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Production momentum takes the cake for startups with novel food ideas

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A missing ingredient in today’s novel food startups is the business plan. At least, it’s not always written in the original recipe.

Eighteen months into niche confectioner Dear Caramel, proprietors Yvette and Jamie Wynne say they have a loose business plan, but the speed of production, packaging, warehousing and distribution well outpaces anything on paper.

“It’s an evolving plan,” said Jamie Wynne. “It’s progressing into a business plan, but I still feel like we’re learning.”

The husband-and-wife business partners wrote their first plan six months into production of the caramel treats – simply as an exercise. The startup is an exercise of its own, intended to teach their 15-year-old daughter Eleanor firsthand how to be an entrepreneur.

“Behind every good idea is a whole lot of work,” he said of the family venture that started simply as holiday gifts.

So they fired up the kettle and began whipping up batch after batch. The business plan? More like an afterthought.

It’s a similar story for 2-year-old Sneaky Greens LLP – except the makers of kale and mustard green-infused seasonings wrote their loose plan before heavy production began. The difficulty is it’s chock-full of eraser marks and rewrites.

“We didn’t have to really be about cash flow and we don’t have a runway,” said co-owner Laura Greene-Johnson. “The growth plan and the business plan have been fairly passive.”

Greene-Johnson and her mother-in-law business partner Doris Johnson have had to course-correct the plan along the way, but nailing down sales forecasts that lead to still-sought-after profits has proven difficult. Sneaky Greens is up to producing 200 spice jars a month for placement in about 20 area grocery stores, and Greene-Johnson said the work is breaking even financially.

It’s hard to definitively say whether a business plan is the vehicle to overcoming profit hurdles. Terrell Creek Farm LLC co-owners say it’s a solid maybe.

“I can see the advantage of having a business plan, especially if a startup is wanting to go to a bank,” said co-owner Barry Million. “We didn’t have to go that route.”

Self-funding is a common thread among startups without business plans.

Five years into running Terrell Creek Farm to sell goat cheeses at farmers markets and area grocers, as well as to a half-dozen restaurants, Barry and Lesley Million still don’t have a written business plan.

“It’s more fly by the seat of our pants,” he said. “We did not have a written plan, just an idea in our head.”

There are various respected schools of thought on business plans. Must-haves identified in a business plan checklist created by the Kauffman Foundation:

• target market and how to penetrate it;

• funding needs and how the money will be obtained;

• compensation system clarified;

• production processes, facilities and distribution system identified;

• customer profile and pricing strategy;

• reasonable sales and profit projections; and

• exit strategy defined.

Recognizing some forethought would lay out a plan to profits, Million said the production work keeps calling. What started with 12 goats now counts around 50 milking goats in the flock, and it’s growing through breeding.

“We just jumped in,” the cheesemonger said, standing behind his cooler recently at Famers Market of the Ozarks. “We knew there was a market for goat cheese. There were only two others in the state, and there wasn’t one in this region. We were in a hurry to get going with it to fill that niche.”

Terrell Creek Farm has created a following at retailers MaMa Jean’s Natural Foods Market, the Brown Derby International Wine Center and Homegrown Food. Then there are the chefs at Metropolitan Farmer, The Order, Farmers Gastropub and Gilardi’s Ristorante.

“We know what we’re selling, and we know the highs and lows,” Million said.

And if investor money enters in, it might change the game, Dear Caramel’s Wynne said.

The Wynnes seek to strike a balance between the daily details of ingredients, recipes and UPC codes and the long view of sales forecasts and investments required to scale. Jamie Wynne wants to prepare the dish before serving it to an investor.

“We are still trying to figure out a lot of our processes and sources. When we’re confident we have that side dialed in and we could answer to somebody else investmentwise, we may go that route,” he said.

“We would take that very seriously, so kind of making our mistakes on our own before we go out seems like a more responsible plan to us. But we can only self-fund for so long. We can only scale so much.”

Greene-Johnson is working to scale Sneaky Greens. She recently performed a cooking demonstration on the “Kansas City Live” TV show, but the key trigger to regional growth is in conversations with Whole Foods Market.

She said they’ve been talking four weeks with Whole Foods representatives about getting on the shelves of the organic foods seller’s Missouri and Kansas stores.

“It’s a long, tedious process,” she said. “I would hope in another month we’d know something.

“But more so we just need to be doing volume, and that’s what we’re focusing on.”

There’s a Catch-22 in the volume game, though. Distributors require a verbal commitment from 40 stores before taking on a new food producer. With Sneaky Greens only halfway there, Greene-Johnson said other grocers like the product but don’t deal directly with the producers. They require a distributor relationship first.

“That’s the chicken and egg thing we’ve been running into,” she said. “It’s frustrating.”

At any point of a live look-in, these startups are chasing their passions and juggling all the business components that go along with it.

“Our goal is not necessarily to take over the caramel world,” Wynne said. “We like working. I like stirring the pot and standing over the kettle. I get focused on production.”


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