Saturday, July 14, 2012

Up From the Basement

Interview with Denise Anderson
Bagel Basement, Hanover, NH

By Jeff Yoskowitz and Kathryn Gordon

Kathryn:  Denise, how was the transition from being a lawyer to becoming a baker?

Denise:  It was a long transition and did not happen overnight, although the final jump off the bridge only takes one step!  It started with a divorce and an opportunity to move to NYC from Kansas City (KC) to be near some of my kids.

My friends told me to just be honest with myself and admit that I loved to bake.   Being a lawyer, I of course analyzed the options of a second career.  I had a successful practice and my own law firm, so whatever I did would take some planning.  Eventually I hired a head hunter and sold my firm to the highest bidder.  I almost signed a lease on a bakery in KC, when I asked myself; what happened to your one-time dream of living in NYC?

I looked at the Institute of Culinary Education (ICE), amongst its competition in NYC, and liked the attitude, the way everyone shared experiences, and the idea that I could get a pastry and management diploma in less than one year.  I kept a few cases and practiced part-time in NYC.  It paid the tuition and rent.  I felt "at home" with the environment even though at my age it was scary going back to school, particularly with people who never went to college, and of course in a city where I was a complete stranger. 

Kathryn:  What advice do you have for another professional thinking about changing careers, and ultimately becoming an entrepreneur?  Was it worth it?

Denise:   When I first decided to leave law, I was afraid to admit what I wanted to do was not as glamorous and lucrative as my career as a lawyer.   What would my family and friends think? 

I made the shift in my career because I was burned out and, at the time, I wanted to do something that was a win/win. My passion is baking, being in the kitchen, making others happy with food.  Making this transition in my career, so late in life, I learned we are who we are because of our experiences.  I am a lawyer of 23 years.  I have skills and a way of thinking because of having practiced business and trial law.  I bring that to being a pastry
chef.  I struggled with how to join the two parts of my life, but then realized I always have had both parts.  I have always been an entrepreneur and love to build a vision.  I did it with my law firm, which was not easy but a huge success.  I will do it in this industry too, but this time I will enjoy the ride.

Jeff:  How much baking experience do you have, besides your externship at ICE?

Denise:  I have been baking since I was very young.  I learned from my grandmothers, both of whom were very skilled at baking.  My dad's mother was a baker in Germany and worked as a baker after she came to America. I was self-taught until ICE.

Kathryn: How did you wind up moving to NH and finding a place to acquire there?

Denise:  When I was practicing labor and employment law in KC, the owners of
Bagel Basement, one of whom is my son, contacted me to consult on the finances and structure of the company.  I advised the owners on contracts and other business issues. 

After I moved to NYC and was working as a pastry chef/cook, one of the owners contacted me.  On behalf of the company, he asked if I would consult again, this time on the labor and management side.  They wanted a full analysis of the cost of goods sold and whether the business was able to continue.  They had gone through several managers and the business was losing money. 

At the end of January, I moved temporarily to NH to advise on Bagel Basement.  If Gordon Ramsay had approached me for a segment on Kitchen Nightmares, we would have aced the deal!  It was the worst. Anything that could go wrong, went wrong.  Being a lawyer, coming from my work ethic and having had the training at ICE and working in NYC, I was able to negotiate and save the business.

Jeff:  How long was the bagel place in operation before you obtained it and why was it for sale?

Denise:  It was started in the late 70's by a couple who wanted to steam bagels.  It was the cool thing to do.  It was the only bagel place in the area.  The current investor group purchased the Bagel Basement around 2004, with the idea it would remain the historical, unique bagel college hangout (near Dartmouth College). 

They have had several managers, none of whom have had the passion to run it to make a profit or grow it beyond just bagels.  When they contacted me, the business was not worth anything.  I doubt they would have been able to sell it for anything more than the equipment.  A bankruptcy would have been the final outcome.

Jeff:  And now you believe you’ve turned it around?

Denise:  After the consulting period, the owners asked me to stay for another 30 days, which I agreed to, because I could see the business turning around. To convince me to stay on, the owners offered me a majority ownership interest, with full control of the daily operations.

Today, I am the CEO and majority owner.  I feel that my legal background has fully transitioned into part of who I am and what I am doing.  My investors are absolutely the best partners I could ask for.  I am now in conversations with a couple who want to invest in the business, to grow it into a full bakery. 

Kathryn:   The location was originally a bagel place. Are you continuing to offer bagels as you expand the bakery aspect? 

Denise:  When I began my consulting, I was faced with a business that had been mis-managed and employees who were used to doing things as they pleased, without rules or care for the premises.  Several of the employees ended walking off the job when I ran the schedules, held them accountable for the cash drawer, and implemented processes.  I had to find another lead baker.  I had to find staff/employees, etc.  Everything was wrong and nothing was a standardized procedure or process.  It was everything it should not be.  I mean dirty, smelly, etc.

The last General Manager was selling premade frozen muffins.  I sold the rest to empty the freezer and began making our own muffins.  I have since created and designed a process and procedure for our own dry mix and muffins.  I have added cookies, coffee cake, cinnamon rolls, baked bread, and much more, on a daily basis.  We make everything everyday, from scratch, in our ovens.  We also have sandwiches, soups and salads. We also have a retail location in the Medical School, which I have completely revamped.  The menu is entirely in-line with the guests and customers. 

Kathryn:  Have you had to buy new equipment for the new production?

Denise:  We have a 23-year old Excalibur oven and bagel former.  There was a mixer that was probably 10 years old, which has since been replaced.  Since the bakery was bagels only, with muffins frozen, I have supplied the rest of the equipment.  We recently purchased a Viking 7 quart mixer, food processor, baking pans, pastry equipment, etc.

Jeff:  What’s next for you at Bagel Basement?

Denise:  I am finally writing a training manual.  I have put in place many processes and now need to get them in a binder.  I am hoping to franchise the business model and open another bakery.  I may also rename the establishment.

Meanwhile, I am targeting local residents and business owners to help expand our customer base beyond the Dartmouth student population. We have 10,000 people in Hanover, in the surrounding area, and on campus.  The downtown is mainly a Main Street, and we are located on a side street.

Jeff:  How are you financing the purchase of the establishment and your new equipment for the bakery?

Denise:  I have paid for the new mixer and other new small equipment with revenue generated from sales.  We have not borrowed money, yet.

On a good note, the current investors have made current our past due accounts.  I have since been able to make current the old loan and other bills with revenues being generated through our sales.

Editors: Thanks Denise! We will check up on your progress with the turnaround in a few months.

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