST)
    38:07
    2017-10-07 11:04:46 UTC 38:07
    The Cottage Food Industry – Today & Tomorrow (PODCAST)

    David Crabill of Forrager.com, an expert on home-based food businesses, and I talk about where the cottage food industry in the US stands today and where he thinks it’ll go in the future.

    David Crabill is the co-founder of Forrager.com, a website solely focused on the cottage food industry, which is a term used to describe home food businesses. Since the cottage food industry was created via a collection of state laws, there is no official government organization to help organize or improve it. Forrager seeks to organize and improve the resources available for this growing group of small, independent cooks.

    On the culinary front, David has been making chocolate chip cookies since he was eight years old. While trying to start his cookie business in 2011, he learned about the cottage food industry and created Forrager to help others get their home food businesses off the ground. When he’s not developing websites, perfecting recipes, or answering cottage food questions, you can find him solving puzzles, traveling, and speaking at a Toastmasters meeting.

    TRANSCRIPT:
    Jennifer: So, welcome, David. Thank you for being on today.

    David: Oh, thank you so much for having me.

    Jennifer: So, we’re talking about cottage food and the cottage food industry today, but just to, again, lay the foundation, let’s start with basic terminology and basically, what does this phrase, cottage food, actually mean?

    David: Cottage food is an interesting term because there’s no technical definition for it. It’s just the term that people have started using over time. But generally, when I use the term cottage food, I’m referring to somebody’s homemade food that they’re selling. So, that’s pretty much.

    Jennifer: Okay. So, the home-based food producers, basically.

    David: Yeah. I mean, there’s a commercial food space where people are selling food that’s made out of a commercial kitchen and then the cottage food is basically for people who are selling out of a home kitchen.

    Jennifer: Okay. Now, within the cottage food industry, can you talk a little bit about how there is not federal oversight of this law? We’re talking here in the U.S., I just want to make that clear, for folks who are talking in the U.S. today. Other countries might have very different rules and regulations when it comes to home-based food production for sale. So, there’s no federal oversight in terms of cottage food, correct David?

    David: Right. Many people don’t know, but the Food and Drug Association, the FDA, produces a food code, but states adopt whatever laws they want when it comes to food loss.

    Jennifer: So, for this cottage food industry, it’s a state by state basis, right?

    David: Right. So, in the food code that the FDA publishes, there actually is no allowance for selling homemade food. It’s illegal in that document. So, states have to override the food code that they adopt and specifically allow these homemade food sales on a state by state basis.

    Jennifer: Can you share with us at a high level like what you’ve seen changed in the cottage food landscape in the last couple of years? Because as you and I have talked prior to today’s interview, you know, you’ve mentioned that there’s been a lot of changes in cottage food over the last probably five or seven years.

    David: Right, and it keeps evolving. I’d say that the cottage food industry started to develop about a decade ago when the economy went downhill. A lot of states started to enact these cottage food laws to enable homemade food sales to actually allow people in their community to use something that they had, their own kitchen, and make some money by selling food. So, that’s what got the ball rolling, I’d say, probably the recession in the United States and since that time, most states have enacted a cottage food law to allow some form of homemade food sales, although those laws run a gamut. There’s all different types of ways that states allow the law.

    Jennifer: So, within that, what have some of the most liberal things that you’ve seen states allow and then the counterpoint, what are some more would be considered conservative or restrictions that are placed on cottage food entrepreneurs?

    David: Right. So, in terms of liberal things, that reflects back to the last question in terms of how cottage food laws have been changing, so even though a lot of states have enacted a cottage food law, in the past few years, we’ve seen yet another transition into what’s been termed food freedom and that is basically people openly questioning the government’s right to have any say over whether people can sell homemade food. So, to give a little bit of background, the cottage food laws typically come with restrictions. You can only make certain types of foods, you can only sell in certain types of places, but the Food Freedom Movement is really trying to take all the red tape away and prevent the government from being able to stop someone from selling their homemade lasagna to a neighbor.

    Wyoming is the first state that implemented a state-wide food freedom law. So, in Wyoming, you can sell almost anything with the exception of red meat. You could even sell chicken pot pie or something that would be banned in almost every other state and that’s got to be one of the most liberal things that has come out over the past 10 years. But at the same time, a lot of the liberal things that I’ve seen, such as Alaska, allows a lot of different kinds of food and they don’t have very much government oversight. But those laws, Wyoming and Alaska also have very few people who are using the laws. So, it’s possible that the most liberal things that have actually happened come from states like California and Colorado that have added a lot of allowances still with government oversight, but they also affect thousands of people.

    Jennifer: Mm-hmm (affirmative). Yeah, you know I was thinking as you were talking twofold. One is that I’m originally from Wyoming and so as you were talking, you know, I’m like, “Wow,” when I go home to Wyoming I want to talk to some more folks back there and see what they’re thinking and how that impacts them, but you’re right. I mean, the joke in Wyoming is that four-legged animals outnumber humans in four to one ratio. But as you’re talking about California and Colorado and allowing allowances, like here in Washington State where I’m currently based, when our cottage food law was first enacted it was really restrictive and over the last couple of years, they keep evolving it and keep opening up what types of products you’re allowed to sell, how much revenue you’re allowed to make. So it’s been interesting to watch that rule evolve over time, which is another thing, you know, for folks to just be aware of that hat you see written down today might not necessarily be the same thing next year.

    David: Right. It’s great when food laws keep getting amended. That’s been most clear in Colorado. They’ve amended their cottage food law I think each year for the past three years and they’re really one of the standards now for cottage food very recently because they’ve removed a lot of the restrictions that were initially in their law whereas Washington, while their law has evolved, I’d say it’s still very restricted. Washington is one of those places that could make huge strides in the cottage food space because it would impact so many people, but the reality is that very few people are actually using Washington’s cottage food law because it just doesn’t make that much sense for people to do it because of how restricted, and expensive, and complicated it is.

    Jennifer: Oh, absolutely, especially again speaking personally when compared to our neighboring state Oregon, which at least looking at it from the perspective of a Washington resident, Oregon is pretty liberal in comparison in terms of how much they allow their residents to make as cottage food entrepreneurs where they can sell their products and how they can sell their products.

    David: Right.

    Jennifer:So, for some folks, the idea of starting a food business out of your home versus finding and renting kitchen space really sounds ideal. Based on your experiences and your conversations with home-based food business owners, what are some of the benefits of using a home kitchen for your food business?

    David: I think that people can pretty readily see some of the benefits. For instance, if you’re a stay-at-home mom or dad, just being able to stay at home with your kids is a massive benefit. Just being able to work at home and also be able to be with your family is a huge, huge advantage of the cottage food laws. Also, most people have a home kitchen that they can work from, they already paid for it. So, the fact that it’s free is a massive advantage because a commercial kitchen can sometimes run $20 to $30 per hour to rent it out.

    Jennifer:So while that all sounds great, are there challenges in working out of a home kitchen?

    David: There are definitely challenges. I mean, for one, the home kitchen is built for residential use. It’s not built for … it’s built to make food for a family, it’s not built to make food for 100 people at a farmer’s market. So, just the fact that it’s a very small kitchen severely limits people into how much they can make and also the laws themselves had a lot of restrictions on the home kitchen simply because the cottage laws typically come with restrictions about what you can make. So, a lot of times people will choose to forego the cottage food laws and use a commercial kitchen if they want to make a certain item or if they want to sell in a certain way.

    Jennifer:So, speaking of challenges, I’m also wondering about … so those products that are allowed to be produced in a home kitchen are produced in a home kitchen. How does the average consumer respond to this? Do you find either historically or has this changed over time, has there been challenges in home-based food entrepreneurs gaining the trust of consumers if the consumers know that the product is produced in a home kitchen?

    David: It’s so funny because that’s what I would have initially expected and I’ve noticed a lot of people who are diving into the space and starting up their own cottage food operations. They also are concerned that people will not trust their products because they’re using their own home kitchen. In reality though, I’ve noticed that it’s typically an advantage for people to advertise that they’re using their home kitchen because most of us do eat homemade food. We make it ourselves at home or someone else makes it for us and we don’t get sick. You know, it’s perfectly safe. So, I think that most people want to help small business, small producers, people in their own community and the actual consumer perception, there’s not a level of distress that people often think is going to be associated with producing from someone’s home.

    Jennifer:Well, that’s great news.

    David:I would also add that it actually is pretty safe. I mean, there are horror stories about commercial kitchen sometimes and I don’t know if you’ve seen commercial spaces, but I’ve certainly heard from a number of people who have worked in commercial kitchens that were rented and it’s not necessarily safer or cleaner or any of that than a home kitchen space would be.

    Jennifer:Yeah. I’m sitting here nodding my head because I’ve worked both in restaurant and bakery settings and then I’ve also worked in shared kitchen spaces or kitchen incubators and of course, everyone is different, but there you definitely see things that raise eyebrows and make you a little bit concerned from time to time. So, absolutely.

    David:Right. It’s interesting because people like to hide the fact that they’re using their own home kitchen, but I think that’s generally just advantageous for a cottage food operation.

    Jennifer:Again, that’s great to hear because that’s the one question that I get asked a lot about is, should this be something I advertise or not? Again, here in Washington State, we actually have restrictions that you have to advertise it on your packaging and not every state has that, but folks are concerned when they have to disclose that. So, it’s good to hear when you don’t see that as being a disadvantage.

    David:Yeah, and it’s funny how, I think, people’s perceptions of what they need to do are oftentimes to what is actually important. I’d see a lot of cottage food operations who think they need to be really thorough about what they put their labels and I need to think about every single ingredient that’s listed out and in reality, when most people come to the market, maybe unless you’re living in a certain area like the bay area or Los Angeles or something, but for the most part, people are pretty trusting. They come to the market, they try something, try a sample. They don’t look at the label. I think that people can get really anal about what they are doing when they’re trying to start a food business, but a lot of those things just don’t matter in the big picture.

    Jennifer:So, you just mentioned, for example, farmer’s markets being one sales channel that you see cottage food entrepreneurs use and again, the caveat here being that every state has different regulations around where cottage food entrepreneurs are allowed to sell their products. But do you see certain sales channels used with success amongst cottage food operators at a high level across the U.S.?

    David: Yeah. Certainly, the cottage food laws have been successful for some people, so we know that there are sales channels that work. I’d say that it’s not a blanket answer of one sales channel is better than the other. It completely depends on what someone is selling. So, for instance, if someone is producing custom cakes, the best sales channel for that is typically doing direct sales out your home and using Facebook to promote your business and getting referrals from friends and that has been probably the most successful type of cottage food operation in terms of how much they’re selling, but if you’re doing something like selling peanut butter or nuts, then a farmer’s market might be a better place for you to be selling those things because you’re in front of a known audience or a known market and you have people coming by and buying those things.

    So, I’ve seen a variety of different sales channel work well. I would say, I’d actually add to this, that a lot of times, people want to sell online and they think that that’s going to be the secret key to their success in business and I think people overestimate the capabilities of their online presence. I think that people think that they’re going to sell a whole bunch of stuff if they can put their product online, but I actually see that as being one of the least successful sales channels for people who are just starting out.

    Jennifer:Yeah. I’ll concur with you there, not just from a cottage food standpoint, but I see this a lot with, you know, those products that are made in commercial kitchens and they’ll say, “Oh, my sales strategy is that I’m going to be selling online.” It’s like, then do you have a really strong online marketing strategy to support that? At least at farmer’s market, as you mentioned, folks are going to walk by your both and see you, but how are you going to get people to find you on the internet and in amongst millions of websites that are out there? It can just be really hard if not impossible.

    David: Wait, and it’s not just a matter of getting eyes because I’m a website developer, I know that there are people who will just somehow find a website. I don’t know how, but you put a website up and you’ll get traffic to it. So, you can generally get traffic in many ways through advertising or what have you, but it’s a matter of developing trust with people. Typically, people have to have a strong sense of trust towards a person or a brand before they’re willing to pay for something and this concept is someone’s just going to run across your product and buy it is hard to do if you don’t have some level of trust established either through your own presence in your community or through maybe online reviews on Etsy or something like that.

    Jennifer: So, with you then say, my next question was going to be for you, what do you think the key thing is for home-based food entrepreneurs to build successful business? You just mentioned trust. Do you think that that trust component is … is that key to success or are there other things that you see as being really critical?

    David: Yeah, my answer to this question has changed quite a bit over the last few years. I think initially, I thought the key to success of business would be what product do you have? How good is it? How good is your recipe or what’s your marketing like? How’s your product packaged? That’s going to be the key to success, but I’d realized that the key to success, I mean, it ties in with the trust concept, but it’s really the entrepreneur themselves that are the key to the success of the business. I say this because I see a lot of people make the same mistake over and over again.

    I think, generally, people who try to enter this space and become a cottage food entrepreneur, they like doing their own thing and they also don’t [technically 00:18:59] want to be the face of their business. They want to hide behind the scenes, they just want to make their food and however it gets sold is great, but they don’t really want to be on the center stage. I think that’s actually the exact opposite approach that someone needs to take when they’re starting a home food business. People will hide behind a curtain and say, “Oh, I’m working on this secret thing and I’m not going to tell you what it is until it’s ready,” and then even when it is ready, they won’t actually take ownership of their business. They’ll put on their website the ubiquitous we-word like we believe in blah, blah, blah. When you’re starting a business, it’s all about you. It’s all about that entrepreneur and when people are buying a product, they’re not buying a product, they’re buying part of your experience.

    So, that’s the biggest key I’ve seen in terms of people who are successful is that they take ownership of their business and they develop relationships with people and those relationships are what boosts their business. In terms of their product, but product doesn’t matter as much. You need to find what they call product market fits. You need to make sure there is demand for what you’re selling, but if you have the right entrepreneur who’s willing to take ownership of their business, they’ll eventually find the right product for their market.

    Jennifer: Yeah. Thank you for sharing that because so often people see it as being that the product has to take center stage and again, it ties back to that piece that you’re talking about with trust that people need to trust the person and the story behind it, behind that product before they want to spend money on that product.

    David: Yeah, and it’s really hard too because typically, a product is the impetus. It’s like your grandmother had this really great apple pie that everyone loves and it’s the talk of every Thanksgiving, you know. So, it’s like, “Oh, I want to start this business to sell my grandma’s apple pie,” and I think that’s generally where I see people get caught into a trap because their business is revolving around the product instead of revolving around their desire to start a business.

    So, a lot of times, when that product doesn’t catch on or maybe the market isn’t willing to pay a fair price for it, that’s when people’s business will close. But if someone is starting from the standpoint of wanting to start a food business and they’re really passionate about making and selling food and sharing it with their community no matter what form that takes, then they’ll be able to make adjustments over time to ensure the success of their business and they won’t get caught up on, “Well, if I can’t sell these cookies, then why bother?”

    Jennifer: Yup. That’s one of those statement words like it’s so obvious and yet it’s something we so often overlook because you’re right, we go into it and myself included because I’ve toyed with the idea of starting up a cottage food business in addition to a small food biz and it’s always been around the product, not necessarily around the business.

    David: Right. Yeah, it’s very hard. I mean, it took me years to learn this because I initially got into the space because I want to sell chocolate chip cookies that everybody raved about or sell my grandfather’s fudge that is always a staple around the holidays. So that’s what got me into this space. So I think it’s important to recognize that products can get people into the space but ultimately, the people who I see thriving are the people who are willing to adapt their business to whatever the market is asking for. For instance, I tried selling my fudge but it just so happens that selling really unhealthy things these days is not a huge hit at farmer’s markets. Most people are interested in more healthy choices for their families. So, it’s not really a viable business for me unless I was trying to sell in an area to market. It’s like a farmer’s market would not be the right choice for selling a product like that because it’s just not what people are looking for at a farmer’s market.

    Jennifer: Yeah, especially not on a week in, week out basis. One thing for a one-time purchase because it’s for a special event, but you’re right, it’s not something that … and I say this being a professional pastry chef, I hate to say it, but it’s true. Desserts and the like are not necessarily something that most consumers, especially like you said, at farmer’s markets are looking to purchase every single week.

    David: Right.

    Jennifer: As we talked about there’s being a lot of changes in the cottage food industry over the last few years and given your insight, take a look into the crystal ball and where do you think that the cottage food industry in the United States will go in let’s say five years from now?

    David: Well, of course, I can’t know exactly where it’s going to go. I mean, if you’d asked me that five years ago, I probably wouldn’t have been able to tell you where it is today, but I know where I’d like it to go and that’s …

    Jennifer:I’d love to hear that.

    David: There are a couple different things I’d like to see. One is in expense of the Food of Freedom Movement and it just makes sense to me that selling homemade food is something that people have done for pretty much all of human history. It’s a fundamental part of our lives that we make food and we share it with other people. We don’t usually get compensated for it, but I think that we should be able to if people want to make that their livelihood and most food is perfectly safe, but the reason why homemade food is disallowed is because there’s a lot of concern about if you don’t have a sanitary work environment and everything, then you might get someone sick and certainly, that does happen on a rare basis.

    So, in order help prevent a few problems, we disallowed an entire ecosystem of homemade food entrepreneurs so I’d like to see the Food Freedom Movement bring a little bit more awareness to how much government oversight there is in the food space and allow people to question whether that should be the case. The other thing that I’d like to see in the future is perhaps a nationally recognized cottage food law because right now, the cottage food laws, they’re on a state by state basis and some of them are actually quite good. They allow people to run lucrative businesses out of their homes. But the problem is that because they’re on a state by state basis, those people cannot sell to other states, so they wouldn’t be able to list their product on a website like Etsy, and sell online, and then ship it to somebody in another state because there isn’t recognition between states of the other state’s food laws.

    So, if there were some sort of national recognition on cottage food, for instance, in the food code that would allow cottage food to act a lot more like commercially produced food, I think that would be highly beneficial to people because it’s one of the biggest limitations that I see currently in the cottage food industry.

    Jennifer: Yeah. Again, speaking from a state that is still decently restrictive, I know in talking to cottage entrepreneurs here locally that they just say, “Why can’t we do what Oregon is doing?” Even if you might live just across the bridge from Oregon, it’s like I’m sorry, you can’t. You know, talking about your concern over sanitary conditions and food borne illnesses, the reality is even in highly regulated environments like commercial kitchens that are regularly overseen by either USDA and/or county health officials, you still run into issues of food borne health issues.

    David: Yeah, I know and it’s interesting because there’s always a concern about the health and safety of a home kitchen. It’s always brought up when a cottage food law is being discussed or enacted and yet, I still have not heard to this day and I’ve been in the industry for quite a few years and I talked with thousands of people about how cottage food, I still have not heard to this day one instance where a cottage food operation was the cause of a health concern. Usually, the health department gets called about illnesses, food borne illnesses all the time, but they’re usually out of these commercial, inspected, approved kitchens and to be fair, that’s also part of just the fact that cottage food is restricted to usually very safe foods that don’t need to be refrigerated, but it’s just like even the commercial kitchens are always producing things that are totally safe. So, it’s just interesting to me that there’s so much skepticism that comes through when you’re talking about a home kitchen.

    Jennifer: Absolutely.

    David: I wanted to go back to the last point where you’re talking about people who … like if I am in Washington right over the bridge, why can’t I sell in Oregon? I’ve heard that a lot too and I think we did have to question that because the state laws are so across the map literally and figuratively, yet people’s actual … I don’t know how to put it, but you know people are living the same lives in each state. People are subject to the same health laws in each state in terms of what’s going to make them ill and so it’s funny how some states allow certain things and other states don’t. We have to wonder, is there a really good reason why that should be the case?

    Jennifer: No, I agree with you. Like you, I would love to see a national ruling on this if for no other reason also just for clarity because I think it oftentimes makes it harder for home-based food entrepreneurs to start up because they have to figure out exactly what is allowed in their state and potentially, also their county and what business licenses they need and they don’t need, and it can throw a lot of people off of the course because it can be so frustrating.

    David: Yeah. It’s really confusing. It’s extremely confusing, hence the reason why people have to spend so much time just figuring out how to do. That’s something that I think should be very simple, you know. You want to go down the street and sell something at the farmer’s market and yet that can sometimes take months to get approved in certain areas. But it is important to recognize that it’s improved a lot. Back 10 years ago, 15 years ago, homemade food sales were almost universally banned in the United States and I think you’d see it across all thousands of life where there is kind of a waiver, a spectrum and you got from one side to another and we were in a state of being just totally disallowing and distressing of homemade food and that was totally on one end of the spectrum.

    The cottage food laws had brought that way back and pulled back a lot of the control that the government imposed on food sales and it seems like it’s continuing to be pulled back. So, it’s definitely been a huge improvement and we continue to see states improve their laws and today, there are hardly any state that don’t allow any kind of homemade food.

    Jennifer: That’s a great note to end on. We might not be at the cottage food utopia yet, but the industry has come a long way. I want to just quickly mention that a lot of this has also been driven by average civilians. There’s an article on my site from a couple of years ago about the woman who really pushed through the cottage food law in Louisiana and it’s a grandmother who was frustrated by this law. So, a lot of times it is just an average civilian who’s frustrated by it who decides to take it to their lawmakers, get a bill passed and does all the work to do that and to gain momentum behind it. So it’s really exciting to also see, again, the average civilian just saying, “This is really important to us,” and building the from the ground up.

    David: Right, and that’s an important thing to note because a lot of people ask me, “I can’t do X, Y, Z. When is my state going to change this law?” Just given that we do live in a democracy, it’s like well, you might have to be the person who changes the law, you know. That’s how these bills and laws get started. Quite frankly, before I got into this space, I had no idea how a bill or a low got passed, so it does take a lot of learning and diligence. But I’ve seen time and time again where a regular citizen will say, “Hey, I’d like to sell my homemade food or I’d like to sell this item and it’s not allowed in my cottage food law,” and they’ll take the initiative to contact the congressman and make it happen and that’s the way that our political system runs.

    Jennifer: Well, you know, it’ll be exciting as you mentioned nobody can sit here and 100% accurately forecast where the industry will go, but it will be really interesting to see what happens in the next 5, 10, 15 years and where we are then compared to where we are now.

    David: Yeah. I believe that just having seen the past few years that it will be an improvement over what it is today because certainly, these cottage food laws have been very popular and I don’t think it’s happened to-date where a cottage food law has been redacted or made worse through an amendment. So, there’s certainly a lot of desire among people to do this, to sell their homemade food without having to go through a bunch of loopholes and I would expect that that inherit desire amongst the people of our country will continue to provide the path forward to make the laws better.

    Jennifer: Great. Well, I’m excited to see what happens in the coming years and David, I want to thank you for coming on today and sharing your thoughts and your experience having been in the … you’re really looking at the cottage food industry like no other has for the last 10 plus years, so thank you.

    David: Thank you so much for having me.

    Jennifer: Absolutely. Thanks.

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  • Collecting Market Research When You Have No Budget
    2017-10-07 11:04:46 UTC
    Collecting Market Research When You Have No Budget

    You know that it’s important to understand what you can about your target consumer. The large companies dedicate millions of dollars to market research but that’s just not an option for companies like ours. That doesn’t mean market research is still impossible to do though. In this podcast I share some ideas on ways you can conduct market research even when your budget is $0.

    TRANSCRIPT:
    Understanding everything you can about your target market is one of the most critical components of business ownership. And it’s not just one of those things that can be done when you’re in startup mode and never looked at again. Since the marketplace and consumer needs/tastes/desires are constantly changing, so too is what your audience wants and needs from you. A business that doesn’t spend time doing market research is one that runs the risk of being quickly left behind as consumers move on to the next thing.

    Doing market research is something large consumer product goods companies spend thousands, if not millions, on every year. They have internal teams working on this fulltime or they outsource this task to market research experts. That, unfortunately, is not a reality to most small and medium-sized food companies. So how do smaller companies conduct market research when their budgets are already stretched thin? Here are a few ideas:

    1.If you can afford it and have specific questions you want answered about what consumers know/don’t know about your brand or how they interact with your products, hiring a market research firm to do a one-time focus group (either in person or online) can be a good use of resources. The caveat is that this can cost upwards of $10,000 or more depending on your needs and the complexity of the research.

    2.Try asking your customers yourself. You may not be able to hire a market research firm but you can still ask your customers what they like/don’t like/need/want/etc. Unless you have a background in market research, your results may not be as scientific as those that you can get by hiring a market research firm. But asking customers as you interact with them in-person or online, or even by sending out a short survey for them to answer (adding in the chance that survey recipients can win a great reward can help spur responses), can give you insight into who your customers are and how your product and brand are a part of their life.

    3.There is a tremendous amount of research available online for free or low cost if you know where to look. Industry publications like the Specialty Food Association and my site, Small Food Business, publish food industry-specific statistics as those are made available. Your local library can also be an excellent research source as many libraries offer to their patrons free access to industry databases/statistics that would cost an individual thousands of dollars to subscribe to. Talk with your local research librarian to see what may be available through your library system.

    4.For information about demographics, the US Census Bureau (www.census.gov) maintains an online census report that can be drilled down to a zip code level for insight about median age, income, children in the home, etc. within that local area.

    5.Ethnographic research – the study of someone in their natural space – can give you real insight into why consumers make the buying choices that they do. When you ask someone why they made the choice they did to purchase Brand A over Brand B, they will likely give you a lot of rational answers for their purchase. But when you spend time watching how customers shop they may tell a different story. Do consumers seem to price point comparison shop when it comes to products like yours? Are they reading the ingredients labels and/or the nutrition facts? Do they seem to be driven by particular packaging designs? You’ll be amazed with what you can learn when you watch customers.

    6.Lastly, especially if you’re looking to grow your customer base, it can be helpful to talk to people who aren’t currently your customers to get a sense of what they think about your products and what your brand offers to them. One of the best examples of doing this on a small budget that I’ve heard of was a small food company who sent their goodies with friends to those friends’ workplaces. Along with the goodies (and who in office settings doesn’t love free food!), the company also sent along an anonymous survey with key questions they wanted answers to. The feedback they received from that survey, they later said, was more beneficial than anything their friends and family had ever told them – in part because the coworkers felt more comfortable being totally honest. Critical feedback like that can really help propel your business strategy forward.

    7. Another thing you may want to consider is contacting your local college or university as sometimes they may offer courses in Market Research and require their students to do case studies with real companies. The schools that offer this oftentimes maintain a database of companies their students can reach out to.

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  • Full-Time Job + New Food Business + Newborn Baby (PODCAST)
    2017-10-07 11:04:46 UTC
    Full-Time Job + New Food Business + Newborn Baby (PODCAST)

    Starting your food business is hard enough.  Doing it while also maintaining your full-time job makes it that much harder.  But what happens when your first child is born the week before your first farmers’ market?  Visas Taskar of Bombay Bitez shares his experiences juggling it all in his first year of business.

    TRANSCRIPT:

    Jennifer: Today we’re talking to somebody who is working full time while also building and creating. He started his business last year as you’ll hear, and he’s working to continue to grow that business. And there’s some other really interesting things that he’s also juggling as well that we’re going to talk about.

     

    So, want to introduce you today to Vikas Taskar. He is an engineer by profession and foodie at heart. His introduction to the culinary world started, as it does for many of us, in the home kitchen while he was growing up in Bombay, which is now known as Mumbai, India. He started by learning about traditional Indian recipes as well as trying out variations of those recipes on weekends. Last year, he decided to transform his hobby into a business and started Bombay Bitez which serves authentic Western Indian snacks and beverages handmade from scratch with locally sourced ingredients, freshly ground spice mixes, and fresh herbs.

     

    The company, which started as a Farmer’s Market business last summer and expanded into catering in the fall, is starting their second year of business this month.

     

    So thanks so much for joining us.

     

    Vikas: Thank you, Jennifer for having me in the show.

     

    Jennifer: I wanted to start out by talking about the fact that, you know, you are not, you’re not coming into this entrepreneurial endeavor as somebody who has been working in the culinary industry their entire life. And you, like many of us, are coming from a, coming from a different profession. So tell us a little bit about what you’re, what you’re, you know, your professional background is?

     

    Vikas: Yeah, so, I grew up starting engineering as my major. And I got my undergraduate degree in electrical engineering. This is when I was back in India. And during the time I developed an interest for computers so I ended up following that passion. Ended up getting a job in software development right after graduation. After working for a few years, I came to the U.S. I got my Master’s degree. And I continued to work in the tech industry afterwards. So overall, my background is almost entirely science and engineering based.

     

    Jennifer: Which is, know it’s funny. I was about to say, which is different than the food industry, but obviously as you know there’s a lot of cross over. And we’ll talk about how you’ve been able to take a lot of what you use in your daily, professional career and transport it over into your food business. But to start with, what made you want to open up a food business? And then as you start to think about opening up this food business, what were some to the challenges that you knew, even before you started, that you were going to have to overcome?

     

    Vikas: Yes, so my interest in food and cooking actually came about at a very early age when I was growing up in India in the city of Bombay. This was a time when I happened to get very deeply interested in all types of food. Whether it was home cooked food, street food, as well as just about any cuisine that I might try out. And this interest actually remained a hobby for several years, but while it was a hobby, I definitely had the intonation to start something out on my own in the food business at some point. This was driven partly by a couple of, you know, factors.

     

    One is that … and this is true even today. I actually find that cooking is a great stress reliever for me. Particularly cooking for large groups. And this was something I discovered several, several years ago. I also sort of like the feedback aspect of getting, you know, positive feedback or just feedback of any kind on dishes that I had made with an opportunity to kind of go and improve them over time. So, it was finally these factors which led to my venturing into the food industry when I finally did last year.

     

    Jennifer: So what made you determine ultimately, you know, as you, as you realize you want to start up a food business, and, you know, there’s all these different ways you can take it. You can go into packaged food and try to get onto retail shelves. You could open up a restaurant. What, ultimately, made you decide to, at least to start, by becoming a Farmer’s Market business in the first year? And also, by focusing only on one market and not multiple Farmer’s Markets in your first year?

     

    Vikas: So, once I’d made up my mind that I wanted to start a food business, I was fairly clear on a few things which I wanted would assure would happen as part of my business goals. One of these was that I had a fairly low cost plan with low capital outlay. I didn’t want to spend a lot of money. It was going to remain a part time commitment at roughly one to one and half day a week where Farmer’s Market for one day a week with about a half day of prep time behind that one day and then some overheads kind of fit that schedule.

     

    I also liked the aspect that Farmer’s Markets provided me the opportunity to get additional feedback on the food that I was putting out. As well as an opportunity to get revenue, but in sort of an informal scheme which is not perhaps as trying as having a full time business that operates six or possibly even seven days a week. So I looked upon Farmer’s Markets as a combination of a friendly, neighborhood environment, a place which I could use as an experimentation platform for my food, albeit food which had to be of good quality. And an environment where I could essentially put out my business with a relatively low capital cost.

     

    Jennifer: You know, one thing that is evident in talking to you now, and just so that listeners know, I mean you and I have talked. We’ve known each other for about, probably, probably going on two years now. I think about a year before you started your business, we’d been talking. And you’ve always been very focused on not just providing a quality product, but also providing a quality customer experience through having seamless operations. And it always struck me, and correct me if I’m wrong, is that that’s one of those pieces, that I felt really carried over from your professional career as an engineer in that you are very focused on “how can we make the processes as efficient as possible. Whether it’s how I collect money from a consumer or how I, you know, cook this, cook this item.” So why was it … well, again, I guess the first question is “Am I right in that?”

     

    Vikas: Yes, that is definitely true.

     

    Jennifer: On operations?

     

    Vikas: Yes, that is definitely true. So, my, my, I mean, I definitely was very operations focused at the start of my business.

     

    Jennifer: And why was it important for you, like why did you see that as being an important thing to focus on because in talking to a lot of food entrepreneurs, not that they don’t see it as important, but it’s not necessarily kind of the top three that they focus on. So why did you see that as being such an important thing to be concerned with in addition to, again, having really quality product that you’re putting out to consumers.

     

    Vikas: Yes, so one of the things which happened as part of my plans to start a food business was that I set capital constraints on myself and decided that the whole thing was going to start out as a very low cost venture. So given that I had set those constraints, the need to function with efficiency came about almost immediately, right off the bat. I decided to go with this low cost, and relatively operationally efficient, as operationally efficient as possible, approach because I, sort of, always have felt that being efficient is useful at the beginning because it helps when you work with constraints. You might have less money, and you might need to work harder and do more innovative things, but it helps you, sort of, be more frugal and scrappy, and actually to be start up like. And as a result, I ended up being fairly minimalistic when it came to what I perceived as some of the nonessential aspects of the business. Some of which, I realized, potentially were places I could spend more money in. But that was really the genesis of what drove my push toward operational efficiency right from the beginning.

     

    Jennifer: So, I’m curious, what for you in looking at your business, like, can you give us an example of what you viewed as one of those nonessential pieces? And again, this is obviously specific to your business and your business model.

     

    Vikas: Right. So one of the things which I was grappling with, and I should say, right until about a couple of weeks before launching, was I didn’t have a logo. I had thought through all the licenses and [inaudible 00:09:11] and I had gone into a farmer’s market and decided my menu and practiced my recipes and scaled them up and everything. But I didn’t have a logo and I didn’t have a banner. And I just suddenly started to feel that okay, I have a thing that I’m going to, you know, go out to the market, but I don’t actually have something which is going to tell people about who I am. And so I ended up just getting a very minimalistic logo made off the internet using, you know, a combination of the freelance sites. You know, to bring the banner along with it, and then just the standard logo sizes that are available. And, sort of, went with that. So the logo and brand was definitely something which I did as something of a very, very low cost initiative when I did start.

     

    Jennifer: Great! Thanks for sharing that. I appreciate that. You know, the other thing that I, that we want to talk about today, it’s kind of part of today’s theme for the podcast, is the fact that, you know, you mentioned that you’re working full time, and this was kind of a one and a half day venture. But almost exactly the same time you started the Farmer’s Markets you had another huge life event occur. Can you tell us about that?

     

    Vikas: Yes. So, our baby boy was born last year in June. It was actually exactly one week before the start of the Farmer’s Market. So, for a little bit of preface on that, it didn’t come as a surprise because, you know, we had known about this for a while and it was during the planning phase of the business that I was fully aware that there’s a possibility that the business might launch right around the time that he’s born. But of course, when it actually happens, it’s very different from when you think it might happen. So I was presented with this situation last year in June where he was born in the first week of June. We came back from the hospital a couple of days later, and roughly six days after that was, I was at the promotion kitchen getting ready for our first day at the Farmer’s Market.

     

    Jennifer: And of course the birth of any child into the family is a huge event, but I think especially, I mean, this was your first child. And so that’s becoming a parent for the first time can be overwhelming. So how did you manage to juggle being an employee for your, the employer that you worked for, being an entrepreneur, and being a new father all the same time?

     

    Vikas: So, it’s an interesting question. It was actually very difficult for the first 15 months. I will say that I was extremely fortunate to have family support. My wife’s parents were here and so we had help at home in the form of, you know, being able to take [inaudible 00:12:13] responsibilities when I was away. For example in the kitchen, or when I was at work, or when I was getting ready for the Farmer’s Market over the weekend. One of the, I did a couple of things to help me, sort of juggle through these aspects.

     

    The first thing is I decided very much early on that I just had to keep business priorities for the first year. I decided to focus on product quality, customer service, and customer satisfaction, and operational efficiency which is a piece I talked about a little bit. And what I basically did was that I didn’t end up doing a lot of marketing, and I didn’t end up doing a lot of analytics based off our sales data. I didn’t end up maybe expanding my menu a whole lot during the season. And I basically got out a lot of things which I might have done had the time been different. But just the thought of having a laser focus and trying to get whatever I was trying to put out really well done.

     

    The other thing which I, sort of, did is I tried to make sure … and this was partly true because of the background I was coming from. I realized that when I started at market that it’s extremely physically strenuous to work at a Farmer’s Market, let alone just work over the weekend. And so I made sure that I was being physically fit and staying fully prepared for the Saturday and Sunday rituals full of work as opposed to being a relaxing weekend that it might otherwise be.

     

    Jennifer: That’s a great point because it is, working in the kitchen and then, you know, going out. And not just the physical piece of interacting, you know, of preparing the food and serving it to customers, but also the, well it can be uplifting and exciting, interacting with the consumers you have to always be on when the Farmer’s Market’s there. So there’s no time for either physical rest or a mental rest. Especially when, like you said, you’re doing, working full time and then also working Saturdays and Sundays. So taking that time, or figuring out somehow to take care of yourself within that so that you can enter into the weekends rejuvenated and excited about going in for the farmer’s market is huge. Over the course, especially over the course of a full season.

     

    Vikas: Yes, that is definite. I would say that some of the aspect of just of feeling relieved of stress and cooking being a stress reliever that definitely helped in this regard because the weekend activities then came to me a little more naturally than they would by comparison with, you know, taking on something as additional duty.

     

    Jennifer: That’s a great point. Yeah. You know, we talked about, just a minute ago, that you approach year one with that laser focus that you talked about. Which is a great way to phrase it, but it’s also a great thing for, I think, food entrepreneurs whether or not you’re also working full time and or becoming a new parent simultaneously. It is really hard for us as small business owners to try to do everything. Yet we always try to do. You know, most of us try to do everything and ultimately, like you don’t necessarily do all of it well, as opposed to having two or three things you’re really focused on in that first year. I’d be interested in hearing from you. Were there any, kind of, big lessons learned for you with regards to one or all of those pieces that you were focused on for your first year?

     

    Vikas: Yes. Definitely. Actually there were three big lessons I learned as part of the first year in business. The first and most important lesson I learned was the importance of execution in bringing a product to market. This was true for a couple of reasons. One is that I spent the better part of 2015, roughly the latter half, on weekends, kind of [inaudible 00:16:15], thinking through what I might build. Thinking through what I need to do to get started. But 2016, roughly February 2016, was the first time I actually got started with the nitty gritty of what’s actually involved to start a business. And I realized there were gaps in my understanding. There were potential things I had not considered. There were roadblocks that I had. And so I realized that execution is really important, you know, it’s said quite popularly that ideas are a dime a dozen, but execution is what matters. And I really felt that firsthand.

     

    The other, the second lesson that I learned was the importance of cash flow. Because I was keeping his business very low cost and I tried to make it self-sustaining as much as possible, I had a close eye on our costs, on revenues. Making sure they aren’t going over at any point of time. From the perspective that I realized that, you know, I could look at my business as something that’s promising with a lot of potential for the long term. But in the near term, I still have to be able to pay the next month’s rent. I still have to be about to get inventory for the next week. And I still need to basically manage the rhythm of running the business, regardless of how it might pan out in the long term.

     

    And then, my final lesson, what I would say, the third most important lesson, was that there is actually a lot power of observation when it comes to the food business. And this, I felt was somewhat specific to my experience in the food business because while I was trying to start up a food business, I talked to a lot of food businesses, a lot of entrepreneurs. And in some cases, particularly while approaching a small business, I found that maybe they don’t always have the time to talk to you, or they don’t always, you know, they can’t always [inaudible 00:18:10] you in with what you’re asking them. But sometimes just being observant. You know, standing alongside a chef who’s cooking in an open kitchen, or a food cart at farmer’s market, or a food truck. You know, watching them take orders, and watching customer behavior. Some of these things actually tended to answer over half of my questions. And so over all this time I just realized that being observant actually answers so many questions for me.

     

    Jennifer: Oh, I love that idea! I also, I feel like it might also answers questions you didn’t even know you had.

     

    Vikas: That is absolutely right. In fact, it gave me learnings right from the fact, that I actually, hadn’t gotten my city business license until two weeks before starting in business because I didn’t know that I needed a city license. But then, you know, you see the licenses which are displayed at a business and then I realized, “Hey! Maybe I need one.”

     

    Jennifer: That’s great!

     

    Vikas: And then, down to little things like, you know, somebody serving, let’s say, a roll. What kind of aluminum foil are they using? Or what brand of vinyl gloves are they using? Now these things might actually appear as very mundane and day to day to an average business owner, but being new, I realized there was value in observing and, sort of, making most of all these things because when you go to the store, you’re presented with so many brands that you really do need to make a quick choice.

     

    Jennifer: Yeah, it allows you almost to let somebody else vet the products for you. So that you can just go in and say, “Okay. These are the ones that XYZ are using. I trust that they are going to be better than if I just come in and blindly choose.”

     

    Vikas: That is correct.

     

    Jennifer: What about, you mentioned that you didn’t necessarily spend the time, a bunch of time or energy or money, on marketing. There’s nothing wrong with that, but what about the customer education piece? And I kind of roll that into marketing because often times people will say, “Marketing and customer education go hand in hand.” But in your case, you know, your menu doesn’t necessarily consist of what Americans are always familiar with when it come to quote typical Indian cuisine. Your menu is authentic, but maybe not mainstream for, especially for Caucasian Americans.

     

    Vikas: That is right.

     

    Jennifer: Did, so … I guess a couple questions: Did the demographics in the area that, in your farmer’s market area, did it necessitate that you had to educate the public about your menu items? And if so, what did you do to help with that education process?

     

    Vikas: So, good question. I definitely did need to do a lot of customer education. For some background, the food that I started out serving, both the snacks and the beverages, these are extremely popular in the western states of India, but they really haven’t penetrated into a lot of American cities. Definitely not in Seattle. And so, what I found that, what I found is that the demographic of the farmer’s market was such that I had people who hadn’t even tried the food, let alone hadn’t even heard of them. And so they would come up and ask me, say, “Hey. What is this?” So for example, we had a tapioca patty and they had sort of tapioca starch in their mind whereas this is actually tapioca that we use. And so I had to, sort of, educate them about how we put this together, and the tradition of how we cook it and prepare it. And there was definitely a lot of face to face time spent talking with customers at the stall.

     

    I also had resources ready and, sort of, handy for them, in case they had more questions or needed more information. In some cases, those resources were really as simple as Wikipedia articles or maybe a link to a recipe on the internet.

     

    It was overall an eye opening experience because what I realized out of having this sort of different menu from the standard what you might see in Indian restaurants or quick service restaurants, is that we got a lot of polarized opinions from some of our traditional items. On the one hand, there were people who thought, “Wow. This is something that I’ve never tasted before.” But on the other hand, there were people who maybe hadn’t even tasted all of those flavors coming together. Like tapioca, peanut, and potato with cumin seed and salt, and a few other spices. And they kind of took a little time to warm up. So in terms of how we adjusted and who we, sort of, got the consumer education going, it was a combination of face to face time spent with the consumer and, you know, it did mean, in some cases, that, you know, maybe you spend an extra minute or two in processing that order.

     

    We did give away complementary samples initially where maybe a customer would order a more familiar item off the menu. Or they might just order a beverage. And I’d say, “Hey! We have this traditional item on our menu today. Would you like try something?” Or would they like to try it, and then, you know, maybe you give them a piece or a small sample.

     

    And towards the latter half of the season we definitely found that people had warmed up to these items.

     

    Jennifer: Interesting. I like that idea of doing the sampler. I mean, certainly, you know, if you can afford it to do the sampler.

     

    What about, you’d also told me in a prior conversation that you put together a menu item that basically, kind of was a sampler platter if you will. A little bit of everything to help encourage, encourage people to try an assortment of items offered from your, from your farmer’s market booth. Can you tell us about that?

     

    Vikas: Yes. That is correct. So one of the things we realized was because a lot this menu was new to the customer at the farmer’s market there might be some apprehension with regards to trying a specific item. Particularly if the customer is not sure about what it tastes like. And, you know, although we were giving out complementary samples, along with, you know, to paying customers who would buy some other product. Not everyone might stop by for a sample and so on. So what we actually did was we put together a sampler which was a small quantity of every item on our menu and we actually sold that as a full menu item.

     

    Now what ended up happening as a result was that there was a little bit of a hit we took in terms of our margins because the sampler was discounted relative to the combined price of the individual items. But what it did allow is that it gave the customers the opportunity to sort of get a feel for each of the different items. We actually found that a lot of the customers who tried the sampler for a couple of weeks actually came back and bought the individual items in future weeks.

     

    Jennifer: That’s fantastic! And you know, sometimes it is those short term, you know, you never want to have a crazy, crazy discount on your margin, but to be able to get customers to trust and learn about those other products ends up being a much better long term revenue idea then simply hoping that one day they might choose something different off the menu.

     

    Vikas: Yes.

     

    Jennifer: What, you know, we’ve been talking mainly about the farmer’s market arm of your business, but as I mentioned in the introduction, starting last fall you also started offering catering services. So can you tell us a little bit about the catering piece of your business? Why you ultimately decided to go that route? Had you planned that as part of your initial business plan? You know, and again, I know throwing a bunch of questions at you, but you know, what, what did you find different, or what did you learn in comparison to being the farmer’s market when it came to catering?

     

    Vikas: Yeah, so, catering was an arm of the business that started out in the early fall of 2016. So roughly about three and a half months into the farmer’s market season. Catering was definitely something which I had thought about as something I wanted to do when I started the business, but then keeping a tight set of priorities, being busy with everything else that was going on in life, I decided, you know, maybe I should just give it a few months to see how the farmer’s market takes off before I get into catering. So in about the third month, we got into catering. The catering angle of the business is actually fairly different. In the sense that we have an expanded menu. We have a very different clientele and the orders schedule tends to be very different than the farmer’s market.

     

    So speaking through each of these, what tends to happen is that we’re based on the east side of Seattle and so the clientele tends to be fairly local. Which is very different from the farmer’s market which is people who live in the city and actually, just might walk to the market or walk down the hill, you know, to the nearest stall depending on where they live. As I learned demographic of people who were coming to our catering business was almost the, you know, 180 degrees opposite of what the demographic was at the farmer’s market. We needed to prioritize a lot more on a lot of traditional Indian foods which might not have been things we sold at the farmer’s market, but have started to become popular among the local circles here. And so that was one angle of catering which, you know we needed to adapt and build.

     

    There was a benefit of catering in that, catering orders seemed to be fairly well defined. And so we knew exactly when the order was coming in how much food was to be prepared and so, the situation of having food left over or having, you know, inventory that is being, kind of, just kept in the kitchen and doesn’t have a use for was really not there.

     

    And then finally, and this is actually an interesting place where perhaps the farmer’s market was beneficial. Catering orders given my full time job, and given the fact that there are family commitments, catering orders, in essence, do tend to be fairly sporadic where we’ve done catering orders ranging from birthday party, baby shower, holiday party, you know, small gatherings at home. But over a period of time I realized that a catering order is great if the caterer is available to service the order on that day. Very different from a farmer’s market where you decide to go out on the day that you are available and then you can service any customer.

     

    The reason I mention this is because in catering orders, we did have two or three situations where the order came in and then, you know, we were just way too busy on that weekend and we couldn’t take that order. Now I don’t know if that person going to order again after three months or after six months, or maybe after a month. Whereas at the farmer’s market even if we would run out of food, the customer could potentially come back the next weekend, you know, come a little earlier and try our food.

     

    So I think in balance there’s definitely been a lot of learnings as well as understandings of key differences in the whole experience of getting into the catering business.

     

    Jennifer: So then, you know, as, again, as I mentioned, like, you are starting your second farmer’s market season now. Are you continuing catering simultaneously? As you also do the farmer’s markets or how are you going to work that this summer?

     

    Vikas: So, yes. We will be doing catering along with farmer’s markets this summer. One of the things that I realized which experienced caterers do and which I didn’t do actually the first year is they ask for a significant amount of lead time to prepare for an event. They typically sign contracts. They have some sort of formalized relationship with the customer well ahead of the event. So yes, we’ll definitely be doing catering in our second year as well.

     

    This is a small business, and so we aren’t set up to do, for example, full service catering like some other caterers are set up to do. But we’re looking to expand as we go along.

     

    Jennifer: So that actually fits perfectly in with my next question. So, as you head into this second year of business, do you have those, do you have those three priorities again like you did last year that you’re really focused on this year? What are you, what are you focusing on, what do you hope to learn, what, where are areas of strategic growth that you’re really looking towards for your business? Or essentially, what are you thinking? Like if you and I are talking a year from now, what would you love to be telling me about your second year of business?

     

    Vikas: Yes. So, as we enter the second year of business in June, I’m looking at a few things that I’d like to do in the second year. The first is sales growth. So look at growing our sales year over year. Two, an expanded menu. We had a fairly limited menu at the farmer’s market last year primarily because we were just starting out. Looking to have better analytics on some of our sales data. So we didn’t really keep a lot of cash analytics. We didn’t really keep close track of sales as in the break down of sales week to week because we were just so busy, kind of, in the whole production process that, you know, we were just very tired at the end of it.

     

    Another goal which I have for the second year is starting to explore more social media channels. And expanding marketing presence because that was one of the places where I couldn’t make it a core priority in the first year. But now with the second year feeling more of an implement for it over the first, I do want to expand in that space.

     

    I also have the goal of essentially growing the business. So scaling up. We currently have a size limit on catering orders. We aren’t exactly set up to do very large, for example, 300 or 500 person orders. I’d like to start scaling up on the catering front, and then also scaling up on the farmer’s market front. It’s kind of an interesting challenge given the fact that everything in life remains the same. And our baby boy is going to be one year old very soon, so that takes up time, too. So I’m definitely looking at this as growing over the first year and then trying to start to do new things in the second year where I’m sort of building on the first year of experiences.

     

    Jennifer: You know, and so, working towards building on, like you said, your first year experiences, you’re still working full time? Correct?

     

    Vikas: Yes. That is correct.

     

    Jennifer: And then you now have an almost, I mean, you know, coming up any day now, one year old. So I’ll ask you. How are you planning, or how are you hoping to manage all that? And still enter into the weekends feeling revitalized and excited about being at the farmer’s market?

     

    Vikas: That’s a great question. So, one of the things which I have done in the down time that we had … and it’s not exactly down time because we stared catering in fall. But we didn’t do a farmer’s market in the winter season. And so there was down time to that extent. Is, I worked on improving our processes. I worked on improving how we manage inventory. And overall just streamlining our prep time, so that we have a better picture on, we feel better about how we’re going into the market prepared for the next, prepared for the next season. So definitely improved efficiency is going to play a big role.

     

    The other thing which I’ll say is that as we sort of enter the second year of business, you know, I’ve taken time to become more efficient at household tasks. I will say that this is starting from mundane tasks like filling milk bottles and, you know, making sure that everything is neat and tidy around the home kitchen and making sure that home chores are taken care of. Because over a period of time, managing a family as well as managing a business necessitates that, you know, you really have to, kind of, take this on as two jobs. And more than two jobs actually. I think the thing that has kind of helped me and this is a discussion we used to have even last year is the business is, in a sense, a second child. And so when the business is viewed upon as a second child it really takes upon a responsibility of its own.

     

    And in terms of energy and staying vitalized, this was a part that really came to mind last year as well. Which is how will I have the energy to work nearly 22 to 24 hours over the weekend when I’ve worked a full week Monday through Friday? I realized in the end that food and cooking, cooking in particular being a stress reliever, and the whole experience of seeing a satisfied customer at the market who has eaten your product and praises it or gives you positive feedback in a different way, is really so powerful. That really sometimes it’s not the energy but the adrenaline rush which comes from seeing those satisfied customers which keeps me going.

     

    Jennifer: Yeah. I can identify with that, that it’s the, those experiences, I feel like they give you energy. Even though you are working on your feet, you know, all weekend long. You still kind of walk away more jazzed and more excited. I remember that when I worked in a professional kitchen, for hotels, I would be so excited by the end of the day, I would have to come home and there would be like two hours of wind down afterwards before I could go to sleep even though I wasn’t getting off until two AM. Just because it is the adrenaline. It’s coursing through you and you’re excited and you’re loving what you’re doing and that does provide you with a certain amount of energy.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, thank you so much for talking to us and sharing, sharing your story! You know what I love about it, like I said in the beginning is the fact that you are, you are doing what is not necessarily uncommon in the food industry which is trying to juggle this balance of professional, full time career with starting up a food business, or growing the food business like you’re doing now in addition to family responsibilities. And that, you know, sometimes that can be a tough act to juggle, so I love talking to folks like you who are doing it.

     

    I also love your focus on operational efficiency. It’s one of those things that outside of this podcast in talking to other food entrepreneurs I’ve been hearing come up more and more. And whether it’s streamlining a business process or a cooking method, or something, that that’s really what’s helping a lot of food entrepreneurs become more successful because time is, time is our biggest constraint. So how can you maximize your time when it’s in the kitchen or when you’re focused on your business, and a lot of that is by taking a look at the processes you have and making sure they are as efficient as possible.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, again, thank you so much! I will put a link to the Bombay Bitez Facebook page on the transcripts for this podcast which will be on the Small Food Biz website. And again, thank you! I really appreciate it.

     

    Vikas: Thank you so much, Jennifer, for having me on the show.

     

    Jennifer: Yeah! Thank you.

     

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    Building Successful Food Service Relationships (PODCAST)
    27:03
    2017-10-07 11:04:46 UTC 27:03
    Building Successful Food Service Relationships (PODCAST)

    When I asked on the Small Food Business Facebook page, what types of topics podcast listeners would like to learn about, several people mentioned an interest in knowing more about selling to food service accounts.  With that in mind and armed with questions sourced from listeners about this topic, I reached out to Allison Ball, of Alli Ball Consulting, to find out more about what food producers should be doing if they’re interested in getting food service accounts.

    Alli has offered listeners to today’s podcast a discount of $25 on her e-coures.  For more information, click here and use the promo code smallfoodbiz.

    TRANSCRIPT:

    Jennifer: Allison, thank you so much for being here today. I really appreciate it.

     

    Allison: You’re welcome. I’m excited to chat with you.

     

    Jennifer: So we’re going to start with a really basic question because we’re talking about food service today, but want to make sure that everybody listening is on the same page. So what exactly do we mean when we talk about just the word food service in general, because we’re going to be talking about how to get food service accounts, or some tips and ideas. But what does food service mean? What types of businesses does that comprise of?

     

    Allison: Yeah, that’s a great question. So food service is essentially the opposite of retail. So it’s when a producer sells to a wholesale account, then uses their product either as an ingredient or as an item on the menu. So it’s establishments where food is served over the counter rather than off the shelf. So food service accounts could be restaurants, bars, schools with cafeterias, businesses where they provide meals for their employees, coffee shops, things like that.

     

    As a producer you can sell to both retail stores and food service accounts. Say you make something like a Bloody Mary mix. You could sell it in a quart container on a retail shelf, or you could sell it in bulk to a bar. Does that make sense?

     

    Jennifer: Yeah, that makes great sense. And I love the example, too. I mean some of the ones that you mentioned, things like school cafeterias and food that’s sold within a corporate setting, which certainly up here in Seattle a number of our tech firms do that. Yeah, those are ones that I hadn’t really thought of but, yeah, those are food service accounts. It’s great to think that it’s a pretty wide-ranging types of businesses.

     

    Allison: It really is. I’ve had clients who have had really, really great success in nursing homes and hospitals and things like that, so it really is a broad category.

     

    Jennifer: Oh, that’s excellent. So you know I know that over the course of our interview today we’re going probably dive into this next question in more detail, but again, kind of like at a high level. So what are some of the things that make selling to food service establishments different than selling to a retail store buyer?

     

    Allison: Yep. So like I mentioned in that past example, number one is it’s usually sold in bulk or in bigger quantities. So again, using that Bloody Mary example, you might sell a 16 ounce Bloody Mary mix on a retail store shelf, on a grocery store shelf, but you might sell your Bloody Mary mix in one gallon jugs to your food service account. So usually bulk. So usually the packaging is a little bit different. And typically it’s higher volume as well. So if you make a really small batch product or something that’s really seasonal, that might not be a great fit for food service.

     

    And then there’s two other things, too. The pricing is slightly different. And then lastly, when you sell food service, you don’t necessarily get the brand recognition that you would on a grocery shelf. So the end user might not know that the restaurant or the cafeteria or the golf course, whatever it is, is using a particular brand in their cafeteria, right? So if you make pickled onions, or you make, I don’t know, a type of cheese, a particular farmstead cheese, that end user might not know it’s your brand of pickled onions or your dairy’s cheese because it’s not highlighted on that food service’s menu.

     

    Jennifer: Okay. So we’ll talk about the packaging and the pricing piece in a minute. But what you were just talking about with regards to brand, just in your experience, is that really important to some food entrepreneurs and so they might determine that going into food service is not the right avenue for them because they want to build that brand recognition?

     

    Allison: Yeah. I do think that that’s really important. Especially if you are a brand that is higher end and your story helps sell your product or helps justify the higher price point on your product. For example, if you make really, really high end chocolates, and you are all about the story of foraging the inclusions that you put in your high end truffles, and they all come from within 20 miles of your home and you’re doing everything by hand and on and on and on, when that food service account buys your truffles and has to pay that really high price point for that, and then they just put a single truffle on a dessert plate, they’re not going to highlight your brand and maybe can’t justify paying the expensive price because of that.

     

    So yeah, for some producers who really want to build the brand following, food service may not be the way to go. Alternatively, some food service accounts do highlight brands. Right? If you do have a great story to tell, they might want to partner with you because your brand following. It just depends on the account.

     

    Jennifer: Again, that’s a good reminder for folks not just to be looking at the sales because somebody might be listening to this today and think, wow, this is a great potential channel to get into. I can really drive sales through this. That would be wonderful for the bottom line, but if it’s not in alignment for what you want for you brand awareness, then it might not be a good fit for you.

     

    Allison: Exactly. Exactly. If it’s essential that you have the brand awareness to sell your product, then food service might not necessarily be the right channel for you.

     

    Jennifer: So stepping back, you were talking about packaging and you mentioned about bulk sizes, bigger sizes. Is there other things that food entrepreneurs should take into account when it comes to selling to food service? I mean a lot of food entrepreneurs spend a lot of time and a lot of money on their packaging. Is that as important when you’re talking about food service accounts? [crosstalk 00:06:31]

     

    Allison: No, it’s definitely not as important because that end user doesn’t see the packaging. Or rarely, rarely sees the packaging. So like we said, selling it in bulk to food service accounts is much more typical than selling your smaller retail packaging. But the most important thing is that that packaging for food service accounts is that it’s sturdy, that it’s stackable, that it’s going to protect your product from transport or in storage. So there’s no need for that really beautiful packaging that’s ready for the retail shelf, but it must be able to protect your product.

     

    And then furthermore, you want to make sure that you still have all of your information on the outside of that packaging so that it has your brand name, that it has the product. You still want to put your ingredients on the packaging. That is really important, especially as consumers are more and more concerned with ingredients. So you want that, and then you always want to have your best by date on your food service package because food service establishments are buying lots and lots of ingredients and they want to be able to quickly look at the outside of your packaging and know how to properly rotate and use their products from their inventory.

     

    Jennifer: Oh, that’s a great tip.

     

    Allison: Yeah.

     

    Jennifer: I was thinking back to the days when I was working as a pastry chef for a big hotel and just the quantity of ingredients that we would get in on orders, and then it’s just going into storage.

     

    Allison: Exactly.

     

    Jennifer: And you’re right, I mean we’re kind of throwing it back into the walk-in.

     

    Allison: Yeah, exactly. Exactly. And you know if you’re ordering 200 pounds of sugar at a time, and they’re coming in 20 pound bags, you want to make sure that you’re keeping your back stock rotated. So in my mind, like the bigger the better for the size of the expiration date on your food service packaging.

     

    Jennifer: Great. You know, I had mentioned to you Allison, that prior to this interview, I put it out on Facebook that you and I were going to be talking. We were going to be talking about food service and wanted to know what questions folks had. And without a doubt, and I know this is not … there’s no easy answer to this, but without a doubt the number one question that came up again and again was with regards to pricing. Is there a secret or is there anything to know about when it comes to pricing your products for food service versus when you’re pricing them for grocery stores and retail buyers?

     

    Allison: Yeah. It’s a really good question, and it’s one that I do get all the time. And sadly, there is not a magic number that you can just punch into your spreadsheet. So it is similar to retail in the way that margins vary from category to category. They vary from type of establishment. A coffee shop that’s buying your pastries is going to pay a different price than a tech company who’s buying your pastries. So there aren’t rules that are set in stone.

     

    The easiest way for you to approach the conversation of pricing is to be really honest and straightforward with your accounts. So I’ve seen margins that range from 30% all the way to 60%. Typically it’s about a 35% margin that they’re looking for in food service. But above all, producers need to figure out their own pricing, compare it with the competitors, and have an honest conversation with your accounts about pricing. And realize that pricing is negotiable from both sides. You can negotiate pricing on your terms as a vendor, and then also that food service account is going to want to negotiate pricing as well.

     

    Jennifer: You mentioned comparing it with competitors, and that’s one thing to do let’s say, when you’re trying to get it onto a store shelf because you can just go to stores and do a little bit of competitive analysis from a price standpoint, but when selling food service, I mean that’s a little harder because you can’t just [crosstalk 00:10:47]

     

    Allison: It’s a little harder.

     

    Jennifer: Is there any-

     

    Allison: One of the things that I talk about so often is realizing that as a vendor starting into the food industry, realizing that when you gain new accounts and whether you’re selling direct to an establishment through an in house buyer or you’re starting to have those conversations about picking up distribution, or maybe you’re adding a broker, it’s all about relationships.

     

    So the more you can start those relationships from a place of mutual understanding and trust, the better. So once you establish those relationships, I mean they happen over time, and they grow slowly, but once you have those trusted relationships, and you have those key people in your network, you can ask them questions like that. You could say, “Hey, distributor. What target margins are catering companies looking for as they’re buying bulk ingredients?” “What do you think of my packaging for food service?” “How do you like my sell sheet?” All things like that.

     

    Certainly like I said, those relationships happen over time, and I wouldn’t necessarily start asking all those questions in your first meeting as you’re interviewing a new broker, or in your first sales pitch to a new wholesale account. But over time, once you have that relationship established, you can lean on your accounts for feedback and advice.

     

    Jennifer: That’s great advice. So it can be a two way street.

     

    Allison: Yeah. Yeah, I guess that was a long-winded way of saying that you can ask about your competitors’ pricing. You can say, “Hey, are we the most expensive mustard on your list?” Or, “We want to be the value mustard in your deli. What would it take for us to get there in terms of pricing? What price do you want to see?”

     

    So yeah. Just ask. I feel like over and over again, my clients are surprised with how much information they can get just by asking.

     

    Jennifer: Yeah that’s great. I’m thinking about the fact that I feel so often that when I talk to food entrepreneurs, they’re always so nervous about the pricing discussion and afraid like they just say one wrong thing and the whole deal blows up. So I love what you’re sharing about, obviously it is you have to build the relationship. It’s not something you want to ask the first time you meet them, but ask them and see if you can get feedback from them.

     

    Allison: Yeah, and I think that it is important to realize that you don’t want to be a high maintenance vendor. Right? So it is important to realize you don’t want to ask all those questions in the first meeting. That first meeting you do want to seem prepared and confident and like you know what you’re doing. You put some thought into your pricing. When you seem unprepared for those meetings, whether it is food service or a meeting with a broker or a meeting with a retail account, if you seem unprepared you seem unprofessional. But down the line, you can ask for feedback and get some suggestions on your product or your pricing or your packaging. Whatever you’re looking for.

     

    Jennifer: So in terms of that first meeting, or actually we’ll kind of step even before that, you’ve talked a little bit about brokers, you’ve talked a little bit about distributors, and you also mentioned just potentially talking to like the buyer at the food service organization, how does one find food service accounts? And is it better to go with a broker? Maybe there is no better, maybe it depends, but that’s another question. It’s like okay, I’m interested in going into food service, but now how do I … do I literally just look up all the cafes in my neighborhood and start knocking on their door?

     

    Allison: Yeah, it depends. And it depends what type of accounts you’re looking for. If you are looking for corporate accounts, and you’re really looking to get into all the little kiosks and little like … shoot, what are they called? I’m going to have to have you edit this out. Why can’t I think of the name of it? Like oh, the break rooms.

     

    Okay. I’ll start over there. So let’s see. So it depends on which type of food service account you’re looking to get into. If you’re looking to get into big companies and you’re looking to get your product in all of the break rooms in all of their offices, you might need to go through a food service distributor. It might not work if you roll up to the office and try to figure out who does the purchasing at Google or Facebook. Right? That might be challenging. So larger accounts like that, use distribution.

     

    That’s not to say that cold calling and knocking on doors doesn’t work, but that tends to work with smaller accounts. Certainly cafes in your neighborhood. Sometimes schools, too, if you know of a parent who is heavily involved in the school you can get an introduction through someone in the community. Sometimes the cold calling does work, but with food service, it tends to more often it works through distribution.

     

    Jennifer: Okay. And I just want to tell one of my very favorite stories is actually speaking of a big company that begins with the letter G in the San Francisco area. There was a story about a food entrepreneur that I know who, she would always have samples with her and was just standing at the bus stop waiting to go into the city, happened to chat up the person next to her because they were always on the bus, and gave this person samples. The person loved it and was like, here, I’m going to put you in contact with the purchasing manager at said big company. And that’s actually how they got in, was just literally by hanging out and talking. And she had no idea this woman worked for this company, had no idea this woman had any connections, but that networking piece is sometimes also surprising how powerful it can be.

     

    Allison: It really is, and if you have a great product and you happen to be in the right place at the right time, sometimes those really wonderful connections happen and you never know where they’re going to lead. I also think that it’s important to realize that trade shows are still really important in the food service space. People, like larger companies who are looking for food service or for bulk products often do the bigger shows, like Fancy Food, and pick up big accounts there. So trade shows are great.

     

    Also I forgot to mention, when looking for a distributor for food service, oftentimes there are distributors who specialize in retail accounts and distributors who specialize in food service accounts. So if you specifically want to do food service, it could be worthwhile to find a distributor who specializes in that. It isn’t necessarily the same distributor who’s going to get you on the retail shelves.

     

    Jennifer: Okay. Yeah, that’s another great tip to know.

     

    So let’s say that you found this contact, whether it’s a distributor, whether it’s the purchasing manager, is the sales process any different than when you go in for a retail account? I mean I guess I’m just wondering because the brand isn’t necessarily as important in terms of end facing to the consumer. Does your story matter as much, or is it more nuts and bolts and numbers? Do you [crosstalk 00:19:07]-

     

    Allison: Yeah, those are great questions. Ultimately it comes back to the why. Why would that food service buyer purchase your product instead of making it in house? So does your product save them time? Does it save them labor costs? Do you have equipment where you can make your product that they don’t own that equipment in their kitchen? Maybe your product guarantees consistency on their menu. So again going back to that Bloody Mary mix example, it takes a ton of work to make a really high quality Bloody Mary mix.

     

    We’re talking about a Bloody Mary mix that is not just V8 out of a can with horseradish mixed in and some sriracha. Right? Like if you want to make a really high quality Bloody Mary mix, you are roasting those tomatoes. You are blending them, straining them. All of that. So it takes a ton of prep work. For my client who’s making this Bloody Mary mix, he goes in and his sales pitch is all about how it takes that labor off the bar staff, their pricing is then super controlled, with the portion size. That Bloody Mary mix costs the same every single time they order it. It tastes the same every single time they serve it. Year round, right? So it allows that bar to really, really control their numbers. And, like I said, gain efficiencies on the prep side of things.

     

    So think about if your product can somehow benefit that food service establishment. Whether it is from a consistency point of view, or a labor point of view or a quality point of view. Something they can’t do in house.

     

    Jennifer: Okay so it’s thinking about it through their eyes and coming up where their pain points are it sounds like.

     

    Allison: Exactly. Exactly. What can you provide that they can’t do themselves?

     

    Jennifer: Right. You know another thing-

     

    Allison: So-

     

    Jennifer: Oh, I’m sorry.

     

    Allison: I was going to say, in addition to that, you and I talked a bit about sales sheets and if you would, in addition to having a different verbal pitch to that buyer, you would want to make sure that you have a different sell sheet as well. You don’t want to hand over your sell sheet that talks about the dimensions of your retail product when really you want them to buy it in those five gallon pails or in the five pound boxes or whatever it is.

     

    Jennifer: Yeah. Again, like I keep saying, thank you that’s great. But like really, that’s another great point. You’re selling to a different audience so to speak, so all those other components have to line up.

     

    Allison: Exactly. And at the end of the day, the food service buyer doesn’t care if your product looks really great on a Metro shelf because they want to know how does it perform in the kitchen? How does it play with the other items on their menu? How does it work for their business? They don’t care about the retail story of your product.

     

    Jennifer: To that end, is it ever recommended that the producers come up with recipes or suggestions so that the buyer can start to see how the product can be used in different ingredients? Or is it pretty much like the food service folks know what they’re doing and you don’t-

     

    Allison: No, I think it’s a great idea to do recipe suggestions. And certainly you would want to assess the individual account before you go in making suggestions, right? You might have a buyer who is really confident and knows exactly why they would want your product, and doesn’t really have the time or the interest in hearing your suggestions. But there are some buyers who are really open to that and would love to hear how to use your shrub in their cocktail recipes for brunch. It just depends on your product and if it makes sense with the account that you’re pitching to.

     

    Jennifer: Yeah. I envisioned like, “Oh, Thomas [Koller 00:23:43] here’s how you could use my [crosstalk 00:23:47].

     

    Allison: Yeah. Exactly. He doesn’t care. He doesn’t need suggestions on how to use your ketchup, right?

     

    Jennifer: No.

     

    Allison: Yeah. He’s like, “I got it.”

     

    So it depends. If your product’s unique, it might make sense. It also I think it can help to brag on who else uses your product. If you do have a really great account, say you were selling your salt to the French Laundry, then you wanted to go pitch at a high end restaurant in Portland, you could say, “We are the number one used salt at the French Laundry. Like wouldn’t you love to use the same salt that they do?”

     

    So it depends. If you already have a reputation and have some of those accounts that might help increase sales or help gain new accounts, you can certainly mention it.

     

    Jennifer: That’s a great point.

     

    Allison: Yeah. It could be highlighted on your sell sheet. I guess that’s where I would do it. Yeah.

     

    Jennifer: One question that I got when I asked again the folks on the Small Food Business Facebook page, do food brands need to have a contract in place with food service buyers? And if so, what is that going to look like? Or is a purchase order all that’s really needed and used?

     

    Allison: Yeah so it depends if you’re going direct or through a distributor. If you go through a distributor, then they already have contracts and terms and everything set up with that account. If you go direct, you’re going to want all that information that’s typically put on a purchase order. So your payment terms, your order and delivery days or process, you might have a return process outlined or guaranteed sales buy backs if you do anything like that. Just like you would on a retail purchase order.

     

    But I think beyond that it’s hard to get buyers to commit to longer contracts, because again they’re placing a bet on your product. They are betting that it’s going to sell, that it’s going to work with their current menu. That you are going to be easy to work with.

     

    So at the beginning, you’re testing the waters. You’re testing them out and they’re testing your product out. They’re testing you out. You’re entering into a relationship with with them. So it would be rare to expect them to sign a contract that would really lock them into that relationship.

     

    Jennifer: Okay. And then my last question for you, because we’ve covered a bunch of different things today, is there anything else when we talk about food service sales that you think based on your experience is important to discuss or food producers to be thinking about?

     

    Allison: Yes. I’ve definitely touched on this throughout the conversation today, but I can’t emphasize enough how important it is to realize that you as a producer, you’re the face of your business. You are your brand. And this is something that there is no direct cost associated with this. But the more warm and easy going and trustworthy and low maintenance that you are, the more likely you are to gain a following and to pick up these relationships with people in the food industry and to really grow your business.

     

    No one wants to work with someone who is high maintenance, right? You can have the best product, and if you yourself are challenging to work with, it might not be worth it for that buyer to establish a relationship with you. So whether you are thinking about your product for food service or direct to consumer at a farmers market or through specialty retail accounts, whichever channel you’re going through, it’s important to realize that above all, you as a person need to be really lovely to work with.

     

    Does that make sense?

     

    Jennifer: Yeah. Absolutely. And that made me think too also about making sure that you don’t put the cart before the horse. You might have a great product and you might be great to work with, but if you don’t say have your production process in place, your operations in place, and you approach a big account and they go through all the red tape on their end and then want to place an order with you, if you can’t deliver on that order, they’re not going to want to take a risk on you. Why go through that hassle again? So they can tell if you’re ready.

     

    Allison: Absolutely. And buyers are really busy. They’re doing a million things and so you have one chance to make an impression, and if you’re in that conversation and it’s going well and all of a sudden they say, “Yeah sure, we want you to deliver to all 18 of our stores up and down the west coast, and you’re not ready to do that? It puts both of you in a really challenging situation. You don’t want to say yes and then not be able to fulfill those orders. But at the same time, that’s the one chance you got. That buyer’s not going to wait for you to sort out your production and come back in a year and ask again to be put on the shelf.

     

    Jennifer: Mm-hmm (affirmative).

     

    Well, you’ve given us lots of great things to think about. I’m like okay, so be a good person to work with, have a great product and be ready, production wise.

     

    Allison: Yeah. Exactly. Exactly. I guess we can sum it up by saying just be thoughtful and intentional in your business. I see a lot of people who just grasp at things. We call it the shiny object syndrome. Where you see an opportunity and drop what you’re doing and go after that opportunity. Maybe it’s a new food service account, or maybe it’s a fancy new trade show, or maybe you’re going to be put in the gift bags at the Emmy’s. There are all these shiny things going on in life and it’s really important to not get distracted by those as you’re building your food business, and really be intentional with your growth strategy.

     

    Jennifer: I love that. Yeah, that sums it up perfectly.

     

    Allison: Thank you.

     

    Jennifer: Ally, thank you so much.

     

    Allison: Oh, this was so fun.

     

    Jennifer: Thank you. And obviously again to everybody listening, on the transcript of this page I will have links to Ally’s website. She also has a wonderful course as I mentioned in the introduction that might be interesting to many of you about getting both your company, your product, all those pieces ready to go after buyers and successfully get those buyers and get those accounts. So I’ll include a link to all of that on the transcript page for today’s podcast.

     

    Allison: Wonderful. Thanks for having me Jennifer. This was wonderful.

     

    Jennifer: Yeah, thank you again Ally. Really appreciate it.

     

    For more information about Allison Ball check out her website at alliball.com.  Additionally, Alli has downloadable e-courses on her website that help you understand how to connect with Wholesale Buyers and maximize your sell sheets.  She has generously offered podcast listeners a $25 savings if you use the code smallfoodbiz when checking out.  For more information, click here.

    Click here to listen to other podcasts in the Small Food Business podcast series.

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    Getting Out Of The Kitchen (MICROPOD)
    2017-10-07 11:04:46 UTC
    Getting Out Of The Kitchen (MICROPOD)

    Today I have a little micro-pod for you, if you will. A short podcast where I’m going to share with you something that’s been on my mind as an entrepreneur. In part, today’s podcast is short because I’m exhausted – but not in the way you problely think.

    TRANSCRIPT:

    This past Saturday I ran my very first ultra trail marathon. It was a 50K which, to those of us in the US, equates to about 31 miles and it had approximately 5000 feet of elevation gain throughout the course – there was a lot of hills! It was a long, hot, dry day and my body is utterly worn out right now.

    While my body is tired – and very sore – my mind has never felt better though.   In doing the race I gave myself permission to not focus on work for an entire weekend. Study after study shows that taking time away from work can be one of the best things for entrepreneurs yet it’s so very hard to do.   This isn’t to say that I didn’t think about work while running – when you have multiple hours with not much to keep you company but your own thoughts it’s natural that some of the things you’re working through at work will come up. But I just let them come up and let my brain mull over them as I worked on putting one foot in front of the other. For some things I came up with some potential new creative solutions and there were other issues where nothing seemed to simmer to the surface so I filed it away as something to focus on for another day.

    In addition to not focusing on work, this race also gave me time away from being a mother. That may sound incredibly harsh and it’s not meant to – I adore with every fiber of my being my daughter and the time I spend with her. But if you are a parent you know how easy it is to want to spend every moment of your nonworking time with your child. As good as that is for your bond, it doesn’t always leave a lot of time for you to focus on who you are outside of being an entrepreneur and a parent. This race was a chance for me to be incredibly selfish with my time and just focus on me. In doing the race it reclaimed for me a little bit of who I am at my core when you strip away the titles of parent and business owner. It felt good to get back to that core for a little bit and made the joy of running down the finishing chute with my daughter even sweeter.

    One thing I thought about a lot while running and that’s the fact that being a business owner is a lot like running an ultramarathon. The reality is that it’s a long slog. We’re not in this as a sprint – there’s little in terms of easy cash when it comes to the food industry. You have to be willing to be in this business day in and day out – albeit with taking some time now and again to get your brain out of the business – just putting one foot in front of the other thousands of times over.   There are moments of euphoria along your journey and moments of utter despair where you’re sure you’ll never finish. You will undoubtably stumble along the way – we all do – but you’ve got to pick yourself up, dust yourself off, and keep going.  The journey will make you stronger and smarter as a business person.

    You know one of my new years goals this year was to do something that really pushed me outside my comfort zone. Lining up at the start of the 50K was a little terrifying, but it was also exhilarating and sometimes the best experiences in life come from those times we push ourselves – both in business and in life – so that we’re standing just outside our comfort zones.

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    What To Know When Selling Your Food Business (PODCAST)
    2017-10-07 11:04:46 UTC
    What To Know When Selling Your Food Business (PODCAST)

    Some of us start food businesses and never give a thought to selling it while others enter the business with an exit strategy in mind.  Regardless of which camp you fall into, knowing what buyers are looking for can help you make the decisions now that keep your options open in the future no matter what you ultimately decide.

    TRANSCRIPT:

    Jennifer: Today we are talking to Bryce Hansen of Hansen Business Advisory who helps owners of privately held businesses navigate the challenges of selling their business. Specializing in privately held business of one million to twenty million in annual revenue in the Pacific Northwest, Hansen Business Advisory bridges the gap between the buyer and the seller’s unique needs, acting as a quarterback for the process. After identifying the clients goals, Hansen Business Advisory helps repair the business for sale, locating qualified potential buyers and finally negotiate and close the sale.

     

    I realize that many of the listeners may not have businesses that are in the one million to twenty million dollar annual revenue range, however, Bryce is able to share a lot of information with us that is applicable to you if you are thinking either now or some point down the road you might look to sell your business.

     

    Jennifer: So Bryce, as we get started today, I was hoping that you could tell me, based on your experience, what have you found that entrepreneurs think about as they think about selling their business? What drives this motivation to sell something that they dreamt about and were so passionate about and have worked so hard to build?

     

    Bryce : The priority reason that I come across and it depends on the size of the businesses you work on, but in the space that I work in, a primary driver is business retirement. They have been working on these business their whole life, they really love it, it’s their baby, but they may not have kids who are interesting in taking over the business or they may have kids, quite frankly, that they aren’t sure should be taking over the business or they can’t afford to take it over and the parent who is wanting to retire needs the money for retirement.

     

    Sometimes we see people who are exhausted, they’ve just been working in their business a long time and they’re, quite frankly, exhausted and so sometimes that’s a reason. Occasionally, they’re entrepreneurs that have lots of ideas. I don’t want to use the clinical term of ADD, but they tend to be, they’re really all over the place and so they occasionally are bored with the project and they have a new project that they want to work on and sometimes larger companies, they just want to cash out or maybe it’s beyond the skills that they have and they know that they need additional skills to keep it growing.

     

    Jennifer: Oh, absolutely.

     

    Bryce : But, retirement is a big part of it.

     

    Jennifer: Okay, that’s interesting. With regards to new project ideas, I like to joke that that’s called “Shiny Object Syndrome.”

     

    Bryce : Absolutely, absolutely.

     

    Jennifer: A new thing to do.

     

    Bryce : Yeah, yeah. They just find something new or the business they started has morphed into a place that they didn’t originally think that it was going to be and it works. It works really well, but they’re maybe more passionate about one part of it that the business didn’t morph into.

     

    Jennifer: That’s a good point. In talking to some entrepreneurs who have sold their businesses, sometimes, at least what I’ve seen is that these are people who like starting the businesses, but once it gets to that point where it’s really smooth sailing and the processes are down and everything else, it’s not necessarily as exciting to the entrepreneur anymore.

     

    Bryce : That’s absolutely true.

     

    Jennifer: To cut to the chase, the biggest question most entrepreneurs have when they’re thinking about selling their business is, how do I determine what price to put on this? How much should I be asking for this? I know that this is not necessarily a question that you can answer easily and succinctly and tell everybody, just do X and you’ll get Y, but what are some the steps you go through to determine a business’s worth?

     

    Bryce : Well, we say that valuing a business is an art. There are certainly mathematical steps that you can take to evaluate a business, but it’s a big part an art. We also say that the value is in the eye of the beholder, so what I mean by that is, the seller might have an idea of what they want for it and how they came up with that could be based on an amount of time they’ve put into the business, could be based on the amount of energy they put in, the dollars and then it could be as straight forward as sentimental value. It’s been with the family for a hundred years or 50 years, so they really think it’s worth a lot and those are usually what people think that it is worth and occasionally we find people who actually think it’s worth based on the cash flow of the business, which is one way of measuring the value of a business, but it’s pretty rare that they actually start that place.

     

    Usually it’s something else that they say, well this business is worth X because of Y and then on the other side of the coin is, what is a buyer willing to pay? The value of a business is only what the market’s willing to bear, so somebody can say it’s worth … I want X for it, but you might not be able to sell it for that, so you really need to see what the market is going to bear for it and the market is really determined by how many people are looking at the business.

     

    If you have a family member who says, I want to pay this much for it, you’re not really seeing what the outside world’s looking and if you’re working with an MNA Advisor or broker and they only have a certain reach, a geographical reach or a certain industry reach, they may only get certain people to weigh in on the value. If you’re working nationally or internationally, you are going to get the whole world to value in on it. Now, those may not be the buyers you’re looking for, but it really does come down to, who’s looking at it and who wants it? Sometimes people are willing to pay more than the math says and sometimes they’re willing to pay less for it.

     

    Jennifer: So, what happens ’cause I imagine if it’s somebody wants to pay more than, let’s say, the math says, that’s a great position to be in, but what happens if, again, the entrepreneur has a, or the business owner has a price in their mind based off of some of those intangibles that you talked about and what if the reality of what the market will bear and is willing to pay for that isn’t necessarily what the business owner had been hoping for, then what?

     

    Bryce : Yeah, yeah, so usually as an intermediary like myself, or other folks who are helping people sell, we try to work with the business owner to explain the math side and I didn’t really mention that, so I’ll mention it briefly and it can get fairly complicated and detailed, so I’ll keep it very high level in the sense that there’s three approaches that we use to value a business. One is call the asset approach. One is called the income approach and one is called the market approach. Assets is basically, what are the assets of the business minus what are the liabilities for the business and that would be a value. That’s usually used for businesses that aren’t producing or have a whole lot of assets, but aren’t producing much cash flow.

     

    The next step is the income method and that’s really based on cash flow of the business and that’s where a lot of businesses are valued that way and then the third is the market approach. What are other businesses like that business sold for, so we look around and say, this is a similar business to X that recently sold or here’s ten businesses that were in the same realm and they recently sold for this, so we can expect roughly X for the business and so we work with the owners to explain that and say, this is kind of where we are coming from, even if it’s not what you were looking for and what we’re finding in the market, we start with that a benchmark.

     

    If that doesn’t help and if they still say, we need more than that from this business or we think it’s worth more. If we think it’s worth more, then that’s usually a time when we say, okay, we’re going to have to maybe try a different strategy and often it’s maybe just the right fit. We need to find a different broker who does think it’s worth that much. If it’s just not enough for their needs, for their retirement and their other interests, then we come back to, how do we grow value? How do grow the business to be worth what they need? Sometimes it’s tweaking the business to improve profitability or top line revenue and other times it may be bringing on a partner or merging with someone else.

     

    Jennifer: So, it sounds like sometimes it may be the case of, I don’t want to say going back to the drawing board completely, but saying, okay, let’s rework some stuff and potentially revisit selling the business six months, a year, at some point down the timeline a little bit, is that right?

     

    Bryce : Yeah, absolutely. Ideally, we’re talking with a client three to five years before they’re ready to sell.

     

    Jennifer: Oh wow, interesting.

     

    Bryce : Yeah, that’s ideal. It’s like with any tax planner or with a wealth manager, sometimes banking, legal, the more time you have, the more time you have to plan and so when we’re putting together financials for the business, we want a least three years of good history to be able to work off of and so if they don’t have that … We’ll get a call, hey I just bought a house in Palm Springs and I’m ready to retire, I want to sell my business and sometimes it works. Sometimes the business is ready to go, but more often then not there are some things that need to be done and we’ll work with them to improve the business. Sometimes there’s a missing employee, a key person in that business, there’s a variety of different things. There could be a complete dependency on the owner and it’s not really sellable at this point because if the owner goes away, all the relationships go away, things like that.

     

    Jennifer: Yeah, I think that last point, I feel especially with food entrepreneurs, I know I’m guilty of that myself, where the business is all … Yes, you have business plans and you have things documented, but really the business is all in your head and if you go away, there’s not always necessarily a lot left there, so getting the business to the point where it can be transitioned to another person or another team can take some time.

     

    Bryce : There’s a lot of things we do prior to listing the business for sale and most of that is around figuring out, well we are just trying to get in the head of a buyer and say what would a buyer want and if they’re looking at a business that the owner is everything, they’re all the relationships, all the accounting is in their head, the contracts, everything, there’s not a ton of value to that business for a new buyer. There is a value to the owner, but not to a new buyer because they can’t come in and realize that same cash flow and that same business so it’s going to be a tremendous amount of work in which case they don’t want to pay that much for the business.

     

    We look at suppliers, do they have many different suppliers they’re working with or do they just stuck with one person who is supplying their business? That’s a pretty big risk. Are their customers … Around the northwest here, we have a lot of Boeing customers and I could imagine in your line of work, maybe Food Services of America or something, someone who’s selling just to one person and if that relationship goes away, the business goes away, so we’re looking for, do they have diversification of their suppliers and their customers and can the business run a month without the owner? That’s a test we always ask, if you went on vacation and couldn’t talk to the business, would it survive a month with you being away?

     

    Jennifer: Alright, now a month away, definitely could not be done on my end, but that just sounds so wonderful.

     

    Bryce : It depends for every business. Not every business needs that. There’s a lot of different structures out there and how they operate.

     

    Jennifer: You had mentioned a little bit about three years of financials and then some of these processes in place so that, let’s say, that key person could be away from the business, are there any other things that the business owner or entrepreneur should be thinking about in terms of documentation as they get ready to sell their business, so before they’ve even gone out and tried to find a buyer, what other things do they need to basically have ready to go?

     

    Bryce : Well, I think the first and most important part is the financials. That is kind of the bedrock of selling a business. Many people are in business to make money and to do that. A lot of people are in business because they are really passionate about what they do and they enjoy it and maybe the cause that they are going for, but when they turn to sell a business it really is often about the numbers unless they get really lucky and find someone who’s super passionate and willing to pay whatever they’re asking for, for their business, so having strong financial statements that have been looked at by a CPA, hopefully, with a review or an audit, that’s not as common in these size businesses, but potentially an audit. Documentation on how people operate. Job descriptions are great, processes and procedures around establishing new products and what margins should be and some of the performance indicators of the business, so the new owner can have an idea as to what they’re getting into.

     

    Jennifer: So, I assume and correct me if I’m wrong, but if you’re going to be sharing all this information with the potential buyer that there’s an NDA or a nondisclosure agreement that’s in place?

     

    Bryce : Absolutely.

     

    Jennifer: Okay.

     

    Bryce : Absolutely and the way we operate is that we prescreen potential buyers before we even share anything with them, so we will set up an NDA and then we really have a conversation, a deep conversation about what they’re looking for and why this business may work. We’re looking at their financial ability to pay. Are they bankable? Is the business bankable, we look at prior to even taking on the engagement, but is the buyer able to finance the business? That’s a big part of what we are doing and finally we run it by the owner and say, hey, it’s this type of person or it’s this business that’s looking at you, are you comfortable because in our space, the owners often care more about who it is they’re selling to and what they’re about then necessarily the person that will pay the absolute most.

     

    Jennifer: So, yeah, you fed perfectly into my next question, which was going to be around this idea of fit for the new buyer, so you just stated to many buyers that is a big deal and that is part of their process in choosing the right buyer, so what sort of things should the seller be asking questions about or be thinking about with regards to potentially where the buyer sees the business going in the future so they have the best chance of getting that right fit for their business?

     

    Bryce : Absolutely. One of the things that we like to do is set up weekly meetings with the buyer and seller once we get to a point, once we have a letter of intent, we actually want them to talk to each other and I know that’s not common on the larger sale businesses or sometimes is not common, let’s put it that way, but we want them to have those conversations. How do you handle your employees? How do you treat your employees? What are your benefits like? What’s your working culture like? How do you look to work? Are you outgoing and out talking to the people on the floor or are you more kept to yourself? Do you want this business as just an investment and it’s just churning dollars for you or are you actually going to be actively working in it? What are you passions and why would you get into this business? What’s your background?

     

    We have people who have come from executive backgrounds and sometimes the owner will go, well what do they know about my business and it turns out that they have some sort of hobby or incredible interest in that area and they’re passionate about it and they’re not looking at this as a goldmine for them, they are actually looking at it as a second career to their life and they’re really more looking for enjoyment out of it.

     

    Jennifer: Interesting. Again, that’s a good point that you bring up that it’s not just about the financials for many people and for some people it may by and again that’s great, but for a lot of entrepreneurs who have built this business up from the ground up a lot of it is being driven by passion, so you want somebody who can carry that on and potentially even carry it further and beyond where you were ready to.

     

    Bryce : Sometimes we get … People say, I want to be able to have my grandchildren be able to see this business and know that I used to know that business. I started that business and look at it today. Certainly financials are important and like I said, having a solid accounting system in place there and then having solid financial recording to come out of the business is really important because a bank is not going to help support you depending on what the buyer’s financial abilities are. Most often they are going to be bringing in a bank and the bank’s not going to loan on a business that doesn’t have a strong financial backing, so there is certainly that component to it, but often there’s a lot more of a soft side to the transaction then most people think.

     

    Jennifer: So Hansen Business Advisory works with businesses primarily that have over a million dollars in cash flow, which is not necessarily where all of our listeners are, so my question then is, can those businesses that have less cash flow than that, is there still a market for them to be sold, or are buyers only interested in businesses that have bigger revenue streams?

     

    Bryce : No, absolutely. There is definitely a market for businesses with less than a million dollars in cash flow. The challenge is often how are those businesses set up and how do we find the right buyer for those businesses? The banks often will have more challenges times, again it comes back to reporting and some of the numbers oriented things to lend on a smaller business and the SBA, Small Business Administration, has great programs out there for people to be able to borrow in those situations.

     

    There’s certainly business opportunities out there for those sellers and for buyers because not everybody has that kind of money to buy a business and I think even more so those businesses are around passion and the buyer and seller are just like, hey this is really neat business that has a great opportunity to grow and maybe it doesn’t, but it’s just fun and I really enjoy it and I like the cause that it goes toward. A lot of people are very interested these days in cause-oriented businesses that don’t necessarily make a lot of money, but they fulfill a need within the community or within the world, so certainly opportunities out there. I would have to say they do become more challenging to sell in a traditional business sense, but they can be done for sure.

     

    Jennifer: That’s great to hear because like I said, I think that there’s potentially some listeners who would be under that one million dollar revenue mark who might be thinking of exiting their businesses, hopefully to your point earlier in this podcast, be thinking out, pushing out that timeline and saying, okay, maybe three, five or plus years beyond that and preparing their businesses for sale at that point.

     

    Bryce : Yeah and I would encourage the listeners to think about, don’t think about your business as a small business, think about your business as a big business and howw are you treating things like a big business would? Are you getting financial looked at? Are you having someone prepare you taxes and review them? Are getting professional advice from attorneys and from CPA’s and from bankers? Are you doing all those things that will help you to grow and be an established sophisticated business because that’s really where someone will be interested in buying.

     

    If the cash flow is smaller and total revenues are smaller, but the business is really well set up and it’s a unique business and maybe the owner just hasn’t got there yet, they just haven’t got to that size yet, there’s a wonderful opportunity for someone to come in and for whatever reason they’ve decided to get out, it may be a great opportunity for someone to step in and take it to the next level.

     

    Jennifer: I love that idea of, you know, we always talk about that we’ve a small food businesses, but yeah, we should be thinking like we’re big businesses and putting the things in place that need to be put in place, so that we are thinking of ourselves as a big business.

     

    Bryce : Yeah, I have a client who the first thing they were talking about was, well, I haven’t really got to that yet and they’ve been in business for ten years and haven’t really got to the whole financial … Getting good financial statements and reporting and it’s a big business now and it’s one of those things, I think everybody needs to take seriously early on and a lot of people start businesses without even thinking whether some day they want to sell it, but then they get to the point that they need to sell it or they changed their mind and say, actually I do want to sell the business and it sometimes takes a few years to readjust the business to become sellable, but they didn’t really have that intention in the first place, they just said, well let’s just see how this goes.

     

    Jennifer: Oh absolutely, so my last question for you then, around this idea of selling a business, so selling something that you’ve built can be really rewarding, but it can also be strange to wake up one day and no longer be the owner of that business and I say that having sold a business myself, that you wake up the next morning and you’re like, not only what do I do, but so much of your identity is tied up in that you were the owner or the founder or entrepreneur of said business, so what do you recommend to your clients that they do that first day or that first week after sale’s been completed?

     

    Bryce : That’s a great question. We want to actually have that conversation before we even engage with them, so we’re asking them early on, what is your plan? What do you want to do? We want to engage spouse, whether it’s husband or wife that runs the business, if the significant other is not involved in the business, bring them into the conversation and say, what are you guys going to do? Where do you want to go and what are you hobbies? What are your interests? Because there is only so much golf that someone can play before they kind of get bored and especially a lot of the clients I work with who are in the retirement years, they’ve been involved in this business their whole life and don’t really have a life outside of it and same thing with their relationship and their marriage or their significant other, they don’t really know how they are going to work together, so occasionally we honestly bring up if there needs to be counseling involved. I’ve had spouses say, I don’t know what I’m going to do when he’s around the house that much?

     

    Jennifer: I laugh because, personal story, but when my dad first retired, I think it was about two weeks before my mom told him he had to go back to work.

     

    Bryce : Yeah, absolutely. Absolutely. We try to have that conversation very early on to get them thinking about it and make sure that they have a plan in place and then when it finally comes down to the week after, we’re hoping that they’re implementing on that plan, whether it’s starting a new business or a hobby or getting involved in the community or working on boards, those type of people of have owned a business for a long time and have that entrepreneur spirit just don’t sit around well and so we suggest that they get involved in activities and keep themselves busy and entertained and keep their mind sharp and so we say, may as well get started on it. Maybe take a vacation or two to get started, but then really start implementing that plan that we’ve worked on.

     

    Jennifer: Perfect, that’s great advice. That’s really great advice. In fact, I’ll kind of pause for a minute, all of it. I keep thinking to sum everything you’ve said today up, it’s having this long range vision. That long range vision for your business. The long range vision for your life and how do you make all of that interconnect in a way that’s going to keep you happy and keep your business growing and thriving and potentially sellable if that’s ultimately where you decide that they business needs to go.

     

    Bryce : Yeah, and I say, big or small, you should take a moment if you can’t regularly do it, take some portion of the week and try to work on your business not in your business. Think about those activities about selling the business, about the capital structure as far as your loans are concerned and how’s the business preforming and is it headed the direction you want it to be and is your life fulfilled by it? Sort of take a step back, I don’t know, at least once a month and really look at that so you know where the business is headed.

     

    Jennifer: That’s such great council because it is so easy especially for those of us on the smaller spectrum to get so caught up in just the frenetic, day-to-day of the business. I often tell people, but if you don’t step back to that 10,000 foot level and see, is that frenetic work you’re doing, is it getting you where you want? All you’re doing is spinning your wheel, kind of like a hamster.

     

    Bryce : Absolutely.

     

    Jennifer: Well Bryce, I really appreciate your time today. Thank you so much for sharing your expertise with us.

     

    Bryce : Jennifer, it was my pleasure. I really enjoyed it and I hope it was helpful to your clients.

     

    Jennifer: Great, thank you so much.

     

    Bryce : Take care.

     

    Speaker 1: Thanks for listening to today’s podcast and I hope it gave you some food for thought as you think long term about your business and whether or not you may want to sell it one day.

     

    Speaking of this podcast series, I would love to hear from listeners about what topics you’d like to see covered. Our next podcast which will air on Tuesday, May 30th, right after Memorial Day, is focused on food service sales. This is a great example of a topic idea that was brought to me by a listener. So what questions to do you have or topics you’d like to see covered?

     

    Let me know by emailing info@smallfoodbiz, that’s biz.com or leave a message on the Small Food Business Facebook page at facebook.com/smallfoodbiz.

     

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    Insurance Needs With Food Businesses In Mind (PODCAST)
    2017-10-07 11:04:46 UTC
    Insurance Needs With Food Businesses In Mind (PODCAST)

    Most food entrepreneurs know they need business insurance but beyond that may not know exactly what to be looking for or asking about.  So in today’s podcast we talked with Joel Paprocki of Insuremyfood.com to find out more about this important topic.

    TRANSCRIPT:

    Jennifer: I often tell people when I’m talking to food entrepreneurs that, other than knowing that I need to have insurance for my business, I don’t really know much more beyond that, which is why we have Joel Paprocki on our podcast today. He is the owner of insuremyfood.com, and he’s a founding member of the local Austin Food Trailer Chamber and a passionate supporter of the mobile food movement and the eat local food movement. Working together with insurance companies and underwriters, he designed insurance programs specifically addressing the needs of food trucks, food trailers, caterers, and micro food manufacturers.

     

    Shortly after rolling out the program in Austin, to much success, he expanded the program to a national level in 2011 and now represents food vendors of every type in nearly every state. Joel, who started the Paprocki Insurance Agency in 2004, is a certified insurance counselor and a charter property and casualty underwriter. Joel, thanks so much for being on with us today.

     

    Joel Paprocki: Thank you, Jennifer, for having me.

     

    Jennifer: Like I said, this is not my area of expertise, which is why I’m really excited that you’re here. Let’s start with a really basic question. That is, why do food businesses need to have insurance?

     

    Joel Paprocki: It’s a good question, and a common question. It helps to take a step back. I feel like insurance gets a little misunderstood. There’s a multi-billion-dollar auto industry for insurance that markets that. Cost is what the consideration is, but especially for business, insurance that you look at as more of a tool, and it’s a vital tool of any economy and business. Some of the reasons for having insurance can be varied and all work together.

     

    Most other people you deal with, whether it’s a landlord, a commissary, kitchen, an event, etc., are unwilling to take on the risks that you bring to them, so by having insurance, you can demonstrate that you have the means to pay and protect, and a lot of those entities will go a step further and ask to be listed as an additional insured on your policy, so it opens up business opportunities and kind of looks like a cost of doing business from one perspective. Another way that it’s a tool, it opens up opportunities to finance your company so, if you need to get a piece of equipment, you can get insurance on that, and that will allow you to get a loan on that equipment, so that’s another way it can be used as a tool.

     

    I also really like the social responsibility of it. You may be willing, as a business, a startup business, to take many risks. You’re already taking a risk and jumping off starting a business, but there’s a sense of social responsibility. If a customer did get sick, maybe I don’t have assets, from that perspective, but I would feel responsible and want to have the means to compensate and take care of my customer if something tragic like that did happen.

     

    Also, there’s a tool that frees up your capital in your business so, if you didn’t have insurance, you may have to store capital in case something did happen and pay that out of your own pocket. This way, you can transfer the risk to the insurance company for a premium, and then you don’t have to maintain as much savings to save for that rainy day or that scenario. You can transfer that. Of course, the more obvious that many people think about is, it does protect, make a wall around your assets, a layer of protection there, as well.

     

    Jennifer: Which is important. If you’re working really hard to start up this business, that’s critical. To that point that you also mentioned about working in commissaries, kitchens, events, things like that, I know that a lot of food entrepreneurs I talk to, when they get to that point where they’re going out for their first “bigger” retail relationship, and the retailer won’t bring them on unless they have a certain amount of insurance and add them as an additional insured, like you said, to protect that store who’s buying your product, as well.

     

    Joel Paprocki: Exactly. A large business may have millions and millions in assets, and to bring on a potential risk that you bring by doing business with them, they’re not willing to risk that even if in the startup phase, small businesses, so they’re going to require that of them.

     

    Jennifer: A lot of what we talk about at Small Food Business, both on the podcast and on the website, is some of the differences and some of things that make food business a little bit different and unique from, let’s say, any other business that somebody might create. Are there differences also in insurance that, for things that food businesses need to be thinking about that might be specific to the food industry versus if you were talking to an entrepreneur of a hair salon, for example?

     

    Joel Paprocki: There are some things that are similar. Everyone has a premises that they invite customers onto. Even if you’re a mobile vendor, where you end up locating, that is still your premises, and things can happen, and that’s pretty similar. Slip-and-fall, most people think of that when they think of needing a liability insurance.

     

    Beyond that, the uniqueness to food vendors is going to be their product, so there’s product liability on most all insurance policies. Food vendors’ product is a little unique. It’s perishable. They have a lot of volume turnover. Compared to a hair salon, there’s really no product that they’re distributing. They’re doing more of a professional service, so that’s what is unique to the food industry is their product liability that they’re exposed to.

     

    Jennifer: That’s interesting. I hadn’t thought about that, so you’re saying even for … Sorry, I’m going back to the first part of your answer. Even for like a mobile food vendor, even though you’re not bringing people, let’s say, into your store, into your restaurant, there are still potential, like you said, slip-and-fall and things that they need to be considering?

     

    Joel Paprocki: Definitely. Actually, the truth is, those claims are probably 50-100 more likely than a food-related claim, so the reason they have liability in those areas is, whether they’re setting up a tent or they’re parking their truck next to an area, they can be found liable, even if they park next to a curb. Attorneys get creative so, if they turn around and slip over a curb or a divot in the sidewalk, and this is a real scenario I’m thinking of that was in Portland.

     

    The city has a wording that says, “We’re not responsible for anything,” so that came back to the food truck that that person hurt their ankle on the divot in the sidewalk, which you would think the food truck had no responsibility over but, because of the way municipalities are and they worded it, that that goes back to the vendor because, as a business owner, unlike inviting someone into your house, you have a much higher risk when you invite a paying customer to do business with you and you have to go beyond just doing the normal.

     

    We have to go a step further and predict and prevent risks from happening, and that’s where you see those claims where you see in the news that seem ridiculous, but you almost have to be the protector of the customer because you have the extra duty that you’re inviting them onto your premises and area. In that same category, people don’t often think about, and this is a common scenario, you put up a tent, and you put up a “We’re Open” flag or sign and the wind comes, blows it over, and it could injure someone, more likely the claim we see is it causes property damage to a car. It scratches the car of a customer next to it, and those area also under that same category or premises liability, but property damage versus injury.

     

    Jennifer: Just as we’ve been talking, you’ve mentioned a couple of different types of, I guess, insurance coverage, whether it’s product, you had mentioned the premises. With all of these different options that are available, and I’m sure that’s just touching the surface, how does a food entrepreneur really start to understand what they need for their business and, yet, not get too much and pay too much? How would somebody work with you or work with another insurance company? What questions do they need to be prepared to both answer, and what questions should they be asking?

     

    Joel Paprocki: I would start from the point of being able to work and trust their agent. I call it in our agency, “Love your agency.” That’s how you can provide the most benefit to the customer to get the coverages they need. If they’re going to a broker, it would be to be truthful on the application, be up front with what they’re doing so that the broker can properly analyze and offer the coverages.

     

    Starting from a point of, “Let’s look at coverages, options, and then back from there if it’s not within cost or if you’re willing to take on the risk in that category,” and say, “That’s not a concern of mine, but I know it’s available.” This is the cost, and just approach it as open mind and open conversation and ask questions to clarify it so you can understand and ask examples of claim scenarios you may be concerned about, and then ask for advice on things that you might not be thinking about that may be a risk to you to explore all the options.

     

    Jennifer: Without going, and I’m sure this is one of those things where you go super deep on, but at a high level … Again, we’ve kind of touched on the premises, and if I’m not using the right terminology, let me know, but we’ve touched on premises and product liability, what other big umbrella pieces should food businesses be thinking about? In my head, I’m envisioning, let’s say you’re working in a commissary kitchen and there’s a fire and you lose $10,000 worth of packaging, where does that fall under?

     

    Joel Paprocki: What we’ve been talking about thus far is general liability, and then that encompasses bodily injury and property damage to, essentially, others or customer and look at it that way, the public. The other major pieces would be property coverage, like you mentioned, so your equipment, your business property, but it also could mean auto insurance if that property’s a vehicle.

     

    There’s other coverages that are not as available, and people might not think about in the normal thought process, but there’s food spoilage, so if you were to lose your food due to spoilage. There’s loss of business income due to an insurance loss, and that’s one of the things I think is very important and overlooked in the industry but, if you have a truck or another piece of equipment in your commissary that you need to operate and make income, if that is damaged and you don’t have that income during that time while you’re trying to get it back up and running, that will put most small businesses out of business, and that’s also an important coverage.

     

    Jennifer: That is something that you don’t really think about. You just assume that … It’s like you plan for the business worst case scenarios, but you don’t think that something might stop the business for a piece of time.

     

    Joel Paprocki: Especially if you rely on that income as your primary income, your business from the food vending, obviously, that can be pretty devastating to not have a month or two months or whatever it might be, so it’s something to think through as a worst case scenario. Would you be able to absorb that or do you need to transfer that with an insurance policy?

     

    Jennifer: If you had to say that there’s one big question that you always get from food entrepreneurs, or a consistent thing that you keep hearing that you always hear come up, is there one topic that food entrepreneurs are really curious about or have a lot of questions when it comes to insurance?

     

    Joel Paprocki: It can vary. For the most part, the most small businesses just starting off are starting from scratch and just kind of learning what general liability is and what that means, so that’s probably the most common question. Beyond that is, how do I cover my property that’s moving around constantly?

     

    That’s a little bit of a challenge for the insurance industry. They’re like, “Do you have a property that’s either a building or property located inside that building?” They don’t necessarily like to cover equipment that can be anywhere at any time and follow it. I get questions on that a lot because they’ll start with their agent who has their home and auto, and they’re just stumped on how to cover this property that’s moving around, so that’s a common question, as well as how to cover property that doesn’t stay in one spot.

     

    Jennifer: That’s an interesting point. I imagine both for … Would folks who are going to farmers markets and festivals and, again, putting up tents that could fall down and things like that, would those … When we talked about moving around, my first thought is going to mobile food trucks. Somebody who is kind of moving their location, would that sort of also be that same type of concern?

     

    Joel Paprocki: Exactly. The general liability policies are also, oftentimes, tied to an address, like an address on the policy. That’s kind of the way insurance is designed to do it, so even if they don’t have property, liability still needs to be able to follow you at the locations you’re going to, in addition to how property follows you.

     

    Jennifer: I’m going to ask you a question that I know is not one you’re really going to be able to answer, which is going to sound odd. One of the biggest hurdles, I think, for food businesses, especially those who are starting up, is cost. I’ve heard from folks in the past, like, “Oh, well. I’ll get insurance for my business when my business hits X point.” What sort of things go into the consideration to kind of outline what the cost will be? I don’t expect that you can sit here and tell me, “Oh, a food business can expect to spend X a year,” but what sort of things might increase or decrease their insurance policy?

     

    We’ve talked about some of the different kind of categories that they might be thinking about and, obviously, if you have one of those or don’t have one of those, that would decrease cost. Does the type of food that you’re producing, let’s say if you’re working with meat versus if you’re working with jams, does that impact cost at all?

     

    Joel Paprocki: The cost is pretty flat and stable as far as types of food being vended. There are some exclusions that they’re unwilling to look at, and I’ll go over those in a second. General liability policies will start around $300, and they’re primarily based on your sales, so an insurance company, if you’re selling $100,000 worth of food, you’re turning over more product, more chance for a risk, so that’s really what they look at on general liability to rate the policy if it fails, so that’s that piece.

     

    As far as certain categories, like you mentioned meat, if it’s directly importing meat from another country, that’s one that’s probably not going to be able to be looked at on most policies. Certain things that make health claims or dietary supplements that fall into those categories are areas where it’d be much more challenging to find a policy that would be affordable for someone starting off.

     

    Jennifer: The amount of equipment that you have and truck and all of that, does that, again, go into the equation?

     

    Joel Paprocki: It does. Initially, they’re just focused on general liability and what they look at. When you add property to it, the coverages will go up proportional to the value of the equipment, etc., so that would be added on top of that. There’s things like, if it’s a truck, like a food truck, you have automobile liability, which is separate from general liability, so those can add cost, as well.

     

    Jennifer: This is, like I said, not an area that I’m an expert in, but an area that I, personally, have always … I always joke with food entrepreneurs that I’m as risk-adversant as you can be as an entrepreneur, so insurance for me, like I said, is one of those things that I need to have for my business to protect this business that I’m trying to build and, ultimately, to protect me, too, and protect my assets, as well. I know that this will be something that’s of interest to a lot of people who are out there.

     

    I’m going to include a link to your website, the insuremyfood.com website that folks will be able to link to from the transcript from this podcast to find out more information because I know that you have some more information on the website and some more resources on there, too, to help guide people if they’re in either the beginning of this process or, after listening to this podcast, realize that they need to potentially take a closer look at their insurance policy and either add things, subtract things, whatever it is, to make it work for them, but insurance is definitely a critical issue, especially for food these days.

     

    Joel Paprocki: Definitely. I appreciate that, and I’m always happy to answer any questions if anyone reaches out.

     

    Jennifer: Perfect. I appreciate that. Joel, thank you so much for taking a little bit of time today to talk with us.

     

    Joel Paprocki: Thank you, Jennifer.

     

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    The Power Of Storytelling In Business
    47:21
    2017-12-20 04:56:33 UTC 47:21
    The Power Of Storytelling In Business

    A good story is on of the most powerful marketing tools a business can have. This is even more critical for small businesses that lack the large marketing budgets of big brands. But telling a good story is definitely an art which is why we invited Esther Choy, founder of the Leadership Story Lab and author of Let The Story Do The Work: The Art Of Storytelling for Business Success, to help us learn how to craft a story that gets remembered. For additional resources, as mentioned in today’s podcast, please scroll to the end of the transcript.

    TRANSCRIPT:
    Jennifer: Esther, thank you so much for joining us today, and I want to start with a big picture question because we’re talking about storytelling today and that your book Let The Story Do the Work: The Art of Storytelling for Business Success … That’s what it’s all about.

    Tell us, to start, give us a foundation. Why is storytelling so important to business owners these days?

    Esther: Well thank you so much for having me, first of all. I think storytelling is especially important to business these days and in the future because people are so distracted. People are so busy. Whatever we offer that we think are the best of the best in the market, oftentimes it’s perceived as commodity in someone else’s eyes. The true differentiator, besides quality, is your story. Story can really hold people’s attention, and most importantly story can get people to care.

    You think about how much information there are out there. It’s at our fingertips. But if people don’t care, it doesn’t matter what information we put out there. But we can get people to care, and you can get people to care because of your stories, then you’re already halfway too success.

    Jennifer: That’s true. As you’re talking, I was just thinking about how that’s true. Even from its most basic marketing 101, if I can get someone to care, then I’ve got a better chance of them just remembering my business name to begin with.

    Esther: Yeah. You know, because we’re distracted, because there’s so much information out there, we don’t tend to remember as much as we’d like to or as we used to. By really and intrigued, I find something just wonderful, entertaining, and captivating, then I’m gonna go look it up. I’m gonna go find out what it is all about. So I think we should really start with the basic, and that’s our stories.

    Jennifer: So then starting with that basic, can you talk to us a little bit about … This sounds like such a basic question, but what a story is and what a story isn’t. Maybe you can give us examples to help us understand. I guess I’m thinking that oftentimes in business, we think of a story and then go to PowerPoint presentation. I mean, so what’s the story [crosstalk 00:02:46].

    Esther: This is such a wonderful question, and it’s one that I can talk all day about. But let me make it brief and pragmatic.

    So first by starting with what story isn’t because you hear the word very often. It is definitely enjoying a resurgence, a renaissance. You can see that business story used in the printing company tell your business story. But what they do is they help you create your business card, your collateral, your letterhead. So they call it a story. You also might hear people say, “What’s the story here?” What is really behind the question is what are the basic bullet points to help you understand the situations. I can give you examples after examples of what people use story as a proxy for something else. Then the most mind-boggling, to me at least when I started teaching storytelling, was somebody assumed that a story is a product pitch.

    I ran this workshop, and I had a few people raise their hands and volunteer to tell their stories and have it critiqued. Then this gentleman gave a product pitch. Everybody kind of looked at each other, was scratching their head, we were like, “Hmm. Where’s the story?” And he said, “That is the story. That’s my product. I just told you. Were you listening?”

    So how I would define it is structural [inaudible 00:04:55] beginning, middle, and end. Strategically, there’s a clear intent where the story matches with that intent. Then lastly, I would define story as the classical model with central characters, challenges, journey, and a satisfying end. So those are how I would define story isn’t. Story can be long, so think about any epic movie, Lord of the Rings, Star Wars, or think of a shortest commercial. We’ve seen a lot of those during SuperBowl’s time.

    Or of the short I’ve heard recently, actually. I don’t think a writer even intended it to be a story. It was actually a writer’s comment on an article by the New York Times. And the article was about the former president, Obama, dropping off his daughter at first day of college. Then he was quoted saying, “Dropping off my child in college is like having open-heart surgery”. But that’s the article. And then one of the readers comment was, “Two weeks after I dropped off my daughter at college, I was grocery shopping, and I came upon the cereal aisle. I pick a box of Cheerios, and the image of my daughter as a toddler sitting on her high-chair and picking up Cheerios one by one with her chubby little hand flushed over me, and I held the box of Cheerios and started bawling in the middle of the supermarket. Luckily, a kind elderly lady walked by me, and she put her hand gently on my shoulder, and she said, ‘I know, dear. I feel the same way these days when I see the price of a Cheerio box'”.

    It’s a story. There’s a beginning with a scene and a hook. There’s a journey, and then there’s a resolution. So it’s a super short story. It didn’t even meant to be a story, but it had all of that component.

    Jennifer: So you just were talking about … And I know that there’s multiple structure and elements in a good story. One of the things that I love, as you talk about in your book, is that good business stories … And as you were mentioning now, they have those same elements and structure as, let’s say, a good fiction story. It was making me think when I read that a lot about how, especially these days in fiction books that I read, there’s a hook that’s in the beginning because they want to capture your attention, and you want to keep turning the pages and keep reading.

    You had talked about, in your book, how a hook can help an audience get engaged and stay focused and leave them wanting more. Do you have any good examples of hooks you’ve seen businesses use?

    Esther: Sure. I explain hook … It’s in the book. So I explained hooked the following way. Make sure, in the beginning of your story, that it has a conflict or a contrast or a contradiction. So conflict is nothing more than two opposing forces going on an opposite direction. They’re opposing each other. Contrast is two opposing different, opposite qualities being put right next to each other. Then contradiction is contradicting your audience’s expectation.

    So let me give you some examples, and maybe you can tell me. Well, actually, you probably can because you’ve already read the book. But I’ll see if your audience will be able to guess whether the hook is a conflict, a contrast, or a contradiction. So this is a real example, too, by the way by one of my colleagues.

    She told me that, at one of her jobs prior to business school, it was a Tuesday around 10am. It was my second day at a new job. Chris, a software developer, was explaining the company’s technology to me. In the middle of our conversation, he received an instant message, quickly got up, and told me, “It’s time for a cupcake run”. Maybe everyone can take a moment and think about … Is it a conflict? There’s two opposing forces. A contrast? Two opposite qualities. Or contradictions? Your expectation being contradicted. Now, this is a good example of a contradiction because, typically, at least not in the office Tuesday morning, you don’t drop a conversation with a new colleague and then turn around and run for cupcakes. It’s just a very odd thing to do. So it’s a contradiction.

    What people wonder is, “Why? What’s the cupcake all about?” In other words, they want to know more. So that’s an example of a hook in business. It doesn’t have to be all-encompassing. In fact, in the beginning of the story, all you want to know, all you want to achieve, is that your audience want to know more. If you can inspire that, then you are on your way to telling great stories.

    Jennifer: That example was a great one. You heard me laugh because it was just like, “Oh my goodness. Yes. What’s going on with the cupcakes? I need to know the story”. Fantastic.

    You also just used the word inspire which I think is a great word especially as you talk about emotion, and you do spend a lot of time in the book talking about the role of emotion when it comes to storytelling and how, ultimately through your storytelling, you’re hoping or you’re aspiring to invoke an emotion in your audience.

    So why is creating this emotion in your audience so important?

    Esther: Well, two reasons. One may not apply to everyone, but many I work with consider emotions frill or unnecessary or even hindering sound business decision, and so that’s why I spend so much time and so much effort through to the book to bring back the proper role of emotion. A lot of people I know kind of starting from this false assumption that, in order to make good business decisions judgment, that you have to remove emotion. That is absolutely wrong, and that is scientifically proven wrong because, in order for us to make any decision at all, it must involve our emotion. We might not feel emotional. That’s a really big distinction there. But somewhere in our brain, our emotion is tabbed to enable to us to make decision. So that’s why, in the context of persuading, informing, influencing, leading, in business, we need to inspire other people’s emotion.

    And when you have a good story, when you tell a great story, that’s how you can tap that hidden part of decision-making.

    Jennifer: So then, in order to tap somebody else’s emotions … When you tell your story … And correct me if I’m wrong, but you have to be kind of telling it through their lens with your story, but it’s their mind. So you’re a bit of [crosstalk 00:14:33].

    Esther: Yeah. Exactly. So the interesting … I think this is just tantalizing research is that when two people are engaged in storytelling, one is telling story and the other is listening to the story. Their brains begin to synchronize because what I’m describing to you, you are trying to picture in your head, and you’re trying to feel it. So because we are tuned into each other through a story, our brains are literally humming and synchronizing. So that’s how … You can try, but it’s really hard. People forget facts all the time, but they never forget a good story. You can try to forget a good story, but it’s really hard to do.

    Jennifer: You know, you highlight in your book that essentially there are five basic thought points that all stories will essentially come from. We’re not going to go through each five. But for the folks who are listening, more often than not they’re on an earlier stage of business growth. So for earlier state entrepreneurs, do you tend to find or do you tend to see that one of these plot points is used more often than others? Or does it really depend on the business type and who the business’ audience is and the founder’s story?

    Esther: Sure. We don’t need to go over all five. But just for your listeners’ sake and so that they know what are the five. They are origin, rags to riches, rebirth, overcoming the monster, and then the quest. What I often find of entrepreneurs, business owners, once they made it, a lot of times they tell rags to riches stories. Or another name for rags to riches is underdog. Basically, those who have the odds stacked against them, but they made it. They are successful. So there’s that nice endpoint to their business story that makes them a good … It’s a very classic American story, in fact. [crosstalk 00:17:24]

    Jennifer: It’s like every entrepreneur in a magazine article.

    Esther: Yeah, exactly. For early stage entrepreneurs, a lot of times I see two of those plots. One is the origin. How this business came about or how this entrepreneur discovered her passion to start a business. Like why I asked you, “So, Jennifer, how did you come to do this?” Because people are curious. I think I’ve heard, many years ago, about how no matter what type of websites they’re about, page is actually the most riveted because people want to know who are the people behind this business. So the origin taps into that innate curiosity in us that wanted to know, “Hey, how did it all begin?” So that’s one for early stage.

    The other I think I often hear is overcoming the monster. The name might be a little misleading because I’m not talking about big, jagged-teeth monster lurking in the closet and waiting to attack you, but monster here is more allegorical to a big problem or a big need that is waiting for someone to figure out how to overcome.

    Jennifer: So I want to mention for all the listeners … Just a reminder, as always, in the transcript for this podcast, we’re going to have links to the book. We’re going to have links to Esther’s company’s website. There’s a lot more information and, of course, within the book. The book goes into a lot more information about some of these structural parts and the plots that we’ve been talking about. So if you’re working on crafting your story, you’re working on revising your story, it is a wonderful place to get some more information. In fact, I would say right before we begin recording that, after reading the book, it’s a good reminder for me that I need to go back and revisit my business story and make sure that I’m telling it correctly.

    So here is one of my very favorite part of the book, and I’m going to just let everybody know so that if you just want to pick up the book and just take a look at this one part. So on page 49, you shared this phenomenal story of … It was this founder, and they had crafted their story based off of what was important to them of what had inspired them to start the business. But ultimately, it wasn’t a good fit for the audience that they were trying to attract. And at a very high level, just so folks know, the people were running a daycare, a childcare, and they had been inspired by the events of 9/11 and found that an audience who’s looking for childcare doesn’t necessarily want to be reminded about 9/11. You talk about, in your book, that oftentimes we as entrepreneurs … What inspired us isn’t necessarily always the right story to tell if that’s not going to resonate with our audience.

    So since entrepreneurs tend to be … We tend to be pretty close to our businesses and our stories and our products. How do you recommend that business owners seek feedback on their stories so that we can determine whether we are telling the right story or not or telling it in the right way?

    Esther: Yeah, I’m glad that this is one of your favorite parts of the book. It is also one of my favorite. I feel very lucky to be working with this pair of business owners because the origin story, in this case, how they started this early-childhood enrichment education business, is truly just awe-inspiring, sad, but ultimately it is awe-inspiring. But I think that we discovered that it is not the right fit for the audience, and I absolutely recommend that to everyone, is to go and play anthropologist and go and interview your customers especially your most loyal customers because those are the ones that you hope to attract more of.

    But why are they attracted to your product may not be the reasons that you think that attracted them. So that’s why, and that’s exactly what I did. Once we had a chance to study the parents, in this case mostly young urban college-educated late 20s, early 30s moms, we realized that they are attracted to [inaudible 00:23:28] academies for all sorts of valid, creative, loving, very parent-centric reasons that, when they hear about 9/11, you can just see that sort of dissonance in their face. In fact, you can almost feel that they feel the dissonance.

    So there’s really no way around studying and interviewing your customers especially your most loyal customers. Observing them. So don’t just take what they tell you, but observe them, and then test-drive your story. Again, ask them how your story made them feel but also observe their body language because they might want to say things that they think will make you happy, so we have to be careful. Not that we can’t take their words for it, but there’s a economic behavior economics term called declare a preference and actual preference. They might declare that they prefer something because of also some other reasons that has nothing to do with their actual preference. It’s just why seek jobs [inaudible 00:24:56] they don’t do consider research because they think consumers don’t know what they want until they have exactly what they want put right in front of them. But I don’t know if every business can get away with not studying their customers, but you can gather feedback and test your story based on both what they tell you and what you observe about them. Then you can more likely try to emulate what resonates with them.

    Jennifer: I guess it’s something that I talk a lot about knowing your audience just in general, from understanding what products sell, but it continues to come back to that. That’s what I’m hearing now. It’s like you have to know who your audience is, and I love that part that you brought up about really trying to understand your most loyal customers because, ultimately, you want more loyal customers as opposed to kind of the one-offs who will drop in once a year and make a purchase from you, let’s say.

    Esther: Yeah, exactly, because you want your loyal customers to stay loyal, and then you want more of your loyal customers. The only way to attract more of the same is by really understanding why they stay loyal, not why we think they are loyal to us.

    Jennifer: Yeah, because it’s often different.

    My next question … So, this is for anybody who is listening right now and is like, “Okay, all of this sounds great, but I don’t have a good story to tell”. What I have heard a few entrepreneurs tell me time and time again … They’re just like, “I just don’t have a very good story,” and I will tell folks who are listening that this book actually … One of my favorite functions of the book is that it actually comes with a list of question prompts. So if you find yourself in that spot, or if you’re like me and you’re like, “Maybe I should look at revisiting my story,” you can use these question prompts to start to brainstorm about what your story is and what it isn’t, you know, and what makes it unique and interesting.

    So if I were telling you right now, “I just don’t have an interesting story,” can you share an example of one or two questions that you recommend people ask themselves?

    Esther: Sure. Well, Jennifer-

    Jennifer: Uh-oh, now I put myself on the spot.

    Esther: I take these invitations very, very seriously, and I’m actually really glad you gave me an invitation to do that, so I’m jumping right on it.

    So you mentioned that your daughter makes you smile, earlier, and yet you are not with her. You are doing this interview, and this interview requires quite a bit of preparation. This is just one of many, many, many things you do, [inaudible 00:28:22] business. So why do you do what you do? That’s one question taken out of the list of crazy 10 good questions type.

    Another could be … When you first announced your business, how did people react to it in the beginning? And then you can also … That’s another category of the 10 crazy good questions. Then I’ll give you another example. So you mentioned you really love the kitchen, working in the kitchen. How is this now, your work, different from, let’s say, right before business school?

    So I can go on and on and on. I’m sure you’ve already done that. What I’ve listed here is just 10 different types of questions. It has the basic building blocks under each type, and then you fill in the blanks with the facts that are relevant to you and pertinent to you. So literally, you can come up question hundreds and thousands of questions based on these 10 different templates of questions.

    Jennifer: And again, folks who are listening, these questions really are powerful. I mean, it’s a little bit like having a therapist, if you will, digging into you a little bit but in a really good way. In fact, before we started recording, I had mentioned that of course I had read the book prior to us talking today, but I’ve actually gone ahead and set some time in my calendar where I’ll be able to give some undivided attention to going through these questions again because I think that they’re worth revisiting. I think that I personally need to put some serious work into them and make sure that my story’s being told effectively in a manner that’s gonna resonate with all of you, as an example. So these questions are phenomenal. They do make you look deeper, I think, than most of us who, certainly like myself … I don’t come from a storytelling background, so I didn’t really know where to start. So I highly recommend taking a look at these.

    Esther: We have actually more questions. It’s free. Anybody can go and download. I’m sure you’ll include that in the transcript, as well. It’s leadershipstorylab.com, all in one word, and it’s free. Yeah, I’m really happy to hear that you find it helpful because that’s the mining process, story mining process, right? I like to say that we don’t have to be superhero to tell great stories. Because we know where to look. Every one of us is sitting on a treasure trove of stories if you know where to look. So these questions will help everyone know where to look and how to mine their stories.

    Jennifer: Right. Yeah, we will include a link in the transcript to these additional questions as well.

    So I have one last question for you. One of the things that you talk about in the book, which it was the first time I had started to think about it this way. I thought it was pretty brilliant.

    So we as business owners, and truthfully, you and I went to the same business school, and we spent a lot of time talking about differentiation and [inaudible 00:32:15] analysis and what makes us different from out competitors, what makes us unique. However, you also talk about the importance of using your story to help create similarities with your audience. So why is this important?

    Esther: Wow, you’ve really done your homework. So the similarity aspect came from the question that a lot of us have been asked. I talked to many career coaches, very seasoned career coaches, and they told me that nobody seems to know how to answer that question, and yet this is something that we are confronted all the time. So, hey, Jennifer, tell me about yourself. Of course, it’s hard to put a framework around it because nobody has three hours to listen to our story. Most people don’t. So you know this is not going to be a very long answer, and yet of all the things about us, all the accomplishments and achievements, which one do we talk about? Is it personal? Or is it professional? Where do you even begin to think about this?

    What I suggest is start with similarities. Start with something that you potentially will share with your audience. Your shared experience. In the book, I talked about how I went, in business school, I didn’t have a business background and much less quantitative aptitude. So I was lost, but I was also an older than average student, and I knew that if I didn’t ask questions in class, I will miss my boat of understanding following. So I asked questions. I didn’t care. I sat in the front row. I didn’t have to look at anyone else in the face, and I asked my questions. So even though I was really skittish about, oh, I’m the only slow one in the class. Everyone else got it except me. You know, it felt a little embarrassed. But actually I was hardly the only one because I had so many people come up to me, and most of them I had know idea who they were initially, but so many people came up to me just randomly during the day thanking me for asking their questions.

    So this idea that you were not alone, even though you might felt like you were, is something that is shared by a lot of people. It’s something that a lot of people will have in common with you. And then the list goes on and on and on. So pick one thing, something, that you know is universally shared, and especially if you have a chance to do some due diligence on who you’re speaking to. Maybe you’re speaking to a potential buyer or a prospective partner. There’s so much that we can look up about everyone else these days. Just a little bit of homework ahead of time and prepare a few stories that highlights the similarities that you share with that person or with that group of people that is going to get you that much further.

    This is important because, at the end of the day, yes, differentiating yourself is important. Being unique and different is important. But ultimately, we like others who are like us. If perceive someone to be similar to us, then that person is more likable. And if that person is more likable, then we tend to trust her more, and we tend to want to interact and maybe even do business with her more. So that’s a very powerful social influence that is very much underutilized.

    Jennifer: I was thinking, because you also mentioned the word stories plural. It made me [inaudible 00:37:15] about how you have different audiences. We’ve been talking in kind of the business landscape of, like you said, partners, potential investors, buyers. But then as we also head into the holidays, you might go to a party, and you’re chit-chatting with somebody you’ve never met. That is, even in a less informal … I mean, that is all networking. You never know who that person is or who they’re connected to or what they’re interested in and having “versions” of your business story that you feel confident pulling out and using, in a true and authentic manner of course, you never know who you’re talking to and what that relationship might yield for you personally or for your business.

    Esther: And that’s why I always encourage people to have a library of stories. Certainly if you’re quick on your feet and you can come up with stories in a flash, good for you. I am not one of those people. I prefer to have a chance to think about it, thank about it ahead of time, and put it together. So it’s a really worthwhile investment. Use the questions, and use the template, because it will save you time.

    By library of stories, I don’t mean thousands. But even have anywhere from three to five stories related to your business or related to who you are as a person and why others should trust you and do business with you. I would say those things are very worthwhile exploring and developing stories.

    Here’s one more trick that I find very effective and multiplying the effort because I’m a little bit lazy sometimes, so I like to … If I especially like a story, I like to tell it over and over again, but how do I not even get bored myself let alone boring other people?

    So here’s how you do it. Here’s the trick. You can use the same story, but you add different ending. So can I give you an example?

    Jennifer: Please, yeah.

    Esther: It’s a short one. So I mentioned that I have two kids, two daughters. One is nine years old, and one is six years old. The nine year old, especially, has quite a bit of activities. So my Saturday morning can be really hectic driving her back and forth around town different places. One Saturday morning after I dropped her off at dance, I was dying for a cup of coffee. I was dying to sit down and read my news on my phone. So as soon as I left her studio, I made a beeline to the coffee shop down the street. I place an order. I was very much looking to 45 minutes of just some me time. But right after I place my order, I realize that I didn’t have my wallet. I didn’t lost it. Nobody stole it, but I changed my purse my Saturdays. Of all things that I transfer, I didn’t have my wallet. So I was embarrassed. I was really feeling lost because I thought that 45 precious minutes of me time was just slipping through my fingertips.

    Then just as I was fumbling, as I was humming and hawing as the barista bring me back my coffee, this person down the line said, “Oh, how much is it? Let me pay for you”. And I thought, “Oh, I’m even more embarrassed because now I need someone to rescue me,” so I hum and haw and said, “Oh, no. Thank you. I’ll be fine,” and then she insisted. Then I said, “No,” and so we back and forth and back and forth. We did a little dance, but actually I really wanted it. So what she finally said was, “You know what? Thank you for giving me this opportunity to pay for you”. Now I thought, okay, this is crazy. But before I could even say anything, she said, “Someone else paid for me when I was in this situation, and I’ve been looking for an opportunity to do it for somebody else. So thank you,” then she didn’t even just wait for me to say anything. She just nudged me over and then paid for it.

    Now as I thank her and got her name, I took my coffee to a little table, I though, “Man, sometimes reading news can be really depressing, so sometimes I really ought to look up from my phone and look around because real people can actually be so much more inspiring”. That’s how I would end the story. Possibility number one.

    But there’s also another option. Another option to end the story is … As I took my coffee and thanked her and found a little table to sit down, I am so reminded of the fact that kindness doesn’t need to be reciprocated. Kindness actually ought to be paid forward. That’s another possibility to end the story.

    And then yet another possibility to end the story would be, as I took my coffee and thank her and found a little table to sit down, I had to really remind myself, “Esther Choi, just stop changing the damn purse”.

    So same story, different endings. One story turned into three stories.

    Jennifer: Yup, and each of the different stories, at least for me, evoke different emotions.

    Esther: Yes, exactly. So don’t need to come up with hundreds and thousands of stories. Just come up with three to five that are really good. It’s not even something heroic or epic. But when you change the ending it, as you said, evokes different emotion. It creates different, altogether, meaning for the story.

    Jennifer: Oh, that’s great example. Thank you for sharing that.

    Esther: Yeah, you’re welcome. You’re welcome. I hope that’s helpful.

    Jennifer: It is to me, and I’m certain to the listeners as well.

    I want to thank you for your time today. Really appreciate you coming on and sharing so much great information. And also, again, for the listeners, the book is titled, Let the Story Do the Work: The Art of Storytelling for Business Success. And there will be links to it on our Facebook page and in the transcript and on all the usual places on small food biz.

    So, Esther, thank you so much.

    Esther: Thank you so much for having me. This is really a lot of fun.

    Jennifer: Oh, great. Well, thank you.

    ADDITIONAL STORYTELLING RESOURCES MENTIONED BY ESTHER CAN BE FOUND BY CLICKING HERE.

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    Do I Need Professional Culinary Experience Before Beginning My Food Business? (PODCAST)
    7:26
    2017-12-20 04:56:33 UTC 7:26
    Do I Need Professional Culinary Experience Before Beginning My Food Business? (PODCAST)


    In this short podcast, we try to get to the bottom of a question that comes up more often than not as people consider starting a food business.

    TRANSCRIPT:

    Today I want to address a question I get asked frequently when I’m talking to budding food entrepreneurs and those who are dreaming about one day starting a food business. It seems as though a question that’s on a lot of people’s minds is do I need to have professional experience before starting a food business?

    The short answer is no, you don’t. Plenty of people in this industry – from food truck operators to restaurateurs to those who produce packaged products that they sell wholesale – have found success without a culinary background behind them.

    That being said, I’m going to add a caveat to that. Before I started culinary school, I had no culinary experience beyond cooking and baking in my own kitchen. Culinary school helped me fine-tune my skills and gave me a level of confidence that I didn’t have prior to that about what I was capable of in the kitchen. Specifically when it comes to pastries, the science behind pastries can be so exacting that I felt it was important I focus and learn it in school.

    This isn’t to say that you need to follow the same track. I was 21 when I went to culinary school so it’s not like I had years of even home cooking experience under my belt! If you feel confident in your culinary skills then I would argue that spending the money on culinary school is not necessarily the best bet. Especially now with the number of online and in-person cooking classes – if you feel like there’s one or two things you want to brush up on you can probably do it at a much lower cost than a full-on commitment to culinary school.

    The question about whether or not you need to spend some time working in the industry though – regardless of whether or not you go to culinary school – is a different one altogether. Unless you’re planning to start a home-based food business or other small farmers’ market business, I don’t think you necessarily need to spend time working for someone else. But if you’re shooting for something a little bigger – like a food truck, café, or restaurant – I personally think some of the best time you can spend preparing for your new business venture is by working for a similar food business. If you’ve listened to these podcasts before, you may remember our conversation with Natascha of The Ginger Pig food truck in Boulder, Colorado. She talked at length about the benefits she derived in working for a restaurant before she opened up her food truck. It’s worth noting that she worked for that restaurant for free because she felt that experience would be so critical to the success of her business. I tend to agree with her – and by the way, in case you missed that podcast I’ll post a link to it in the transcript for today’s podcast.

    Learning how to cook or bake is something that many can fine-tune – but learning how to handle the production and operations side of working in a fast-paced kitchen where you have customers literally waiting outside your door is another thing altogether. What you learn working for another company – both the good and the bad – can go a long way in helping you determine what you want to do in your business.

    As way of another example – someone I know opened up a cupcake store several years ago at the height of the cupcake boom. At that time, she didn’t come from a culinary background though she did know how to make darn-good cupcakes! However, the first several months after her store opened was a disaster. Not having worked in a bakery before, she wasn’t familiar with the idea of pars which, if you don’t know, is basically the idea of forecasting how much product you need to make on any given day based on prior sales records. For a product like cupcakes, which needs to be sold that day or it’s going to be thrown away, pars are incredibly important in helping keep your business financially solvent. It wasn’t until this entrepreneur hired a kitchen manager who did have bakery experience that they were able to turn around the company. In hindsight, had she worked for a bakery prior to opening the store, that’s an expensive mistake she could have avoided.

    I should note that this store is still up and going and is doing really well. Which once again is testament to the fact that you certainly don’t need to have culinary experience in order to run a successful food business. However, like in any entrepreneurial endeavor, you need to have a clear understanding of your strengths and weaknesses – and be honest with yourself about that. Then you can look to hire employees who fill, in this case, your void in culinary experience or you can opt to surround yourself with mentors who understand the food industry whom you can bounce questions off of.

    Interested in other Small Food Business podcasts? You can check them all out by visiting Smallfoodbiz.com/podcasts.

    Combat Military Veterans Building A Food Business That Builds Hope (PODCAST)
    2017-12-20 04:56:33 UTC
    Combat Military Veterans Building A Food Business That Builds Hope (PODCAST)

    rumi spice(This is a repost from last year which I feel is important to share again). In honor of Veteran’s Day, in today’s podcast we’re talking with the Chief Marketing Officer of a veteran-owned and run small food business.

    TRANSCRIPT:

    Jennifer: I don’t typically share straight business stories on this Podcast series, but Rumi Spice’s story really caught my attention, for reasons that you’ll see in a minute. I knew this was a story you had to hear.

     

      By way of background, Rumi Spice is a food focused social enterprise, founded by a team of US Military combat veterans. They import saffron directly from rural Afghan farmers in an economic partnership. By connecting Afghan farmers directly to the international market they seek to catalyze market driven economic development one farmer at a time.

     

      The Rumi Spice processing facility in Herat, Afghanistan employees 75 Afghan woman who are paid direct wages. In addition, saffron is more and more becoming a viable alternative to growing opium, which is both a security and economic problem plaguing not just Afghanistan but the international economy. By cultivating for-profit business, Rumi Spice is helping to lay a foundation for long term peace in Afghanistan.

     

      Emily Miller, who we’re speaking with today, is co-founder and CMO of Rumi Spice. Emily thank you so much for joining us, really appreciate it.

     

    Emily: Thank you for having me.

     

    Jennifer: To begin with, I particularly wanted to feature today’s interview around Veteran’s Day because of both your and your co-founder, Kimberly Jung’s, military background.

     

      Would you mind sharing with our listeners a bit about your military background?

     

    Emily: Yeah, absolutely. Kimberly and I first met at West Point, we were both classmates, class of 2008. We graduated and were engineer officers in the army as 2nd lieutenants. Both of us had very different experiences in Afghanistan. I was serving on a Special Operations Team; I was one of the first women to go out on night raids with Special Operations and work with women and children. Whereas Kim spent her deployment as a Route Clearance platoon leader, so she was actually looking for improvised explosive devices on the side of the road.

     

      Very, very different experiences in Afghanistan, but we both took away a very common thing which was kind of a love for the Afghan people and for the country itself.

     

    Jennifer: Was there a moment when you or Kimberly, when you guys were in Afghanistan, when you started to develop an idea of that would later become Rumi Spice? Or was is it you took away with you kind of a love for the Afghan people and sort of kept that in the back of your mind, but didn’t necessarily think that you might wanna start up a business that would somehow integrate with Afghanistan?

     

    Emily: When we were in Afghanistan we didn’t have the idea specifically for Rumi Spice or saffron particularly. We did have this frustration with … We just didn’t feel like we were making an impact, a long term impact in the Army. Kim always talks about how she would go out with her platoon, she would clear a roadside bomb and then within a few hours another one would be in it’s place kind of thing. That’s a little bit how it felt in the Army. We would go out on these night raids, get bad guys, but the very next day more bad guys would pop up.

     

      Kim and I kind of always had in the back of our mind that we really wanted to do something that could affect Afghanistan long term. When we were in business school a friend of ours, the other co-founder Keith, he was in Afghanistan working with the Afghan farmers and called us on Skype and said, “I think I have a really great idea for a business that could be really powerful for these farmers.” That’s kind of where the idea started.

     

    Jennifer: Oh, wow that’s interesting. I want to mention this so that everybody is aware; you and Kimberly were both at Harvard Business School where you both earned your MBA.

     

      That’s interesting how that connection came together for you guys. Most of the folks listening are food professionals and so are probably familiar with saffron. Just in case someone who is listening isn’t familiar with it, can you tell us a little bit about saffron? I mean it’s kind of claimed a fame, so to speak, is that it’s the most expensive spice in the world, so why?

     

    Emily: Yeah, that’s the first thing we tell people. It is the most expensive spice in the world. It’s one of the few things in the world that’s retained it’s value over thousands of years, which made saffron very interesting to us.

     

      Saffron itself is the stigma of a Crocus flower. It’s this beautiful, purple flower, each flower has three stigmas. The reason it’s so expensive is that they’re hand picked only once a year, the harvest is in November. Just to give you an idea of the amount of labor it takes; it takes about 150,000 flower blossoms to make just a kilogram of saffron. An enormous amount of labor goes into a very short period of time to get the saffron and process it.

     

    Jennifer: Oh, wow. Yeah, that is a very labor intensive product.

     

    Emily: Mm-hmm (affirmative).

     

    Jennifer: It’s interesting, obviously, because as a social enterprise your mission isn’t just to purely profit from saffron, but that you want to help build the Afghan economy. You want to, as we said in your bio, combat the international opium problem, help sort of bring peace to the region ultimately. That’s a lot to put into one business plan.

     

      I’m curious; when you were at business school did you have business school colleagues or professors or have you talked to potential investors who tell you that what you guys are trying to do with the mission of Rumi Spice is actually too big? That you should just focus on the dollar and cents and the profits part of the equation?

     

    Emily: Yeah, that’s a really question. You know, I’ll be honest; when Kim and Keith talked to me about this initially I was skeptical. I was just like, “Guys, doing business in Afghanistan is going to be so difficult. Are we sure that we can take this on?”

     

      Even I was questioning whether we could do this, but people have actually been really supportive. Kim and I both took a lot of classes at Harvard. One of my particular favorites is called “Re-Imagining Capitalism: Business and the Big Problems” and it’s really all about using business as a force for good, and that’s how we view Rumi Spice. Yes, that it’s for profit but it’s also about making an impact and we don’t think that making an impact and making a profit are mutually exclusive. We’re really trying to do both. We’ve had a lot of support from all of our professors and mentors and the social entrepreneurship folks at Harvard have been great for us.

     

      It’s definitely a daunting mission. There are a lot of different components that we’re taking on. But that’s kind of what makes it fun.

     

    Jennifer: Yeah, so to that end … How do you and your team sort of evaluate all of the logistical components? Because we’re not just talking about a for-profit business with a social mission, but then we’re also adding in international and cultural boundaries as well.

     

      You have a whole bunch of logistical pieces to this business. How do you make sure that each box gets checked off correctly? Then I’ll kind of add to that, do you feel that your and Kimberly and the other folks on your team who come from a military background, that your military training as helped pay off in that regard to that very logistical approach to, okay what are the problems and now how are we going to surmount those potential hurdles?

     

    Emily: Definitely. I think that is one of the reasons we don’t see many competitors coming in for our [inaudible 00:07:18]. A lot of people are just, “Wow, that’s a big challenge to take on in Afghanistan.” I think the only reason honestly we’re able to do it is because of our combined experience in Afghanistan.

     

      If you look at our co-founders we have done a cumulative total of over nine deployments to Afghanistan. Even our legal counsel, Carol, wasn’t in the military but she was a civilian in Afghanistan for two years, speaks fluent Dari. I do think our prior networks, our in-country expertise, all of these things … We built the critical relationships and partnerships.

     

      That is how business is done in Afghanistan. It’s built on trusted relationships. I don’t think without those things in place we could have ever solved all the logistical problems. It took us a full year to really get off the ground, to have all of these things built. It’s something we’re always working on, optimizing, even now.

     

      Yeah, definitely wouldn’t have been able to do it without the military experience and actually being in Afghanistan and building these relationships.

     

    Jennifer: To that end, because you do have a really impressive roster of folks and backgrounds and areas of expertise within your company, were all of those people that you and Kimberly and Keith already had within your networks? Or did you identify that there were certain roles that needed to be filled, and then if you didn’t have that in your network how did you go out and find, you know, a legal counsel who speaks [Dari 00:08:49]?

     

    Emily: I like to say, and many investors just at large tend to say, that really success of a company is less about the product or the idea and more about the team of people running the company. I definitely believe that to be true. I think fundamentally you need to have a CEO who is an amazing leader and who can attract top talent to follow them on their quest, and that’s exactly what Kim has done. She’s just a natural at identifying talent and recruiting them. She was the person who found Carol who’s our legal counsel; she went to Harvard Law School, was a friend of Kim’s sister, so talk about utilizing your network.

     

      We realized very early on, we needed legal counsel and when we met Carol it was like, “This is perfect.” Kim just is fantastic at recruiting people and getting them on board. She was friends with Keith who’s the other Co-Founder who was in Afghanistan actually working with the farmers.

     

      Kim’s really the one who kind of pulled the whole team together. She’s just amazing at seeing the gaps and finding the right type of mentors and team members to bring it, and that’s been crucial. I’d honestly say without the right people it would never have worked.

     

    Jennifer: Then from your role as Chief Marketing Officer, you have to know that you have an incredible story behind your brand. How do you convey that story to buyers and consumers in a way that is succinct and that’s going to resonate with them? Because there are so many pieces to your business.

     

    Emily: Yeah, there are so many. There’s so many angles to our story. I’m fairly new at this; I was in the military for five years, went to business school, learned a little bit about marketing, but really we all feel like we’re making it up as we go, a little bit?

     

    Jennifer: I think that’s entrepreneurship in general, though.

     

    Emily: Yeah, definitely. Kind of building the airplane while in flight, kind of thing?

     

      For instance, I think it really depends on who the audience is. We’re pretty thoughtful about the messaging we use depending on who we’re talking to. When we’re selling to the top chefs and restaurants in the world, which we sell to many of the top restaurants in New York for instance, they care first and foremost about quality, freshness, and the origin of the product. We really focus on that. We do tell them our story, they love knowing that we employ Afghan women and we’re making a difference in Afghanistan, but the first thing they do is they open the saffron and they want to know is it top quality? Is it fresh? That’s how we differentiate.

     

      Buyers and consumers though, they’re a little different. They’re a little less picky about the quality itself. We always put out there that we’re veteran owned and we’re dedicated to making an impact on Afghan women and empowering the Afghan economy. I think that really resonates.

     

      The thing we say … We have two major slogans, if you can call it that, that we say quite often. One is “cultivating peace,” that’s really what we believe we’re doing in Afghanistan for the long term. Then another is an Afghan proverb and it’s, “drop by drop a river is made.” That has definitely been our experience with Rumi Spice. Long term change just does not happen overnight and it is a day in, day out building business and making it happen. It’s slow, but we’ve seen already just in a year and a half we’ve made a huge impact.

     

      We’ve grown our farmer network from eleven farmers, we’re up to now over thirty-four farmers. The processing facility alone, as you mentioned, employs seventy-five Afghan women. We’re getting there. It’s slow, but we’re definitely making a lot of progress.

     

    Jennifer: It’s a beautiful proverb. Again … That resonates for entrepreneurship in general. That’s really beautiful.

     

    Emily: Yeah, I think it is too.

     

    Jennifer: Another kind of marketing question for you; for the average consumer, and obviously average consumer for your consumer base is different than potentially average consumer in middle America. Saffron still isn’t necessarily a common spice in consumer’s pantries these days, in the US at least. How do you work towards demystifying it for consumers so that they feel comfortable paying the price point and then feel comfortable actually using it, as opposed to maybe buying it and then letting it sit in their pantry forever?

     

    Emily: That’s a really great question, and it’s hard.

     

      We launched our saffron in Central Market, it’s a huge retailer in Texas. Kim and I personally went down there to do demos and that was the number one question we got; “Oh my gosh I love your story, great product, what do I do with it?”

     

      Saffron tends to get pigeonholed into this spice that you use in [inaudible 00:13:32] and that’s pretty much all people associate with it initially. We’re really trying to shift people away from this, to get them to understand that it’s a very versatile spice. So many cultures use it in vastly different ways. Italians use it in risotto, Afghans love it in tea. Indians put it in desserts and all sorts of sweet dishes. The French make an amazing saffron [inaudible 00:13:53]. Then obviously Spanish love it in [inaudible 00:13:57].

     

      We really try to use our social media a lot. We’re active on Instagram and Pinterest; always posting new recipes and new ways to try it and incorporate it in your regular diet.

     

      We’ve also been in … We call them “ingredient customers” but the Blue Apron and Hello Fresh. We’ve had our saffron in those and that’s been really great, since people get the saffron and if they’ve never used it before, they’re both getting our saffron, our story, and they’re also experimenting and getting to cook with it. We’re trying to do more of that as well.

     

    Jennifer: That’s a very interesting marketing angle.

     

    Emily: Mm-hmm (affirmative).

     

    Jennifer: I’m going to kind of shift a little from marketing to military. Obviously as all of us who are in sort of the business world know, you hear a lot about military veterans returning to the US and not being able to find jobs. I kind of have a two part question here for you.

     

      The first one is, what would you say to someone listening who is thinking of hiring for a position in their company and might be considering hiring a veteran? I know that we’re painting with a really broad brush here, and kind of being very stereotypical, but would you mind sharing some of your thoughts on what you feel make military veterans exceptional employees?

     

    Emily: There’s so many amazing things about hiring veterans. In my experience, I’ve seen a lot of employers … They just don’t know what veterans are capable of, or maybe they have a hard time understanding their experience. I would caution against, I think people tend to think of veterans maybe as victims a little bit. The media portrays us as PTSD riddled, or the women as victims of sexual assault. I would say those are very, very small numbers. I think most veterans are really amazing.

     

      I think we bring so much to the table. One of them is obviously leadership. I just think we are leading people in complex, ambiguous, very intense situations at a very young age. We’ve got the leadership experience. Strong communication skills, attention to detail. I’d say more than anything else, veterans are just very hungry and we’re very scrappy. We tell people this all the time that if you’re going to start a business, you want a veteran right? Because we have a bias for action. We thrive on having a higher mission and purpose, and working with a team of people towards a common goal.

     

      I don’t think you can say that for a lot of people. I think that’s what veterans really want out of a job when they get out of the military. They want something with a higher purpose. I think we really thrive in team environments.

     

    Jennifer: Then so what about if you’re a military veteran listening and you want to start your own company? In interviews that you and your team members have done for other publications, there’s been a lot of mention of the strong network within the military community and how that can be an asset for military veterans looking to start companies.

     

      For you, do you have any words of advice for someone who may be where you were several years ago and is thinking about starting a business?

     

    Emily: Yeah, I would say a lot of our success is due to our network. I hate to kind of fall back on that, but it’s really true. The first place that Kim and I turned was to our West Point network, and Veteran’s Affairs. We’ve had so much support. One of our investors is Hivers & Strivers, and so they’re an investment portfolio that only backs academy grad owned ventures, which is really great. Because I think there’s so much emphasis on placing veterans in jobs and not enough emphasis on veterans as entrepreneurs.

     

    Jennifer: Mm-hmm (affirmative).

     

    Emily: There are a lot of organizations out there like The Bunker, they have supported us immensely.

     

      I think it’s just really taking the time to map out your network, and get a feel for who could really help you be a mentor in this? Who could help you start? Especially when it comes to fundraising. I think that that was absolutely critical. We really surrounded ourselves with great mentors who gave us just spot on advice along the way.

     

      Also the Harvard network. I mean, being in school while starting a business was just great for us because we had professors who were guiding us along the way, and that was another fantastic network to access.

     

    Jennifer: Great. I realized as we were talking there was one question I forgot to ask, which is is there a story behind the name of the company?

     

    Emily: Yeah. Kim and I were actually traveling in India and we kept coming across quotes by Rumi. Rumi is a thirteenth century poet and philosopher. There’s a little contention over this, but he was basically born in the region that is now Afghanistan, Iran, Pakistan, somewhere in there. We were really inspired by all of his quotes, and he’s just an amazing poet. He was the namesake for the company.

     

    Jennifer: Okay. I was wondering about that.

     

    Emily: Yeah, absolutely.

     

    Jennifer: Emily I really appreciate you taking the time to share your story and Rumi Spice’s story with us. I’m sure that everyone listening agrees that this is a really unique story. You guys have had some really interesting business challenges that are different than the average food entrepreneur might have. But obviously with the team of people you have around you and the network that you’ve built, you guys are well served to overcome all of those.

     

      Thank you so much for sharing your story. Obviously also for bringing just a really, great product to market that is more than just a great product, but also has this huge social enterprise piece of it. Thank you so much.

     

    Emily: Yeah, thank you for having us.

     

    Jennifer: Absolutely. I do want to say, because we are right around Veteran’s Day, also thank you to you and to Kim and to the others on your team for your service.

     

    Emily: Thanks. We loved our time in the military. Wouldn’t change it for the world.

     

    Jennifer: Wonderful. Well, thank you.

     

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    A Follow Up: Brewing The American Dream Competition (PODCAST)
    28:16
    2017-12-20 04:56:33 UTC 28:16
    A Follow Up: Brewing The American Dream Competition (PODCAST)

    About a year ago we aired a podcast about the Samuel Adams Brewing The American Dreams competition and I’m excited today to follow up with last year’s winners, Katy Flannery and Gwen Burlingame who are the co-founders Minus The Moo; a gourmet lactose-free ice cream. One of the things I think makes their story so unique and inspiring is that they won this national competition despite having been in business for only about a year and a half. Proof that you don’t need to be a million dollar revenue business and sold nationwide to win business plan competitions!


    TRANSCRIPT:
    Jennifer: It was about a year ago when I aired a podcast in which I talked to Jennifer Glanville, who’s the Director of Brewery Programs for Samuel Adams, about the American Dream Wildcard pitch room. We’re following up on that initial podcast today by talking with the winners of the 2016 competition. So, Katy and Gwen, they … I’m so excited to have them on today to have them tell us a little bit about their company, but also about their experiences going through the competition. So thank you guys for joining us.

    Gwen: Thank you so much for having us on.

    Jennifer: Absolutely. You know, I just want to start with, can you tell us a little bit about your company? The name is Minus the Moo. So tell us about it, and how it got started.

    Katy: Hi, this is Katy. So we started Minus the Moo because I love ice cream, and growing up, ice cream was a huge part of my life. But unfortunately, over time I started realizing that I was lactose intolerant, so it left this huge void in my life that I wanted a traditional premium ice cream that my friends and family would be willing to enjoy with me, but that was just lactose-free. So I went to my kitchen to start creating a lactose-free ice cream that still made with cream and milk and all the same ingredients as a traditional premium ice cream, but we just add the lactase enzyme to break down the lactose. That way, those who are lactose intolerant and those who aren’t can share the same kind of ice cream together.

    Jennifer: So how did you, can you tell us a little bit about your background, because how did you realize that, hey I can create a premium ice cream product, with using things like the cream, but I can take the lactose out of it?

    Katy: Gwen and I actually, so we went to Villanova University, and that’s where we met and became friends, and I was a nursing major. So while I was sitting through my organic chemistry classes and biochem, learning more and more about lactose intolerance, the lactase enzyme, and all the involvement around that, I was daydreaming about how one day I can have a premium ice cream that was lactose free. So my background in health sciences, and working in the field it gave me the tool kit to be able to identify what was wrong and what I needed to do to fix it, and then subsequently I went to the Penn State ice cream short course back in 2015, and learned more about ice cream. So I already started working on my recipes at home, but going to that program helped give me more tools to be able to figure out how to perfect our recipes to make our premium ice cream taste just like any other ice cream, but just without the lactose.

    Jennifer: So when you were originally developing those recipes, were you doing it with the mind set that you wanted to start this up as a business? Or were you doing it with the mind set that I just want something that I can have for myself at home?

    Katy: So I wanted something I can have at home, but when this is all coming about and when I was in college I would tell my friend how one day I dreamed of making the best lactose-free ice cream that there ever was. And that they would love it too. So I think deep down in my heart I wanted to be able to start a company because it’s not just about starting the company, but it’s also … I used to walk through grocery aisle looking for a solution that I could just pick up off the shelf, take home, and immediately be able to enjoy with my friends. And not have to go through the process of making ice cream at home by myself. And I wanted other people who were feeling the same way to be able to have that same experience. So starting the company, it’s about this journey and it started from my personal experience, and Gwen watching that journey, and that desire to have real ice cream again. But I really just wanted to be able to have other households feel that they could enjoy ice cream together again too.

    Jennifer: And on a personal note, so I have a toddler that has food allergies, and one of the things I was telling my husband the other day is I was like, “Man, right now we can’t have summer ice cream nights” like I did as a kid because of the food allergies. So to hear about a company called Minus the Moo, it’s just so exciting that … You’re going into it not with just like, hey this is a great product, but more about that experience of what does that product do for the family unit or when you’re together with your friends. It’s about that kind of gathering and all being together and enjoying it at the same time. Not, hey let me just go grab my homemade stuff while you eat your thing from the store, and somebody else gets something from somewhere else.

    Katy: Exactly, because ice cream is something that’s intended to be shared. It’s something that you could live without, although I couldn’t live without it. But we think that there’s very few things in this world that everybody seems to enjoy together, everybody loves, and it’s something that just unanimously excites people. So we want family units or friends or something to be able to have that enjoyment together, and so that people feel that they’re living their best life.

    So it’s more than just a company, it’s about the whole mission of bringing back the joy to real ice cream for lactose intolerant consumers and everyone around them.

    Jennifer: Yeah, that is what many summer memories are made of.

    Katy: Yes, yes.

    Gwen: Absolutely.

    Jennifer: So, now tell us a little bit about … Obviously as I mentioned in the brief introduction, you guys are the winners of the 2016 American Dream wildcard pitch room. So tell us when you entered the competition, how many years had your company been up and running? How much staff did you have? Where were you on your business journey?

    Gwen: Yeah, so we had been around at that point for about a year and a half. So we had started the company out of commonwealth kitchen in Dorchester, right outside Boston, or part of Boston. And so we were actually hand making the ice cream. We started at the [inaudible 00:05:55] market, which is in the south end, it’s a farmers market. And so that’s how we really got started. Hand making it, selling it at the farmers market, and really getting to get face to face time with our customers. So we had started [inaudible 00:06:09] and it was still just Katy and I, and so we actually found out about the competition through commonwealth kitchen. Given that Sam Adams is based in Boston, they had kind of put out some information about it, and we were really encouraged by the staff at commonwealth kitchen to apply. So that’s really what kind of got us on the path.

    Katy: But at the point that we had applied, we were in some grocery stores in Boston. We have put together the nuts and bolts for scalability at the time that we had applied. But it was a very short portion of having that active business model to be able to pitch.

    Jennifer: Yeah but I love to hear that, because often times and even after we aired the podcast last year with Jennifer Glanville, I had some folks come to me just saying, I just don’t think my company’s big enough, or old enough. And I think there’s often times this misconception that in order to enter a business plan competition or any type of competition like this, that your company has to meet certain metrics, or be at a certain revenue point, or be at least five years old. So it’s nice to hear that that isn’t always the case.

    Gwen: Yeah and we would say that, I think the thing that we had going for us is that even though we had just gone into some grocery stores, we were in the midst of building the blocks to make it a scalable business. So I think that’s really important, is just even if you’re not there yet, having the foresight and having the plan in place and working towards some specific milestones. I think that’s what really set us apart a little bit as we were kind of told from the judges. So that’s kind of a great thing to have. And at the end of the day it’s really about being super passionate about what you’re doing. and having a clear plan for how you want to look ahead and get to the end goal.

    Jennifer: And the truth of the matter is that even if you don’t ultimately end up entering a competition or winning a competition, having that foresight is really important to you as a business entrepreneur anyway in helping you move your business forward.

    Katy: Oh yeah, we’ve entered a lot of business competitions just because what do we have to lose? Usually there’s no entry fee or if they are it’s very minimal and what better way to get feedback on what you’re thinking, where you’re going, where you’ve been. And just putting it in front of a professional group of people who have done it before and likely seen lots of pitches. We think that it’s been a really good check point to make us better and stronger. So we even continue now to throw our hat in the ring as much as we possibly can.

    Jennifer: That’s a great attitude though, I love it. It is a good way to get feedback if nothing else. And it forces you to always be thinking ahead, which is great.

    Gwen: Absolutely. It’s been super helpful to us. At each different kind of point where we’ve been in a competition or had access to different mentors, just keeps pushing you to get into more detail of where you want to go and really just helps you along the way.

    Katy: And what better competition than the Sam Adams Brewing the American dream. They are the pinnacle of success, especially for us here at home in Boston. Jim Cook and team, when you’re pitching the story, you’re pitching it to someone who’s done it before. And has done it so well, and with such integrity that it’s an amazing competition. So I would encourage anybody to apply, no matter where they think they are because the exposure to this group of people is invaluable.

    Jennifer: So tell us a little bit about this process of applying. How did you go about doing it? Did you apply online, did you create a video? How did you do that? And then how did you think that you made your company stand out and get noticed?

    Katy: So we were sent the application in the notification box in commonwealth kitchen. And then we applied online. And through that application process they then … We did it down to pick, I think it was five companies.

    Gwen: Yeah.

    Katy: And each city, I think each city might have had different amounts of companies that they had pitching in this preliminary round. So after the application round, then you went to the preliminary pitching round, where we went to the brewery here in Boston and pitched against some other awesome companies. And then at the end of that, they evaluated which company they were going to put on to the final round. Which, even for the companies that didn’t get on to the final round, they had a mentorship portion at the brewery where other companies, even if you weren’t part of the program could come in and meet with different members of Sam Adams. And they were in different segments, so either way you knew you were going to get a lot out of that night.

    Jennifer: Oh definitely.

    Katy: And then when we found out that we moved on to the final round, which was awesome. And the final pitch was in December, so October was the preliminary round and then the final round was in December, where we pitched against other companies from other cities. And it was a wonderful experience.

    Gwen: We even learned a lot from the other companies that were coming from other areas of the country. They were in all different types of products, some were beverages, there were other food products. And it was just great to hear experiences from other entrepreneurs, different markets. It really helped us along the way as well. We took a lot of even bare feedback as well as the judges feedback. So it’s a really good experience. And Katy had mentioned that mentorship program in the preliminary round. And that’s actually Sam Adam’s speed coaching events, and so if you go online to the brewing the American dream they have a calendar of events that are not only the competition but also these speed coaching events. And we would encourage anyone to go to those as well because you get access to experts in different categories of the business. So that’s been really helpful as well.

    Jennifer: Oh absolutely, that type of just being able to ask experts those questions, especially some of the more logistical stuff, like when it comes to operations, depending on what your business in like. Being able to talk to somebody about that is huge.

    Katy: Oh yeah and they bring a member of pretty much every team or segment that they have for the business because they want to be able to answer any question that you may have. They have people in finance, accounting, logistics, sales, marketing, PR, advertising, anything you could ever think of like customer relations. They have a representative there to answer all of your questions, and you get 20 minutes of their time, which it’s really, really impressive that they’re willing to take time out of their day to do that. And they’re excited about it. The energy in the room is always very high, you can tell it’s not something that they were forced to do. They want to do it and they want to help, which is great.

    Jennifer: Oh yeah, that sounds fantastic. So what did you do, let’s say between the preliminary and the finals. What did you do to either tweak or prepare for your pitch? What types of information did you anticipate that the judges would want to know about?

    Katy: So when we were prepping for the final pitch, it was really just about practicing, practicing, practicing. And so we took the opportunity to practice in front of friends and family, other mentors that we had come across along the way. Just to make sure that we were thinking of all the possible questions. And also that we had our pitch down to the concise two minutes that we were given.

    Jennifer: Okay.

    Gwen: So that’s really, just continuing to hone and craft the right message is what we did in those couple months.

    Katy: And by doing other pitch competitions, we knew generally there are consistent questions that you can start expecting. For a new company who maybe hasn’t done a pitch competition before, you could probably google them, there’s great resources out there. Ask some mentors or advisors. So we actually also decide who’s going to field what category of questions. And that’s really helpful so that way you’re not, especially if you’re pitching with two people, you’re not fumbling over each other. We know that generally if it’s in a certain realm I take them, Gwen takes another segment. So that’s really helpful, and we practice so much, we can’t underscore that enough.

    Gwen: And it’s helpful to practice in front of … Generally of course we practiced in front of friends and family, but also to bring in someone who doesn’t really know anything about your business. That’s also really helpful because they’re going to have the questions that judges who don’t know you are going to have. And you can make sure that even though you think you’re being really clear, are you truly being clear to somebody who doesn’t know anything about you.

    Jennifer: That is a great point. Yeah we often, thank you, you know we often, because it’s in our head, it makes sense to us, and yeah sometimes it does take … Especially the food industries kind of a crazy world, so talking to somebody who doesn’t know it as well as you do, or even your categories, somebody who doesn’t know ice cream as well as you do, and that category within the industry to be able to answer their questions and make sure it’s clearly conveyed to them is often times different than when you’re talking to somebody who does know the category we well as you do.

    Gwen: Absolutely.

    Jennifer: So I want to talk a little bit about your experiences since winning the competition. First of all, so when you guys won, were your minds just kind of blown?

    Gwen: Yes.

    Katy: Yes.

    Gwen: They were videotaping the whole thing, and you can kind of see us in the audience. And we just looked shocked.

    Katy: Yeah there’s a definitive pause of them saying our names, us understand and comprehending that it was. And then we kind of looked at each other and we’re like, oh what do we do now?

    Jennifer: That’s a great moment.

    Katy: It was really exciting. And I think another thing that we really loved about that moment was even in the just however many hours we had been at the brewery doing this, there had already been this great sense of comradery amongst the other companies. And so between us and the other company, [inaudible 00:16:48] barbecue sauce, won the runner up, everyone was so excited. It didn’t matter if they won, everyone was so excited for us. There were hugs and it was just really nice.

    Gwen: And [inaudible 00:16:59] barbecue, they were all on the west coast, and he just actually inboxed us. He’s coming up to Boston. So even though it’s been months since the competition, we still stay in touch.

    Jennifer: That’s great.

    Katy: It was great.

    Jennifer: So for those listening who don’t know, and I’ll include a link to this other podcast that I keep mentioning, I’ll include a link in the transcript for this podcast if you want to go back and listen to that one. But the winner of the competition gets a $10,000 grant plus a year of mentoring. So I’d love to know a little bit from you about how you utilize both of those resources in your business, specifically the mentorship piece because that’s really huge for a newer, smaller food business.

    Gwen: Yeah it’s been wonderful. Obviously the $10,000 grant was really, really helpful at this stage that we were at. We were able to take that and do a lot more in terms of marketing events to gain brand awareness in New England. We were actually able to hire marketing interns for the summer. So we’ve gotten a lot of really wonderful use out of that. But we would say that the mentorship is by far and away the most exciting piece. And the part that we have gotten the most out of so far, and we’re only half way through that year, which is really, really great.

    We’ve met with different departments at Sam Adams. We’ve met with the finance team, operations, social media and digital marketing, PR, trade marketing, packaging, the list goes on and on. And we got to have a two hour session with Jim Cook recently, which was so wonderful. We were both star struck. It was just so great to get really personalized feedback. He had given us so much wonderful feedback in the competition, but getting to sit down with him again and really hash out some of our more recent challenges was great.

    Katy: And actually the day that we met with Jim, we had found out that we got into a local grocery chain here. And so he wanted to cheers and have a beer with us. And that is something that I will never forget for the rest of my life. Even going into the competition, I’m a huge beer fan, so I never anticipated that he would be at the pitch competition, or the preliminary. I don’t know why, but in my mind I was like, oh they’re so big, he won’t be here. And then Gwen had mentioned to me, she’s like, “Oh Jim’s here.” And I just walked out, I need a minute. Because I was just simultaneously so excited, I needed to have my head on right. So having him believe in our business, and be willing to take two hours out of his day, and I’m sure anytime we ask for a meeting with him, it’s never no, and it’s okay, let’s line up the schedule. So it’s been wonderful.

    Gwen: Yeah, and the other departments that we’ve met with too, they’re busy, they have their own jobs, and just being able to fit us in. And they get excited about meeting with us, which is just so nice. We met with the finance team quite a few times actually when we were just trying to figure some things out with our accounting, and they gave us so much of their time and attention, and I don’t know, that just really meant a lot to us. And it’s been great for us too because my background is in marketing, Katy obviously was a nurse, and so there’s going to be things in our business that we haven’t experienced before. And so having someone in that specific expertise to reach out to and really to talk through the specifics with, has been really, really great.

    Jennifer: Well let me ask you also to kind of tandem to that, so your background’s in marketing, but for example when you talked about being able to meet with the social media team, in my head I was like oh my goodness, that would be so great, because I feel like that world is constantly changing. And just to be able to talk to people who are like, this is how we really work on stuff. Even given your background in marketing, have you found meeting with those teams that you may have had a background in, also to be really helpful for you?

    Gwen: Yeah 100%. Especially I would say, my background is mostly in product marketing launching new products, and so at the company that I used to work in a very large company, where every specific kind of expertise was siloed into a different team. So although I worked with the social media team, I worked with the public relations team, the specifics, and actually the executional piece of it was not something I was so familiar with that I felt comfortable just forging ahead. And so really the more tactical pieces, they’ve been able to help us with, the PR team helped us with how to write a press release. I had done it maybe once before, but always with the guidance of someone was expert at my last company. So I think just getting that affirmation that you’re on the right track with something that you don’t feel like you’re an expert in is so, so helpful. And just like you said, keeping up to date on what’s changing in each different industry or category is wonderful as well.

    Jennifer: So then do you guys have any words of advice for folks who are listening now, who might want to enter, who are thinking of entering this year’s competition. What would you tell them?

    Gwen: Do it.

    Katy: Absolutely.

    Katy: No matter where you think that you are in the lifespan of your company, we would recommend doing it. The mentorship and the access to all of the resources and expertise that you have is invaluable. And you have nothing to lose. So we would definitely, absolutely say just do it, put together the best plan that you have, improve your scalability in your plan and your goal. Prove your passion and just go for it.

    Gwen: Yeah the team at Sam Adams, even from just being in the preliminary the first part of the competition, we already felt that they had welcomed us into the Sam Adam’s family. And I think regardless of whether we had won or lost, there would’ve been people there to support us in some capacity so I think it’s definitely worthwhile.

    Katy: Yeah what she didn’t say was the people who coordinate all of these meetings that we have, we usually go through one of two people who help. We’ll email this woman and say, hey we’re having issues with our brand messaging, and she’ll specifically find these people, match our calendar schedules, we’ll arrive on that day, she’ll make sure that we’re all set, get us to the meeting, all those lists of things. They never stop caring for you and nurturing you and doing your job to make sure that you get what you need. So we can’t speak more highly of this company and the people that they have working there.

    Gwen: Yeah, we would be excited for any company who got to go and do this in the next round.

    Jennifer: Well really it’s such a great resource, especially for food businesses because there are starting to become more opportunities for food businesses with regards to business playing competitions or finding funding, and even mentorship. But even that, we pale in comparison to the tech industry. And I say that being out here in Seattle. It’s so great to hear that Sam Adams, the company’s doing this from such an authentic place, and truly with this desire to help bring the next generation of food businesses to the forefront.

    Katy: Absolutely and we obviously believe and we love food, everything about it. So even for anybody who listens and has questions about it, we would be more than happy to answer any questions that we could. If you just head to our website minusthemoo.com, if you click on the contact us page, you’re going to reach Gwen or I. So we would be more than happy to field any questions, and try and help fuel growth for other companies in food who are just trying to make a difference. So we’re happy to help in any way that we can too.

    Jennifer: Oh that’s really generous, thank you. I’m going to ask you one last question and we’ll bring it back around to minus the moo. What are you guys excited about the most as you look from three to five years out from now, because obviously you do a lot of thinking about the growth of your company. What are you really excited for?

    Gwen: We’re really excited to just kind of get in the hands of more customers that are looking for a solution to their lactose intolerance. Katie’s a perfect example, but if we can help in some way to allow other people to truly enjoy ice cream and other foods, maybe potentially in the future, that’s really what we’re looking for. So right now we’re just trying to grow our business into new regions. We actually just launched E-commerce on our website, so now people can have minus the moo delivered right to their door. So we’re just really excited to be able to help more people around the country to truly enjoy ice cream.

    Jennifer: Oh wow, that is very exciting. Like on a personal level, I’m like, oh that’s very exciting. That’s also a logistical challenge. Congratulations, to be able to ship a frozen product across the country, that takes some work, so congratulations on figuring that out.

    Katy: Thank you.

    Gwen: Thank you, we’re really excited.

    Jennifer: Well I want to thank both of you for joining us today and sharing a little bit about your experiences being part of this competition, and also telling us about Minus the Moo and about what your business is doing now and where you’re hoping it’s working towards bringing it in the next few years. So thank you so much for joining us today.

    Gwen & Katy: Thank you for having us.

    For more information about Samuel Adams’ Brewing The American Dream Competition and small business resources, click here.

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    Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)
    26:14
    2017-12-20 04:56:33 UTC 26:14
    Finding & Making The Most Out Of Your Shared Kitchen Space (PODCAST)

    Finding and effectively working in a shared kitchen space can be one of the hardest aspects of food business entrepreneurship. We talk with Rachael Miller of The Food Corridor in this podcast for tips on how to find a space to work in as well as what you can do to work happily and efficiently in that space.

    TRANSCRIPT:

    Jennifer: We’re talking with Rachael Miller today of The Food Corridor. The Food Corridor connects commercial kitchen spaces with food entrepreneurs seeking rentable, licensed kitchen spaces. The platform includes tools like scheduling and booking, payment processing, and communication to support the ongoing relationship. Rachael, thank you so much for coming on today.

    Rachael: Great, thanks for having me, it’s good to be here.

    Jennifer: So, I want to start with as we begin today, I want to talk a little bit about the Food Corridor, how it works to solve a very real problem in the food industry. You know, what was the impetus for starting it, can you just give us a little bit of background behind it?

    Rachael: Sure. One of my favorite parts about the Food Corridor is our story, it was started out of some academic research, which is I think really exciting to show the merger between academic life and real world, so our founder and CEO, Ashley Colpaart was doing PhD research at Colorado State University and she ended up getting into researching shared use kitchens and community kitchens and the history of them, and stumbling upon this really significant gap that we have in the US and actually around the world, and she found that there are so many … she actually found a couple things. So, there’s this enormous market gap, we found that there are often underutilized kitchen assets in a community that people don’t know about for a variety of reasons and we also found that kitchens that do exist are spending up to half a person’s salary a year managing kitchen clients, doing pretty noxious tasks doing things like invoicing often on paper, calendar management often still on paper, and then chasing down client documents like business licenses and health and safety certifications and really it just seemed like a little archaic and really inefficient, so Ashley was going through her research she really did see this enormous business opportunity.

    And so, we started a couple years ago and we launched officially June of 2016 and we’ve been working to connect commercial kitchen spaces that are licensed in communities with food companies who need to rent out this space to prepare their goods.

    Jennifer: So, you mentioned the term shared use kitchen, so let’s kind of, since we’re going to be talking about shared use kitchens and other components of that today, can we clear up some terminology first, because I get a lot of questions from listeners. What’s the difference between a shared use kitchen, an incubator kitchen, an accelerator kitchen, what do these mean?

    Rachael: That’s a great question, especially for a food entrepreneur who’s looking to jump into a space and maybe they know they need a couple things but they don’t know what they should be looking for, and that’s really common from what we’ve seen. So, the three terms just to break it down, a shared use kitchen is really any kitchen that people can rent out to use or even collaboratively use as a co-op. So these are what we would call co-working spaces. Pretty simple, straight forward, there’s not a lot of bells and whistles. In a simple shared use kitchen, people rent out space, they control their own business, they manage their own market access and they go rent out the space, make their pizza, make their jams and jellies, wash their dishes, and then the kitchen bills them and that’s a pretty standard shared use kitchen model. Once it starts to get a little more integrated with programming, that’s where you start to use terms like incubator and accelerator.

    An accelerator kitchen is shorter term, and this does translate into the general business start up world, too. An accelerator is usually for earlier stage companies they need a lot of hands on touching, they need a lot of coaching to get through the process, this might be someone who has done really well with their salsas, and by doing well, their friends love it and their families love it and they make it really well, but they don’t know exactly how to write a business plan or how to access a larger market or even how to get into that flirts farmer’s market. So that’s what you’re looking for in accelerator, is very defined programming and it’s really time bound. This is often a three to six month program that you’ll see entrepreneurs often graduate from at the end. So, you go in, it’s very intense, you work with professionals to get you to the next level and then you’re done and you might graduate into a shared use kitchen space or maybe you’ll go into an incubator.

    That brings us to our third term, we talked about shared used kitchens, accelerators, and then incubators, which these are for growing and earlier stage companies as well, there is an element of programming and usually one of the greater benefits of being a member of an incubator is there’s an element of credibility that you get from being accepted into this community so you also are exposed to mentors and mentorship. And please know that this varies widely between kitchens, which is why it’s important when a food entrepreneur is touring a kitchen to see if this is the right fit for them that they do ask about resources that are offered by the kitchen and how the kitchen defines itself, really. So, does the kitchen think it’s an incubator, accelerator, and then how does each party define that?

    Jennifer: And so then, kind of back to the previous question, so via the Food Corridor, would you say that most of the kitchens that are listed there and showcased there, are they shared use, are they incubator or a combination?

    Rachael: It is across the board, it really is. We’re working with everyone from a restaurant or a bakery who has some underutilized kitchen space that they’re not running 24 hours a day, and they rent that out to someone who has figured out their business model, they’ve figured out their market, they just need a licensed space to rent and we’re working with some wonderful programs who are full incubators or accelerators. One of my favorite ones that I just blogged about recently is Hot Bread Kitchen in New York, and they work with a defined demographic in New York and it’s people who are still building to eventually find jobs and it’s often in bakeries, so they’re not only figuring out these culinary skills but really life skills as well. So, there’s a social component to it. And that’s, again, that’s not every kitchen. So it just depends on the mission of each kitchen.

    Jennifer: And then just to be clear for listeners, you’re also nationwide, right? So, if there’s somebody listening here who’s from one side of the country and somebody from the other side of the country, they can utilize the Food Corridor. Obviously, there’s no guarantee, but they can utilize the food corridor to try and find kitchen space in their area.

    Rachael: We are nationwide, and we’re also working in Canada.

    Jennifer: Okay.

    Rachael: So that’s an exciting expansion for us, we are not yet caught up to geographically search for kitchens, however I do have a lot of companies, we have a network on Facebook, it’s a private group called the network for incubator and commissary kitchens for shared use kitchen professionals asking questions and kind of collectively answering questions and I have a lot of food entrepreneurs who want to join that group, and it’s really not the right space for them, bu it’s interesting that their primary focus or reason for wanting to join the NICK is they’re looking for a kitchen in their area, which goes back to our first point in that there are so many underutilized kitchens around the country, we’re just trying to be that connector piece. So, at this point I would say yeah, reach out to us, we’re connecting kitchens and entrepreneurs every day. And it is nationwide.

    Jennifer: That’s one of – just to have that resource, because I talk to folks, the biggest hurdle is … I mean you can’t get any of your licensing, you can’t get health permits, you can’t get anything and you can’t figure out your production until you have that space. And so, to be able to figure out that component of it is a huge piece of the puzzle for folks.

    Rachael: Oh I think so, I think that it’s really daunting as well, because food law changes depending on where you are, state wise, county wise, and so to have a kitchen that can facilitate that relationship with the health inspector, to build out a commercial kitchen we’re talking anywhere from 250 thousand dollars upward, and it can go significantly upward. So, it really does help entrepreneurs get on their feet with the lowest startup cost.

    Jennifer: I’m going to ask you a very open ended question because we talked about how there are different types of kitchen spaces but also even within those kitchens, they might have different resources available, and then we’re also comparing different state, county, country health laws. On the whole though, are there any recommendations you have as to what food entrepreneurs should be looking for or asking questions about the kitchen managers as they research to find the best kitchen rental for their business?

    Rachael: Sure, this, boy, this really does depend on what a food company wants out of the relationship and what a kitchen can realistically offer. So, again a lot of these kitchens require a tour before they will take you on as a client, there’s often an application process, there’s a reason for that. If a food entrepreneur is trying a kitchen and they’re trying to figure out what a kitchen could offer them, definitely look at the relationship the kitchen has with their local health inspector. I think that everyone freaks out when you think about food health inspection, it is scary because your business is literally riding on that relationship. They’re not as scary as they seem, health inspectors are there for a reason and it’s a really good reason, it’s to keep your consumers safe and to protect you as a business owner.

    If your kitchen and the kitchen manager can help facilitate that relationship, I think that that is something that is a huge plus for a company. If the kitchen is on good terms with the health inspector, that’s a great sign. If they’re a little maybe skittish about talking about it, or they are not … the health inspector is seen as kind of this evil entity, that might be a red flag for food entrepreneurs. Let’s see, another things is again, looking at what a food business would like to have in a slate of offerings from a kitchen, look at access to information. Is the kitchen manager uncertain about Cottage law or food temperature or sanitation resources. They should at least know where to point you. If they aren’t really sure about food safety resources, you should dig a little deeper and find out why. and then I would, let’s see … if you’re a food company that’s just jumping in, you’re going to ask about business programming, you’re going to ask about relationships in the community, do ask about kitchen growth. See where the kitchen wants to go, are they going to stay the same size they are, or do they have plans for expansion?

    Jennifer: Oh that’s a good question!

    Rachael: That might dictate how long you see yourself in that space. Look at programming, do they invite food entrepreneurs in to do classes for the community? Do they offer business programming for the entrepreneur? We’ve seen some shared use kitchens that have wonderful farmer’s markets, Hope & Main is a kitchen out in Rhode Island, and they have this great farmer’s market and their food entrepreneurs get additional exposure if they also go to the food market. And then resource buying. So, we just had a great question a couple days ago from a food entrepreneur who’s in the Midwest looking for some vegan ingredients, looking for some organic ingredients, which as we all know can be really expensive. And so does your kitchen offer a potential buying co-op option? Can you go in with the other baker who runs the kitchen out for the other hours and all buy your flower together?

    And again, these aren’t all necessities, but that formula depends on what you’re looking for. Honestly, as a food entrepreneur who might just be starting out, you might not know what you need, which is I think very common and that’s okay. It’s awesome that you’re just taking the first step and touring a kitchen to expand your business. So ask about the other clients, see who else is working in that space.

    Jennifer: You know, and I would add, because you talked about for example partnering from a buying perspective with the baker who uses the kitchen in the other hours, and that made me think to the scheduling, what hours is that kitchen or is that table that you would be renting, what hours is it available? Because that may dictate whether it’s going to work for you or not, if the only hours it’s available are between two AM and five AM, that may not work for your lifestyle.

    Rachael: Definitely, yes thank you. That’s really pragmatic. When can you access the space? And some … how do I want to say this. Some kitchens have keyless entry keypads, some actually have hard keys which is a little scary id you lose your key, then you have to replace the whole system for the company. But do ask when you are allowed to be at the kitchen. The kitchens with 24 hour access are a great community asset, and we’re seeing more and more of those, so do ask about that.

    Jennifer: So, you had mentioned … first of all, I want to just bring up, I loved the point that you brought up about health inspectors shouldn’t necessarily be seen as this real evil because they are providing the community with a huge asset with regards to safety, but it does also protect you as a business owner. I’ve always welcomed health inspectors into my kitchens, but I had never thought about it from that standpoint of no, having them in actually protects me as a business owner as well, so thank you for bringing that up, too.

    Rachael: Oh, definitely. Again, it can be really daunting, but the sooner you just jump in and rip that band aid off and talk to your health inspector, the less scary it becomes, and I think that kind of business liability perspective, it’s an essential component to your risk and liability plan. And your insurance company who’s covering your business, this is important to them as well, so this is really a win, win, win.

    Jennifer: Yeah. That’s a great way to look at it, thanks. You had mentioned obviously via the Food Corridor and via the Facebook group, NICK, you spent a lot of time interacting with kitchen space owners of all types. Based off of those interactions that you’ve had, what do you think that food entrepreneurs can do to really help solidify their relationship with the kitchen, the kitchen manager, the kitchen staff … if they find that kitchen they love, what can they do to really build and solidify that relationship?

    Rachael: Sure, this list is so big but it’s so easy. It’s so easy, this is a working business relationship, but it’s also really personal. You’re co-sharing this space and it does get really intimate, right? You’re creating your livelihood as a business owner, and you’re doing it in someone else’s space. So, I would say for you as a food entrepreneur, have your business in order to the degree that you are aware of. So, if you know that you need your business licensing in order, come with your folder of documents ready to show the kitchen manager when you’re touring the space. Be aware of what you’re going to need to offer in that phone call with the kitchen manager, come with your documents, be ready to show that you are ready to cook and ready to sell to the public. And if you don’t know that, come with the questions to ask.

    That’s a good starting point for that relationship. So, again I just think it’s important to understand that this is transactional, you’re paying someone to rent a space, but it is so much more than that. Shared use kitchens are such a key component of community building and of local entrepreneur growth and keeping local dollars in your community, and you can be a part of that if you’re really good tenants of your shared use kitchen. So, I think being as self sufficient as possible within your boundaries is helpful. And I think that the biggest point that has come up from talking to so many kitchen managers is that cleanliness goes a long way. We can talk pie in the sky about community and networking all we want, but you really need to wipe down your countertops. You really need to sweep up your space and be a humble and aware tenant. It’s really going to increase everybody’s experience.

    Jennifer: You know, as you said that I flashed back to this … when I was working a shared use kitchen and it was one of these kitchens where, for example, there’s be multiple businesses in the space at the same time and we basically each had our own little tables to be working on. And just coming in one day with this huge list of stuff that had to get accomplished during my timeframe, and coming in to find out that the person who had been in that space right before me hadn’t cleaned it, I mean there was stuff all over the floor, the countertops, not just for the kitchen managers but for other people who might be working in that space with you and to build good relationships with them. I was ticked off that I had to spend half an hour cleaning this space before I could begin working in it. Yeah I guess it made me think, it’s not just the kitchen managers, it’s the other folks that you’ll be interacting with on a daily basis.

    Rachael: Oh my gosh, that is a great example, yeah. It matters, right? Other people do affect you, and I think we’ve all worked in enough kitchens, or at least a lot of us have if you’re listening to this podcast, it’s really easy to get pretty aggro in the kitchen. We all know there’s really strong personality. But, sometimes you’ve just got to wipe that countertop that somebody didn’t clean up before you and it’s awful. But, then be that responsible tenant, talk to your kitchen manager, you suck it up that day, you wipe it down but as long as you … we’re all adults, right?

    Jennifer: Act like it.

    Rachael: Yeah. So, act like it, exactly. There was a kitchen I just toured in Cleveland, Ohio. The Cleveland Culinary … oh jeez. I’m going to forget their name. Cleveland Culinary Launching Kitchen. And they had several kitchen cooking spaces and there were entrepreneurs there at the same time and it just had such a nice flow about the kitchen. All the entrepreneurs knew about each other, they were excited about each other’s success stories, some of them had graduated recently out of the space, and it really did feel like everyone was kind of high fiving all day long. I think that speaks a lot to the caliber of the food entrepreneurs, as well as the kitchen manager, you can get that sort of culture in your kitchen.

    Jennifer: You know, that’s a good point, the piece about culture because I feel now that I might scare folks away from the multi use kitchen simultaneous use. But also in the kitchen that I worked in, they didn’t have a buying program but basically the entrepreneurs all got together and said, “okay, we’re going to buy from this distributor, it’s a thousand dollar minimum for each order, let’s all go in on this,” so none of us had to shell out a thousand dollars, we could just buy what we needed and then get the delivery. And so kind of created a co-op model ourselves. And it was a wonderful community, you know of course anytime you interact with other people there will always be hiccups that happen along the way, but for the most part, getting into a kitchen like that that has a great culture can do a lot for you as a business owner in terms of resources and getting information, but also it’s nice not to always be working by yourself as an entrepreneur.

    Rachael: Yes. Oh gosh, that’s a great point. I think that anyone who’s launched a business knows that it can be pretty lonely. You’re stuck in spreadsheets at three in the morning or you’re trying to get this business plan out or you’re trying to figure out the best copacker to use, I agree I think that just having those other people in your life who know what you’re going through can get you through to the next step. That’s a great point.

    Jennifer: So we talked about some of the things to avoid, as well as some of the things to do, is there anything else that you can think of like, “hey this really helps.” It sounds like be clean, be courteous are the two big takeaways, is there anything else that food entrepreneurs need to know? I guess and be prepared, which was the other point you brought up of when you go in to talk to folks, be prepared either with your paperwork or with the questions that you know you need to get answers to.

    Rachael: Definitely, I think there are some key offense that really can rub kitchen managers the wrong way and a lot of it is just about inappropriately stretching that relationship, right? It’s very communal, and you might know this person, it might be your aunt, it might be your best friend from the seventh grade who is making quinoa bars now, but really don’t stretch that relationship, this is a working relationship, so if you have a kid policy, a lot of kitchens have an age limit. You can’t bring any kids under 12 or under 16 or none, unless they work for your company. So, don’t let your kids come in and run around the walk-in. Paying late is something that we have tried to alleviate through the Food Corridor through we facilitate invoicing, so all of our invoicing is automated, so we try to help kitchens get their payment on time, so it all goes through our app so it’s all very easy to access.

    And then hogging supplies in the kitchen if there are shared supplies, pots and colanders, and again this is not a resource every kitchen offers but at some point there will be a shared resource such as trash bags or paper towels, or countertop cleaner. And just be cognizant that everyone is working as hard as they can to get their food out the door. Make sure you know your boundaries, so read your contract, I would say that’s probably the number one way to keep things in good order is read your contract, confirm what you’re allowed to use in the kitchen and how much of it and when you’re allowed to use it and just make sure that you’re on the up and up. I think probably a good way to just generally do that is check in, check in with your kitchen manager and say, “hey, we’ve been here a couple months, we love the space, how do you think things are going?” Or, “hey we’ve been here a couple months, you know the company before us isn’t pulling their weight, how do we address this?”

    Jennifer: Yeah, that is, again, that’s a great point. It’s one of those that seems so simple and so obvious, but yet, having worked in kitchen spaces, you can sometimes let those issues get under your skin and get aggro as opposed to trying to address them. Or, I just also love that idea of just approaching the kitchen manager proactively, and saying, “hey we love it, we’re super happy, what do you think, is there anything else we need to be doing or thinking about?” And that goes back to that earlier point of just building and solidifying that relationship with them.

    Rachael: Exactly, yep, it goes a long way.

    Jennifer: Well Rachael, I really appreciate this today, again as we talked about in the very beginning, having this kitchen space to work out of is critical for those food entrepreneurs who are not operating under Cottage Food Laws, it is probably the biggest piece of the puzzle, like everything else can kind of get figured out if not immediately, eventually it can get figured out from packaging and production, processes and all of that, but you need to have that kitchen space, like I said, in order to get your licenses so that you can actually begin selling to the public like you want to. So thank you so much, both for taking the time to talk to us, but also for you working with the Food Corridor to create this resource for food entrepreneurs.

    Rachael: Absolutely, it’s fun to talk about this. If anyone ever has any questions about shared use kitchens or they’re not quite sure where to go, we are happy to talk to you, so even if it’s just a little Facebook chat, or shoot us an email, and we’re ready to talk.

    Jennifer: Well, and again for the folks who are listening, as always in the transcript I will include links to the Food Corridor’s website, and to Facebook so that you will be able to get in touch with them and ask questions and find that kitchen space that you need for your business.

    Rachael: Wonderful, and just a last bit of info, we’re working on a shared use kitchen toolkit to increase resources and kind of templating what shared use kitchen managers might need for documents moving forward if they’re just launching or growing, so stay tuned.

    Jennifer: Excellent, that sounds like exactly what the industry needs, so I’m very excited to hear that.

    Rachael: Great.

    Jennifer: Well again, Rachael, thank you so much for your time, really appreciate it.

    Rachael: Thanks, Jennifer.

    For more great podcasts in this series, check out www.smallfoodbiz.com/podcasts.

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    The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)
    6:43
    2017-12-20 04:56:33 UTC 6:43
    The Simple Marketing Trick One Farmers’ Market Vendor Uses To Keep Customers Coming Back (PODCAST)

    We’re doing things a little differently today with a short podcast about something I noticed recently at my farmers’ market. It’s was a simple, yet effective, way to generate return customers.

    TRANSCRIPT:
    The dirty little secret about Seattle, where I live, is that while yes, it rains a tremendous amount of the time – the Summers here are truly glorious. At some point in June (or, in really bad years, in July), the rain tapers off and we don’t see another drop until late September or October. What’s more, every single day is, on average, sunny and 74-degrees with no humidity. I am convinced this is the only reason why the first settlers to Seattle actually stuck around. The Summers are glorious!

    This means that our farmers’ markets in the Summers are also outstanding. There is a tremendous amount of produce that’s brought in from family-farms that operate less than an hour outside the city and we have a ton of artisans who are doing really unique, interesting thigns with new products. Seattleittes love their farmers’ markets (remember, our famous Pike’s Place Market was one of the first official farmers’ markets in the country!) and for many a trip to the market is a weekly tradition.

    While our markets generate big crowds, the downside from the point of view of the vendor, is that there is also ample competition at the market for those consumers’ dollars. There’s not just one person selling radishes – there are 5 different local and organic farms at my neighborhood farmers market that sell, amongst other things, radishes of all different types and varieties. There is not just one or two people selling desserts – there’s an ice cream vendor, an ice pop vendor, a handpie vendor, a cookie vendor, a gluten-free bakery, and someone selling vegan baked goods. And, right now with berries at the height of their growing season, there are literally 8 different vendors selling raspberries, blueberries, and blackberries. The completion is fierce.

    So the other day I was looking for berries – and honestly was a bit overwhelmed about which farm vendor to choose from. Ultimately I chose one for no particular purpose and made my purchase – thinking that next time I would make a purchase from another one and spread my money around a bit. However, as I was checking out the person working that market stand told me to hold onto the berry boxes because if I brought them back next time I would get a $1 off per box my next purchase.

    That caught my attention. From a consumer standpoint, organic berries aren’t cheap so I’ll take a dollar off where I can get it. This also reminded me though that this is a small operation I was purchasing from as the fact that their ability to recycle their boxes would help their bottom line and the reinforced for me personallyt hat this was the type of small farm I wanted to buying from. Lastly though, in order to get my $1 off I actually have to go back to that exact same market stall to purchase my berries – there’s a very real reason for me to return there and since the anme of the farm is printed on the berry boxes I currently have in my hosue, I know exactly where I need to go.

    This is just one example of great marketing. So often when we talk about marketing we think about things like social media strategies or television ads but essentially marketing is all about getting the customer to remember your name and to come back and purchase from you again. In this case the family farm is achieving this in the simplest of ways by encouraging me to bring my boxes back to them for a future discount.

    Marketing doesn’t have to complicated or convoluted – good marketing is that which is fairly easy for you to execute, is within your budget, and stands out to your customers.

    I’d love to know what simple things you do to keep your customers coming back. Share your thougths and experiences by emailing me at info (at) smallfoodbiz (dot) com. And until next time, thanks, as always, for listening.

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    Breaking Through The Crickets With Food Videos (PODCAST)
    26:35
    2017-12-20 04:56:33 UTC 26:35
    Breaking Through The Crickets With Food Videos (PODCAST)

    You already know that pictures tell a thousand words – especially when it comes to your food products – but what about video? We talk with Brooke Lark about how and why food entrepreneurs should be adding food videos to their marketing strategy as well as how to actually make it happen on a tight budget.

    RESOURCES MENTIONED IN THIS PODCAST ARE LISTED BELOW THE TRANSCRIPT

    TRANSCRIPT:
    Brooke Lark has worked as a professional food photographer and videographer for 10+ years. Her clients include General Mills, Nature Nates, Good Cook and KitchenAid, and she’s become one of the most well-connected and trusted foodies in the industry. Her work has appeared in dozens of cookbooks, magazines and digital publications. When she’s not playing with her food, you’ll find her mountain biking steep canyon trails in stunning Salt Lake City, Utah.

    Jennifer: Brooke, thank you so much for joining us today.

    Brooke: Thank you for having me Jennifer. I’m so glad to be here.

    Jennifer: I’m so excited to be talking about the video side of the food world, because that’s just one way that we can all make our food products look amazing. I’m going to be really upfront at the beginning here and let you, and let all the listeners know that I am an absolute total neophyte when it comes to video. Just, again, start at the ground level. For a long time food entrepreneurs, we know that food photography’s really important, but what about this added component of video. Why should we be thinking about adding this to our marketing bag of tricks?

    Brooke: Good question and I’m so glad that you’re a neophyte, because those are my favorite kinds of videographers to talk to. The first and foremost answer to that is that you should be thinking, you shouldn’t even be thinking about adding food video. You should be adding food video period is the single most powerful way to get your brand in front of people, because every single algorithm on every single channel is designed to capture the attention economy. The algorithm is weighted more heavily to benefit food videos, or videos in general, but, of course, we’re in the market, the business of food. So, adding food video to every single one of your social channels is not only a way to expand the messaging to your audience, but it’s a way to beat the algorithm that sometimes feel like they’re working against us.

    Jennifer: This sounds so obvious, but now in my head I’m like, “Oh, so that’s when I go on Facebook now all I see are videos coming up.”

    Brooke: Yes.

    Jennifer: That seems so obvious, but, okay. That makes sense.

    Brooke: There are so many food videos in the Facebook feed, because people love them. I always tell students of my classes that food video is the ultimate opportunity to give people both an escape from their regular work-a-day lives and a voyeuristic experience of being in our kitchen and having this experience that they are not having, because they’re sitting in a cubicle. We know that most food video, well that most video is watched with the sound turned off. The assumption is that most people are sitting at work, wiling time away. You’ll see a lot of videos on Facebook particularly will have the lower thirds, they’ll run captions so that you never have to turn up the sound. Food is such an obvious way to peek into another world without ever needing to turn on any kind of sound. It’s become just a hugely popular format, but it’s also a hugely successful way to boost your metrics, to boost your reach and to really get people, your brand in front of people in a way that food photography doesn’t even touch.

    Jennifer: I can see also how food video, and again, based on your experiences, correct me if I’m wrong, but how food video would, could also make let’s say that your food product used in a recipe, if you’re showcasing that in a video it makes it more approachable than … I mean, food photography, don’t get me wrong done well is absolutely gorgeous, but is sometimes doesn’t look like I could ever attain that when I make it at home for my toddler versus some of the food videos that I’ve seen, it makes it look tangible. Like, “Okay, there’s basically six steps and I can do this too.”

    Brooke: Yes. I think as brands too there’s this extension of what you’re saying, which is as a brand almost always one of the most important things that you are trying to do with your brand is educate people. How do you use it? Why do you need it? How do you work it into your life? Conveying that in a photo is often significantly more tricky than just inviting people into an idea that suddenly becomes incredibly accessible, because like you said, “I am sitting here watching it, in 30 to 60 seconds there is this meal.” Now, what’s at the front of your brain is this idea that was made with your brand. Instead of this picture with your brand popped up next to it and that tends to feel a little more advertisey than video.

    So, video is a really organic way to say, “Hey, look at how approachable this is. Look at how much you need this in your life. Look at how fun this,” and you’re entertaining along the way. Lots of buckets are being checked from a marketing standpoint, from a social media, and a conversation standpoint, and from an education standpoint for your brand as well.

    Jennifer: It’s like the trifecta for brands. It’s like what we all-

    Brooke: It is.

    Jennifer: … aspire for.

    Brooke: Yes. It really is.

    Jennifer: I’d love to know a little bit from you, about how did you get into doing video and when did you realize that this was something that you needed to add to your repertoire?

    Brooke: Great question. I have been a food photographer for nine years and I work with a variety of brands and about a year and a half ago I kept noticing, in several food photography forums that food photographers would pop in and say, “I have a food video going viral.” In the world of photography and content creation virality is really what we use to educate and drive our creative and editorial decisions. It became really interesting to me that it was turning less and less about just posts going viral and more and more about video going viral. About the same time Facebook had updated their algorithm and it was clear that video was really the way to start reaching a mass number of your page fan. I panicked, because I am not, I mean, I can wield a camera, but I am not, I do not consider myself a filmographer or a video person. Tech just absolutely, I’d rather be laying catatonic on the floor than learn new tech.

    I said, “Okay, I know that I have to do this. It feels scary and impossible and overwhelming. My life was already so busy with a full client list.” I just did not know how I was going to do it, but I actually have a 19 year old son who had taken several Adobe courses and become certified in them during high school. He was actually leaving for his job in 15 minutes and I said, and I knew that I would not have the attention span to actually pick this up if I had to sit down for a long course, because those workshops can be two, or three, or four weeks and I just, I cannot learn that way.

    I said, “Go get your uniform on and I want you to teach me everything I need to know to film this video.” So we did in 15 minutes, we shot 2 videos, we pulled them onto my laptop. He said, “Click here, click here, click here.” Just unlocking the basics made it feel at least accessible. From there, I really fell in love. It ended up being just an even more profound form of creative control and being able to create messaging and a story.

    Then, of course, you put it on your social media channels and people respond to it. So, it’s so much more satisfying to get a video up than a post or photo up. So, there we go. Now, every single post that I put in my own site and on the majority of client’s sites are combined photography and video, because it’s almost a waste to just do photos anymore. If we are going to do a recipe, or run a new product, or a new idea, or if we are trying to educate we will always consider video first over just photography.

    Jennifer: That leads me to my next question. It sounds like, obviously if you’re considering them both in tandem at the very least that there are some real results with this. For example, when you put a video up on social media, you’re seeing likes and eyeballs on it more so than potentially just your average photo-

    Brooke: Yes and it’s not just likes. You’re going to see immediate increase in reach. You’re going to see an immediate increase in shares. Video naturally, again it beats the algorithm, so you’re naturally going to get in front of more people, but the question that I find a lot of people ask is, “Then what does it do for my brand and is there even click through?” And yes, there is. From every single video that I have posted on my own site and on client sites that has gone viral, the attrition rate of click throughs has remained steady for up to two years.

    Jennifer: Wow.

    Brooke: For instance, last year for one of the brands that I work for we created one pot pasta. We knew that one pot pastas were trending. They wanted to feature a pan, so I said, “Let’s take this pot that you guys want to feature, we’ll throw it together, we’ll create an Amazon link to this product, and a link to your blog so that people can come and get the recipe.” We created the food video so that it would say, “Chicken,” but it wouldn’t say how much. We encouraged people in the way that the video was created to need to click through to print the recipe. That post to, was bringing in so before this time their blog would maybe have 1,200 to 1,800 views a day and as soon as that video went viral, we were seeing anywhere from 10,000 to 20,000 click throughs for a week straight.

    Jennifer: Wow.

    Brooke: Then, that number has paired down about a week and a half in to somewhere around 5,000 and that 5,000 stayed strong for another month. From one video, right?

    Jennifer: Yeah.

    Brooke: To this day it’s still the top viewed post every single day. I’ve seen those same numbers on my own site where I’ll see 3,000% increase in numbers of views and those numbers will remain steady for several days if not several weeks depending on how I’m sharing it and where I’m sharing it. It’s almost like you can’t afford not to do video. It’s such a profoundly more accessible way to get your ideas and your product in front of people’s eyes. The results are phenomenal.

    Jennifer: Honestly, perfect segue into my next question, because the listeners for this podcast series, most are smaller food entrepreneurs who don’t have millions in marketing budget and when we hear video we automatically think dollar signs and even if you’re saying we can’t afford not to do, but the reality is we’re also constrained by our budgets. Somebody might be wondering, how are we going to afford to pay a team to create this video for us? Is this something that we have to outsource to an expert? I mean, once I have the money I’d love to outsource it to an expert who can do this for me, but in the short term if the budget isn’t there, is this something that food entrepreneurs can learn to do themselves?

    Brooke: Yes, really good questions. I would say that the first thing is yes, video can feel really terrifying and the going industry rate, budget wise is about $2,000 per minute of video. You’ll see that most video, food videos, if you’re running them on social media than the need to be under 60 seconds. Maybe you would assume that you have a $2,000 budget; however, one of the best things about food video is it doesn’t require a team. It doesn’t require a significantly high level of after effects or special effects. The actual base cost of most food video is quite affordable and you can find food photographers and food bloggers and I would never hire someone to shoot a recipe video that is not recipe centric in their art. That is the first thing, do not Craig’s List this. Do not just look for a film graduate down the road that has a fancy camera. That’s not what you need. You need someone who can style food, who understands the metrics behind the kinds of recipes that are worth developing, that are typically assumed to be going viral. There is a little bit of an art to it.

    You can actually outsource for anywhere from $500 to $1,200 for just a standard tasty style video. It’s not as inaccessible, I think price wise as you might guess, especially considering that you can share and share and share across multiple channels and it will work for you. Now, with that said, if you want to do it yourself it’s surprisingly possible. You need a table. You need a really beautiful source of diffused directional light from a window and you need at least one camera. The Cannon, lower end T2is, and T3is, and T5is, and T6is. Those you can actually purchase at Costco for under $1,000 with a standard lens and you’re going to come away with great video.

    I actually run a food photography group where several people have come up with some beautiful iPhone videography. It is possible to make it incredibly accessible. I think that there’s always a learning curve. That’s the benefit of outsourcing, is someone can walk you through and hold your hand and make it go away. If you have time for a learning curve and you don’t have time to hire someone to do your video for you, oh yeah, it’s a totally doable learning curve.

    Jennifer: So, actually, something back for a second for the outsource piece. Question about, because you had mentioned the, both the importance of photography and the videos. If you were looking to hire somebody to do a video for you, would you also, and assuming you had the budget for it, would you also look for somebody to do photographs of that same-

    Brooke: Yes.

    Jennifer: … recipe, plate, whatever you’re doing and combine it all into one afternoon.

    Brooke: Yes. Absolutely. I am a huge fan of cycling and recycling through content. I feel like if you were going to pay someone to go into the studio for you, you get video and you get photo and you have them get all of the angles. I can actually send you a list if you’d like of the specific angles that I think are really important in a shoot. Maybe you’re going to pay $100 or $200 more, but you are then going to have enough content to run ads, to run, excuse me, images on a variety of different social channels from Pinterest to Instagram. All of these tools that we have that are really, if not free, they’re very, very low cost ways to start building a visual image for your brand and interacting with fans and getting your brand and again, the education of your brand in front of people. Yes, I think that combining … If you are going to pay someone to create a food video, then make sure that you also get photography from that shoot.

    Jennifer: Perfect. I’ll just make a note for folks who are listening, I’ll include, when you go to the transcript for today’s podcast, which you can find at smallfoodbiz.com, I’ll include that information that Brooke just mentioned about the different angles. I’ll also make a call out for, some of the cameras that she just mentioned. You’ll be able to find it in the transcript, but if you’re just looking for real quick, “I just need to get this info.” Obviously, there will also be a link to her website as well.

    Because I did want to mention, speaking of learning curve and trying to learn something well, but learn it within a manageable time period, because most of us as food entrepreneurs don’t have weeks to dedicate to learning an entirely new craft. I did want to mention that you offer a 90 minute, I love that you call it a crash course, it just seems like … Again, the listeners know this, it’s like I’m a mom. I have a toddler. I’m running a business. I do not have hours, 90 minutes.

    Brooke: I know. That was the whole thing is when I started, I managed this food photography group. It is growing so quickly. The only way that people had, they had all of these questions in food videography and food photography can feel so hard, so confusing and far off. Like you said, when you’re a neophyte it’s, it feels so far away. Just, again, going back to my own learning curve it’s like, “I am a busy person. I don’t have weeks to dedicate.” I was like, Let’s just create this really, really accessible way where it is the hot, quick, and dirty guide to get up and running and it is created for brand new videographers and food photographers. If you have never purchased a camera, I will walk you through. You are welcome to come in and talk to me on my, in my Facebook group, because it’s … If I didn’t have someone to hold my hand I would have not been able to even access this skill. It really is surprisingly accessible. Yeah, 90 minutes, done.

    Jennifer: Perfect. Again, there’ll be a link to that course on this site. As always, I just want to make it clear that this is not an affiliate link and I’m not getting compensated for this. I just think this is a really good resource for food entrepreneurs, especially those who are looking to include food video into their marketing repertoire, but may not yet be at the point where you can afford to outsource it to somebody else. They’ll also be a coupon code. That coupon code is SmallFoodBiz with the S, the F, and the B all capitalized and then the number 50 after it. I’ll include that in the transcript as well.

    Brooke: That’s $50 off, so …

    Jennifer: Great. Thank you.

    Brooke: Pop through.

    Jennifer: Thank you. Brooke, you talked a little bit about obviously, you had your 19 year old son help you, but again going back to this learning curve, was there one or two mistakes when you started in the video piece that still stand out to you as great lessons learned?

    Brooke: Oh, yeah. Those are some great questions. Yeah, I would say that I did not realize how much of, I had to learn how much of the video needed to be fixed in post. Once you video it, I would pull it in and then go through all of the process of editing it and exporting it and then I would say, “Well, I pushed it live and it’s not very clear, or it’s not very bright.” Learning that there is actually a significant amount of post processing required and just like you would filter a picture to get the right look or to pop the colors that you need popped or whatever. Video is the very, very same. Learning that process and learning what I needed to apply to make my videos look really high quality, I would say that that was one of the mistakes that I made from the beginning just because I didn’t know.

    The other mistake is filming in the winter is just a pain in the head, because you have the cloudy day and the light will come in and come out. I had to learn … how to either … check the, my exposure, so that the shots were the same from shot to shot to shot and/or set up an artificial light setting, which I tend to shoot only natural light. I really recommend it. The coloring is just so much more beautiful, but finally saying, “Okay, I need an artificial light thing,” was the answer to the winter shooting mistakes.

    Jennifer: I’m thinking as you talk about cloudy days, I’m based in Seattle, that gives us maybe two and a half months where we can shoot anything here.

    Brooke: I know. Well, you might be okay, because diffused is okay as long as it stays diffused, but it’s when the sun will start blinking in and out. Your shots, you know, you’ll be pouring milk and all of a sudden the sun will come out as you’re pouring and all of a sudden you can’t see anything, but a totally bright screen, because the exposure just gone. Diffused stays good you may be-

    Jennifer: I’m golden.

    Brooke: … in the best place ever.

    Jennifer: Yeah, we never see the sun. We’ll be fine.

    Brooke: Okay, good. You’re stoked.

    Jennifer: Brooke, I really want to thank you. For me personally, you’ve made this seem a little less scary and a little bit more approachable. Also, I think just reinforced for me the importance of doing this, because you’re right, this is all I’m seeing when I’m going on social media so shouldn’t I be doing something similar if I want those same type of results?

    Brooke: Yes, for sure. I think that that’s one of those things too where you see it. You always see the front side of things coming through your feed, but you don’t necessarily see the backside. For instance, there are a couple of bloggers last year who just started adding video to their pages on Facebook. So, this is Facebook specific, but again, every single social media platform is designed to support video and to boost your video. Anyway, several of them who just started adding video last year grew their multitudes of stories where they grew from 10,000 followers to more than 1,000,000 followers in less than year. The results are quick and fast. The results are generally, fairly sustainable, especially compared to that feeling of sometimes you put so much out into the void and you just never hear crickets back. Through video’s one of the fastest ways to really break through the crickets.

    Jennifer: That’s perfect. I love that, breaking through the crickets. That’s what the folks … that I talk to that’s our struggle, because as smaller food producers who don’t have the millions of dollars it’s, how do we break through the crickets and how do we get noticed by our target audiences? Thank you for sharing this.

    Brooke: Yes, absolutely. Please you or your listeners, I am always available. It is a passion of mine to get people up and running to help answer questions. I’m an open book. I will send you a link to my food photography group, so if someone does want to get started and need help, I’m absolutely here to support.

    Jennifer: Great and you know I will say, I personally joined that group, just because I wanted to see what was going on and I found it, I have found it really interesting to read about what folks are doing on the food photography world. It’s just giving me, even though I don’t ever plan to go out and professionally photograph food, it’s just given me some really interesting insight into things to be thinking about and how to do it and different ways to do it.

    Brooke: Good. I think that anything that gives you more fluency in a topic helps you understand better what to ask for, what you really need, what you don’t need. I’m glad. I’m glad that you’re finding it useful.

    Jennifer: Yeah, so thank you Brooke. I appreciate it. Again, to the folks listening, I’ll have it broken out on the transcript where we’ll have the transcript for this podcast, but then I’ll also breakout some of these resources that Brooke was talking about and call them out so they’re really obvious if you just want to go over there and quickly click on those and get that information.

    Brooke: Wonderful.

    Jennifer: Brooke, thank you for your time today.

    Brooke: Thank you. I look so forward to continuing to work with you guys. This is so fun.

    Jennifer: Great, thank you Brooke.

    RESOURCES MENTIONED IN THE PODCAST:

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    The Cottage Food Industry – Today & Tomorrow (PODCAST)
    38:07
    2017-12-20 04:56:33 UTC 38:07
    The Cottage Food Industry – Today & Tomorrow (PODCAST)

    David Crabill of Forrager.com, an expert on home-based food businesses, and I talk about where the cottage food industry in the US stands today and where he thinks it’ll go in the future.

    David Crabill is the co-founder of Forrager.com, a website solely focused on the cottage food industry, which is a term used to describe home food businesses. Since the cottage food industry was created via a collection of state laws, there is no official government organization to help organize or improve it. Forrager seeks to organize and improve the resources available for this growing group of small, independent cooks.

    On the culinary front, David has been making chocolate chip cookies since he was eight years old. While trying to start his cookie business in 2011, he learned about the cottage food industry and created Forrager to help others get their home food businesses off the ground. When he’s not developing websites, perfecting recipes, or answering cottage food questions, you can find him solving puzzles, traveling, and speaking at a Toastmasters meeting.

    TRANSCRIPT:
    Jennifer: So, welcome, David. Thank you for being on today.

    David: Oh, thank you so much for having me.

    Jennifer: So, we’re talking about cottage food and the cottage food industry today, but just to, again, lay the foundation, let’s start with basic terminology and basically, what does this phrase, cottage food, actually mean?

    David: Cottage food is an interesting term because there’s no technical definition for it. It’s just the term that people have started using over time. But generally, when I use the term cottage food, I’m referring to somebody’s homemade food that they’re selling. So, that’s pretty much.

    Jennifer: Okay. So, the home-based food producers, basically.

    David: Yeah. I mean, there’s a commercial food space where people are selling food that’s made out of a commercial kitchen and then the cottage food is basically for people who are selling out of a home kitchen.

    Jennifer: Okay. Now, within the cottage food industry, can you talk a little bit about how there is not federal oversight of this law? We’re talking here in the U.S., I just want to make that clear, for folks who are talking in the U.S. today. Other countries might have very different rules and regulations when it comes to home-based food production for sale. So, there’s no federal oversight in terms of cottage food, correct David?

    David: Right. Many people don’t know, but the Food and Drug Association, the FDA, produces a food code, but states adopt whatever laws they want when it comes to food loss.

    Jennifer: So, for this cottage food industry, it’s a state by state basis, right?

    David: Right. So, in the food code that the FDA publishes, there actually is no allowance for selling homemade food. It’s illegal in that document. So, states have to override the food code that they adopt and specifically allow these homemade food sales on a state by state basis.

    Jennifer: Can you share with us at a high level like what you’ve seen changed in the cottage food landscape in the last couple of years? Because as you and I have talked prior to today’s interview, you know, you’ve mentioned that there’s been a lot of changes in cottage food over the last probably five or seven years.

    David: Right, and it keeps evolving. I’d say that the cottage food industry started to develop about a decade ago when the economy went downhill. A lot of states started to enact these cottage food laws to enable homemade food sales to actually allow people in their community to use something that they had, their own kitchen, and make some money by selling food. So, that’s what got the ball rolling, I’d say, probably the recession in the United States and since that time, most states have enacted a cottage food law to allow some form of homemade food sales, although those laws run a gamut. There’s all different types of ways that states allow the law.

    Jennifer: So, within that, what have some of the most liberal things that you’ve seen states allow and then the counterpoint, what are some more would be considered conservative or restrictions that are placed on cottage food entrepreneurs?

    David: Right. So, in terms of liberal things, that reflects back to the last question in terms of how cottage food laws have been changing, so even though a lot of states have enacted a cottage food law, in the past few years, we’ve seen yet another transition into what’s been termed food freedom and that is basically people openly questioning the government’s right to have any say over whether people can sell homemade food. So, to give a little bit of background, the cottage food laws typically come with restrictions. You can only make certain types of foods, you can only sell in certain types of places, but the Food Freedom Movement is really trying to take all the red tape away and prevent the government from being able to stop someone from selling their homemade lasagna to a neighbor.

    Wyoming is the first state that implemented a state-wide food freedom law. So, in Wyoming, you can sell almost anything with the exception of red meat. You could even sell chicken pot pie or something that would be banned in almost every other state and that’s got to be one of the most liberal things that has come out over the past 10 years. But at the same time, a lot of the liberal things that I’ve seen, such as Alaska, allows a lot of different kinds of food and they don’t have very much government oversight. But those laws, Wyoming and Alaska also have very few people who are using the laws. So, it’s possible that the most liberal things that have actually happened come from states like California and Colorado that have added a lot of allowances still with government oversight, but they also affect thousands of people.

    Jennifer: Mm-hmm (affirmative). Yeah, you know I was thinking as you were talking twofold. One is that I’m originally from Wyoming and so as you were talking, you know, I’m like, “Wow,” when I go home to Wyoming I want to talk to some more folks back there and see what they’re thinking and how that impacts them, but you’re right. I mean, the joke in Wyoming is that four-legged animals outnumber humans in four to one ratio. But as you’re talking about California and Colorado and allowing allowances, like here in Washington State where I’m currently based, when our cottage food law was first enacted it was really restrictive and over the last couple of years, they keep evolving it and keep opening up what types of products you’re allowed to sell, how much revenue you’re allowed to make. So it’s been interesting to watch that rule evolve over time, which is another thing, you know, for folks to just be aware of that hat you see written down today might not necessarily be the same thing next year.

    David: Right. It’s great when food laws keep getting amended. That’s been most clear in Colorado. They’ve amended their cottage food law I think each year for the past three years and they’re really one of the standards now for cottage food very recently because they’ve removed a lot of the restrictions that were initially in their law whereas Washington, while their law has evolved, I’d say it’s still very restricted. Washington is one of those places that could make huge strides in the cottage food space because it would impact so many people, but the reality is that very few people are actually using Washington’s cottage food law because it just doesn’t make that much sense for people to do it because of how restricted, and expensive, and complicated it is.

    Jennifer: Oh, absolutely, especially again speaking personally when compared to our neighboring state Oregon, which at least looking at it from the perspective of a Washington resident, Oregon is pretty liberal in comparison in terms of how much they allow their residents to make as cottage food entrepreneurs where they can sell their products and how they can sell their products.

    David: Right.

    Jennifer:So, for some folks, the idea of starting a food business out of your home versus finding and renting kitchen space really sounds ideal. Based on your experiences and your conversations with home-based food business owners, what are some of the benefits of using a home kitchen for your food business?

    David: I think that people can pretty readily see some of the benefits. For instance, if you’re a stay-at-home mom or dad, just being able to stay at home with your kids is a massive benefit. Just being able to work at home and also be able to be with your family is a huge, huge advantage of the cottage food laws. Also, most people have a home kitchen that they can work from, they already paid for it. So, the fact that it’s free is a massive advantage because a commercial kitchen can sometimes run $20 to $30 per hour to rent it out.

    Jennifer:So while that all sounds great, are there challenges in working out of a home kitchen?

    David: There are definitely challenges. I mean, for one, the home kitchen is built for residential use. It’s not built for … it’s built to make food for a family, it’s not built to make food for 100 people at a farmer’s market. So, just the fact that it’s a very small kitchen severely limits people into how much they can make and also the laws themselves had a lot of restrictions on the home kitchen simply because the cottage laws typically come with restrictions about what you can make. So, a lot of times people will choose to forego the cottage food laws and use a commercial kitchen if they want to make a certain item or if they want to sell in a certain way.

    Jennifer:So, speaking of challenges, I’m also wondering about … so those products that are allowed to be produced in a home kitchen are produced in a home kitchen. How does the average consumer respond to this? Do you find either historically or has this changed over time, has there been challenges in home-based food entrepreneurs gaining the trust of consumers if the consumers know that the product is produced in a home kitchen?

    David: It’s so funny because that’s what I would have initially expected and I’ve noticed a lot of people who are diving into the space and starting up their own cottage food operations. They also are concerned that people will not trust their products because they’re using their own home kitchen. In reality though, I’ve noticed that it’s typically an advantage for people to advertise that they’re using their home kitchen because most of us do eat homemade food. We make it ourselves at home or someone else makes it for us and we don’t get sick. You know, it’s perfectly safe. So, I think that most people want to help small business, small producers, people in their own community and the actual consumer perception, there’s not a level of distress that people often think is going to be associated with producing from someone’s home.

    Jennifer:Well, that’s great news.

    David:I would also add that it actually is pretty safe. I mean, there are horror stories about commercial kitchen sometimes and I don’t know if you’ve seen commercial spaces, but I’ve certainly heard from a number of people who have worked in commercial kitchens that were rented and it’s not necessarily safer or cleaner or any of that than a home kitchen space would be.

    Jennifer:Yeah. I’m sitting here nodding my head because I’ve worked both in restaurant and bakery settings and then I’ve also worked in shared kitchen spaces or kitchen incubators and of course, everyone is different, but there you definitely see things that raise eyebrows and make you a little bit concerned from time to time. So, absolutely.

    David:Right. It’s interesting because people like to hide the fact that they’re using their own home kitchen, but I think that’s generally just advantageous for a cottage food operation.

    Jennifer:Again, that’s great to hear because that’s the one question that I get asked a lot about is, should this be something I advertise or not? Again, here in Washington State, we actually have restrictions that you have to advertise it on your packaging and not every state has that, but folks are concerned when they have to disclose that. So, it’s good to hear when you don’t see that as being a disadvantage.

    David:Yeah, and it’s funny how, I think, people’s perceptions of what they need to do are oftentimes to what is actually important. I’d see a lot of cottage food operations who think they need to be really thorough about what they put their labels and I need to think about every single ingredient that’s listed out and in reality, when most people come to the market, maybe unless you’re living in a certain area like the bay area or Los Angeles or something, but for the most part, people are pretty trusting. They come to the market, they try something, try a sample. They don’t look at the label. I think that people can get really anal about what they are doing when they’re trying to start a food business, but a lot of those things just don’t matter in the big picture.

    Jennifer:So, you just mentioned, for example, farmer’s markets being one sales channel that you see cottage food entrepreneurs use and again, the caveat here being that every state has different regulations around where cottage food entrepreneurs are allowed to sell their products. But do you see certain sales channels used with success amongst cottage food operators at a high level across the U.S.?

    David: Yeah. Certainly, the cottage food laws have been successful for some people, so we know that there are sales channels that work. I’d say that it’s not a blanket answer of one sales channel is better than the other. It completely depends on what someone is selling. So, for instance, if someone is producing custom cakes, the best sales channel for that is typically doing direct sales out your home and using Facebook to promote your business and getting referrals from friends and that has been probably the most successful type of cottage food operation in terms of how much they’re selling, but if you’re doing something like selling peanut butter or nuts, then a farmer’s market might be a better place for you to be selling those things because you’re in front of a known audience or a known market and you have people coming by and buying those things.

    So, I’ve seen a variety of different sales channel work well. I would say, I’d actually add to this, that a lot of times, people want to sell online and they think that that’s going to be the secret key to their success in business and I think people overestimate the capabilities of their online presence. I think that people think that they’re going to sell a whole bunch of stuff if they can put their product online, but I actually see that as being one of the least successful sales channels for people who are just starting out.

    Jennifer:Yeah. I’ll concur with you there, not just from a cottage food standpoint, but I see this a lot with, you know, those products that are made in commercial kitchens and they’ll say, “Oh, my sales strategy is that I’m going to be selling online.” It’s like, then do you have a really strong online marketing strategy to support that? At least at farmer’s market, as you mentioned, folks are going to walk by your both and see you, but how are you going to get people to find you on the internet and in amongst millions of websites that are out there? It can just be really hard if not impossible.

    David: Wait, and it’s not just a matter of getting eyes because I’m a website developer, I know that there are people who will just somehow find a website. I don’t know how, but you put a website up and you’ll get traffic to it. So, you can generally get traffic in many ways through advertising or what have you, but it’s a matter of developing trust with people. Typically, people have to have a strong sense of trust towards a person or a brand before they’re willing to pay for something and this concept is someone’s just going to run across your product and buy it is hard to do if you don’t have some level of trust established either through your own presence in your community or through maybe online reviews on Etsy or something like that.

    Jennifer: So, with you then say, my next question was going to be for you, what do you think the key thing is for home-based food entrepreneurs to build successful business? You just mentioned trust. Do you think that that trust component is … is that key to success or are there other things that you see as being really critical?

    David: Yeah, my answer to this question has changed quite a bit over the last few years. I think initially, I thought the key to success of business would be what product do you have? How good is it? How good is your recipe or what’s your marketing like? How’s your product packaged? That’s going to be the key to success, but I’d realized that the key to success, I mean, it ties in with the trust concept, but it’s really the entrepreneur themselves that are the key to the success of the business. I say this because I see a lot of people make the same mistake over and over again.

    I think, generally, people who try to enter this space and become a cottage food entrepreneur, they like doing their own thing and they also don’t [technically 00:18:59] want to be the face of their business. They want to hide behind the scenes, they just want to make their food and however it gets sold is great, but they don’t really want to be on the center stage. I think that’s actually the exact opposite approach that someone needs to take when they’re starting a home food business. People will hide behind a curtain and say, “Oh, I’m working on this secret thing and I’m not going to tell you what it is until it’s ready,” and then even when it is ready, they won’t actually take ownership of their business. They’ll put on their website the ubiquitous we-word like we believe in blah, blah, blah. When you’re starting a business, it’s all about you. It’s all about that entrepreneur and when people are buying a product, they’re not buying a product, they’re buying part of your experience.

    So, that’s the biggest key I’ve seen in terms of people who are successful is that they take ownership of their business and they develop relationships with people and those relationships are what boosts their business. In terms of their product, but product doesn’t matter as much. You need to find what they call product market fits. You need to make sure there is demand for what you’re selling, but if you have the right entrepreneur who’s willing to take ownership of their business, they’ll eventually find the right product for their market.

    Jennifer: Yeah. Thank you for sharing that because so often people see it as being that the product has to take center stage and again, it ties back to that piece that you’re talking about with trust that people need to trust the person and the story behind it, behind that product before they want to spend money on that product.

    David: Yeah, and it’s really hard too because typically, a product is the impetus. It’s like your grandmother had this really great apple pie that everyone loves and it’s the talk of every Thanksgiving, you know. So, it’s like, “Oh, I want to start this business to sell my grandma’s apple pie,” and I think that’s generally where I see people get caught into a trap because their business is revolving around the product instead of revolving around their desire to start a business.

    So, a lot of times, when that product doesn’t catch on or maybe the market isn’t willing to pay a fair price for it, that’s when people’s business will close. But if someone is starting from the standpoint of wanting to start a food business and they’re really passionate about making and selling food and sharing it with their community no matter what form that takes, then they’ll be able to make adjustments over time to ensure the success of their business and they won’t get caught up on, “Well, if I can’t sell these cookies, then why bother?”

    Jennifer: Yup. That’s one of those statement words like it’s so obvious and yet it’s something we so often overlook because you’re right, we go into it and myself included because I’ve toyed with the idea of starting up a cottage food business in addition to a small food biz and it’s always been around the product, not necessarily around the business.

    David: Right. Yeah, it’s very hard. I mean, it took me years to learn this because I initially got into the space because I want to sell chocolate chip cookies that everybody raved about or sell my grandfather’s fudge that is always a staple around the holidays. So that’s what got me into this space. So I think it’s important to recognize that products can get people into the space but ultimately, the people who I see thriving are the people who are willing to adapt their business to whatever the market is asking for. For instance, I tried selling my fudge but it just so happens that selling really unhealthy things these days is not a huge hit at farmer’s markets. Most people are interested in more healthy choices for their families. So, it’s not really a viable business for me unless I was trying to sell in an area to market. It’s like a farmer’s market would not be the right choice for selling a product like that because it’s just not what people are looking for at a farmer’s market.

    Jennifer: Yeah, especially not on a week in, week out basis. One thing for a one-time purchase because it’s for a special event, but you’re right, it’s not something that … and I say this being a professional pastry chef, I hate to say it, but it’s true. Desserts and the like are not necessarily something that most consumers, especially like you said, at farmer’s markets are looking to purchase every single week.

    David: Right.

    Jennifer: As we talked about there’s being a lot of changes in the cottage food industry over the last few years and given your insight, take a look into the crystal ball and where do you think that the cottage food industry in the United States will go in let’s say five years from now?

    David: Well, of course, I can’t know exactly where it’s going to go. I mean, if you’d asked me that five years ago, I probably wouldn’t have been able to tell you where it is today, but I know where I’d like it to go and that’s …

    Jennifer:I’d love to hear that.

    David: There are a couple different things I’d like to see. One is in expense of the Food of Freedom Movement and it just makes sense to me that selling homemade food is something that people have done for pretty much all of human history. It’s a fundamental part of our lives that we make food and we share it with other people. We don’t usually get compensated for it, but I think that we should be able to if people want to make that their livelihood and most food is perfectly safe, but the reason why homemade food is disallowed is because there’s a lot of concern about if you don’t have a sanitary work environment and everything, then you might get someone sick and certainly, that does happen on a rare basis.

    So, in order help prevent a few problems, we disallowed an entire ecosystem of homemade food entrepreneurs so I’d like to see the Food Freedom Movement bring a little bit more awareness to how much government oversight there is in the food space and allow people to question whether that should be the case. The other thing that I’d like to see in the future is perhaps a nationally recognized cottage food law because right now, the cottage food laws, they’re on a state by state basis and some of them are actually quite good. They allow people to run lucrative businesses out of their homes. But the problem is that because they’re on a state by state basis, those people cannot sell to other states, so they wouldn’t be able to list their product on a website like Etsy, and sell online, and then ship it to somebody in another state because there isn’t recognition between states of the other state’s food laws.

    So, if there were some sort of national recognition on cottage food, for instance, in the food code that would allow cottage food to act a lot more like commercially produced food, I think that would be highly beneficial to people because it’s one of the biggest limitations that I see currently in the cottage food industry.

    Jennifer: Yeah. Again, speaking from a state that is still decently restrictive, I know in talking to cottage entrepreneurs here locally that they just say, “Why can’t we do what Oregon is doing?” Even if you might live just across the bridge from Oregon, it’s like I’m sorry, you can’t. You know, talking about your concern over sanitary conditions and food borne illnesses, the reality is even in highly regulated environments like commercial kitchens that are regularly overseen by either USDA and/or county health officials, you still run into issues of food borne health issues.

    David: Yeah, I know and it’s interesting because there’s always a concern about the health and safety of a home kitchen. It’s always brought up when a cottage food law is being discussed or enacted and yet, I still have not heard to this day and I’ve been in the industry for quite a few years and I talked with thousands of people about how cottage food, I still have not heard to this day one instance where a cottage food operation was the cause of a health concern. Usually, the health department gets called about illnesses, food borne illnesses all the time, but they’re usually out of these commercial, inspected, approved kitchens and to be fair, that’s also part of just the fact that cottage food is restricted to usually very safe foods that don’t need to be refrigerated, but it’s just like even the commercial kitchens are always producing things that are totally safe. So, it’s just interesting to me that there’s so much skepticism that comes through when you’re talking about a home kitchen.

    Jennifer: Absolutely.

    David: I wanted to go back to the last point where you’re talking about people who … like if I am in Washington right over the bridge, why can’t I sell in Oregon? I’ve heard that a lot too and I think we did have to question that because the state laws are so across the map literally and figuratively, yet people’s actual … I don’t know how to put it, but you know people are living the same lives in each state. People are subject to the same health laws in each state in terms of what’s going to make them ill and so it’s funny how some states allow certain things and other states don’t. We have to wonder, is there a really good reason why that should be the case?

    Jennifer: No, I agree with you. Like you, I would love to see a national ruling on this if for no other reason also just for clarity because I think it oftentimes makes it harder for home-based food entrepreneurs to start up because they have to figure out exactly what is allowed in their state and potentially, also their county and what business licenses they need and they don’t need, and it can throw a lot of people off of the course because it can be so frustrating.

    David: Yeah. It’s really confusing. It’s extremely confusing, hence the reason why people have to spend so much time just figuring out how to do. That’s something that I think should be very simple, you know. You want to go down the street and sell something at the farmer’s market and yet that can sometimes take months to get approved in certain areas. But it is important to recognize that it’s improved a lot. Back 10 years ago, 15 years ago, homemade food sales were almost universally banned in the United States and I think you’d see it across all thousands of life where there is kind of a waiver, a spectrum and you got from one side to another and we were in a state of being just totally disallowing and distressing of homemade food and that was totally on one end of the spectrum.

    The cottage food laws had brought that way back and pulled back a lot of the control that the government imposed on food sales and it seems like it’s continuing to be pulled back. So, it’s definitely been a huge improvement and we continue to see states improve their laws and today, there are hardly any state that don’t allow any kind of homemade food.

    Jennifer: That’s a great note to end on. We might not be at the cottage food utopia yet, but the industry has come a long way. I want to just quickly mention that a lot of this has also been driven by average civilians. There’s an article on my site from a couple of years ago about the woman who really pushed through the cottage food law in Louisiana and it’s a grandmother who was frustrated by this law. So, a lot of times it is just an average civilian who’s frustrated by it who decides to take it to their lawmakers, get a bill passed and does all the work to do that and to gain momentum behind it. So it’s really exciting to also see, again, the average civilian just saying, “This is really important to us,” and building the from the ground up.

    David: Right, and that’s an important thing to note because a lot of people ask me, “I can’t do X, Y, Z. When is my state going to change this law?” Just given that we do live in a democracy, it’s like well, you might have to be the person who changes the law, you know. That’s how these bills and laws get started. Quite frankly, before I got into this space, I had no idea how a bill or a low got passed, so it does take a lot of learning and diligence. But I’ve seen time and time again where a regular citizen will say, “Hey, I’d like to sell my homemade food or I’d like to sell this item and it’s not allowed in my cottage food law,” and they’ll take the initiative to contact the congressman and make it happen and that’s the way that our political system runs.

    Jennifer: Well, you know, it’ll be exciting as you mentioned nobody can sit here and 100% accurately forecast where the industry will go, but it will be really interesting to see what happens in the next 5, 10, 15 years and where we are then compared to where we are now.

    David: Yeah. I believe that just having seen the past few years that it will be an improvement over what it is today because certainly, these cottage food laws have been very popular and I don’t think it’s happened to-date where a cottage food law has been redacted or made worse through an amendment. So, there’s certainly a lot of desire among people to do this, to sell their homemade food without having to go through a bunch of loopholes and I would expect that that inherit desire amongst the people of our country will continue to provide the path forward to make the laws better.

    Jennifer: Great. Well, I’m excited to see what happens in the coming years and David, I want to thank you for coming on today and sharing your thoughts and your experience having been in the … you’re really looking at the cottage food industry like no other has for the last 10 plus years, so thank you.

    David: Thank you so much for having me.

    Jennifer: Absolutely. Thanks.

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  • Collecting Market Research When You Have No Budget
    2017-12-20 04:56:33 UTC
    Collecting Market Research When You Have No Budget

    You know that it’s important to understand what you can about your target consumer. The large companies dedicate millions of dollars to market research but that’s just not an option for companies like ours. That doesn’t mean market research is still impossible to do though. In this podcast I share some ideas on ways you can conduct market research even when your budget is $0.

    TRANSCRIPT:
    Understanding everything you can about your target market is one of the most critical components of business ownership. And it’s not just one of those things that can be done when you’re in startup mode and never looked at again. Since the marketplace and consumer needs/tastes/desires are constantly changing, so too is what your audience wants and needs from you. A business that doesn’t spend time doing market research is one that runs the risk of being quickly left behind as consumers move on to the next thing.

    Doing market research is something large consumer product goods companies spend thousands, if not millions, on every year. They have internal teams working on this fulltime or they outsource this task to market research experts. That, unfortunately, is not a reality to most small and medium-sized food companies. So how do smaller companies conduct market research when their budgets are already stretched thin? Here are a few ideas:

    1.If you can afford it and have specific questions you want answered about what consumers know/don’t know about your brand or how they interact with your products, hiring a market research firm to do a one-time focus group (either in person or online) can be a good use of resources. The caveat is that this can cost upwards of $10,000 or more depending on your needs and the complexity of the research.

    2.Try asking your customers yourself. You may not be able to hire a market research firm but you can still ask your customers what they like/don’t like/need/want/etc. Unless you have a background in market research, your results may not be as scientific as those that you can get by hiring a market research firm. But asking customers as you interact with them in-person or online, or even by sending out a short survey for them to answer (adding in the chance that survey recipients can win a great reward can help spur responses), can give you insight into who your customers are and how your product and brand are a part of their life.

    3.There is a tremendous amount of research available online for free or low cost if you know where to look. Industry publications like the Specialty Food Association and my site, Small Food Business, publish food industry-specific statistics as those are made available. Your local library can also be an excellent research source as many libraries offer to their patrons free access to industry databases/statistics that would cost an individual thousands of dollars to subscribe to. Talk with your local research librarian to see what may be available through your library system.

    4.For information about demographics, the US Census Bureau (www.census.gov) maintains an online census report that can be drilled down to a zip code level for insight about median age, income, children in the home, etc. within that local area.

    5.Ethnographic research – the study of someone in their natural space – can give you real insight into why consumers make the buying choices that they do. When you ask someone why they made the choice they did to purchase Brand A over Brand B, they will likely give you a lot of rational answers for their purchase. But when you spend time watching how customers shop they may tell a different story. Do consumers seem to price point comparison shop when it comes to products like yours? Are they reading the ingredients labels and/or the nutrition facts? Do they seem to be driven by particular packaging designs? You’ll be amazed with what you can learn when you watch customers.

    6.Lastly, especially if you’re looking to grow your customer base, it can be helpful to talk to people who aren’t currently your customers to get a sense of what they think about your products and what your brand offers to them. One of the best examples of doing this on a small budget that I’ve heard of was a small food company who sent their goodies with friends to those friends’ workplaces. Along with the goodies (and who in office settings doesn’t love free food!), the company also sent along an anonymous survey with key questions they wanted answers to. The feedback they received from that survey, they later said, was more beneficial than anything their friends and family had ever told them – in part because the coworkers felt more comfortable being totally honest. Critical feedback like that can really help propel your business strategy forward.

    7. Another thing you may want to consider is contacting your local college or university as sometimes they may offer courses in Market Research and require their students to do case studies with real companies. The schools that offer this oftentimes maintain a database of companies their students can reach out to.

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  • Full-Time Job + New Food Business + Newborn Baby (PODCAST)
    2017-12-20 04:56:33 UTC
    Full-Time Job + New Food Business + Newborn Baby (PODCAST)

    Starting your food business is hard enough.  Doing it while also maintaining your full-time job makes it that much harder.  But what happens when your first child is born the week before your first farmers’ market?  Visas Taskar of Bombay Bitez shares his experiences juggling it all in his first year of business.

    TRANSCRIPT:

    Jennifer: Today we’re talking to somebody who is working full time while also building and creating. He started his business last year as you’ll hear, and he’s working to continue to grow that business. And there’s some other really interesting things that he’s also juggling as well that we’re going to talk about.

     

    So, want to introduce you today to Vikas Taskar. He is an engineer by profession and foodie at heart. His introduction to the culinary world started, as it does for many of us, in the home kitchen while he was growing up in Bombay, which is now known as Mumbai, India. He started by learning about traditional Indian recipes as well as trying out variations of those recipes on weekends. Last year, he decided to transform his hobby into a business and started Bombay Bitez which serves authentic Western Indian snacks and beverages handmade from scratch with locally sourced ingredients, freshly ground spice mixes, and fresh herbs.

     

    The company, which started as a Farmer’s Market business last summer and expanded into catering in the fall, is starting their second year of business this month.

     

    So thanks so much for joining us.

     

    Vikas: Thank you, Jennifer for having me in the show.

     

    Jennifer: I wanted to start out by talking about the fact that, you know, you are not, you’re not coming into this entrepreneurial endeavor as somebody who has been working in the culinary industry their entire life. And you, like many of us, are coming from a, coming from a different profession. So tell us a little bit about what you’re, what you’re, you know, your professional background is?

     

    Vikas: Yeah, so, I grew up starting engineering as my major. And I got my undergraduate degree in electrical engineering. This is when I was back in India. And during the time I developed an interest for computers so I ended up following that passion. Ended up getting a job in software development right after graduation. After working for a few years, I came to the U.S. I got my Master’s degree. And I continued to work in the tech industry afterwards. So overall, my background is almost entirely science and engineering based.

     

    Jennifer: Which is, know it’s funny. I was about to say, which is different than the food industry, but obviously as you know there’s a lot of cross over. And we’ll talk about how you’ve been able to take a lot of what you use in your daily, professional career and transport it over into your food business. But to start with, what made you want to open up a food business? And then as you start to think about opening up this food business, what were some to the challenges that you knew, even before you started, that you were going to have to overcome?

     

    Vikas: Yes, so my interest in food and cooking actually came about at a very early age when I was growing up in India in the city of Bombay. This was a time when I happened to get very deeply interested in all types of food. Whether it was home cooked food, street food, as well as just about any cuisine that I might try out. And this interest actually remained a hobby for several years, but while it was a hobby, I definitely had the intonation to start something out on my own in the food business at some point. This was driven partly by a couple of, you know, factors.

     

    One is that … and this is true even today. I actually find that cooking is a great stress reliever for me. Particularly cooking for large groups. And this was something I discovered several, several years ago. I also sort of like the feedback aspect of getting, you know, positive feedback or just feedback of any kind on dishes that I had made with an opportunity to kind of go and improve them over time. So, it was finally these factors which led to my venturing into the food industry when I finally did last year.

     

    Jennifer: So what made you determine ultimately, you know, as you, as you realize you want to start up a food business, and, you know, there’s all these different ways you can take it. You can go into packaged food and try to get onto retail shelves. You could open up a restaurant. What, ultimately, made you decide to, at least to start, by becoming a Farmer’s Market business in the first year? And also, by focusing only on one market and not multiple Farmer’s Markets in your first year?

     

    Vikas: So, once I’d made up my mind that I wanted to start a food business, I was fairly clear on a few things which I wanted would assure would happen as part of my business goals. One of these was that I had a fairly low cost plan with low capital outlay. I didn’t want to spend a lot of money. It was going to remain a part time commitment at roughly one to one and half day a week where Farmer’s Market for one day a week with about a half day of prep time behind that one day and then some overheads kind of fit that schedule.

     

    I also liked the aspect that Farmer’s Markets provided me the opportunity to get additional feedback on the food that I was putting out. As well as an opportunity to get revenue, but in sort of an informal scheme which is not perhaps as trying as having a full time business that operates six or possibly even seven days a week. So I looked upon Farmer’s Markets as a combination of a friendly, neighborhood environment, a place which I could use as an experimentation platform for my food, albeit food which had to be of good quality. And an environment where I could essentially put out my business with a relatively low capital cost.

     

    Jennifer: You know, one thing that is evident in talking to you now, and just so that listeners know, I mean you and I have talked. We’ve known each other for about, probably, probably going on two years now. I think about a year before you started your business, we’d been talking. And you’ve always been very focused on not just providing a quality product, but also providing a quality customer experience through having seamless operations. And it always struck me, and correct me if I’m wrong, is that that’s one of those pieces, that I felt really carried over from your professional career as an engineer in that you are very focused on “how can we make the processes as efficient as possible. Whether it’s how I collect money from a consumer or how I, you know, cook this, cook this item.” So why was it … well, again, I guess the first question is “Am I right in that?”

     

    Vikas: Yes, that is definitely true.

     

    Jennifer: On operations?

     

    Vikas: Yes, that is definitely true. So, my, my, I mean, I definitely was very operations focused at the start of my business.

     

    Jennifer: And why was it important for you, like why did you see that as being an important thing to focus on because in talking to a lot of food entrepreneurs, not that they don’t see it as important, but it’s not necessarily kind of the top three that they focus on. So why did you see that as being such an important thing to be concerned with in addition to, again, having really quality product that you’re putting out to consumers.

     

    Vikas: Yes, so one of the things which happened as part of my plans to start a food business was that I set capital constraints on myself and decided that the whole thing was going to start out as a very low cost venture. So given that I had set those constraints, the need to function with efficiency came about almost immediately, right off the bat. I decided to go with this low cost, and relatively operationally efficient, as operationally efficient as possible, approach because I, sort of, always have felt that being efficient is useful at the beginning because it helps when you work with constraints. You might have less money, and you might need to work harder and do more innovative things, but it helps you, sort of, be more frugal and scrappy, and actually to be start up like. And as a result, I ended up being fairly minimalistic when it came to what I perceived as some of the nonessential aspects of the business. Some of which, I realized, potentially were places I could spend more money in. But that was really the genesis of what drove my push toward operational efficiency right from the beginning.

     

    Jennifer: So, I’m curious, what for you in looking at your business, like, can you give us an example of what you viewed as one of those nonessential pieces? And again, this is obviously specific to your business and your business model.

     

    Vikas: Right. So one of the things which I was grappling with, and I should say, right until about a couple of weeks before launching, was I didn’t have a logo. I had thought through all the licenses and [inaudible 00:09:11] and I had gone into a farmer’s market and decided my menu and practiced my recipes and scaled them up and everything. But I didn’t have a logo and I didn’t have a banner. And I just suddenly started to feel that okay, I have a thing that I’m going to, you know, go out to the market, but I don’t actually have something which is going to tell people about who I am. And so I ended up just getting a very minimalistic logo made off the internet using, you know, a combination of the freelance sites. You know, to bring the banner along with it, and then just the standard logo sizes that are available. And, sort of, went with that. So the logo and brand was definitely something which I did as something of a very, very low cost initiative when I did start.

     

    Jennifer: Great! Thanks for sharing that. I appreciate that. You know, the other thing that I, that we want to talk about today, it’s kind of part of today’s theme for the podcast, is the fact that, you know, you mentioned that you’re working full time, and this was kind of a one and a half day venture. But almost exactly the same time you started the Farmer’s Markets you had another huge life event occur. Can you tell us about that?

     

    Vikas: Yes. So, our baby boy was born last year in June. It was actually exactly one week before the start of the Farmer’s Market. So, for a little bit of preface on that, it didn’t come as a surprise because, you know, we had known about this for a while and it was during the planning phase of the business that I was fully aware that there’s a possibility that the business might launch right around the time that he’s born. But of course, when it actually happens, it’s very different from when you think it might happen. So I was presented with this situation last year in June where he was born in the first week of June. We came back from the hospital a couple of days later, and roughly six days after that was, I was at the promotion kitchen getting ready for our first day at the Farmer’s Market.

     

    Jennifer: And of course the birth of any child into the family is a huge event, but I think especially, I mean, this was your first child. And so that’s becoming a parent for the first time can be overwhelming. So how did you manage to juggle being an employee for your, the employer that you worked for, being an entrepreneur, and being a new father all the same time?

     

    Vikas: So, it’s an interesting question. It was actually very difficult for the first 15 months. I will say that I was extremely fortunate to have family support. My wife’s parents were here and so we had help at home in the form of, you know, being able to take [inaudible 00:12:13] responsibilities when I was away. For example in the kitchen, or when I was at work, or when I was getting ready for the Farmer’s Market over the weekend. One of the, I did a couple of things to help me, sort of juggle through these aspects.

     

    The first thing is I decided very much early on that I just had to keep business priorities for the first year. I decided to focus on product quality, customer service, and customer satisfaction, and operational efficiency which is a piece I talked about a little bit. And what I basically did was that I didn’t end up doing a lot of marketing, and I didn’t end up doing a lot of analytics based off our sales data. I didn’t end up maybe expanding my menu a whole lot during the season. And I basically got out a lot of things which I might have done had the time been different. But just the thought of having a laser focus and trying to get whatever I was trying to put out really well done.

     

    The other thing which I, sort of, did is I tried to make sure … and this was partly true because of the background I was coming from. I realized that when I started at market that it’s extremely physically strenuous to work at a Farmer’s Market, let alone just work over the weekend. And so I made sure that I was being physically fit and staying fully prepared for the Saturday and Sunday rituals full of work as opposed to being a relaxing weekend that it might otherwise be.

     

    Jennifer: That’s a great point because it is, working in the kitchen and then, you know, going out. And not just the physical piece of interacting, you know, of preparing the food and serving it to customers, but also the, well it can be uplifting and exciting, interacting with the consumers you have to always be on when the Farmer’s Market’s there. So there’s no time for either physical rest or a mental rest. Especially when, like you said, you’re doing, working full time and then also working Saturdays and Sundays. So taking that time, or figuring out somehow to take care of yourself within that so that you can enter into the weekends rejuvenated and excited about going in for the farmer’s market is huge. Over the course, especially over the course of a full season.

     

    Vikas: Yes, that is definite. I would say that some of the aspect of just of feeling relieved of stress and cooking being a stress reliever that definitely helped in this regard because the weekend activities then came to me a little more naturally than they would by comparison with, you know, taking on something as additional duty.

     

    Jennifer: That’s a great point. Yeah. You know, we talked about, just a minute ago, that you approach year one with that laser focus that you talked about. Which is a great way to phrase it, but it’s also a great thing for, I think, food entrepreneurs whether or not you’re also working full time and or becoming a new parent simultaneously. It is really hard for us as small business owners to try to do everything. Yet we always try to do. You know, most of us try to do everything and ultimately, like you don’t necessarily do all of it well, as opposed to having two or three things you’re really focused on in that first year. I’d be interested in hearing from you. Were there any, kind of, big lessons learned for you with regards to one or all of those pieces that you were focused on for your first year?

     

    Vikas: Yes. Definitely. Actually there were three big lessons I learned as part of the first year in business. The first and most important lesson I learned was the importance of execution in bringing a product to market. This was true for a couple of reasons. One is that I spent the better part of 2015, roughly the latter half, on weekends, kind of [inaudible 00:16:15], thinking through what I might build. Thinking through what I need to do to get started. But 2016, roughly February 2016, was the first time I actually got started with the nitty gritty of what’s actually involved to start a business. And I realized there were gaps in my understanding. There were potential things I had not considered. There were roadblocks that I had. And so I realized that execution is really important, you know, it’s said quite popularly that ideas are a dime a dozen, but execution is what matters. And I really felt that firsthand.

     

    The other, the second lesson that I learned was the importance of cash flow. Because I was keeping his business very low cost and I tried to make it self-sustaining as much as possible, I had a close eye on our costs, on revenues. Making sure they aren’t going over at any point of time. From the perspective that I realized that, you know, I could look at my business as something that’s promising with a lot of potential for the long term. But in the near term, I still have to be able to pay the next month’s rent. I still have to be about to get inventory for the next week. And I still need to basically manage the rhythm of running the business, regardless of how it might pan out in the long term.

     

    And then, my final lesson, what I would say, the third most important lesson, was that there is actually a lot power of observation when it comes to the food business. And this, I felt was somewhat specific to my experience in the food business because while I was trying to start up a food business, I talked to a lot of food businesses, a lot of entrepreneurs. And in some cases, particularly while approaching a small business, I found that maybe they don’t always have the time to talk to you, or they don’t always, you know, they can’t always [inaudible 00:18:10] you in with what you’re asking them. But sometimes just being observant. You know, standing alongside a chef who’s cooking in an open kitchen, or a food cart at farmer’s market, or a food truck. You know, watching them take orders, and watching customer behavior. Some of these things actually tended to answer over half of my questions. And so over all this time I just realized that being observant actually answers so many questions for me.

     

    Jennifer: Oh, I love that idea! I also, I feel like it might also answers questions you didn’t even know you had.

     

    Vikas: That is absolutely right. In fact, it gave me learnings right from the fact, that I actually, hadn’t gotten my city business license until two weeks before starting in business because I didn’t know that I needed a city license. But then, you know, you see the licenses which are displayed at a business and then I realized, “Hey! Maybe I need one.”

     

    Jennifer: That’s great!

     

    Vikas: And then, down to little things like, you know, somebody serving, let’s say, a roll. What kind of aluminum foil are they using? Or what brand of vinyl gloves are they using? Now these things might actually appear as very mundane and day to day to an average business owner, but being new, I realized there was value in observing and, sort of, making most of all these things because when you go to the store, you’re presented with so many brands that you really do need to make a quick choice.

     

    Jennifer: Yeah, it allows you almost to let somebody else vet the products for you. So that you can just go in and say, “Okay. These are the ones that XYZ are using. I trust that they are going to be better than if I just come in and blindly choose.”

     

    Vikas: That is correct.

     

    Jennifer: What about, you mentioned that you didn’t necessarily spend the time, a bunch of time or energy or money, on marketing. There’s nothing wrong with that, but what about the customer education piece? And I kind of roll that into marketing because often times people will say, “Marketing and customer education go hand in hand.” But in your case, you know, your menu doesn’t necessarily consist of what Americans are always familiar with when it come to quote typical Indian cuisine. Your menu is authentic, but maybe not mainstream for, especially for Caucasian Americans.

     

    Vikas: That is right.

     

    Jennifer: Did, so … I guess a couple questions: Did the demographics in the area that, in your farmer’s market area, did it necessitate that you had to educate the public about your menu items? And if so, what did you do to help with that education process?

     

    Vikas: So, good question. I definitely did need to do a lot of customer education. For some background, the food that I started out serving, both the snacks and the beverages, these are extremely popular in the western states of India, but they really haven’t penetrated into a lot of American cities. Definitely not in Seattle. And so, what I found that, what I found is that the demographic of the farmer’s market was such that I had people who hadn’t even tried the food, let alone hadn’t even heard of them. And so they would come up and ask me, say, “Hey. What is this?” So for example, we had a tapioca patty and they had sort of tapioca starch in their mind whereas this is actually tapioca that we use. And so I had to, sort of, educate them about how we put this together, and the tradition of how we cook it and prepare it. And there was definitely a lot of face to face time spent talking with customers at the stall.

     

    I also had resources ready and, sort of, handy for them, in case they had more questions or needed more information. In some cases, those resources were really as simple as Wikipedia articles or maybe a link to a recipe on the internet.

     

    It was overall an eye opening experience because what I realized out of having this sort of different menu from the standard what you might see in Indian restaurants or quick service restaurants, is that we got a lot of polarized opinions from some of our traditional items. On the one hand, there were people who thought, “Wow. This is something that I’ve never tasted before.” But on the other hand, there were people who maybe hadn’t even tasted all of those flavors coming together. Like tapioca, peanut, and potato with cumin seed and salt, and a few other spices. And they kind of took a little time to warm up. So in terms of how we adjusted and who we, sort of, got the consumer education going, it was a combination of face to face time spent with the consumer and, you know, it did mean, in some cases, that, you know, maybe you spend an extra minute or two in processing that order.

     

    We did give away complementary samples initially where maybe a customer would order a more familiar item off the menu. Or they might just order a beverage. And I’d say, “Hey! We have this traditional item on our menu today. Would you like try something?” Or would they like to try it, and then, you know, maybe you give them a piece or a small sample.

     

    And towards the latter half of the season we definitely found that people had warmed up to these items.

     

    Jennifer: Interesting. I like that idea of doing the sampler. I mean, certainly, you know, if you can afford it to do the sampler.

     

    What about, you’d also told me in a prior conversation that you put together a menu item that basically, kind of was a sampler platter if you will. A little bit of everything to help encourage, encourage people to try an assortment of items offered from your, from your farmer’s market booth. Can you tell us about that?

     

    Vikas: Yes. That is correct. So one of the things we realized was because a lot this menu was new to the customer at the farmer’s market there might be some apprehension with regards to trying a specific item. Particularly if the customer is not sure about what it tastes like. And, you know, although we were giving out complementary samples, along with, you know, to paying customers who would buy some other product. Not everyone might stop by for a sample and so on. So what we actually did was we put together a sampler which was a small quantity of every item on our menu and we actually sold that as a full menu item.

     

    Now what ended up happening as a result was that there was a little bit of a hit we took in terms of our margins because the sampler was discounted relative to the combined price of the individual items. But what it did allow is that it gave the customers the opportunity to sort of get a feel for each of the different items. We actually found that a lot of the customers who tried the sampler for a couple of weeks actually came back and bought the individual items in future weeks.

     

    Jennifer: That’s fantastic! And you know, sometimes it is those short term, you know, you never want to have a crazy, crazy discount on your margin, but to be able to get customers to trust and learn about those other products ends up being a much better long term revenue idea then simply hoping that one day they might choose something different off the menu.

     

    Vikas: Yes.

     

    Jennifer: What, you know, we’ve been talking mainly about the farmer’s market arm of your business, but as I mentioned in the introduction, starting last fall you also started offering catering services. So can you tell us a little bit about the catering piece of your business? Why you ultimately decided to go that route? Had you planned that as part of your initial business plan? You know, and again, I know throwing a bunch of questions at you, but you know, what, what did you find different, or what did you learn in comparison to being the farmer’s market when it came to catering?

     

    Vikas: Yeah, so, catering was an arm of the business that started out in the early fall of 2016. So roughly about three and a half months into the farmer’s market season. Catering was definitely something which I had thought about as something I wanted to do when I started the business, but then keeping a tight set of priorities, being busy with everything else that was going on in life, I decided, you know, maybe I should just give it a few months to see how the farmer’s market takes off before I get into catering. So in about the third month, we got into catering. The catering angle of the business is actually fairly different. In the sense that we have an expanded menu. We have a very different clientele and the orders schedule tends to be very different than the farmer’s market.

     

    So speaking through each of these, what tends to happen is that we’re based on the east side of Seattle and so the clientele tends to be fairly local. Which is very different from the farmer’s market which is people who live in the city and actually, just might walk to the market or walk down the hill, you know, to the nearest stall depending on where they live. As I learned demographic of people who were coming to our catering business was almost the, you know, 180 degrees opposite of what the demographic was at the farmer’s market. We needed to prioritize a lot more on a lot of traditional Indian foods which might not have been things we sold at the farmer’s market, but have started to become popular among the local circles here. And so that was one angle of catering which, you know we needed to adapt and build.

     

    There was a benefit of catering in that, catering orders seemed to be fairly well defined. And so we knew exactly when the order was coming in how much food was to be prepared and so, the situation of having food left over or having, you know, inventory that is being, kind of, just kept in the kitchen and doesn’t have a use for was really not there.

     

    And then finally, and this is actually an interesting place where perhaps the farmer’s market was beneficial. Catering orders given my full time job, and given the fact that there are family commitments, catering orders, in essence, do tend to be fairly sporadic where we’ve done catering orders ranging from birthday party, baby shower, holiday party, you know, small gatherings at home. But over a period of time I realized that a catering order is great if the caterer is available to service the order on that day. Very different from a farmer’s market where you decide to go out on the day that you are available and then you can service any customer.

     

    The reason I mention this is because in catering orders, we did have two or three situations where the order came in and then, you know, we were just way too busy on that weekend and we couldn’t take that order. Now I don’t know if that person going to order again after three months or after six months, or maybe after a month. Whereas at the farmer’s market even if we would run out of food, the customer could potentially come back the next weekend, you know, come a little earlier and try our food.

     

    So I think in balance there’s definitely been a lot of learnings as well as understandings of key differences in the whole experience of getting into the catering business.

     

    Jennifer: So then, you know, as, again, as I mentioned, like, you are starting your second farmer’s market season now. Are you continuing catering simultaneously? As you also do the farmer’s markets or how are you going to work that this summer?

     

    Vikas: So, yes. We will be doing catering along with farmer’s markets this summer. One of the things that I realized which experienced caterers do and which I didn’t do actually the first year is they ask for a significant amount of lead time to prepare for an event. They typically sign contracts. They have some sort of formalized relationship with the customer well ahead of the event. So yes, we’ll definitely be doing catering in our second year as well.

     

    This is a small business, and so we aren’t set up to do, for example, full service catering like some other caterers are set up to do. But we’re looking to expand as we go along.

     

    Jennifer: So that actually fits perfectly in with my next question. So, as you head into this second year of business, do you have those, do you have those three priorities again like you did last year that you’re really focused on this year? What are you, what are you focusing on, what do you hope to learn, what, where are areas of strategic growth that you’re really looking towards for your business? Or essentially, what are you thinking? Like if you and I are talking a year from now, what would you love to be telling me about your second year of business?

     

    Vikas: Yes. So, as we enter the second year of business in June, I’m looking at a few things that I’d like to do in the second year. The first is sales growth. So look at growing our sales year over year. Two, an expanded menu. We had a fairly limited menu at the farmer’s market last year primarily because we were just starting out. Looking to have better analytics on some of our sales data. So we didn’t really keep a lot of cash analytics. We didn’t really keep close track of sales as in the break down of sales week to week because we were just so busy, kind of, in the whole production process that, you know, we were just very tired at the end of it.

     

    Another goal which I have for the second year is starting to explore more social media channels. And expanding marketing presence because that was one of the places where I couldn’t make it a core priority in the first year. But now with the second year feeling more of an implement for it over the first, I do want to expand in that space.

     

    I also have the goal of essentially growing the business. So scaling up. We currently have a size limit on catering orders. We aren’t exactly set up to do very large, for example, 300 or 500 person orders. I’d like to start scaling up on the catering front, and then also scaling up on the farmer’s market front. It’s kind of an interesting challenge given the fact that everything in life remains the same. And our baby boy is going to be one year old very soon, so that takes up time, too. So I’m definitely looking at this as growing over the first year and then trying to start to do new things in the second year where I’m sort of building on the first year of experiences.

     

    Jennifer: You know, and so, working towards building on, like you said, your first year experiences, you’re still working full time? Correct?

     

    Vikas: Yes. That is correct.

     

    Jennifer: And then you now have an almost, I mean, you know, coming up any day now, one year old. So I’ll ask you. How are you planning, or how are you hoping to manage all that? And still enter into the weekends feeling revitalized and excited about being at the farmer’s market?

     

    Vikas: That’s a great question. So, one of the things which I have done in the down time that we had … and it’s not exactly down time because we stared catering in fall. But we didn’t do a farmer’s market in the winter season. And so there was down time to that extent. Is, I worked on improving our processes. I worked on improving how we manage inventory. And overall just streamlining our prep time, so that we have a better picture on, we feel better about how we’re going into the market prepared for the next, prepared for the next season. So definitely improved efficiency is going to play a big role.

     

    The other thing which I’ll say is that as we sort of enter the second year of business, you know, I’ve taken time to become more efficient at household tasks. I will say that this is starting from mundane tasks like filling milk bottles and, you know, making sure that everything is neat and tidy around the home kitchen and making sure that home chores are taken care of. Because over a period of time, managing a family as well as managing a business necessitates that, you know, you really have to, kind of, take this on as two jobs. And more than two jobs actually. I think the thing that has kind of helped me and this is a discussion we used to have even last year is the business is, in a sense, a second child. And so when the business is viewed upon as a second child it really takes upon a responsibility of its own.

     

    And in terms of energy and staying vitalized, this was a part that really came to mind last year as well. Which is how will I have the energy to work nearly 22 to 24 hours over the weekend when I’ve worked a full week Monday through Friday? I realized in the end that food and cooking, cooking in particular being a stress reliever, and the whole experience of seeing a satisfied customer at the market who has eaten your product and praises it or gives you positive feedback in a different way, is really so powerful. That really sometimes it’s not the energy but the adrenaline rush which comes from seeing those satisfied customers which keeps me going.

     

    Jennifer: Yeah. I can identify with that, that it’s the, those experiences, I feel like they give you energy. Even though you are working on your feet, you know, all weekend long. You still kind of walk away more jazzed and more excited. I remember that when I worked in a professional kitchen, for hotels, I would be so excited by the end of the day, I would have to come home and there would be like two hours of wind down afterwards before I could go to sleep even though I wasn’t getting off until two AM. Just because it is the adrenaline. It’s coursing through you and you’re excited and you’re loving what you’re doing and that does provide you with a certain amount of energy.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, thank you so much for talking to us and sharing, sharing your story! You know what I love about it, like I said in the beginning is the fact that you are, you are doing what is not necessarily uncommon in the food industry which is trying to juggle this balance of professional, full time career with starting up a food business, or growing the food business like you’re doing now in addition to family responsibilities. And that, you know, sometimes that can be a tough act to juggle, so I love talking to folks like you who are doing it.

     

    I also love your focus on operational efficiency. It’s one of those things that outside of this podcast in talking to other food entrepreneurs I’ve been hearing come up more and more. And whether it’s streamlining a business process or a cooking method, or something, that that’s really what’s helping a lot of food entrepreneurs become more successful because time is, time is our biggest constraint. So how can you maximize your time when it’s in the kitchen or when you’re focused on your business, and a lot of that is by taking a look at the processes you have and making sure they are as efficient as possible.

     

    Vikas: Yes. Absolutely.

     

    Jennifer: Well, again, thank you so much! I will put a link to the Bombay Bitez Facebook page on the transcripts for this podcast which will be on the Small Food Biz website. And again, thank you! I really appreciate it.

     

    Vikas: Thank you so much, Jennifer, for having me on the show.

     

    Jennifer: Yeah! Thank you.

     

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