Opening a New Business In a Campus City

Interview with Katalina’s Bakery Owner Kathy Riegelmann

www.katalinasbakery.com

New Haven, CT

By Kathryn Gordon and Jessie Riley

Jessie:  Kathy, you have a pretty big space here!  How did you get started with your bakery business and find this particular location?

Kathy:  Several years ago I had a coffee shop in the area, so I knew people and people knew me.  I had been taking baking classes and was interested in getting back into the food business.  Yale University had begun a local economic development program to generate more foot traffic in this neighborhood near the campus.  There were some new schools and dorms nearby, and they were looking for a cupcake type business so Yale helped me to find this space. 

Kathryn:  Can you tell me more about your relationship with Yale?

Kathy:  Yes.  Yale is like a partner in that they paid for the commercial architect.  The construction bids went to Yale, and the university arranged the build out for $150K, and arranged my loan.  Yale takes a percentage over my break-even rent each month.  They have been motivated to support several other local businesses in this way because they want this neighborhood to be vibrant.

Jessie: That’s a great opportunity!  How many days a week are you open?

Kathy:  Currently we are open 6 days a week, but we are planning to expand our hours until later at night for the students and to open on Sundays because the families in the neighborhood have been making it a destination location.  I am also taking out a small loan to remodel the back retail area and have a tea counter, and add in loose teas for purchase by the pound.

Kathryn:  Looking around the front counter, you have a frequent buyer type card system here. Can you tell us about it?

Kathy:  We are working with a new automated rewards card system called “Spot On” (www.spoton.com).  It allows me to learn about our customer base through a loyalty card system tied to social media reporting. 

Jessie:  With the “neighborhood focus,” you have a nice space with room for more chairs and tables.  Are you planning to fill that in more?

Kathy:  Actually, no.   You can get wireless internet (Yale) access here but I do not want Katalina’s to become a free parlour (like Starbuck’s) for people to sit around in all day.  We’d rather turnover the tables.  That’s why I am trying to expand my menu in terms of what appeals to different customers buying at different times of the day.

Kathryn:  We came here today to offer a hands-on macaron baking class.  I know you already have regular baking classes, and host birthday parties; are you planning to expand the school part of your business?

Kathy:  Yes, we’d like to.  We have a good open production area.  I can even hear what’s happening at the front retail counter when I am in the back, and go back and forth if I need to. 

Jessie:  Are you here baking personally every day?

Kathy:  At the moment, yes.  But I have staff and I am not here all day!  I still teach at a local fitness center and coach my son’s hockey team (I’m a single parent).  Being in touch with the local athletics world gives me access to our customer base, and helps get me out there.  I have also been able to develop some catering contacts that way.

Kathryn:  Are you happy with your branding?  Do you think that has helped you attract more outside business?

Kathy:  Yes, and I think the bakery has become successful because local people recognize the logo. 

Kathryn:  I see that you do both catering and decorated cakes here.

Kathy:  Yes. I have an assistant Briana who is mind blowing in terms of cake decorating.  I am not as proficient; I don’t have enough patience.  We are doing more catering however.  For example, I was recently approached by the New Haven Symphony.  People know I am a food snob and believe in only good ingredients – and I will not compromise. 

Jessie:  That must help drive up your food costs!

Kathy:  My sister helps with the accounting.  I know that we cover our costs and are able to put some money in the bank each month.  I’m not yet paying myself a salary because I am still earning money teaching at the gym.  I don’t have a precise handle on food costs.  But the customers have no problem putting their money down for good product.  Grad students have more funds than undergraduates, though!

Kathryn:  Thank you Kathy, I can’t wait to eat a cupcake!

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