Home-based Foodies in the Game

May 8, 2013
Business of Food, Current Climate for Small Business
PTA
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If you’ve always wanted to test the commercial market and see if anyone would buy your homemade granola or your Grandma’s cinnamon cookies, now you can…and do it legally. You can cook at home and do not need to rent a commercial kitchen. However, there are some low hurdles to step over and then you can be ready for your first steps to food business success!

In January, 2013 the California Homemade Food Act was signed into law, making it legal for people to sell “low-risk foods” produced in their home kitchens. A food entrepreneur who wants to qualify as a Cottage Food Operation must meet a few criteria:

Produce foods on the approved list,
Have gross sales this year of $35,000 or less (by 2015 this will go up to $50,000),
Complete a food processor training course, and
Have product labels that meet state and federal requirements.

There are more details of course. Note the two categories of cottage food operation:

Class A operations can only sell directly to the consumer (which can include at community events, farmers’ markets and through CSA subscriptions) and can register with a self-certification compliance checklist.
Class B operations must be inspected to receive their permit but can then sell to restaurants, retail food stores and food trucks.

Before this legislation became law, you needed to use a commercial kitchen or food processing facility (such as Eclectic Cookery) to legally sell your food product (or join a kitchen incubator, like La Cocina). For many entrepreneurs who are just starting out, testing their food business ideas by renting a commercial facility is cost prohibitive. Now there is a way to start small at home legally.

The success of the now-closed Underground Market in San Francisco is a clear sign of how many people will be able to benefit from this new law and also how many people want artisanal food. With a pick-up in the economy, there should be more customers for a good product… if it is sold effectively and meets the considerations of the target market. It is a great time for micro businesses and home-based entrepreneurs to really test their products, their ability to do the work and their commitment to be small business owners. There’s a lot of new energy out there to support small food businesses and new policies like this Homemade Food Act to stimulate the growth of the industry.

To learn more about the California Homemade Food Act and how to obtain a cottage food operation permit, go to the San Francisco Department of Public Health and the California Department of Public Health websites.

Celebrating Business in Community

On Wednesday night, Anchor Brewing hosted the annual Potrero Dogpatch Merchants Association (PDMA) member celebration. Anchor provided the beer and food was donated by local businesses. About 150 people came together to celebrate our community of neighborhood businesses and get to know each other better.

I invited four local business owners to attend so they could meet and network with fellow merchants. Networking can be hard to do if you haven’t done it much before. Often it takes getting out there and meeting people two or three times before you develop any lasting connections… but it does work. By putting yourself out there, sharing who you are and what you do, learning about other people and creating new connections…this is how we build a strong, local business community.

I’ve been a member of PDMA for the last three years and currently serve on the association’s board of directors. Joining this group and actively participating in neighborhood business meetings and events has been a great way for me to engage with the neighborhood and other business owners. For me, community service and advocacy is a key part of what it means to be an active local small business owner. If we can strengthen the small business community neighborhood by neighborhood, the entire city benefits.

I hope you are getting out there, too, and making new connections in your community. If you need a place to practice pitching who you are and what services or products you have, let me know. I may be able to direct you to a group that can help you do that. Be in touch!

Good Food Dot Com

March 20, 2013
Business of Food, Current Climate for Small Business, Trends in Small Business
PTA
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When I owned a cheese store in San Francisco in the 1980’s I felt like we were in the middle of a food revolution—there was so much energy around “back to the land”, natural gourmet food, vegetarianism, food buying clubs and food cooperatives. We are now in the midst of another food revolution. This time it’s a food and technology revolution. There is a resurgence of small food businesses that are focused on craft, sustainability and supporting their communities, and at the same time the internet is completely changing the way food is being distributed and sold.

cupcake from Black Jet Bakery

There are many new internet tools to support small businesses and many are being created specifically for food businesses. This includes a search engine for food industry jobs (Good Food Jobs), a new entrepreneurial education and online community for mentoring food start-ups (Local Food Lab), an online wholesale service (Buyer’s Best Friend), and a new portal to market and distribute food products directly to consumers (Good Eggs). It is an exciting time to be starting and running a food business!

soup from Mama Tong

Many of my students at Renaissance Entrepreneurship Center (graduates of the 14-week Business Planning Class) are taking advantage of these tools. b. street waffles, Black Jet Bakery, Double Dutch Sweets, Leslie Kay Bakery, Mama Tong, Ruby’s Oats, and Sow Juice, as well as two of my clients, Starter Bakery and Suite Foods, are all Good Eggs producers.

For new food businesses, this type of publicity and connection to potential customers is invaluable. Access to markets is key for any small or micro business. Setting up an online store or trying to get into a local retail outlet can be a daunting or competitive proposition.

juice from Sow Juice

But if you can prove there is a market, satisfy the marketplace with good services, and build a following through these new online platforms, you just might prove your business model, make it into the mainstream, and develop a sustainable business.

These new internet tools are making it easier for small food businesses to get support, find community and connect with the markets they need to be successful. May they take root and flourish!

Sharing Small Business Wisdom

As part of the lead-up to the eighth annual San Francisco Small Business Week (May 13-18, 2013), I was interviewed for the San Francisco Small Business Week blog.

The week is designed to offer a series of educational and networking events to educate, connect and celebrate the small business community in San Francisco. This year’s festivities will include a conference with 50 free workshops and seminars for small business owners (I’ll be speaking about business planning), a gala called Flavors of San Francisco, and an awards ceremony hosted by the Small Business Commission, the Mayor’s Office and the Board of Supervisors to recognize exceptional small businesses from each district and city-wide.

Here’s my interview with Small Business Week…

SMALL BUSINESS WISDOM FROM PAUL TERRY

Small businesses in San Francisco have a wealth of opportunities to access wisdom and technical assistance from a variety of small business experts who provide one-on-one counseling, technical assistance, and instruction through neighborhood and community-based nonprofit agencies. The San Francisco Small Business Week Committee is pleased to share wisdom from these experts who help the small businesses that shape our communities to succeed.

Today we hear from Paul Terry, business planning coordinator at Renaissance Entrepreneurship Center, who believes that one of the keys to success is making a life-long commitment to education.

What role do you play in supporting San Francisco’s small businesses?

I’ve supported small businesses for more than 25 years as an independent business consultant and owner of Paul Terry & Associates with skills that I developed from launching my own food, distribution and training businesses in San Francisco. I am also the business planning coordinator and primary instructor at the Renaissance Entrepreneurship Center. I was one of the initial developers of Renaissance Entrepreneurship Center’s entrepreneurship program, business incubator, and business support program.

The role I play in supporting small businesses involves teaching, empowering, and encouraging entrepreneurs to start and grow businesses. The training and consulting helps people build their confidence and access the resources they need to be successful in business.

As a small business consultant in private practice, I work with 25-30 businesses each year to facilitate growth and transition, to build effective partnerships, and to implement strategic planning solutions. Over the years, I’ve taught 7,500 entrepreneurs, and I’ve supported over 600 small businesses.

In your years of working with entrepreneurs, what has emerged as the greatest challenge to a small businesses success?

One of the biggest challenges relates to maintaining balance. New business owners need to recognize that their entrepreneurial skills – their ability to get the business up and running – need to be in line with the complexity of the business model. They need to hone their skills, tap into their confidence and develop the scale of business that makes sense for who they are at a particular time. New skills are then required on an ongoing basis as the business grows in size and complexity.

Another challenge facing new businesses involves joint ventures and business partnerships. If the business partners fail to clearly define the relationship at the early stages, problems quickly emerge and often create disruptive conditions as the business grows.

A third challenge for a new business occurs when the entrepreneur attempts to transition from a full-time job — working for someone else — to working in a business that is not immediately profitable. People need to be realistic about the appropriate amount of capital they need launch and grow to profitability.

The common thread – and the reason people come to me – is that they are stuck. They need a better framework for making educated decisions and they need access to the appropriate mentors, advisors and associates for advice and direction.

In your experience, what is the biggest key to long-term success for a small business?

Businesses that have been around for a long time survive and thrive because they provide very good services to established clientele with fair terms and conditions. Long-term success also requires being nimble enough to adapt to new markets, emerging trends, and new technologies.

There are macro and micro competitive forces that can undo a successful business. It is key to make a life-long commitment to education, strategic thinking, and new skills development.

What are some of the most important ways in which small businesses shape communities in San Francisco?

Small businesses define the character of our neighborhoods in San Francisco. The appropriate mix of small businesses enriches and energizes a particular area, which attracts tourism and inspires residents to shop locally. Small businesses invest in their communities by hiring locally, engaging in local politics, donating to nonprofits, building parklets and other community spaces, and doing all the critical things that make our neighborhoods more enjoyable. Small businesses are the advocates of local development and define the flavor and culture of this city – with “pop-ups”, food trucks, trunk shows and an involvement in the local areas where they live, work and play.

Resolve Conflict

Being in business is challenging. You can’t be in business without running into conflict at some point… your landlord raises the rent, your largest client reduces your hours, your reliable vendor is three weeks late with inventory, your wait staff calls in sick at 5:00pm and/or your key employee gives notice. Wow! What to do?

Winged Wisdom, part of Presidio Habitats, a site-based exhibition created for the Presidio of San Francisco

Perhaps the answer is to quit…start a new business or…as we all say to ourselves at one time or another, “I need to get a job!” Most of us don’t go and get a job. Sometimes we try and go through the motions of an interview and think this will resolve all the conflicts…but then realize that’s really not what we want. Working for someone else does not resolve or eliminate conflict. It is still there and now we don’t have the “power” to implement a change!

The idea is not to instigate conflict or prolong it, or try to win the argument. The process of running a business is to minimize conflicts and if a conflict arises, to face it and try to resolve it. The owner has to build the business, take care of the employees, satisfy the clients or customers, and create a balanced life for themselves.

There are solutions to the conflicts. Sometimes it is a genuine transparent management style; at other times, it is direct conversations with key employees; or it could be recognizing the error before the client or vendor sees it and suggesting a solution before there even is a conflict. (When I ran a gourmet food business, I noted right after the holidays that we did not sell all the extra inventory that we had bought. I called the vendors immediately and negotiated a 6 month payout plan…before they noticed we were late with payment and got upset with us.)

To find the right solutions we can look to supportive mentors or professionals who can listen and advise, talk things through with key employees, meditate on the right action, and then forge ahead and explore new approaches. If you run your business with integrity, honesty and transparency and confront your stumbling blocks head on, you can make it through. But if you don’t resolve a conflict…guess what comes back for you another day? So, resolve conflict!

In the Company of Others

A common assumption is that word-of-mouth promotion for small business means encouraging customers or clients to tell other people about your business, either directly or through online review tools like Yelp. This is important but another key part of word-of-mouth promotion involves your own word-of-mouth efforts—attending events, meeting new contacts, talking with others and sharing who you are and what you do.

It’s great to attend events that directly relate to your business or industry and it’s also incredibly valuable to just get out there and make contact with people. We need to be out in the public—be it a street fair, holiday event or home-based party—and connect with others.

Even at gatherings that aren’t “officially” networking events, try to put yourself into the mix and in your own way, “work the room”. It’s okay to have an agenda in mind. You can be ready with a critical question to ask or some simple information to share about you and your own business. Travel with a business success story or a lesson learned, and always be on the lookout for good resources and leads for other business owners you know.

In conversation with PTA Associate Andrea Baker, Owner of Baker Consulting

The key to building a good reputation may simply mean being a person ready with a story to tell, good resources to share, and the ability to listen and ask questions in all conversations. Every encounter is a potential business opportunity—even if you don’t know what the benefit will be to you and your business in the moment! It is in the company of others that magic can happen.

Testing the Waters

Before you start a new business or expand into a new marketplace, it’s always essential to “test the waters”. This means doing some simple market research. The intent is to find out as much as possible about potential customers or clients before taking the plunge and/or repeating a marketing effort!

Shoe leather approach
Market research can be as simple as asking casual questions, comparing prices, walking around your neighborhood or attending a trade show. I call this “shoe leather research” even if you don’t do it by walking around. You learn by keeping your eyes open, your ears to the ground, and paying attention to what you notice.

Situational Observations
Casual and informal research can also be called situational research. Basically, it involves getting a feel for the industry, the general marketplace, and/or the specific targeted market that you think is right. The process can include informal conversations with potential customers (“I’m thinking of opening an online pet helpline. Would you use something like that?”), direct competitors (“I wonder if you could help me as I’m thinking about opening a shop like yours 50 miles away.”), and potential suppliers (“Can you tell me how much inventory you usually sell to stores that carry your line?”) Sometimes this informal style of research generates enough information to build your confidence and help you get a new business started. Other times, this approach will help an existing business to identify and carry a new product line.

Formalized Primary Research
Shoe leather and situational research can be very helpful but more formalized research may also be needed when trying to determine if your business approach is the right fit. This can include careful observation (watching, counting, recording), interviewing someone relevant to your business area (by phone, in person or online with carefully chosen questions), or preparing a survey to administer to your potential customer base (by mail, in person or online using free software like Survey Monkey).

Secondary Research
It can also be very helpful to do secondary research—getting information from trade journals, census reports and other industry references. There are online services based on Google key words or specific industry data. This form of research is easier in a way (you just go online and ask some questions) but it isn’t always relevant and may be too general for your market. A combination of primary research (done by you to acquire original data) and secondary research are BOTH valid and need to be part of your business planning.

Making the Time
The most important factor when selecting a market research approach is to determine if you have the time to do it and if you will actually compile and use the data. Your research should help you minimize the risks related to the venture you want to undertake, so make the effort to talk to people, gather information from the industry, watch competitors and record your impressions. Testing the waters (even at the shallow end) will make your plunge into business much more successful!

photo credit: http://walkingfit.ucr.edu/faq.html

A Day in the Community

Last Saturday (before the World Series started nearby… Go Giants!) I attended the 23rd annual Potrero Hill Festival, a gathering organized by the Potrero Dogpatch Merchants Association (PDMA). The festival was a benefit for the Potrero Neighborhood House. Twentieth Street was teaming with people enjoying the live music, sampling tasty treats from food trucks, learning about a variety of important causes, and supporting Potrero Hill and other San Francisco businesses. It was a full day of sun, fun, music and food, with many families with young children in attendance.

This festival was a great way to remember the strength of community that comes from the neighborhood and in particular, the local businesses that make it a vibrant place to live and work. A variety of local food establishments were involved this year, from the new restaurant Skool, to neighborhood anchors Good Life Grocery and Farley’s.

To be a part of a community, we need to show up, get involved, and support our neighbors. This year, after 20 years of doing business on Potrero Hill, I was invited to join the PDMA board of directors. I am learning a lot, working with other small business owners/volunteers, and seeing how a few people can make a significant impact through their involvement in local businesses, schools, organizations and the political process. Wherever you live I hope there are opportunities, like this festival, to come together as a community. If not, maybe it’s time to take the lead and organize something in your neighborhood!

Outstanding Service

October 10, 2012
Entrepreneurship Training, Events & Community, Profiles
PTA
4 Comments

Last week I received the Outstanding Service Award from Renaissance Entrepreneurship Center. This award was presented by CEO Sharon Miller to recognize over twenty years of work with Renaissance as an independent business consultant in developing classes and incubator programs and as the primary business planning instructor and coordinator.

receiving the Renaissance Outstanding Service Award

It was such an honor to receive this award in front of colleagues, students, friends and family during Renaissance’s gala event, “Small Business, Big Impact: Celebrating 28 Years of Small Business Success” on October 2nd at the Bently Reserve in San Francisco.

It was quite surprising to realize that I have taught over 5,000 business planning students and supported over 100 incubator tenants at Renaissance. The secret is that I’m constantly inspired working with new and emerging business owners. I love the experience of helping students to explore options, get organized, develop practical business skills and take the steps necessary to make their small businesses work. I am inspired each day by the diversity of people who want to start their own businesses, the variety of business ideas, students’ focus and passion, as well as their willingness to put in the time and make the commitment to be successful.

While the award was so appreciated, the people who truly deserve the accolades are the Renaissance graduates — the new entrepreneurs who are doing research, creating prototypes, testing concepts, launching on a trial basis, and then jumping into the marketplace.

with fellow Renaissance graduate award winners, Heidi Gibson, Yvonne Hines and Alphonso Rhodes

These small and micro businesses are the engines of our local and national economy. We need to support them so they can thrive, continue to expand, offer jobs, and become community-based institutions for our neighborhoods and cities. When you choose to frequent small, independently owned businesses you are directly building the local economy and, in the process, supporting some amazing, dynamic people. Our small business owners are heroes. They are making a difference through their focus on sustainability and their attention to the local community. We need to award the local, small business owner for outstanding service!

Leading you in the Right Direction

As business owners, we cannot do it all by ourselves. Small business specialists can help tackle problems in accounting, law, insurance, graphic design, marketing, management and other critical areas.

I’ve found there are three primary reasons for a business owner to hire an outside expert:

For the short-term when over-extended, such as market expansion or preparing a business for sale
For specific or sensitive issues, such as personnel problems
For issues demanding special expertise, such as computer systems, taxes or engineering help.

Here’s how you can choose the right professional for you and your business:

Before your search begins
Determine what you really need, when you need it and how much you can afford to spend. This will help you decide the type of professional to look for and the criteria you’ll want to use in evaluating your options. Know the results or outcomes you would like to obtain. This will help clarify the level of expertise you’re looking for.

The Search
Ask for recommendations from colleagues in businesses of similar type, size and philosophy (instead of blindly searching the internet). If colleagues have been satisfied clients they will be happy and eager to refer the professional or consultant to you. You can also find quality help through business associations and industry-specific professional groups.

The Screening
Find an advisor who can really listen, evaluate the situation, make recommendations and then, if appropriate, help you implement solutions. When you first talk with the professional, notice if he or she can connect your problem to his or her previous experience. Pay attention to the questions the professional asks you.

The Meeting
Spend the first few minutes of your first face-to-face meeting setting an agenda, identifying possible outcomes and getting agreement on the length of the first session. This will help focus your time, set criteria for measurable results and keep you in charge. The professional should be able to define the basic issues and then estimate time, terms and fees.

The Agreement
It’s wise to get things in writing, including a work plan and timeline. Many professionals will provide a letter of agreement but don’t expect consultants, like a computer or management consultant, to provide a full analysis for free. A thorough analysis of your business situation and expert recommendations are worth paying for in advance of a solution being implemented. This important step, if done properly, can actually save the overall expenditure of certain projects and should be included in the total budget for the project.

Using professionals in your business is not a sign of weakness! It is an indication of sound management practices. As a business grows, staff can be added to replace outside experts or you can continue to use contract professionals.

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