What Larger Organizations Take For Granted

Interview with Ruthie Vishlitzky

Co-Founder Luca and Bosco, Ice Creams and Desserts

www.lucaandbosco.com

By Kathryn Gordon of Food Startup Help

Kathryn:  Hi Ruthie, I met you a few months ago in a CAPS ice cream theory class at ICE.  Since then, you’ve opened up at the Essex Street Market!

How did you get the idea to open an ice cream business?   And where does the name come from?

Ruthie:  My co founder, Catherine Oddenino, and I both had very different careers.  I was working in health and human services for local government while Catherine was in the corporate world in online media. We are both passionate food people with keen palates, so we started with the idea of making ice cream that was less sweet and playing with flavor combinations that were less readily available, and did a lot of experimentation on nights and weekends.  When we got such great feedback from people who are tremendously choosy eaters we knew we had something really worth pursuing. We both left our “day jobs” this spring and have been working to really grow and establish the business since then.

Luca is Catherine’s Maltese terrier, and Bosco is my chocolate Lab!

Kathryn:  When did you make your first ice cream?

Ruthie:  I made my first ice cream for the first time in October 2011. When we started we bought a bunch of recipe books and started experimenting, it didn’t take long before we were writing recipes instead of following them to create “our style” of ice cream. We’ve taken ice cream science courses like the one at Penn State that helped us understand a lot more of the food science around freezing temperatures and textures, but ultimately, that course approached ice cream as a very processed food. The Michael Laiskonis CAPS at ICE was great since it covered a lot of the science, but ultimately approached ice cream as a culinary creation. The CAPS course served as a great reminder of some of the core ice cream basics, but I definitely feel like all the course materials will be great to have as a reference when we look to tweak our recipes.

Kathryn:  What are your current business goals?

Ruthie:  We just opened our first retail location at Essex Street Market, which helps us grow our brand, but we’re still currently producing out of an incubator space. That’s been a great learning experience but definitely impacts and limits what we can do given the fact that we have limited storage and rent the kitchen by the hour. So we’re looking to move into our own kitchen in early 2014 and establish a wholesale business to restaurants, as well as selling pints wholesale to markets/stores.

Kathryn:  How do you come up with flavors?

Ruthie:  We love to explore flavors, and are frequently inspired by different experiences, meals, travels, and seasons to create different flavors! If anything, we often have to reel ourselves in, since we always need to balance serving up the basics as well as showing people successful though unexpected flavors. Our ice cream is significantly less sweet than others, and we use more milk than cream (so it’s not super high in butterfat).  That helps enhance our flavors.

Through the store we learned that we always have to carry more straightforward flavors like chocolate and vanilla, but we’ve been really surprised by our customers’ favorable reactions and also plan to always carry more unusual flavors like honey lavender, Drunk & Salty Caramel with bourbon, and Whiskey Fudge Rebellion.  We both take great joy in watching our customers’ reactions as they taste a sample of a flavor they were slightly skeptical about – & order Goat Cheese and Rosemary Olive Oil!.

Kathryn:  Do you have a business plan? 

Ruthie:   We have an ever-evolving business plan that we keep updating and editing as we learn our business realities or realize new opportunities.  We’re a good example of a business that tries to take advantage of a lot of resources that are already out there. We’ve gone to tons of free workshops, we applied and got into the incubator program at Hot Bread Kitchen (HBK) which has given us a lot of support and guidance, and we’ve taken advantage of opportunities working with the City of New York through the Economic Development Corporation which is how we got our space at Essex Street Market with lower rents than usual since it’s operated by the City (we otherwise wouldn’t be in the position to have a location in the Lower East Side).

Our financing so far has ranged from self-funding, credit cards, friends and family loans, small business micro loan and even a Kickstarter crowd sourcing campaign (this is how we raised money to purchase our Emory Thompson batch freezer). Funding is definitely a huge ongoing challenge; especially since ice cream equipment is so incredibly expensive and it’s hard to get financing when you’re a startup.

Kathryn:  Where are you doing your production?

Ruthie:    We’re currently producing our ice cream at the HBK incubator kitchen.  At first we used to use dry ice when needing to transport it from place to place, but that has its own issues since then it hardens the ice cream too much, and we had to learn how to properly temper it to feed it to folks.

We recently bought our own hardening cabinet/freezer so that we can now have a dedicated space for our ice cream (we pay HBK rent for it to sit in their space)! It’s such a relief to now know that no one is opening and closing our freezer (and hence slowly but surely degrading our product).  Our freezer is so cold (as low as -30 degrees) that the ice cream now makes it from East Harlem to the Lower East Side and is still cold enough to be too hard to scoop on arrival! So no more need for dry ice for local transport and that’s a huge savings on time and money.

Kathryn:  What key lessons have you learned?

Ruthie:   I think as an entrepreneur you always have to keep learning and adapting to your realities and opportunities. We always try to make the most out of every situation, whether it’s learning from our mistakes/lessons or forming new relationships that could be helpful for the future.

I think some of my personal surprises/unexpected lessons have been:

1)   As someone who was in mid-level management before this business, I definitely took for granted the basic infrastructure in a working organization. As an entrepreneur you have to get involved in a host of tedious and uninteresting topics from payroll, insurance, to your POS system and email addresses. It’s not like prior jobs where there was an IT guy to setup my email, and an office manager to get all my supplies from, someone else to schedule things etc.  As an entrepreneur you have to create all of that stuff that those ins larger organizations take for granted… So much entrepreneurship is unfortunately not about ice cream or food, and consumes a ridiculous amount of time.

2)   We really thought we could make a lot of money by participating in events like Smorgasburg or New Amsterdam Market. We initially projected it as a revenue stream in our financial projections, but after a few times at it, we realized that really it’s more of an expense (or break even), but for us is just really good for the marketing/buzz. It was super rewarding getting people’s feedback on our product before we had our space at Essex Street Market. But we learned that there are definitely things that were very different in reality than in concept.

3)   Our last reality check was learning that a commercial kitchen, and especially producing a food in a large quantity, is extremely different than cooking in your home kitchen (which is where it all started for us).

We have definitely come a long way in the last couple of years from making ice cream at home, to moving all of our production to a commercial kitchen.

Kathryn:  Thanks Ruthie!  Anything else you’d like to share with our readers?

Ruthie:   Really the most important thing to us is that we get to make people happy on a daily basis.  Seeing that look of surprise and delight on people’s faces when they try a new flavor, or watching a kid gets that perfect scoop with sprinkles is the kind of immediate reward and gratification that either of us rarely got while sitting in front of a computer every day.  

Food Festivals and Weddings = Profits

 Interview with JulianPlyter

Co Owner/Chef of Melt Bakery

www.meltbakery.com

Interview by Kathryn Gordon

Kathryn:  Hi Julian!  I’d wanted to come and visit you at Melt Bakery ever since you were a guest panelist at one of our How to Start a Successful Bakery-Related Business at ICE (Institute of Culinary Education); and I absolutely love ice cream…

Julian:  And cookies. I really enjoy baking the cookies! 

Kathryn:  It’s very “neighborhood” here.  Already 3 guys have come in for ice cream sandwiches, and one has already come back for another one of the “sandwiches of the day.”

Julian:  We opened in this retail (brick and mortar) location in 2012 after 2 years of being in markets. The majority of our customers here do live or work in the neighborhood.  At our second permanent location, on the High Line, sales are more tourists driven. 

Kathryn:  Are all of your sales retail?

Julian:  We’re also in about 20 wholesale outlets, for example we’re in 5 Brother Jimmy’s BBQ locations. 

Kathryn:  How do you transport your ice cream sandwiches from here to the other locations?

Julian:  We use a delivery-around-town service that some friends started called “Dessert Run.”  The will cover wholesale and retail sales:   (www.dessertrun.com)

Kathryn:  And how did you get your wholesale clients?

Julian:  We’ve been working with a salesperson.  He finds it easier to sell ice cream than what he did before, which was energy sales.  Who doesn’t want to sample ice cream?

Kathryn:  Can you talk about how you got started in the ice cream sandwich business?

Julian:  I was working as restaurant and hotel pastry chefs, and was ready to “do my own thing.”  I had catered a party several years back and met my business partner Kareem Hamady; he still works in finance but was looking for a food project.  Initially he helped with the business financing but we've essentially been self sufficient after an initial $300 food investment.

At first we rented from 2 different commercial kitchens for our production, and outsourced to run the ice cream.  We knew where we wanted to locate and found this (former leather jacket) store (1,400 square feet on 2 floors).  We built it all out ourselves over 4 months, except hiring someone to do the tiling, plumbing and electric. 

Kathryn:  And you were able to do that because…

Julian:  I come from a line of handymen!  When I was 7, I helped my father build a log cabin – I worked on the shingles.  Now I can fix my own electric if I have to.

Kathryn:  How did you find this location? 

Julian:  Kareem and I just walked around.  It was very near where we first started selling at the Hester Street market.  Note:  Melt Bakery's first location is at 132 Orchard Street.

Kathryn:  And now you rent your kitchen out to other food entrepreneurs?

Julian:  We have both NY State Department of Agriculture and NYC Department of Health oversight, so we have been able to rent to other people who need ice cream machines.  Not many kitchens can offer that option – and the utility cost is high. 

Melt Bakery’s 37.5Q Carpigiani 660 Volt machine, bought at auction

Kathryn:  What are the state level inspections like for you?

Julian:  Everything is from samples.  If they take a sample away, and it grows in a petri dish – they would come back.  The NYC Department of Health is much more focused on “what they see” immediately in the kitchen, versus data.  One risk is that it's my responsibility for any other businesses who produce in my kitchen (for other ice cream companies who rent from us as an incubator kitchen).

Kathryn:  Are you thinking of expanding locations?

Photo:  machine to track data for state inspections

Julian:  I am always thinking about expanding!  Right now our target is Tokyo!  We have a lot of press in Japan – some people have gotten off their air plane and come straight here for ice cream sandwiches and a photo op.  

Kathryn:  How cyclical have you found the ice cream business?

Julian:  I really consider us to be in the “ice cream sandwich business,” not ice cream.  Ice cream is a very different proposition – people have to wait in lines, make their choices, the ice cream has to be scooped and then put on a cone or in a cup.  Our sales are quick.  That’s why the format works from carts in food festivals, etc.  Everything is pre packaged. You just have to decide what flavor and size sandwich you want. 

Kathryn:  How many satellite locations/carts do you have?

Julian:  It varies.  With the High Line location (open April to October), some weekends in May we will have 6 outlets running (such as Madison Square Eats). Sometimes we do weddings. It’s a good growth niche with a high profit.  They are also easy to plan for and not weather dependent.  If I have leftover inventory, it's frozen and protected to sell another day.  E-Commerce is also expanding. We can also ship within a 2-day delivery zone.

Kathryn:  You’ve been on TV and you’ve gotten some very good press. 

Julian:  It’s actually been entirely from word-of-mouth.

Kathryn:  To what do you attribute your success to date?

Julian:  Correct growth.  What I mean by that is:  no loans, no borrowing, no equity shares.  From the time I quit my paying job, this business has been self financing.  In fact, the most surprising aspect is “how much money we didn’t need” to be able to do it ourselves.

Kathryn:  What advice would you give another food entrepreneur?

Julian:  Look into wholesale.  And food festivals.  You are only constrained by time in terms of what you sell.  If you have the capacity to have stock (and restock) and “move the line” you will make profits – even with apparently high entry fees.

Kathryn:  Thank you Julian.  I'm going to come visit you on the High Line next!

Hot Bread Kitchen

Wholesale, Retail and Incubator Space

Hot Bread Kitchen

Interview with Kathryn Gordon, Jeff Yoskowitz and Jessie Riley

Food Start Up Help recently visited Hot Bread Kitchen, and met with Molly Crossin (Communications & Development Director) and CBO (Chief Bread Officer) Ben Hershberger for a tour.   Hot Bread Kitchen is located in Spanish Harlem’s historic La Marqueta at 115^th Street and Park Avenue, and is open Monday – Saturday 8 am – 6 pm.  Visit their website, www.hotbreadkitchen.org to learn more about their artisan products, on-the-job training programs, and community events.

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Kathryn:  Hi Ben, I haven’t seen you since you were at Per Se.  And now you’re here, in Hot Bread Kitchen!  Molly, it’s nice to meet you!  Can you tell us about Hot Bread Kitchen?

Molly:  Our mission is to increase economic security for foreign born and low income people.  We work with the community through:  on-the-job training programs to work with our bakers and produce wholesale/retail breads, and also offer an incubator commercial kitchen space available for lease by entrepreneurs. 

Kathryn:  Ben, what are the differences from working in a traditional production kitchen and here, where you do production but also are a training program at the same time? 

Ben:  It’s challenging, but I love it.  In the outside world, I had complete control over who was hired, and fired.  Here, we work with people to figure out how we can train them for future, outside jobs.  I figure out who’s best suited for what tasks.  For instance, some people are excellent at shaping breads while others are really good at the actual baking of the product.

Jessie:  I see that you have some great training/kitchen organization materials here for the trainees.  How long do the trainees work, here at Hot Bread Kitchen?

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Molly:  There is no typical length of time.  For some it’s a year, for others many years. 

Kathryn:  And besides the production facility, you also have a classroom.  You have lots of great bread books here!

Molly:  We do counseling, and English-language classes.  It’s very one-on-one with each of our trainees.  Someone is having a review right now, in fact.

Jeff:  How often do you take on new trainees?

Ben:  I’m evaluating one today.  She’s working in the shaping room, and just came to me through our application process.  So far, she’s picking it up well.  I have to look at how someone “fits into the team,” and how quickly they can pick up a particular skill to determine if they are a good fit.

Right now, they are all shaping bialys.

Kathryn:  I see spiral mixers, proofer/retarders and other bread making equipment I recognize, but I don’t recognize all the equipment!  Can you tell us what’s new in the kitchen?

Ben:  This is our tortilla production line.   We just got a machine for the corn nixtamalization – which is the process to treat corn with lime to increase its nutritional content. 

Jeff:  Where do you source your ingredients?

Ben:  We try to work with organic and local ingredients when I can.  I am getting some of my corn and flours from western NY State.  It’s good:  the bakers learn how to interact with the dough and evaluate the hydration, because the flours vary between deliveries.  They learn more that way, which is useful when they get outside jobs.

Jessie:  Molly, can you tell us about the incubator kitchen facility?

Molly:  We work with up to 50 clients at a time here, and offer incubator client workshops to help support them.  The application process and rates is outlined on our website, www.hotbreadkitchen.org.  In addition, we lease to a certain number of commercial clients; they have to be “up and running” before they can apply here, with a developed product and a bit of a customer base. 

You can also take a virtual tour of the facility on the website.

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Jessie:  Thank you so much for the tour and your time!

How to Successfully Run an Incubator Kitchen

Interview with the owners of Hesperides Kitchens & Bakeries in Hawthorne, NJ

Lisa and Albert VanDenBerg with Kathryn Gordon and Jeff Yoskowitz

www.hesperidesorganica.com

Kathryn:  Hi Lisa, Hi Albert. I met you here a few months ago when I came to help with the production of one of your clients.  I’ve spoken to several of your clients who say that the two of you are completely supportive of them and what they’re trying to do.

How long have you been in the commercial incubator kitchen business?

Albert:  It’s been about 2 ½ years.  This is my grandfather’s old feed & grain mill from the 1920’s, that has been split into 4 buildings.  Originally, there was a guy who rented some space here and built himself a kitchen for dipping oils.  After he left a cookie company moved in, but they wound up selling their business.  When I was trying to rent the kitchen space, a company called, Red Ribbon Pretzel was starting out and needed a small kitchen.  I just said, “come see what I’ve got!”  They decided that this space would work for them to start their business, and that’s how it all started, and Lisa and I got into the incubator business. 

Lisa:  I run an organic farm in NY State.  We also use some of the space here ourselves for a CSA (Community Supported Agriculture) and food co-op.  It allows us to sell our product, and to feature our incubator client products as well.  For example, CSA share participants can pre-order any one of our incubator client products for pick-up when they come here on Tuesdays for their fruit/vegetables.  We also have a CSA for cheese, other dairy products and coffee.   Some of our incubator kitchen clients use the vegetables and fruits from the farm.  We are trying to help these people make money – as the owners we want them to make money and succeed. 

Lisa VanDenBerg with product showcase in the CSA pickup space at Hesperides with incubator client products

Kathryn:  I love it!  You’re facilitating farm-to-table and supporting local artisanal food producers at the same time.  That’s brilliant.

Lisa:  We attended a NEOFA (Northeast Organic Farming Association) conference on incubator kitchens. That was very helpful to help us understand more about this business and get some tips from other farmers who have supported product incubation.

Albert:  For example, I build the walk-ins myself. NEOFA participants gave us tricks like how to rig up an air conditioner for the walk in and bypass needing an overhead compressor, We’re able to cool the walk in for a fraction of the typical set-up cost.

Jeff:  I’m not sure I understand that, but it sounds really useful to know! 

Can you tell us more about your facility and the mechanics of how you set everything up here?

Albert:  We have 11 kitchen spaces here, in an 8,500 square foot facility.  2 kitchens (one bakery, one culinary) are rented by the shift, and the others by monthly clients.  In total, we currently have about 40 customers. 

Lisa:  We find people through referrals on the internet, and the Rutgers incubator facility.   We have also had a client who “outgrew” our space, wasn’t ready for their own kitchen, and transitioned to Rutgers (which can support a higher level of manufacturing).  For example, to wholesale meat-based products you have to be in a USDA facility like Rutgers.

(Editor’s note: look for our upcoming interview at the Rutger’s incubator kitchen)

Kathryn:  How do you schedule clients for the shared commercial kitchens?

Albert:  We recently started to use Google calendar, and it’s working very well for us administratively and for the clients.   Freelancers can see the available time slots on the web, but only Lisa and I can actually schedule people to use the space.  Everybody who works here knows they have to be flexible to be able to keep their production costs down, and share the space.

Jeff:  How to you approve people to use your space?  What kind of requirements do you have, and what do people get for a base price? 

Lisa:  We require $250 a month minimum.  For that, they also get a storage rack (clients have to provide a cover and a lock), and storage in the shared fridge and/or freezer walk-ins.  Each kitchen has a standard set of equipment: burner, convection oven, reach in refrigerator, 20 Qt. Hobart and speed rack.  Clients provide their own small wares and sheet pans.  Everyone shares the 3-part sink dishwashing area, break-room and bathrooms.

Albert:  Clients are required to carry one million in product liability insurance, and have a Serv Safe food handler’s license to use the bakery kitchen.  To use the culinary kitchen, they have to have the Serv Safe manager’s certification. 

Jeff:  You don’t require a security deposit or pre-payment?  What happens if someone breaks a 20 Qt. mixer or something on their shift? 

Albert:  That’s actually only happened once, and the shift worker’s boss helped to pay for the repair.   We’re trusting in that sense.

Kathryn:  Can you talk about the food handler’s licensing and how you work with the local health inspector?  If there’s an inspection, and you have 40 clients, how does that process work?

Albert:  I also have a food handler’s license.  Everyone has to follow my procedure manual.  I have to be the leader because if the health inspector comes in, whatever they find could shut me (and the entire Hesperides incubator facility) completely down.

Lisa:  We walk through the kitchens daily.  One of us, or our son, is here every day.  We throw away any ingredients that have expired.  We throw out any food that’s not covered.  If someone left dirty dishes in the shared 3-part sink, we just throw them away.  We have to – it’s our liability.

View within Hesperides from Shelly Goldenberg’s Chelique chocolate production area 

                                                              

Jeff:  When you build out a new kitchen, how do you get your equipment?  And is it both gas and electric here?

Albert:  I buy used equipment on Craig’s list, and it works out well because I can work on the maintenance.  I try to buy new convection ovens.   The ovens are gas, and the 6-burner stove in the commercial kitchen is gas – everything else runs on electric.   Our total utility bill is 5% gas.  In the summer, the air conditioning to keep the kitchens cool is the highest cost. 

 

Kathryn:  And how does it work if a particular monthly client needs a special piece of equipment?  For example, you have people here making ice cream.

Lisa:  We used our electrician who knows the building to run the lines, and the client who needs that equipment pays the electrical installation cost. 

Kathryn:  And you’ll charge them a higher electric fee too?

Albert:  Yes but it isn’t on a separate meter, so I work with each individual client on their pricing.  For monthly clients, each pricing arrangement differs anyway, based on their kitchen size.

Jeff:  What’s the turnover like of clients?  How are you marketing to find clients for the kitchen spaces? 

Lisa:  At this point, we get 10-15 inquiries per week.  Everyone thinks they can do this! So the spaces pretty much fill themselves.  We have a majority on a monthly plan, which requires us to train people less (we train new people on how to use the equipment, and we have to “watch” new people more in terms of the cleanliness standards, etc.)

Albert:  We have less turnover than you’d think.  Some clients have been with us from the beginning.

It’s a co-operative here so everyone has to get along.  I will turn people away if the product doesn’t really fit in.   We have gotten rid of people if they don’t clean up, or play the radio too loud.

Jeff:  You’ve seen a tremendous volume of new start-up food businesses walk through these doors.  What are the most common mistakes people make?

Albert:  Everyone thinks they want to rent their “own space,” not realizing that at least 50% of what’s required is outside, selling and working on websites/marketing etc.    Baking is not 100% of your time, so a shared space can be a perfectly viable option.  Sales and marketing needs as much attention as baking. 

Lisa:  People who were formerly home cooks do not realize the amount of production that they can make in 2 hours in a convection oven with a large mixer.

 

Albert:  I’ve seen people really not know what they’re doing in terms of pretty standard kitchen equipment, even ones who have graduated from culinary schools.  I read the manuals (for the Hobart and the convection ovens).  I know how time and temperature is affected by convection cooking – and I never worked in a kitchen!

On the positive side, the most amazing thing is that the clients help each other:  how to work a piece of equipment, where to source ingredients, or how to package a product.

Lisa:  We want our clients to be able to just focus on their cooking.  There are no hidden costs from working here – each client knows ahead of time exactly what each month’s production will cost in terms of rent/overhead/utilities.   We even take care of scheduling for the pest control, dumpster pickups and cleaning grease traps.  Clients clean their own kitchen spaces daily, but we also have a weekly cleaning service for the floors. 

Jeff:  Is there anything you’ve learned over the years that you wish you hadn’t had to deal with?

Albert:   It was a learning curve about certification and the “black market” demand.  One of our clients would need a copy of their certificate to be able to sell at a farmer’s market, but then it would somehow get copied and be given to their friends (who were not legal clients and not producing their products in an authorized, commercial kitchen).  Those people would unfortunately represent themselves as working here, and that created a liability issue for us. 

Now we have changed the certification copying policy so that we will only fax directly to whoever officially needs it at the farmers market, etc. and the certificate for our approved clients is only for a specific business name, and for a specific length of time.

Kathryn:  Thanks Albert and Lisa!  It’s been very informative talking with you.   And the next time I come over here, I’m going to bring a cooler and buy some of the local artisan cheeses you offer!

Want to Learn More About Our Services? Visit us and learn more at

www.foodstartuphelp.com

Blazing My Own Path

A Passionate Businesswoman, Having a Blast and Enjoying (Almost) Every Minute

An interview with Shelly Goldenberg

www.cheliquechocolate.com

www.Shellyscakestudio.com

Interview by Jeff Yoskowitz and Kathryn Gordon at Hesperides Incubator Kitchen, Hawthorne NJ

Kathryn:  So Shelly, I know from being your Mod 4 instructor at The Institute for Culinary Education (ICE) for chocolate and decorated cakes that you make absolutely stunning cakes, but now you have added chocolate to your repertoire.  Can you explain that transition and your vision for your business? 

(A note from Kathryn…  When Shelly told me “she made cakes,” I postponed looking at her website, because I didn’t know the quality of her cakes. Shelly’s were actually so beautiful, that as soon as her externship chef, Francois Payard, took a look at her portfolio she was asked to create the cake for the opening of his store at The Plaza Hotel). 

  

Shelly:  I love learning.  I love learning new techniques, challenging myself artistically, and setting challenges for myself.   I had a successful cake business before I ever started at ICE, but I was highly motivated to learn more about chocolate during my externship and post-externship training. 

Jeff:  Okay, so let’s start with talking about your cake business. How did you get started?

Shelly:  I used to be a lawyer, and for 10 years I had a high profile, nice job in Israel.  Then 6 years ago, we moved to NYC “temporarily” for my husband’s business, which gave me an opening to drop my old job and to start doing the more creative things that I was interested in doing but was too scared to do in Israel because it would have meant leaving the security of my lawyer’s salary.

When we moved here, as a mother, I wanted the best cakes for my 3 kids, so I took some classes with Toba Garrett and Betty Van Nostrand. I volunteered to make cakes for friends, then I sold my first one for $40 and my business began.

Kathryn:  Why did you begin the pastry & baking program at ICE?

Shelly:  From the beginning, my cakes were gorgeous but I got feedback that they should be moister.  My baking initially kind of sucked!  Clients weren’t getting the same enjoyment eating the cakes as they were looking at them.

So, instead of creating the whole cake from scratch myself, I hired a professional baker to make my cakes, which I then decorated.  It was cheaper for me to do just the fondant work. That didn’t work out though. 

Jeff:  That sounds like a pretty reasonable set up.  How come it didn’t work out?

Shelly:  I realized that the baker wasn’t quite following my buttercream recipe.   My pistachio buttercream recipe, for example, is delicious.  I really worked hard on it and I felt the tastings I did for the clients myself didn’t match the final product.

I wanted complete control of the process and the technical knowledge to get there, so I went to ICE.  At the time, I also wanted to learn how to do chocolate, and I thought I would eventually start selling chocolate to my cake customers as party favors.

 I wanted people to eat my product and react with “Wow -- that’s what it’s supposed to taste like”!

Jeff:  You’re still doing cakes, although now you’re focusing on chocolate?

Shelly:  Actually, I believe I can do both.  They are both seasonal businesses.  I find the highest demand for chocolate in the winter, and now that it’s summer, the wedding season cake orders naturally pick up.

Right now I have two websites, although I am thinking of merging them into one and presenting a cohesive artistic vision for my business. At the moment, I work alone until we’re in the high demand for each season, and then I take on interns and seasonal employees.  (I use the free ICE career placement services when I need people).

Jeff:  So what’s the vision for your business, since demand is growing in both segments?

Shelly:  I am at the point where I can see my success, and what I need to do now is sit down and make some plans.  The chocolate and cake businesses do run a bit differently from each other.  To continue to do both, I need a business map to visualize for myself what kind of experience I want to give to my clients.  I need to be the one to innovate, to bring out a new collection each season (like in the fashion industry).  But I think I’m “done” being the only one in the kitchen.  To be successful, I need to spend more time marketing. Other people under my supervision can execute my formulas especially in the cake baking, and production line for the chocolates. I will always retain final creative control over the cake decorating, though.

Kathryn:  You have pretty chocolates and you’ve modified your packaging for the various chocolate holiday seasons.  Did you design it all yourself?

Shelly:  Yes and obtaining packaging in runs of less than 5,000 is never easy.  But in the end, I found a great small company who will do a small quantity of custom print boxes.  

Kathryn: In starting your business, did you take advice from anyone?

Shelly:  I actually did everything myself!  I did my own market comparison of competitors of artisan chocolates and then priced out my chocolates by lowering my prices by 10% compared to my competitors. I built my own websites and I took my own photos.  I drew my own logo of a cocoa bean and gave it to a graphic designer to digitize it.  I designed my own packaging to be eye-catching.  In short, I took no advice from anyone. 

Jeff:  How did that work out?

Shelly:  I’ll tell you honestly, I started my chocolate business as a way to thoroughly learn the way to produce chocolate, school myself in new techniques, and see if I was able to build a high production line of something I never did before, but always wanted to learn.  I started in September, 2011 with no specific plan beyond having as many people as possible love my chocolate! Luckily, because people do like my chocolate, it has grown into a small profitable business. 

Now I have some challenges, and an urgent need for a more structured business plan.  I sent out my own online newsletters through Constant Contact.  Through that, I was able to sell $10K in chocolates in the first 3 months and was able to buy a tempering machine with the profits.   I also sell directly at gift fairs, and find that a very good way to move my product so I will continue to do that through the fall. 

I was introduced to a broker, who got me into 6-7 retail stores in NYC like Garden of Eden and West Side Market.  That gave me volume, but I had to sell at half price for wholesale versus what I can make with direct sales via the internet, or in gift fairs.

Kathryn:  Right now you’re producing in an incubator kitchen. Is that working out for you, and how did you get there?

Shelly:  When I went looking for a space to produce the chocolates, I started in a “warm kitchen” in the back of a cookware store.  It was tiny, but only $20 an hour and the very nice owners didn’t charge me for using the space past 5 pm!  I got myself a real bargain, but it was hard to work there for any production efficiency.  I Googled incubator kitchens online and found this space. 

The best part about this contract is I can rent a small amount of permanent space with no ovens nearby, and rent additional cold storage space for chocolates and/or production space for my cake orders as required.  It’s very flexible and cost-effective.

Kathryn:  Given the type of production spaces you need, do you think it makes sense to focus on only one of your businesses?

Shelly:  I find the high end, custom cake business to be easy for me to manage.  You have ample notice for a project, and there’s nothing to stock.  Since I’m pretty much the only one working on the cake, I’m under tons of pressure just before the project, but there is no overhead except for rental of the kitchen when needed.  For artisan chocolate, it’s more complicated. I need stock, have to care about shelf life, need to have more marketing and sales follow-up, and there are more people involved.

Jeff:  A very experienced business person once told me you can’t truly run a business successfully if you have to manage every single detail and aspect of it yourself.

Shelly:  I am seeking a partner who will help me with the business part of the business. I have lots of ideas and I know that I can sell the product because people love it, but I need someone to help with the financing and marketing, because I am not good at it.   

Jeff:  Do you have time for your family?

Shelly:   You know, I wrote up a plan of how much time I wanted to spend a day with my kids, my husband, the gym, my businesses etc.  It added up to more hours than are in a day so that didn’t work and I threw the paper out!

Recently, I started working with a branding company that gave me a long list of questions to focus on things that are very relevant, and will help me structure my plan to grow my profits and balance my life commitments. 

Jeff:  OK Shelly, thank you very much for your time today.  And thanks for the chocolates!  How about we plan on talking to you in a few months, when you’ve finished your branding survey analysis. We’d love it if you can share it with us.

Shelly:  Yes, that would be great!

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