Know Your Numbers — This is a Business Not a Hobby — A business needs to be profitable. You will need to drill down into the numbers and nail down high quality, lowest cost inputs to keep your production costs low. Figure out exactly how much it costs you to produce one unit including ingredients, worker time, electricity, packaging, labels, and delivery. Know your numbers! Many start-ups have no idea what it costs to produce one unit or fail to include packaging, labels, delivery, electricity and, especially their time, to produce the item. Knowing your numbers will help you determine competitive and profitable prices (retail and wholesale). Remember, this is a business so you need to make an actual profit from day one even if you are a single-person operation (like me).
As part of our series called “5 Things You Need to Create a Successful Food Line or Specialty Food”, I had the pleasure of interviewing Danielle Rowell, PhD, MBA, MA, owner and founder of the Inebriated Baker® and its subsidiary the Inebriated Chef®. Danielle humorously refers to herself as a ‘recovering’ academic and higher education administrator. She has spent the last 20 years donning a variety of hats within higher education, including dean, program director, professor, accreditor, program director and curriculum developer. Danielle has focused exclusively on remote higher education program development, delivery and accreditation since 2010.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
Thank you for taking the time to chat with me. I am honored to have been included in this series. So, you would like to start right out of the gate with the long-winded ‘origin story’, eh? [Chuckle]
I am proud to declare that I call the Bluegrass State (Kentucky) my home. However, it does not take long for my ‘dirty secret’ to be discovered — that I am actually a transplant from New York. Although my accent is relatively faint as compared to my cousins from Long Island and Staten Island (imagine ‘”The Sopranos”), I have found that it is best to get this out of the way from the onset: ahem,“cawfee” (coffee), “qwuatta” (quarter), “watta” (water).”
I was born and raised in New York. I am the older of two children. My father worked as a mechanic in the utilities sector. After my brother and I started school full-time, my mother became a realtor. In the early 1990s, my dad decided to turn his love of antiquing, garage sales, auctions, and ‘trash day dumpster-diving’ into a successful mom-and-pop antique business operating out of a rented antique mall booth.
My father’s business mantra was simple: 1. Find unique or coveted pieces that are already in great condition or in restorable condition. 2. Buy at competitive prices. 3. Sell at competitive prices with negotiating room for the buyer. It is a win-win for everyone. You will make a profit. Customers score a great product at a great price point.
It was very common to go out on a quick family errand and return with the car full of musty treasures from the unexpected yard sale or an especially bountiful trash day. I vividly remember on the way home from an out-of-state family road trip, my brother and I were expertly packed into the backseat of the station wagon. Our bodies were meticulously wedged between our respective car door and the mountain of antiques amassed in a few prime yard sales that we stumbled upon on the drive home. Our faces squished against the window the entire ride home.
While my brother and I continue to playfully chant ‘child abuse’ to my parents as we recant the story as middle-aged adults, it has only recently hit me how much this memory (and my father’s simple mantra) has influenced how I run my business.
I think that, in our technologically-driven environment, too many entrepreneurs lose focus, especially as they scale up. They move away from my father’s simple mantra toward high-tech, quantitative big data analytics forecasting and performance measurement tools dressed up in fancy company visions and mission statements. Yes, data is important, but it is not the only source of data.
Whenever possible, I prefer to keep it simple by focusing on quality products, competitive prices, and positive customer experiences with the guiding principle that everyone should be able to enjoy a little luxury at a price point that fits within their budget.
Can you share with us the story of the “ah ha” moment that led to the creation of the food brand you are leading?
It is 2007. I have been living in Myrtle Beach for two years with my newly retired parents. I was just coming off a failed relationship and was focusing on completing my doctoral dissertation, so money was tight.
Luckily, Myrtle Beach, especially during the off-season, was awash in awesome food, beverage, and entertainment deals for locals. My parents taught me the art of happy hour. You can eat and imbibe like a king even if you only have a few dollars in your pocket. The only thing that you could never get on happy hour was dessert. I love dessert. I need dessert. Now, being low on cash, in order to indulge my sweet tooth, I had to give up a few cocktails.
Ah Ha! What about an edible cocktail™? A cocktail you can actually eat — not just adding a little pipette of alcohol to a baked good or a tablespoon for ‘flavor,’ but an honest-to-goodness dessert that has a full shot of booze in it and tastes like a recreation of your favorite cocktail, mixed drink or martini? There are many bakeries adding alcohol to cupcakes out there, but I am still the first and only one to guarantee a full shot after baking in each edible cocktail™. Immediately the name and fun logo popped into my head: the Inebriated Baker®.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Allow me to begin by saying that you will make many mistakes when you first start out, especially if this is your very first business venture and/or first foray into food. You will continue to make mistakes as you grow the business, too. Mistakes are good! Mistakes allow us to recognize a deficient area and fix it. Mistakes can be a source of new ideas. Do not allow mistakes to derail your success — learn from the experience, adjust, and pivot accordingly.
Pivot. That brings me to an important sidebar. Pivot. This term has taken center stage because of the COVID global health crisis. Business of all sizes must be ready and willing to pivot in response (hopefully preemptively) to anything that forces a reevaluation of the existing business model, goals, strategy, organization, product and/or processes. Successful pivoting can be as simple as repositioning and rebranding a product in light of shifting customer demand or adopting new social media marketing tactics. Learning from your mistakes is the cornerstone to pivoting efficiently and effectively, and becomes increasingly significant as the business scales up.
Owners of successful startups recognize that building a satisfied customer base from the onset is the key to longevity. As a startup, you will make mistakes but that is where customer feedback comes into play. As a startup, you should always seek customer feedback. The earlier you can identify a potential issue and fix it, the better.
I do not have a story about a funny mistake. However, I will discuss the most significant mistake that I made and how it drove home the importance of planning, customer experience, and pivoting.
It was July in Kentucky. I landed my first big corporate catering event order — an executive’s birthday. Kentucky in July is very hot and humid. The order was for four varieties of my boozy edible cocktail cupcakes™. I pride myself on only using the freshest ingredients, which means simple, delicate buttercream frosting made with actual butter and no stabilizers. Well, real buttercream frosting + July’s stagnating heat = a disaster.
In retrospect, I was not ready for such a large order. I was not ready for delivery logistical issues. I was delivering in my personal car. I did not have a cooler large enough for the order. Well…you can guess what happened. Even though the delivery drop-off was only a 10-minute drive, with traffic and the weather, it might as well have been a cross-country trip because the frosting was a droopy mess. I know it still tasted great, but presentation is just as important, especially for a dessert. This is not the ideal first impression that I wanted to make as a start-up business, especially to this large and very influential local business. I apologized profusely, comped the entire order, and offered a discount on the next order (if they would give me a second chance to make it right). They were very nice about the situation because they knew I was a very green, one-person, homegrown local start-up. They texted me to let me know that the cupcakes, although looking worse for wear, were delicious.
What did I learn? Be prepared and think ahead. Plan. Anticipate possible obstacles and hiccups. Be ready to apply what you learned by pivoting ASAP. Pivot within your means and budget. I could not immediately afford a new refrigerated delivery truck, but I could afford better temperature-resistant packaging, thermal bubble wrap, sub-zero gel packs, and an extra-large cooler for the backseat of my car. Every customer experience is a chance to improve processes.
Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?
First, reach out to your local Small Business Association and research what permits, training certificates, etc. are required for your intended product/business. When it comes to food, there are numerous laws and statues at the federal, state, county, city, and municipality level to which you must adhere. Before you begin, you should take the time to understand the legal environment and statutory requirements governing your product/industry.
Second, research your market and find your niche. There are a ton of bakeries out there. I knew this when I started, but what will make me stand out from the crowd? You need to figure this out and design a cohesive story, voice and presence for your brand.
Third, your niche will be the basis of your marketing (social media, local, word-of-mouth, website/e-sales). Do not make the same mistake that I did and think of social media as an afterthought. Social media is a lifeline for small start-ups who cannot afford to hire a marketing firm. Leverage your personal contacts and organically grow your brand digitally, as well as F2F. Be sure to leverage technology to your advantage and use a variety of platforms and modalities that align with your product and customer base.
Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?
If you did all of your research and planning and are ready to give it a go, start small and test the waters with low overhead costs: local food maker craft fairs, community festivals, farmer’s markets and holiday bazaars. If you are producing a ‘low-risk food product’ and your local municipality permits home-based food processing, this is a great way to dip your proverbial ‘toe into the water’ without the huge commercial kitchen rental fees. It is a great way to test recipes, get feedback from customers in real-time, develop brand recognition, and develop your selling voice.
You have to put yourself out there in order to make the jump from idea to actuality but the risk does not have to be all-consuming. If you have been cooking for friends and family, you need to expand outward and garner the input of customers who are not related to you.
Be ready for all kinds of feedback. Do not take it personally. I know this business is your ‘baby,’ but try to remember that the goal is to get feedback that can be actualized as improvements that will ultimately strengthen the business. All feedback is a great source of information that you can use to strengthen the brand and product.
Honestly, I love doing the festivals and fairs. I get to stand under my obnoxious lime green tent and ‘hock my wares’ F2F to a wide swath of customers from all marketing segments. During the pre-COVID era when I could give away free samples, I had the opportunity to immediately interact and engage the customer and watch their nonverbal cues. I used the festivals as an opportunity to get honest feedback on recipes, menu offerings, marketing, digital content, packaging, pricing and the list goes on.
During one 8-hour festival, I could get actual facetime with over 300 people representing my diverse target audience, which is more information than I could glean from a year of social media analytical data and insight reports that only look at engagement, time on a page and click throughs.
I cannot stress enough the importance of the local festival circuit. There is no better testing ground that a local bazaar or market to get your product in front of a large and diverse customer base. Sales are not the primary objective-although they are very affirming! Your goal is to build a conversation with the community and secure information that you can take back home and translate into actionable product, business, and brand improvements.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
This is tricky. I suppose it really depends upon the industry and product. Food-based businesses may not often find a need for an invention development specialist. However, we often require manufacturing and process consultants.
If you do hire a third party consultant, be sure that you have secured all of the legal aspects of your product in advance: trademarks, service marks, branding, copyrights, patents, formulas. Be sure to hire an attorney experienced in these areas!
That being said, I think that you really need to have some hands-on experience producing the product yourself in a test kitchen, especially regarding recipe formulation and shelf stability, so you know the strengths and weaknesses of your product. So, if you do decide to hire a manufacturing or process consultant, you can engage intelligently with them to achieve your desired goal. You do not want to lose yourself, your brand, your voice, your proprietary information, or your product to a team of out-of-house consultants.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
All startups, especially food-based lines, start with bootstrapping. I funded my startup with my savings from my ‘day job’. There are plenty of creative lines of funding outside the traditional VC and bank loan avenues, including crowdsourcing, federal and state grants, low interest SBA loans, and microloans from friends and family. Get creative and think outside the box. Do not be too quick to take a loan from a third party or agree to a new co-owner or silent partner to score a quick cash infusion — you may be giving away your business before it even starts.
Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?
I do not have patent experience because you cannot patent a recipe. However, I do have extensive trademark experience for my slogans, logos and business names. I filed all of my trademark applications myself using USPTO.gov. It is much more cost effective to file yourself. It is not difficult, just take your time and review all of the rich information that is provided carefully (a few times). Your first application will be a cumbersome experience; once you go through it, it actually becomes much easier.
Always try to source local ingredients whenever possible (and cost effective). As a start-up, local farm ingredients may not be the most cost effective option versus a big-box retail seller. As you grow and are able to bulk order, you can negotiate good prices from local farmers and food providers.
When you start, I recommend that you always remember to find the best ingredients for the lowest prices and only buy what you will use. This will ensure greater profitability and less shrinkage losses — after all, scoring butter for 1 dollar/pound is an amazing deal but only if you do not let 99 pounds spoil.
Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food Line or Specialty Food” and why?
1. Passion— You need to have a genuine passion for what you are creating. Unless you have copious amounts of money to tap into, you will likely begin by bootstrapping, which also means that you will be a one-person business-building machine. Passion will help you weather the 30-hour days. Yes, you did read that correctly. If you are not enthusiastic about your product or brand, why should anybody else be?
2. Research & Planning — You need to do your research and planning (a continuous theme throughout my responses). Starting any food-related business requires research and planning. You need to research your market and find your unique niche. You need to plan and map out the actual business-side, which is not limited to menu engineering, recipe testing, marketing, production and delivery. What many mom-and-pop food start-ups forget is the way back, back-of-the-house administrative items (a.k.a, the boring stuff): record keeping, accounting, cost breakdowns, profit margin, etc.
You can have the best product in the world, but a business is just that — a business — and there is a lot more to creating a successful business than grandma’s recipes (even if they are amazing). I think that many start-ups fail to plan, especially when it comes to costs: startup costs, operating costs, input costs. They try to scale-up too early and too quickly without the sales to support their spending. For bakeries, in particular, many (even the famous franchises) have humble beginnings — starting as a hobby and growing into a cottage-based industry or food before establishing the first dedicated retail location. As an entrepreneur looking to duplicate the success of our favorite business or professional mentor, we fail to see all the research, planning and pivoting involved in the scaling-up process. Take it slow. Have a business plan with measureable goals. Every business is different.
3. Humility — Know When to Ask for Help — Third, many single-person start-ups make the mistake of not knowing when to ask for help and/or to hire a professional. I cannot count how many Google search holes I fell down — 12-hours later, no solution just a ton of articles. Yes, you are bootstrapping your start-up. Yes, money is tight. However, you cannot do everything. There will come a time where you realize that it will take more time and effort for you to complete the task yourself than if you were to hire a trusted, skilled professional. Your local SBA can recommend some vetted professionals that focus on assisting start-ups. Look at their work. Interview them. Tell them exactly what you need from them. Figure out an affordable payment / barter plan. Also, seek out assistance from your local Chamber of Commerce, entrepreneurial professional groups, and local university business schools.
4. Know Your Numbers — This is a Business Not a Hobby — A business needs to be profitable. You will need to drill down into the numbers and nail down high quality, lowest cost inputs to keep your production costs low. Figure out exactly how much it costs you to produce one unit including ingredients, worker time, electricity, packaging, labels, and delivery. Know your numbers! Many start-ups have no idea what it costs to produce one unit or fail to include packaging, labels, delivery, electricity and, especially their time, to produce the item. Knowing your numbers will help you determine competitive and profitable prices (retail and wholesale). Remember, this is a business so you need to make an actual profit from day one even if you are a single-person operation (like me).
5. Get and Stay Organized — Finally, get organized and stay organized! Actually, this is not number five, rather it is an overarching umbrella step, and it starts as soon as you have an idea for a business. Organization includes menu ideas, expansion mapping, license deadlines, accounting ledgers, marketing ideas, website updates, vendor POCs, pretty much everything. Pick an organization method and be consistent.
My local SBA coach recommended the use of different color notebooks one for each aspect of the business that I could organize my thoughts in a single document — a blue book for menu ideas; a green book for high priority items; a yellow book for second stage development; a red book for long-term expansion ideas; a black book for marketing; and so on.
Start-ups require that owners wear all of the hats. If we do not organize and prioritize, we find ourselves working 24-hours straight without any real accomplishment. There are too many fragments scattered to the wind and we feel like we are just spinning our wheels without any measureable accomplishment. I have found this simple organization method to be invaluable, especially as a single person start-up. It really helped me to prioritize because I often found myself spending too much time developing a stage-two expansion idea when I should have been focused on fixing a high-priority website issue.
The final piece to the stay-organized step is to use a consistent accounting booking system for tracking expenses. As a startup, you will be making purchases left and right to build an inventory and supply base. The system does not have to be high-tech — a simple written, accounting ledger book will do the job (then you can transfer over to a digital spreadsheet).
Can you share your ideas about how to create a product that people really love and are ‘crazy about’?
First, you need to be passionate and ‘crazy’ about it. Enthusiasm is infectious. Drum up customer excitement with a unique voice and engaging marketing and sales pitches both on social media, as well as in person. Ask yourself, “Is this something I would buy?” Involve your customer base and ask them what they want!
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
Well, I do not know if I have made the world a better place. I am trying to give back to the local community whenever possible, especially now as COVID has derailed the annual gala fundraising events for most nonprofits. I made sure that community outreach was a cornerstone of my business. I regularly donate to multiple local charity fundraising events such as God’s Food Pantry, Humane Society, Allegro Dance Group, Habitat for Humanity and The GoodGiving Challenge. I give what I can — products, gift cards, video support, and endorsements. In the near future, I would love to sponsor community events and expand my outreach to other nonprofit groups that are near and dear to my heart.
I would also like to dust off my experience as a college professor, curriculum designer, program director and use it to build a free community outreach program in entrepreneurship and entrepreneurialism with synchronous and asynchronous training classes and mentoring/ shadowing opportunities. There are a million resources available locally and online, but you need to know where to find them and what to look for. I would like to develop a practical hand-on training program — much like an academic degree program — organized into subject area focus classes with all that information in one location complete with a mentoring/shadow program.
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
Pay it Forward! I strongly believe that you should always remember where you came from (both as an individual and as a business entity). Give back to the local communities that helped you. Financial support is wonderful, but what I have always found lacking is mentoring support. Even now, I would love to find a mentor in a similar business and shadow them.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.