Sunday, May 27, 2012

Ready to Jump In

Ready to Jump In

Interview with Cameca Johnson by Kathryn Gordon (website should be live in June)

KathrynCameca, you graduated from the pastry program at ICE August 2011, and since then you’ve said that you’re baking cakes for friends and family? 

Cameca:  I went to ICE initially with the idea that I would master plated desserts in a restaurant and open a dessert bar.  But after going through the program, a friend asked me to make a cake for her daughter’s birthday, and I continued doing that as more friends and family asked me to do it.  Now I’m really interested in all the different aspects of cakes, decorating and sugarcraft, and driving myself to learn as much as possible.

Kathryn:  How are you doing that?

Cameca:  I currently subscribe to a cake decorating magazine, and I work my way through each of their “projects” systematically.  I’ve also taken a lot of advanced classes, and I go anonymously to various classes offered at bakeries to check out what they’re doing and how they operate.  But that was difficult to do during the day with my 9-5 job.  So I’ve just resigned my day job!  Going forward, I’ll have more time flexibility. 

(Kathryn interviewed Cameca on the annual ICE Cuisine Course in France.  Cameca’s last day at her finance job was just before the trip to the Loire Valley.

Kathryn:  Wow, you quit!  Ok, so let’s talk about that decision making process.  How are you planning the steps to take to go from not charging friends and family anything except base ingredient costs – to quitting your day job and jumping into this business?

Cameca:   I took a 16-week workshop in business opportunities designed for business entrepreneurs to learn how to make their businesses sustainable, versus supporting an “expensive hobby.”  I’m just finishing those last classes now:  Workshop in Business Opportunities  I have my last session when we return from France.

Kathryn:  So you have a business plan, from having finished that course?

Cameca:  The WIBO program gives you a structure, and then you fill in the aspects of the business plan for your own specific business, customer base, etc.  They provide a wealth of information.  And they bring in actual entrepreneurs to give insight regarding their own experiences.  They provide mentoring resources via direct contact as well as seminars, workshops, etc. to participants who need specific legal or accounting questions addressed, before someone is ready to start paying for those services on their own. 

Kathryn:  So having gone through that program, what about your business incorporation, liability insurance, websites/marketing, your overhead/food/labor cost analysis…  Where are you with all of that part of the process? 

Cameca:  I did cost out each of my cakes, and know what it costs me to make using wholesale ingredient prices and packaging costs.  

Kathryn:  Up till now, you’ve worked in finance – so that must help!  Since you have that skill-set, are you planning to keep up with all of your own accounting, or use a program?

Cameca:  Right now, I am manually maintaining my own general ledger. 

Kathryn:  What about paying yourself? Do you think that your customer base will support it as compared to other market prices for cakes?

Cameca:  I think so.  Honestly, I didn’t think about paying myself at first.  But I think I should “pay myself,” because it is taking me 8-10 hours to make, decorate and deliver each cake.  I’ve also looked at what people are willing to pay for cakes – people in other markets besides people living within Manhattan.

Kathryn:  How are you charging for the cakes? By the serving?

Cameca:  Yes, but I do charge differently for simple buttercream versus the more expensive fondant, and I charge additional fees for sugarpaste flower decorations (which require more labor skill and time).

Kathryn:  How do you get your cakes to your customers? 

Cameca:  I am actually about to buy a second hand car. Friends and family can continue to pick up their cakes from me, or I will charge a delivery fee from my production place in Queens with gas and tolls.

Kathryn:  Where will you be doing your production?

Cameca:  I will be using an incubator kitchen in my area on a shift-by-shift basis (The Entrepreneur Space).  Not too many of their customers are cake bakers – so the incubator has cake pans I can use, as well as additional equipment.  I pretty much just have to schedule time to bake and bring in my ingredients.  My friend’s husband goes to Restaurant Depot, so that is one way I can get wholesale ingredients.  So I have no overhead cost unless I have a customer order.

Kathryn:  What if this takes off, what would be your next step for production?

Cameca:  Next, I would sign a lease for monthly space at an incubator kitchen that would be open 24 hours a day.  After that, I would try to rent and renovate a studio space for a commercial kitchen. I think that jumping to a retail storefront as a next step is too expensive.

Kathryn:  What does the incubator require besides the fee for the 8-hour production shift?      

Cameca:  In addition to the application, the incubator requires:  1) a security deposit; 2) proof of insurance (including worker’s compensation if applicable; 3) Food Handler’s certificate; 4) business registration and tax ID number; and 5) emergency contact information.

After I start using the kitchen I will apply for the 20C Food Processing Establishment License.

Kathryn:  How are you marketing your new business?

Cameca:  After France, I am meeting a high school friend of mine shortly to work on the website and Facebook page.  I am trying to obtain some free PR through doing competitions and charity events.   I will make samples for a charity event for 500 people in June, so I am hoping to have brochures ready by then with the website up live.  Another strategy I plan to try is advertising in small local papers.  Friends are also already helping me with referrals.  And I’ve been trying to take my own photos of all my cakes, to help get the website and Facebook pages up and my brochures ready.

Kathryn:  How many flavors of cakes are you offering, and are you doing tastings?

Cameca:  I have about 7 standard flavors, but I will customize.  I do tasting consultations and that cost is included in the final proposal to the client.  So far, most of my current customers want round, tiered cakes with fondant and “wow” colors.  Maybe from watching TV!

Kathryn:  What kind of deposit do you require?

Cameca:  Currently I collect 25%, but I am considering going to 50% upfront. 

KathrynCameca, I hate to ask, but how are you financing this?   You rent your apartment now, right?  How are you going to be able to pay for all of this?

Cameca:  I have some savings from my prior job in the finance industry that will cover me a few months, and some employee stock that will be automatically liquidated shortly since I am leaving.  This, together with the rehire policy from my employer (since I left on good terms), is my safety net.  The stock sale may actually generate some tax losses, so I am hoping that I will not have to pay any taxable income penalty.

I also still have a part-time (evening and weekend) job that I got after my externship that will be continuing, for now.  And I’m lucky it allows flexibility in scheduling, because it’s in catering and I can tell them when I’m available, and when I’m not.  If I had to start working there full-time, the catering job would pay for my rent. 

Kathryn:  So what words of advice would you give to some other person, like a recent graduate, who thinks they might also be ready to make this kind of a move?

Cameca:  Think everything out.  You need a plan prior to doing anything.  Don’t just quit your day job without a plan – if you work for someone, find out what that company’s termination procedure is.   In some positions, you might be vested.  Determine if this the right time strategically to leave, or if you wait a bit longer is it more beneficial to you in terms of future retirement pay?  Do you have any unpaid vacation days that they will owe you based on how many years you’ve worked there?  And finally, how many months will all of that accumulate to help pay your production and living space rent(s)? 

Kathryn:  OK Cameca, those are very useful questions that anyone else in your shoes who is considering jumping into this industry on your own should be ask themselves.

Thanks for sharing those thoughts, and we’d like to follow-up with you in a few months of baking cakes in the incubator kitchen!

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Thursday, May 24, 2012

Start Up Financing

Jeff Yoskowitz is a co-owner of Food Start Up Help and a business financing expert.

Interview by Kathryn Gordon.

KathrynJeff, I know there are a variety of possible ways to fund a startup business. Can you discuss one for our readers?

Jeff: Sure. For business startups, one of the first things I suggest is to get a business line of credit. This helps to separate business and personal credit and expenses. It also helps build business credit while protecting personal credit.

There are unsecured business lines of credit that don’t require any collateral and are really useful to startup companies that have no established revenue. A business where an owner or a partner has very good credit can expect to receive between a $25,000 and $75,000 business credit line.

Kathryn: So, is good credit the most important aspect in obtaining an unsecured business line of credit?

Jeff: As a startup, you should be concerned about your consumer credit score because if you are looking for unsecured business credit, a business credit card, or some other form of business funding, like equipment leasing, your personal credit profile will be reviewed as part of the pre-approval and approval processes.

Kathryn: Are there ways to maintain a good credit score?

Jeff: Of course. There are basically five categories that make up your credit score.  The most important is your payment history. This looks at your payment information on all different types of accounts and if you are paying on time. It also includes negative records such as bankruptcies, collections and judgments against you.

The second most important category, which most don’t realize, is your credit utilization.  This is the amount of money you owe compared to your available credit. It is best to keep your utilization below 25 percent. For example, if you have $10,000 of available credit, it is best to keep your balance below $2500.

Third is the length of your credit history. Simply put, the longer you have had credit (good credit), the better off you are.

Inquiries and new credit are the fourth category. Inquiries are checks into your credit history by financial institutions, car dealers, credit card companies, etc. Too many in a recent or short period will reflect negatively on your score.

The final category evaluates the types of credit you use. Credit scoring companies like to see a mix of different types of credit to show that you can qualify for them.

Kathryn: Do you recommend a place where people can check their scores?

Jeff: I usually recommend They offer a free trial and it doesn’t cost you anything if you cancel before the trial period ends.

Kathryn:  So what if someone has poor credit? Should they try to fix their credit to get financing?

Jeff: First of all, they should start repairing and taking the steps to fix their credit, regardless. It’s just too important not to. Honestly, sometimes it is very expensive or just takes a very long time to repair. Some people “borrow” good credit from someone else who can act like a personal guarantor and that enables them to get the lines of credit that way.

Kathryn: Thanks Jeff, we look forward to the next interview.

Jeff: Anytime!

Wednesday, May 23, 2012

Food Photography

Food Photography
Interview by Kathryn Gordon with Expert Food Photographer Steve Legato

Kathryn: Steve, I know you did the beautiful photography for my book, Les Petits Macarons! and everybody loves it, too. What is your background?

Steve: I first was interested in being a documentary photographer actually- that was about 16 years ago -but my first opportunity to photograph for magazines was to shoot food for their restaurant reviews. My passion for photography was immediately fueled with a newly found intrigue and passion for food; there is just so much to know and experience and see; tastes, ingredients, techniques, history, culture, trends, philosophies...  Food is amazing.

Kathryn: Do you specialize in photography for magazines, books, websites, brochures, packaging, etc. or “do it all?”

Steve: I do all of these, and each requires a certain nuance in the way you shoot it. Editorial, websites and such tend to be more cutting edge and creative, whereas packaging and book photography is very exacting and meticulous. I love and enjoy aspects of each.

Kathryn: We visited your studio in Philadelphia for a week to shoot for my book with Running Press. Are all shoots done in a studio? I know that you travel a lot. Are your shoots ever done on site in restaurants and bakeries?

Steve: I've done food shoots in generator rooms, bathrooms, kitchens, dining rooms, rooftops, on my back porch- as well as my studio and on location at restaurants, bakeries. Where ever there is light (an outlet) and a little room, there is a way!

      Steve in his studio lining up a shot for Kathryn and Anne's macaron book

Kathryn: What are the challenges to food photography, particularly to pastry, baking and confections? Do you cringe when you see bad photos of food?

Steve: The challenge is always to describe the food clearly (even if it’s messy!) I want the viewer to quickly understand the food as if they were also present there and took a bite of it…What is the experience of eating this? How does it feel? Dry, moist, tender, crisp- even sweet, savory, salty, bitter, creamy, acidic, hot, cold... I'm trying to portray the sensuality of food, of the experience of eating, the perceptions...

In a purely photographic sense, there is the challenge of composition; to create a flow to an image, a tension, a sense of poetry or beauty; sometimes that's based on just the food itself, sometimes on how elements are arranged within the frame, the focus, point of view, etc.

I do cringe sometimes but more so if I see an indelicacy or indifference in treatment. That might sound strange, but there are parallels in almost any occupation; music, cooking, writing, etc. That being said, a bad picture of an exquisite meal can be a wonderful reminder of that experience- like a post-it note rather than a poem, and I appreciate that as well.

Kathryn: Your studio had a fridge, basic stove, microwave and a freezer, which helped to shoot the ice cream chapter! What kind of kitchen is required to help shoot food? Do you always have to have kitchen facilities available too?

Steve: It's certainly nice to have the tools to create the food you need for the shoot. Think about it like having tools to fix your car, it's easy to have the 3 or 4 things you need to change the oil, but to change the timing belt, well...

The kitchen is the same way. You can get away with a minimal amount of tools and some creativity, but if you’re photographing 50 dishes this week, it indeed takes a full resource of kitchen and culinary tools, and expertise, to get that done and done well.

Kathryn: Do you ever provide the food styling and props, or do clients typically have to provide their own (or hire food and prop stylists)? On some photo shoots I've been on everyone has an assistant, too! The photographer has theirs, the food stylist theirs, and the prop stylist theirs! It can get crowded.

Steve: I usually work together with the client to hire a prop stylist and a food stylist when applicable (cook books, advertising, packaging, etc.) Their contribution to the final image is invaluable. A great food/prop stylist is behind every great food photo!

      One of 3 prop tables set up in the studio for the 5 day cookbook photo shoot

Kathryn: What should clients be prepared with before they enter the studio for a shoot? (What's the worst-story you can think of in terms of “bad food photography” you've encountered?)

Steve: I'd say to just be prepared for the process. It takes great ingredients, talented people, tools, organization and time, especially the time to make it all work well. Mostly I think it’s a fun and interesting experience for the client! (I do remember a chef at a diner wanted to draw grill marks on the “grilled” vegetables with a Sharpie...I talked him out of it, luckily :)  Especially in editorial shoots, you have to be prepared for anything, really in quite a Zen way, you see how you can find, interpret, adapt, and capture the beauty in most anything.

Kathryn: To establish a time frame, how long in advance do people have to schedule a shoot? How long can it take to receive the finished product, now that there are digital support systems?

Steve: It takes time to plan a shoot, procure the ingredients, and hire the necessary crew. For the major project, you can certainly plan a month in advance (even just to give enough notice to avoid scheduling conflicts). For me, I'd say about two weeks are sufficient, but when more people are involved, the more advance you need.

Finished files can be delivered right away -within hours in some rare cases- but most of the time I'd say a few days a week. It does take time to clean up images, to make adjustments such as color balance. I'd say that it's best to be clear with the photographer what your needs (and timing expectations) are- certainly they should accommodate to the best of their ability- we are, in fact, working for you!

Kathryn: On average, is there an average length of time it takes for a shoot? Is the client usually present?

Steve: The time a shoot takes depends...Editorial shoots are often quite quick—a few hours—even with ~12 dishes (as long as the restaurant can create the dishes quickly enough). For a cookbook or other more meticulous photography project, you have props, a set to create, as well as the actual dishes to be made by the food stylist. Typically, I shoot about 6 dishes a day.

The client is typically present to make certain the pictures are being made to their specs/needs. (Note by Kathryn: given the digital editing software, the client can actually see their shots set up in real-time on the screen and at the end of the day help review the progress made by looking at all the photos on the computer).
    Steve's shot of Kathryn's strawberry guava macarons as seen on his editing system

Kathryn: We assume someone of your experience level is expensive. Can you provide any general costs or price ranges (only if possible in this format, of course)!

Steve: Prices vary and depend on a few different things including what type of project, how the pics are used and to what extent, the complexity, and finally associated costs of producing the images. Think of shooting a bowl of soup for a major soup company vs. shooting a bowl of soup for a local diner. Within each level of project, there will be a range of prices that you will find most photographers come in at.

Kathryn: If someone who needs photo cannot (yet) afford an experienced food photographer, and they're trying to do their own photo shoots, do you have any words of advice regarding what kind of lighting generally works best? Any tricks of the trade you could share regarding setting up the food?

Steve: The best trick of the trade is to engage yourself and take a lot of photos. Even if the majority of them are failures, there is a lot to learn from each image. Consider what direction the (main) light source is coming from. Consider if it’s harsh or diffused light, a small source like a light bulb or a large source like a window. How dark are the shadows, how moody? (Shadows define the surface/textures as much as light does, so please do not try to take away all the shadows :)

In a very general way, I try to light food side lit or slightly backlit. If, on a clock face, the camera is positioned at 6 o'clock, the plate of food at the center of the clock, then I'd want the light to be coming anywhere from 9 to 3 o'clock, depending. If the light source is coming from the camera, it tends to rob the dish of any volume, flattening out its surface blandly, filling in any and all shadows (the same goes for overhead light in general).

Try setting the dish near a window and shoot facing towards the window. Then move slightly left or right and see the difference it makes. If shadows are too harsh, set up a piece of white paper or foam core to reflect the light back towards the dish. Vary the distance of the reflector to the dish to change the effectiveness. Try under or over exposing just to experiment.

You'll develop an eye for this, sensitivity and a sensibility over time. Just keep shooting!

Kathryn: That is extremely helpful information, thank you for sharing that. Are there any general comments you'd like to share that we didn't ask about?

Steve: Just like a chef would say, “taste!” I would say, “see!” Food photography is a wonderful thing to be a part of and to experience and be effected by, inspired by. I do believe that a good image makes a difference.

         Kathryn favorite macaron photo from Les Petits Macarons; photo by Steve Legato

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Monday, May 14, 2012

Creating an organic incubator kitchen

Operating a food incubator
Interview with Pete Herman and Mike Schwartz by Jeff Yoskowitz, Kathryn Gordon and Jessie Riley
Name of business: BAO (Bad Ass Organics) and Organic Food Incubator

Kathryn:  So you just gave us a great tour of this 12,000 square foot organic, Kosher facility; can you tell us how you got started? 

Pete:  My background is in investment banking and finance.  A lot of my past work was in management and development of businesses around the world on behalf of banks.  I was looking to do something more interesting, and had been in touch with Mike Brady (the third partner), who I went to high school with.  We wanted to have a business that provided good jobs to people, and offer healthy products to consumers.  A lot of my current work is business management, contract negotiation and some of the sales and marketing for the permanent clients and the daily use clients of the incubator.

Mike:  Mike Brady and I went to college together, and he has an IT/ marketing background.  About 3 years ago, Mike and I decided to start BAO.  We wanted to make a healthy soda that was tasty and good for you, and after a number of experiments we realized we could get a consistent culture with kombucha.  At the time, the market for kombucha was growing so fast we never went back to the sodas!  We started in Hell’s Kitchen in an expensive, shared commissary-catering kitchen for the first year.  We shared a small space (a third of a kitchen) with 2 other companies and our rent was $3000 a month plus utilities…we had to make a move. 

Jeff:  Mike, besides teaching with Kathryn and I at ICE, what is your background?

Mike Schwartz:  I have a culinary degree and attended the CIA.  I worked in restaurants for a long time and started teaching at ICE about 12 years ago as a career culinary instructor.  A lot of my interests had to do with teaching nutrition at ICE. Talking to so many students, you realize how awful a lot of the food in the American food chain is. I figured I should put my money where my mouth is, and I should be making something healthy while also promoting other healthy eating oriented businesses through the incubator structure.

Jeff:  How did you formalize how your partnership is set up?

Pete:  We wrote an operating agreement that defines roles and responsibilities, and we structured as an LLC.

Jessie:   Why did you choose this space?

Mike:  Our prior landlord wanted to raise our rent and we had quickly outgrown our space, so we looked at over 30 spaces in Brooklyn, Bronx, Jersey City and Queens areas.  This was the only space that was ready to go for our production and we were up and running in one and a half weeks.  Once we installed some sinks and our kettle we looked around and the space was too big!  We found some like-minded acquaintances that needed space and contacted them.

Kathryn:   Do you help your incubator kitchen customers obtain their own organic certification?

Mike:  There is a tremendous amount of paperwork required for organic certification.  For example, a National Organic Plan (NOP) has to be developed and filed for each ingredient that you use – and you have to verify that your process is chemical-free. For our products, we use hydrogen peroxide here as our sanitizer because it oxidizes quickly and it’s naturally occurring.  We had to learn all these rules because there was nobody to help us through the 230+ page organic statute.  As a result, we can now help other businesses write their plans, and get through the inspection process here at the Organic Food Incubator.  

Jeff:  What were the major surprises you’ve encountered?

Mike:  After working in restaurants for over 20 years, I had figured that food was food but working in a restaurant or hotel is not food manufacturing.  The labeling alone is a learning curve – the nutritional labeling, the kosher certification, the types and costs of containers and everything else. Our bottles are fired in NJ because we wanted to have a green footprint but even locally, the material shipping costs are insane.  The distribution process learning curve was also a surprise. Simple things like how to get your product onto a truck so a distributor would sell it to store, for example.   To complicate matters, all of our products are refrigerated (because they are fermented and need to be temperature-controlled or they could explode).

Jessie:  What kind of a margin does a distributor take? 

Mike:  It can be between 20-30 percent and the retailer marks it up an additional 30-40 percent before it reaches the consumer.

Pete:  We put together a schematic to explain the process and mark-ups for an intern from the not-for-profit organization Opportunities for Tomorrow.  If the farmer charges $1 for their ingredient cost, the final consumer cost at retail can be $4.50, with the product manufacturer and two distributors in between.

Pete shows us the whole process from farmer to end retailer

Jeff:  Pete, what did you find surprising?

Pete:  There are minimum orders for everything (bottles, labels).  Most people also don’t appreciate the costs that add up in building out a kitchen with the required bathrooms, break rooms, security, sanitation, etc. to satisfy labor law. 

Jeff:  Are there trends that you’re seeing for the type of people interested in incubator kitchens?

Mike:  Age-wise, I guess they tend to be young.  Some were making products at home and selling (illegally) while others have come here with a great idea but are completely new to kitchens.  We help them learn the ropes at whatever stage they’re in for their business.

Kathryn:  How did your incubator kitchen customers find you?

Pete: We’re listed on a number of incubator websites such as the Cornell website and we were featured in the Daily News and the Wall Street Journal.

Jessie:  How have you focused your marketing efforts for BAO?

Mike:  We just used the internet.  In retrospect, we could have done samplings and demos and we just have not, but need to build going forward.   We don’t have a demo team, but a Long Island grocery store wants to pick us up, so we need a team to do product demonstrations in local stores.  That investment is key for a small business to help get your product to customers.  There are already a million products on grocery store shelves and you need yours to stand out.

Kathryn:  What is the cost for the business to use your space?

Mike:  To use the kitchen for a 7 hour shift, that price is currently $220 plus a per pallet cost in a walk-in refrigerator.   To some extent, our clients are also making inter-client arrangements to rent each other’s equipment and help defray costs (such as sharing use of a blast freezer).

Jeff:  The structure you have here for monthly incubator rental customers is very different than other incubator kitchens. You rent them raw space with plumbing hookups for their 3-part and hand sinks, and provide electric hookups and most bring their own equipment.  How did this evolve?

Mike:  It kind of worked out on its own.  We have such a varied mix of companies and there are few who require ovens.  We leave the space raw and it’s up to each company to bring in the equipment they require.  Everyone shares the loading dock, and bathroom/break rooms as well as the walk-in refrigeration, if needed for that product.

Pete:  Originally we thought we might have more shift kitchen usage, but we determined there was more of a demand for private kitchen usage on a monthly rental basis. 

Kathryn:  How big are the various spaces we saw on our tour?

Mike:  They range from about 220 square feet to about 800.

Jeff:  What are your long term plans for BAO, your own product line?

Mike:  We’ve been focusing on getting the incubator kitchens built!  But the brand has been building and sales have been growing, so I need to get back to that.  We’ve been launching new products every 3-4 months. 

Jeff:  What are the long-term goals for the incubator?

Mike:  We’ve talked to investors who like our incubator business model to either expand here or move to another city. There’s a strong culture around the US for locally produced foods which would imply that artisan, hand crafted food manufacturers need space – space that right now does not exist.  We think our incubator model could be duplicated in other metropolitan areas.  The per-shift kitchen model works up to 5 days a month, after that you want to be in your own space.  It’s difficult to afford the right space that will pass inspection (FDA) as well as provide loading docks for bringing in materials or shipping out product, etc.

Jeff: What services do you provide for your customers at the incubator kitchen?

Pete:  When a potential customer needs help with labeling, packaging, recipe development, licensing, etc. we will do some consulting to help them after they have a business plan and are ready for the next step.   We’re working on a classroom to provide training on business management, sanitation, equipment use, and are developing a curriculum now. We can help set them up with an insurance company, obtain equipment, etc. because there are multiple new businesses here working together. Additionally, we can help companies bottle their product using our bottling line, operational procedures, etc.  That kind of hand-holding is hard to find…

Furthermore, micro lender terms are very expensive for small businesses, and eligibility is based on personal credit scores.  However, those loans can be used here to help get started on an initial packaging run, and we can help guide people to get started.

Mike:  We’ve also been approached by companies who need us to be their co-packers and we don’t have the typical 5,000 production run requirement (we can do a test run of 100, for example).  To be a co-packer customer, they have to have their own insurance, a license, (Cornell scheduled process for hot foods), and all their “ducks in a row.”  There’s a lot of demand for that, so we think that business will expand. 

Jeff:  How did you fund your current set-up?

Mike:  We started with friends and family, and we’re now “coming around,” three years in.

Jeff:  What about the incubator kitchen customers, how are they financed?

Pete:  A lot of the incubator customers are self-funded.   Most have between 6-months and a few years of financing.   Some of the smaller businesses have a goal to bring a test product to market and have a budget just enough for that.  We don’t want people to over-commit for their own good, so I always talk to everyone in depth.

Jessie:  What does a company need to be able to start-up here?

Mike:  They just need a) license, b) insurance and c) to be able to make their stuff, or we’ll help them do that through sub-contracting out BAO employees.  When we began, nobody would help us find 100 cases of bottles vs. truckloads full.  We try to help people by providing what was not provided to us when we started up.

Jeff:  Do you have any “words of wisdom” for our readers?

Pete:  Start small, conserve capital and test your product.  Get out there through the daily shared space to prove your concept.  When demand grows and you know if your product is priced correctly, (through trial and error) you can obtain financing and grow. 

Mike:  You have to charge the end (retail) price when you start-up, even at farmer’s markets. Initially sell the product for the grocery store price, and when you do grow and have distributors to take your product to the retail customer base; your pricing model will work.

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Monday, May 7, 2012

Owning A Retail Bakery (The Story 5 Years In)

Meet the Entrepreneur
An in depth interview (with future follow up) to expore the lessons learned by others like you in the baking business

Owning a retail bakery
Interview with Marie Jackson by Jeff Yoskowitz and Kathryn Gordon
Name of business: The Flaky Tart, Atlantic Highlands, NJ

“Coming out of a dark place…  Nobody knows what they’re in for, before they get a grip on balancing the financial viability of a business with creative freedom…” - Marie

Jeff:  Let’s start at the beginning.  What did you do before you opened the bakery?  You took a huge risk because you’d never worked in a bakery before, right?

Marie:  I have a degree in accounting, and worked for a year as a public accountant after college.  I thought it would be a good entry point for a future business but I also knew accounting was not for me.  I did some small jobs while going to culinary school at the New York Restaurant School. 

I got married and my husband’s family ran a snack shop at a seasonal beach club.  I asked if I could fix it up, make it profitable, and bake there for 2 years.  That gig wound up being 16 years long!   I was able to sell wedding cakes, make decorated cookies, do some catering, etc., out of that commercial space.  I found that I loved the summer business the best.  I had a staff to interact with, and customers to talk to.   I decided not to have an isolated wedding cake type studio, but to go into an actual retail bakery and have a community around my baking.

                                                         In The Flaky Tart Office

Jeff:  How did you take the leap to open up this business?

Marie:  Six years into baking out of the snack shop I looked at renting a space, but it fell through.   I was really relieved because I realized I wasn’t ready for my own establishment.  I didn’t have enough experience and my marriage was new, so it was time to put opening a business on the back burner. 

Ideally, I wanted to work in France, but by then I had three babies. Suddenly, the bakery in town where I lived went out of business.  It was the perfect scenario with the kids’ school being right across the street. I could work at the bakery and be able to pick up the kids right after school.  My husband and I looked at each other and decided this unique of an opportunity would never happen again so we decided to give it a try. We’ll be finishing up five years here at The Flaky Tart this fall and finally I will be able to work only when they’re in school.  That took three years longer than planned.

Kathryn:  How many employees do you have now?

Marie:  In the back (kitchen) we have five, including an intern and excluding me! In the front there are two working at any given time, so it’s three full time employees and four part-timers.  I have a nice mix of people with different ages, including high school kids.

                                                  A view of the bakery production area

Jeff:  When you started this business, did you have any partners?  Financial backers?

Marie:  I was so alone…  And it is so not the way to do it!

Jeff:  So now that you’re five years into it, what were the biggest surprises? Obstacles? Regrets?

Marie:   I was exhausted!  I am a marathon runner and a workhorse animal but the problem was that the bakery required me doing that every single day, and it beat me down physically, mentally and emotionally.  The lesson learned is that there are several equally mandatory jobs.  There’s the baking job versus managing “the vision,” and for one person that magnitude is not sustainable -there must be a partner or delegation- or money to hire more employees.

Jeff:  Was that the biggest challenge you’ve faced? 

Marie:  Well, sales have not been a challenge because I received good free publicity.  The back-of-the-house numbers crunching, even with an accounting degree, is the most difficult process to keep up with.  Employees are challenging in that if you want to hire professionals who are loyal and stay with you, they must be paid a livable wage. 

Kathryn:  What kind of rates do you pay your employees, is it more salary or hourly?

Marie:  I pay my “adult” (pastry chef) employees who have mortgage payments on a salary versus the younger ones who are paid on an hourly basis.  I actually think I would rather pay everyone hourly, so that sales and payroll expenses would stay more in line (busy time = more sales and more hours).

Jeff:  You’ve been in business several years now. How has your current menu changed and why do you think you needed to evolve it that way?

Marie:  Initially I was guided by a book (Growing Your Business) which believes a successful business has to be an extension of you. I want to make products that taste fantastic, and I don’t want to copy any French or American style bakery so we pretty much have a blend here of what I think I bake well.  Over time we’ve added some items but tried to keep it simple. 

Editor’s Note:  About 2 years ago, Marie talked with chefs Jeff Yoskowitz, Kathryn Gordon and Ciril Hitz about the direction her bakery was taking.  At that point she was managing the business and continuing to do the majority of the baking, or at least attempting to do both…

Marie, continued:  After talking with Jeff, Kathryn and Ciril I gave my staff some autonomy and mobility, and delegated the baking and they’ve introduced new product that is selling!  They’re now the growth engine and that’s awesome! I didn’t expect that.  

Jeff:  How have food costs been working out for the new items?

Marie:  Well, it’s happening too quickly and we don’t have a handle on it. This is the same issue that got us into trouble in the beginning. There’s a system out there on how to train you staff on costs, which we are actively looking into.

Jeff:  What direction is your menu currently going?

Marie:  We’re looking to balance the “cool things” with the low labor cost/low food costs and right now it’s the opposite.   We need to figure out what our staples are and what sells whatever the weather, whatever the traffic.  

One of my staff updates our Facebook page daily with our lunch menu and specials, posting all new items -- I have nothing to do with it and it works really well to help generate new customers.

Jeff:  When you opened you replaced an existing bakery. What were your customer’s reactions?

Marie:  Initially some customers had some expectations about heavily-decorated themed cakes (from the former bakery) and a few people were discombobulated, but I had changed the look of the bakery so much that they were excited about the new place and our new products.

Jeff:  Do you know who your customer base is?

Marie:  They’re everyone!  We get people from all different types of socio economic and geographic areas. The local press awards I’ve received bring people in, as well. I have done every charity that’s ever walked in the door. I am co-participating in my first set of advertisements now, but that’s actually for our town, not specific to my own business.

Kathryn:  You wanted to quit. What turned your feelings about the bakery around for you?  You’ve said it was around the time when I introduced you to Ciril Hitz.

Marie:  One really important turning point was when I was at my rock bottom (when we met), and I even went to NYC for a holistic doctor to try to get vitamins. I was so exasperated I believed that could help me – but he told me about a book called The E Myth.  The line that I live by now is “if you want to be a baker, get a job in a bakery.  If you own a bakery, you have a new job, you are a business owner and if you don’t do your job, you will fail.”  It changed everything when I read that.

What really helped was a friend, Mike, who told me, you are a success!  I had already achieved my goal which was to bake a great product.  Mike told me I needed a new goal, and that was to be a financial success – that I didn’t have to sacrifice the integrity of my product to make money.  I just had to adjust my thinking.

Ciril Hitz and I were talking about making money, and that it doesn’t just come if you make great stuff.  Ciril told me that I was doing this as a hobby if the bakery was not making money.  Wouldn’t I rather hang out with my kids instead? 

I think a lot of people fail because they just want to do their art, and the trick is you have to do both; the art and the business.  My heart and soul is in this bakery, but I have to find the balance to let my employees do their jobs and for me to manage better. 

Jeff:  You have to learn how to let go, and that’s a big step

Marie:  I think I had to hit rock bottom.  It was a process to realize I could not go on any more, but that I was unable to let go until I could acknowledge that I’m a control freak and my never-give-up-mentality had lead me into a hole.  I had to let go completely then I could decide to take back what I wanted to…

Jeff:  So you’ve told me you back the project completely alone. Any words of advice?

Marie:  I think it’s kind of good that I don’t have the pressure of a loan, either from a bank or an investor.

Jeff:  Although an investor would have forced you to have more control over a business plan and the numbers…

Marie:  I never put it all together with my vision for beautiful, delicious, accessible, high quality food. It’s hard to forecast reality and write that business plan. I achieved the goals I had had, and now I’m ready for a different goal and to succeed financially in that. 

Jeff:  What investment are you happiest about having made over the years?

Marie:  I hired a graphics designer for my packaging early on, and that was an important investment to have an iconic logo.  I paid a couple of thousand dollars and it was worth every penny to have a focus, a by-line and an identifiable image. 

Kathryn:  Do you think your space here is adequate for your production?

Marie:  I’ve learned that “if you have more room, you just spread out more.” I like the bakery to look busy.

Jeff: How’s the rent?

Marie: My rent’s low.  About $1700 per month (with a 3, 5 and 5 year lease renewal).

Jeff:  What were the rent increases for each of those periods?

Marie:  Generally there are small increases per year, up to 5%.  We haven’t received any in the last two years because I did a lot of renovations and the economy has been bad, so the landlord gets a lot of croissants from me!!!

Jeff: Marie, thank you so much for your time. Next time we visit we’ll check up on how you are doing and hopefully you will have some more success stories for us!

Marie: Thanks!
                                      Marie with the signature logo for The Flaky Tart
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