January 23, 2017

Baking Up A Home-Based Food Business (PODCAST)

cottage food businessIn this podcast, cottage food baker Kisha Johnson, of Yankee Girl Bakes, shares insights on how she manages production out of her home, balances her food business with full-time job and family-life, and how she’s grown her business with some very smart, and very inexpensive, marketing techniques.

 

 

 

 

TRANSCRIPT:

Jennifer: Today we’re talking with Kisha Johnson. She is the founder of Yankee Girl Bakes and her story is one that will resonate with a lot of people because she is operating under the cottage food laws in the state of Colorado where she lives. I wanted to talk to her today about her experiences as a cottage food baker.

 

Keisha, thank you so much for joining us.

 

Kisha: Thank you for inviting me.

 

Jennifer: Oh. Absolutely. My first question, we’re going to take it way back, but when did you first start baking? Then, second to that, what was that moment where you decided, “Okay. I really love this and I’m going to turn it into a business”?

 

Kisha: Honestly, I started baking and cooking when I was about seven years old. My mother was not a cook, not a baker. She didn’t enjoy it at all. I remember getting my first cookbook from a reading fair at school and bringing it home. She said, “Okay. Pick out what you’re going to make.” and it started from there. I’ve been baking pretty much ever since.

 

Jennifer: Oh. Wow.

 

Kisha: Yeah.

 

Jennifer: You became the household baker at seven?

 

Kisha: Yeah. Pretty much and I still have that cookbook too, which is pretty funny.

 

Jennifer: Oh. Wow.

 

Kisha: It has a recipe in it for cinnamon toast. It’s butter and cinnamon and sugar.

 

Jennifer: Yep.

 

Kisha: No. It was something that I really enjoyed. I think for me, my extended family was a large Italian family, so for as long as I can remember, good food was always available and it always brought with it, really good family memories. Going forward, throughout just my adult life, it just was something that I enjoyed doing very much, is hospitality is just a part of who I am and my makeup.

 

When we moved to Colorado from back east, I’m originally from the New York area and when we moved to Colorado and especially being in the small town that I’m in, it was hard to find good food. Where I’m from, there’s an Italian bakery, a German bakery, a Polish bakery pretty much in every single neighborhood. You have your favorites and you go to the different [inaudible 00:02:18].

 

When I was a kid and delivered newspapers, I’d go to Russ’s Bakery and get cannoli, every week, but there’s nothing like that where I live, nothing. I just was beside myself, so I said, “Well, if I can’t get it, I might as well make it.” I started making it, bringing it to different events and people started saying, “We want this. We can’t get this. I’m from back east-”

 

Jennifer: I was going to ask that. Did you have a lot of east coast transplants who we’re tasting your goods and missing them?

 

Kisha: So many. So many. People asking for hard rolls that they could have butter with, with their breakfast, from the Jersey area. People from my area, which is Buffalo, asking for a Kimmelweck roll. People asking for a decent hoagie roll. A lot of my baking started out as bread, which is funny because at high altitude, it was very different than doing it sea-level.

 

Jennifer: That’s right, because Colorado, you’ve got a whole other ball of wax you’re playing with there.

 

Kisha: 6,500 feet above sea-level. We’re learning, still learning, after almost four years here. Honestly, that’s what really started it, was I started with just a simple no-knead artisan bread and people were just clamoring and to the point where I actually had to turn away orders on the weekends that I would bake.

 

It got to the point where it was like, “I need to really formalize this because this is getting to a point where I’m going to get noticed by the local authorities.” Someone said to me, “Well, I think what you’re operating under would be considered cottage food,” which I had never heard of. I don’t believe that it actually exists really, in New York, not in the way it does in Colorado.

 

I went and I started doing some research. I went and took a food safety class and really rearranged my kitchen to accommodate what I needed to do for the baking. Then, I went onto the State of Colorado’s website and I incorporated and created an LLC and went from there. A friend of mine helped me develop a little logo. I hit Facebook and started advertising to the local moms groups and here we are two-and-a-half years later, trying to figure out, “What does this look like for the future?” Yeah.

 

Jennifer: Just for folks listening, because like you said, you’re right, cottage food laws are not applicable in every state in the union. I think now we’re up to 41-42 states that have cottage food laws but also just so that everybody listening understands. These laws are driven by the state, it’s not a federal law, which means that, for example, what Keisha’s allowed to do in Colorado is different than what I would be allowed to do in Washington state, which is different from what somebody else in California would be allowed to do.

 

If, as you’re listening to this, you’re thinking, “Wait a minute. I can start a food business in my house?” You need to go and make sure that you’re looking at your state’s cottage food laws to determine what is allowed and what isn’t allowed. There’s more information about that on the Small Food Biz site, just so that everybody’s aware.

 

One thing that really peaked my interest as you were talking about, is that basically you started marketing on Facebook to moms. That’s …

 

Kisha: Absolutely. Absolutely.

 

Jennifer: … interesting. Why did you decide to go that route?

 

Kisha: My career history has been accounting and specifically accounting in the computer industry. One of the things that I had learned just through my career is that marketing plays a big key in what you’re doing. Identifying the why of what you’re doing and then trying to reach the audience from that, to come from that, was really important to me.

 

The reality is, is that most moms do want to feed their families really good food but they don’t have the time necessarily, to sit and actually do it. A lot of people, especially the east coast transplants, they’re used to getting together on a Sunday dinner and having coffee cake and different kinds of desserts and those kinds of things. For me, it felt like I really needed to reach out to the target audience that I was looking to reach.

 

It was really serendipitous because the area that I live in, Castle Rock, it was growing in online community, when I arrived. There were these Facebook groups, these buy-sell-trade Facebook groups, these Castle Rock Handmade, Castle Rock Moms, all these different groups that were starting to really thrive in an environment where you have a lot of stay at home moms. Then, the husbands go and they work in the city and whatnot. They get their community from Facebook.

 

Jennifer: Okay. Yeah.

 

Kisha: To tap into that, was probably the best way for me to not have to spend a lot of money. A loaf of bread costs $4, so it’s not like I’m getting rich off of this right now. To not have to do a big advertising campaign, or try to put a radio ad out, or compete with the larger commercial businesses, Facebook just made the most sense.

 

Jennifer: Okay. Also, you did mention, you were talking about people wanted to get together on the weekends and wanted the coffee cakes. I’m not sure that we mentioned this already, that you have a full-time job in addition to this cottage food business. Your baking is limited to the weekends, so there’s basically a set amount of production you can do every week.

 

Kisha: That is absolutely true. One of the biggest things that I learned, just in the first year or year-and-a-half of this, was A, do not over commit myself and B, to recognize my limitations, which becomes challenging around the holidays because the demand gets really high. We have commercial bakeries like the franchises. I don’t know if I’m allowed to mention them but your Panera Breads or your Kneaders, or things like that.

 

We don’t have the local bakeries that you can run in and grab a couple of coffee cakes or whatever. We just don’t have those. I’m the only one of the cottage food bakers in my area that are actually doing that.

 

Jennifer: Okay.

 

Kisha: And pies. Pies now, some of the other cottage food bakers are picking up and doing but I was the first one to do it in our area. It’s been a challenge. That has been an absolute challenge, is trying to balance this work life and this career life and a business, all at the same time. It’s been an interesting challenge, actually.

 

Jennifer: Speaking of challenges, I think that there are many entrepreneurs who love the idea of being able to start a food business from home. It’s low-cost, you have access to the kitchen all the time, as opposed to renting commercial kitchen space. I also imagine that there are a lot of challenges associated with having your home and your kitchen also be your workspace. I was wondering if you could tell us, from your firsthand experience, about some of the pros and cons that you’ve found from working from your own home kitchen?

 

Kisha: Yeah. The home kitchen was really convenient. I didn’t have to worry about carrying inventory at a local commercial kitchen. I didn’t have to worry about trying to figure out how to insure through a local commercial kitchen. I didn’t have to worry about only being able to bake during their hours and whether that was conducive to when my customers would actually want their product. It would do me no good on a Monday, to do all my baking and they’re not picking up until Friday or Saturday.

 

There was definitely some pros to that, for sure. The cons of … I mean, let’s face it, if I want to stay up until three in the morning on a Friday night, Saturday, I can. Then, I can pick and choose when my customers come to pick up their orders because I do have them come right to my home to pick them up. One of the laws of cottage food is that, at least in Colorado, is that you have to have absolute direct contact with your customers. I can’t leave it somewhere for them to pick up. I can’t have it sold for me through a third-party reseller or anything like that. I just have people come pick it up from me, which is great.

 

I was living in a 1,200 square foot apartment and the kitchen was spacious for what it was but it’s not really suited for cranking out the amount of orders that I was finding myself receiving. There were definitely some challenges to that. Counter space was at a premium. I can only bake two loaves of bread at a time. On a weekend, when I’ve had 15 or 30 loaves of bread, my oven was literally going nonstop at 500 degrees. At high altitude, a really warm area, your bread’s going to rise a lot faster. That can really change or affect the flavor of a good bread.

 

There are some challenges trying to keep the pets out because cottage food does require no pet’s access to the areas that you’re cooking. I’ll tell you, the funniest challenge I had was trying to explain to my son, who is in his 20s, that it’s not a good idea to be making a tuna fish sandwich next to my bread that’s rising on the counter. Which, it sounds funny, but when you’re the only one that’s taken the food safety course and you have the whole family and now you’ve taken over their community space and you’re saying, “Hey, no. This is business space now.” that leads to a challenge too. You really want to make sure that your family’s onboard with this.

 

Jennifer: I love the way that you put that. That you’ve taken over a family community space and you’re saying, “No, no. Now, this is workspace.” You’re right. I laughed when you talked about the tuna fish sandwich. I’ve also seen and I’ve heard of home bakers where somebody will put an onion in with a buttercream cake and now the buttercream cake tastes like onions.

 

Kisha: Absolutely.

 

Jennifer: Yeah. You’re right. You’re taking over the community space.

 

Kisha: Absolutely. When it’s a limited space and you don’t have the luxury of an extra area or an extra counter that you can just say, “Go do that over there,” or as you said, an onion next to a buttercream cake, that’s huge because your customer does not want onion flavored cake. It’s not marketable.

 

Jennifer: I guess that’d be an interesting market.

 

Kisha: It’s been an interesting challenge in that sense but, for me, the idea of making the full-time launch from a full-time job that definitely supports our family to a part-time … If I had to look at my orders right now, I would say absolutely not. I could not sustain myself, even if our orders multiplied by seven times and I was doing that per day. The work is hard. Cottage food is not for the faint or the weary.

 

You have to be the one, I think now in Colorado, they’ve expanded it, you’re allowed to have two sole proprietors that work in the business. It used to be just one. You had one person doing all of the baking and all of the ordering and all of everything. Now, you can have two. It’s not for the faint of heart and it’s definitely a decision that, again, needs to be made with the family and that you realize that once you start selling, you create a customer base and a loyal customer base if you’re good at it. Now, you have an obligation to the community. Yeah.

 

Jennifer: I wanted to ask, I hate to use the word balance-

 

Kisha: Mm-hmm (affirmative).

 

Jennifer: I’m not going to use it from a negative standpoint of like, “Oh. How do you balance?” but more from the standpoint, do you find currently, that having both the creative part-time cottage food business, the creativity that’s allowed in that and yet, the analytical because you were talking about that you work in accounting, which is typically more analytical, do you find that that’s at a good balance for you as a person and for your spirit?

 

Kisha: Yeah. For me, it’s been an unusual … I’m just going to use the term again, serendipitous, because in my teen years when you’re trying to find yourself, I actually did go to an art school, an art high school, like Thame. It was the Buffalo Academy for visual and Performing Arts and I was a visual art major. I always thought that, somehow, someway my future career would be something creative.

 

Then, I made some life choices and had to really buckle down and say, “Okay. Well, this isn’t going to be creative. This needs to pay the rent.” I ended pursuing more of an administrative position. I didn’t go to school or get my degree in accounting but just through various job opportunities and then some schooling, administrative and office management schooling, ended up learning a good amount of accounting.

 

Now, I am the full-time finance manager for an international business in the Denver area. It is very analytical and what I find is that when it’s time to bake, or when it’s time to explore new recipes and figure things out and try to … I’m just going to pause here.

 

It took me 18 months to figure out how to make my carrot cake at high altitude, 18 months. What I find is that the baking really does give me that creative outlet that is a part of my natural bend. Whereas, I would say that the accounting has more been a learned thing for me. I’m good at it because I do approach everything I do with as much excellence as possible but the baking is actually probably the more natural side for me …

 

Jennifer: Okay.

 

Kisha: … as far as that goes.

 

Jennifer: Okay. I asked because I know that, for me, when I was working in professional kitchens, when we talked, I was actually working in kitchens in Colorado, I love, I mean I love the creativity of pastry. I also love that with baking, especially at high altitude. I actually have all my, while my few years of working in Colorado at high altitude, I converted, so I have all of my recipe books that I converted with. I’ve got all my notes …

 

Kisha: Yes.

 

Jennifer: … for the high altitude baking and what we had to do.

 

Kisha: Absolutely.

 

Jennifer: There would be times, and I’ll be perfectly honest about this, there would be times where I would feel like something was missing because it was almost too creative. It wasn’t until I have morphed into a role like this where I’m doing now, which I feel like I have a chance to dive into numbers and dive into stats. I get a balance of both worlds, which is what’s working really well for me. Obviously, I know everybody’s different but I was just curious about your experiences.

 

Kisha: Yeah. The funny thing is, is that I honestly find that, because I spend most of my day working with general ledgers and Excel spreadsheets and balancing checkbooks and credit cards and all of those sorts of things, I find that when I get home, the thing I want to do for my business, really, is my bookkeeping. It’s the last thing I want to do.

 

I don’t want to look at the computer. I don’t want to look at a spreadsheet. I’m probably the worst at figuring out my own costs. Thank God, I would say thank God that I do have some accounting and that I do understand the principles of numbers and things like that because it has enabled me to keep my costs relatively stagnant or stable. Whereas, some of the gals I know that are doing cottage food, it’s like, “You’ve been doing this for five years and you still don’t know what you should be charging for a particular kind of cake.” There’s a problem with that.

 

I don’t know that I necessarily am very good at monitoring my costs from week-to-week or month-to-month but I do understand that you have to keep your costs at a certain percentage so that you do make a little bit of money. Although, talking about when you’re cottage food, going back to the cons of it, when you’re cottage food, is that you don’t get those great warehouse discounts or those great … What is the word I’m looking for?

 

Jennifer: Yeah. You can’t get the bulk…

 

Kisha: Volume. The volume discounts. You’re buying everything, usually at retail. While you can use Costco, or Sam’s Club, or Restaurant Depot, you’re not getting the volume discounts that your restaurant counterparts would be getting.

 

Jennifer: Even if you can use Costco or Sam’s Club, you still then, need someplace to put 50 pounds of flour when you’re not using 50 pounds all at once.

 

Kisha: Right. Exactly. Yeah. It can be a challenge and that definitely, you have to learn to navigate that.

 

Jennifer: Mm-hmm (affirmative).

 

Kisha: For sure.

 

Jennifer: We talked a little bit earlier about you were using or you have used and continue to use Facebook a lot in your business. I’m curious, can you tell us a little bit about how you’ve used Facebook but also what other things that you’ve found from a marketing standpoint that have absolutely just been a home run for your business? Then, on the flip side, what things you might have tried that, for you, may not have worked and if you know of any rationale why you think they didn’t work, though I know it’s never nailed down entirely.

 

Kisha: Absolutely. It’s completely subjective and what might work for one business may not work for another just based on the way your community uses whatever it is that they’re looking to get their advertising from. For me, Facebook has been a home run. It has been an absolute Godsend. It’s the one thing that I would say, if I had to pay for it, for my business, I probably would. That being said, I refuse to boost posts anymore.

 

Jennifer: Interesting. Okay.

 

Kisha: Because I’ve used Facebook now since the beginning and the last few months, I’ve been probably a bit negligent with my Facebook. I got married last month and-

 

Jennifer: Congratulations.

 

Kisha: Thank you. I had to really take a step back because, again, talking about getting your family onboard and while my husband is onboard with it, it’s new to him. He’s not familiar with all of this. Trying to balance working full-time and being newly married and having a business, has been new to me and I’m still navigating that.

 

Facebook has been invaluable. I went from having 10 likes, which were family and friends on my Facebook, to starting to advertise on the local buy-sell-trade groups and the local community groups. I have now exceeded 800 likes in my community …

 

Jennifer: Wow.

 

Kisha: … which is a small community of about 50,000 people. It’s not like I want nationwide coverage here yet, you know.

 

Jennifer: Yep.

 

Kisha: Because I can’t, legally I can’t ship my products anywhere. Facebook has been a home run. What I discovered through using Facebook was that they have an agenda for their business pages and their agenda is to gather money. They want to help us but they want to help us by making money back for themselves.

 

What they do is, they want the user experience for Facebook to be enjoyable. They don’t want their users to be overrun with advertising. If I have a Facebook business page and I’m posting regularly on that Facebook page, then what I’ve discovered is that Facebook will suppress those if it’s what they would consider too much or too often to my audience.

 

Jennifer: Okay.

 

Kisha: Now, I can increase the amount of activity. I’ll give you an example. I can post a holiday special, say for Christmas, and having over 800 likes and Facebook will tell you that 37 people have seen it. You have to wonder, “If I have over 800 likes, why are only 37 of my followers seeing this?”

 

However, if you boost the post and you pay $5 for a 24-hour exposure, or $20 for a week exposure, or whatever your budget is, then I find that my exposure increases dramatically because Facebook will actually put that in front of my followers. Whereas, if they’re not regularly interacting with my page, they won’t actually see what I’m posting.

 

That did catch me by surprise probably about a year into this, what I call my cottage food experiment. What I did last year was I created a group to run simultaneously with my Facebook business page. I have about 150 of my customers and followers on that group but what I’ve found is that my sales actually increased …

 

Jennifer: Interesting.

 

Kisha: … because when Face … This is all my own interpretation and some things that I’ve read on different business blogs and whatnot, but what it seems like, is if you make the effort to join a group, then Facebook decides that’s a community group that you’re interested in and they let you see everything that’s posted in that group, unless you go in and manage your settings. You say, “I don’t want to see this unless my friend … ” Whatever they do.

 

Ironically enough, even though I have over 800 followers on my business page and only 150 followers in my group, my sales increased by about 30%, I think it was. I think it was about 30%, is what I saw.

 

Jennifer: Wow.

 

Kisha: I found that if I put pictures on my Facebook business page and then put them in the group, that I sold more of that product from the group than I did from the business page.

 

Jennifer: Very nice.

 

Kisha: That was really an interesting experiment and I found that the group has definitely … It has increased my sales so much at this point, that I no longer actually advertise on the community buy-sell-trade groups around the area.

 

Jennifer: Oh. Wow.

 

Kisha: I don’t have to because the amount of sales that I was getting from posting on, say 10 or 12 groups, I’m getting in my own group now. Facebook has definitely been a home run for me but it has been a constant tweaking to get that to work well. Then, what I would say also has worked great is, recently I set up a Square. I had a Square account going for sales, so if people wanted to pay by credit card, if they have the opportunity to pay by credit card.

 

What I did then, was I was struggling a little bit with people not realizing that the food is perishable and so they have to pick it up. It’s great to order it but if you don’t pick it up, it’s not going to last forever.

 

Jennifer: Yep.

 

Kisha: What I did was I created a Square website, which is free through the Square. I loaded it up with pictures of everything that I sell in the different categories that I sell. Then, you can go in and you can manage inventory in there. If I decide on a weekend, I only want to make four coffee cakes and I only want to make 10 loaves of bread, then what I do is I go in and I manage that inventory and I put in there: Four blueberry coffee cakes this weekend and 10 loaves of bread.

 

Then I go back to my Facebook group and I say, “Okay. I’ve loaded up four coffee cakes and 10 loaves of bread, first come first serve,” and I point them back to the square website …

 

Jennifer: Nice.

 

Kisha: … and if they pay for it, they get it. It’s been the easiest way that I can think to manage that.

 

Jennifer: That’s fantastic.

 

Kisha: I’m getting prepaid for my product, they know they’re getting a good quality product, they feel confident in the sales because they’re putting their credit card into a secure credit card processing program and it’s a win-win. They know they’re going to get their product, I know I have my guaranteed sales and payments.

 

Jennifer: And you know exactly how much you need to make in terms of production.

 

Kisha: Absolutely. When you say you’re doing a limited run, it creates an urgency on your customer’s part.

 

Jennifer: Absolutely.

 

Kisha: Because they’re like, “Well, it’s not just open-ended.” I’ve already got people messaging me, asking me when I’m going to open Thanksgiving orders. I’m like, “Oh, really people? Let me get unpacked in my new house first.” It’s funny that way.

 

As far as what doesn’t work, email has not worked for me at all. It has not worked. I’ve done a couple of campaigns through Square, they’re always asking me to try their email marketing. I’ve tried it, I think three times and I have gotten zero results from it. Now, the interesting thing is it does have the algorithms that will tell you how many people opened it, how many people looked at it, how many people ignored it, clicked on it, whatever. It tells you all of those statistics. When I do an email, I get about a 50% open rate but a 0% return.

 

Jennifer: Interesting.

 

Kisha: It’s not worth it for me to email. For me, my customers really like to go online, see the product online, look at the pictures, ask questions about it, but they do not buy from me via email, so it stops.

 

Jennifer: Good for you for not only trying that as a marketing avenue but also then looking at, “OK. Well, how many people are opening it? How many people are clicking through and placing orders?” so that you can say, “This isn’t working for me.”

 

Kisha: Right.

 

Jennifer: At like a lot of times, because we’re so busy as entrepreneurs, we put something out there and we just assume it’s working, without doing any of the ROI on the backend to see if it really is.

 

Kisha: Absolutely. One other thing that I did, which is a little bit unique, none of the other cottage food producers are doing it yet, in my area, but one of the things that I do, is I just have a punch card. It’s the simplest thing on the planet but it’s basically, you buy 10 loaves of bread and you get one free.

 

Believe or not, people love that. They love the idea that if they spend enough money to buy 10 loaves of bread that at the end, they get a $4 loaf of bread for free. You know what? I’m happy to do it because it keeps people loyal, it keeps them coming back. They feel like they’re getting a value for their investment, they enjoy the product and it’s just good customer relations.

 

I created a little punch card. It’s got 10 little boxes on it. It basically says, “Buy 10 loaves of bread, get one free.”

 

Jennifer: Nice.

 

Kisha: That works.

 

Jennifer: That’s perfect, you know?

 

Kisha: I know.

 

Jennifer: It doesn’t have to always be all the bells and whistles. Sometimes, it is the simple, easy things, both for you but also for your customers. That’s something they don’t really have to put a lot of thought into. They just carry it with them and that’s easy.

 

Kisha: Absolutely. Absolutely, it is. It’s been great. Then, one other avenue that I sell, which this year I actually, I did one and then with planning the wedding and such, I just said I won’t do any more this year, but next year I’ll pick back up, is I do a couple of community vendor fairs, which is just basically a bunch of crafts people get together and sell a bunch of their stuff. It’s just a craft show.

 

I’ll do that and I do that twice a year at the same location, with the same organization, the YMCA, in our town. That’s been great but this last one that I did, which was right before Easter, I brought all the same inventory that I’ve brought to the previous two or three shows that I did there and I sold out in an hour-and-a-half.

 

Jennifer: Wow.

 

Kisha: Oh my gosh. I was elated and mortified at the same time because I literally had five more hours to go at this show and no product. It was amazing and it showed the loyalty from the community. People were coming to the show and they were coming early because they wanted to make sure they were able to buy what I had.

 

Again, it was such a great feeling but on the other hand, nobody wants to be at a show and sellout of all of their product in an hour-and-a-half and then have people coming looking for them three hours later and they’re not there.

 

Jennifer: Yeah.

 

Kisha: That was definitely a lesson for me, in trying to figure out exactly what do I need to bring? What can I produce? Trying to figure out … Because, obviously, the organizer of the event wasn’t very happy either. She was gracious and she understood. None of us expected it to happen but, again, you want to make everybody in your community as happy as you possibly can.

 

I won’t be doing those Christmas shows this year because I just, am newly married and I promised my husband I would cut back a little bit so that we could actually be a newly married couple.

 

Jennifer: Yeah. That’s important.

 

Kisha: Yes. It is, really. I’d like to stay married.

 

Jennifer: Yes and to start to build those holiday traditions together and-

 

Kisha: Absolutely. It wasn’t that as important before being married, it wasn’t as important that my time be dedicated to another individual but at this point, it is. We’re trying to figure out that balance. I won’t be doing any of those vendor shows the rest of this year but also need to figure out how to balance that when it comes up again next year because it’s not just the organizers that are looking for my product to be there, it’s the customers.

 

Jennifer: Yep.

 

Kisha: Yeah.

 

Jennifer: You hate to disappoint anybody. Like you said, it’s a great situation to be in but it’d be a better situation had you run out like 45 minutes before the end.

 

Kisha: Absolutely, which is usually what happens. Then, that begs the question of, “Okay, if my customers are that excited, that they would all show up the first hour of a show opening to make sure that they clear out my table, am I at the place where it’s time to consider opening that little café?” I’ve been doing some recognizance work and just seeing …

 

When we were in New York, there was a great little bakery, a café bakery and it’s one of those places that’s never overly slammed with business but it’s constantly steady. What they do is, every day, they have three different kinds of sandwiches, three different kinds of soup and three different kinds of dessert. People just, all day long, they’re in and out until they sell out of everything. Then, the next day, they get up and they start all over again doing the same thing.

 

It makes you wonder, is that something that’s manageable? Is that something that would be worth looking into doing in the next year or so? What kind of a location would I need? Do I want something that’s more small town and local to the downtown, what they call old town downtown? Our town is 50,000 people but it’s slated to grow by double in the next 10 years …

 

Jennifer: Oh. Wow.

 

Kisha: … or 15 years. Then, they’re putting in massive shopping and there’s development everywhere and people are moving to Denver by the droves, you know?

 

Jennifer: Mm-hmm (affirmative).

 

Kisha: The question is, is this the time to do it? Is this the time to launch our new … Are you popular enough now that you could make it work? Those are the questions I’m asking myself now.

 

Jennifer: Those are exciting questions. Those are hard questions too.

 

Kisha: Terrifying.

 

Jennifer: Because there’s no real answer.

 

Kisha: Right.

 

Jennifer: There’s no like, “Oh. Well, if I just think on this for 60 more minutes, then I’ll know for sure.” There’s a lot of ambiguity and that’s really hard.

 

Kisha: Yeah. It absolutely is. We have one other small pastry shop in town that has been there for many years and does very well. It’s actually a French pastry chef and whereas I’m a home baker. Everything I learned, I can’t even say I learned from my grandma or my mom. I self-taught everything. It’s, do I have the credentials? Am I good enough to do this when you’re up against some of the best of the best? There are some questions there that you just … It’s terrifying to think of making the leap.

 

Jennifer: Yeah. Absolutely. I will say, I don’t know if this helps, but I have heard time and time again, especially self-taught bakers or cooks, a little bit of the questioning of their credentials because they didn’t go to a culinary school or they don’t have this fancy background. In fact, somebody else I know who’s in the Boulder area in Colorado, she’s struggled with that and actually recently opened up a very successful food truck but struggled with that for a long time, of, “Well, I don’t have the credentials.” Yeah.

 

I don’t know. I went to culinary school but I’m not necessarily of the mind that everybody should. I’m just going to throw that out there, that it’s-

 

Kisha: Thank you for that. We do have a great culinary program up in Denver that if you have a few weeks or a week at a time, they offer week-long programs and things. I’ve thought about maybe just taking a week of personal time and going and doing a little bit of that, just to see if there is something there that I need to know that I don’t know.

 

Jennifer: You may surprise yourself and walk out realizing, “Wait, everything they taught, I did know,” and that may just help boost the confidence. They may just be what you need to feel at least okay with that piece of the equation.

 

Kisha: Thank you. Thank you.

 

Jennifer: I have two last questions for you.

 

Kisha: Sure.

 

Jennifer: The first one being, what’s the biggest lesson you’ve learned since starting this business?

 

Kisha: Oh. Go easy on myself.

 

Jennifer: Okay.

 

Kisha: I think that would be the biggest thing. I tend to be more of your type A, go-getter, achiever, overachiever personality and there are sometimes that you make a recipe and it’s the thousandth time that you’ve made it and it doesn’t turn out. You have to learn to go a little easy on yourself and just realize that sometimes things are just not going to happen.

 

The other thing I would say is that, while I’m in the accounting field by trade, I didn’t start baking because I loved accounting. A lot of people, and I think this would apply to any small business, but a lot of people get into the business of what it is that they do because they’re passionate and they love it. They will neglect the administrative side of the business until it’s too late. Then, they’re trying to find somebody who’s inexpensive to come in and try to figure out the mess that they’ve created over the last one year, or 10 years, or whatever it is, because, maybe the IRS is breathing down their neck.

 

You want to make sure that you find that balance. Even as a small startup when the money is not coming in, make the investment to have the right people around you, providing the services that you are not good at. Find somebody at the local college who can help with marketing because they need an internship. I went to our local moms group and I found a young girl, especially around the holidays, who was taking all of the culinary classes at the local high school.

 

I asked her to come in and just help me when my orders would get so much that I couldn’t do it myself because literally, you’re trying to bake and cleanup and do all your packaging within the same sphere of time. I hired that girl for $5 an hour and there are some rules associated with hiring an employee but if you’re just hiring somebody for a few hours a week or a few hours a month to come in and help, do it.

 

It’s a business expense that you can write off as a cost of goods or as an employment expense or something like that. Do find the people that can help you in the areas you’re not strong in, so that you can succeed in the area you are strong in. That’s probably the biggest lesson that I would say any cottage food producer needs to know right up front.

 

Jennifer: To your point, I would argue that, yes, also any small business, obviously we’re taking to food entrepreneurs, whether you’re cottage food or you’re working out of a commercial kitchen. I literally just had one of those moments where I feel like the universe was just talking to me because I’ve been going over in my head. As we come towards the end of the year, I’ve been thinking about, “How do I manage everything as the business is growing and what do I do?”

 

It’s getting to the point where it’s at the borders of what I can do and I’ve literally have been thinking about, “I need to send an email and see about finding somebody who can help with X,” but I’ve been waffling back and forth because that’s a cost and you hate to put the money out for it. Just hearing you speak, it’s like, “Okay, Universe. I hear you. I hear you. I’ll do it I swear.”

 

Kisha: It’s so true. Even as a bookkeeper and as I said at the beginning of the interview, it’s the thing that I hate to do the most but it’s the most necessary thing. For cottage food producers that are out there, I don’t know if I can give a plug for this or not, if you need to edit it out, that’s fine, but QuickBooks has a really great self-employed or I think it’s called a self-employed app, it’s a mobile app.

 

Jennifer: Oh. Interesting.

 

Kisha: You can hook it into your business banking account and that’s another thing I’d recommend. If you’re a cottage food business, open up a separate business banking account.

 

Jennifer: Okay.

 

Kisha: Do not run this through your personal account. As easy as it is to run to the local grocery store and buy sugar, run it through a separate bank account. You can find bank accounts that have no cost. They basically don’t charge you anything to be open. You can open it as a personal account and use it as a business account.

 

The QuickBooks Small Business or Home Business, I think it’s Home Business or Small Business. It’s an app that goes right on your smartphone. It has a desktop interface with it. It’s fantastic because you literally can go through and say, “Oh. That $10 I spent at the grocery stores, that was a business expense.” You mark it as a business expense and then you tell it what category that it was.

 

Whether it’s cost of goods, whether it’s packaging, whether it’s insurance, whether it’s car payments, whatever it is, it will track that for you. At the end of the year, you can print out this, basically a report and it tells you all the categories that you spent your money in for the business and you literally plug that into your tax return …

 

Jennifer: Oh. Excellent.

 

Kisha: … when you’re filing out your taxes at the end of the year. It asks you, “Did you have a small business? What did you spend in this? What did you spend in this? What did you spend in this?” It literally will tell you the total.

 

Jennifer: Oh. That’s fantastic.

 

Kisha: Yeah, and it will track your business mileage too.

 

Jennifer: Oh. Wow.

 

Kisha: Yeah. That one can be a little tricky for people who are nervous about the government watching their cellphone usage but it has a GPS app that tracks all of your travel and then you go in and tell it, “This was a business travel. This was personal.”

 

Jennifer: Wow.

 

Kisha: Yeah. You can turn that feature off if you don’t like it.

 

Jennifer: That’s good to know. I had no idea about that. Personally, I know that there are a number of accounting programs out there for small businesses. I’m most familiar with QuickBooks, so it’s one that I do love but I had no idea about this app. Thanks for sharing that with us.

 

Kisha: You’re welcome.

 

Jennifer: My last question for you because you jokingly referred to this as your cottage food experiment and I know that you are at this crossroads of trying to decide where it’s going to go from here, but as you stand here now and you look back, are you glad that you undertook the experiment thus far?

 

Kisha: Oh my gosh, yes. I am so glad. I have loved every minute of it. I’ve loved every customer. I’ve loved every friendship. I’ve loved … Excuse me. In Colorado, there’s the local Co-op Extension Office, runs a Colorado Food Producers Facebook page and I have met so many amazing people through the experience. I’ve done some experimenting with selling at a local farmer’s market and I have made great friends through the whole thing.

 

To be honest, my baking has elevated so much since I started. I started off as a good baker but now I would say I’m a great baker. I say that humbly as possible but it’s just been a phenomenal experience. I have learned so much about time management. I have learned so much about production schedules. I’ve learned so much about when you’re having a slow week, to do your labeling and your packaging. There’s so many personal development achievements that I’ve made, just in the last few years, trying to balance work, life, home, family, all of it. It’s just been incredible.

 

Jennifer: Oh. I’m so glad to hear that. I’m so glad to hear that. I have to say, I’m excited to hear what you end up deciding to do next. Though, I congratulate you on taking a breather through the holidays to …

 

Kisha: Thanks.

 

Jennifer: … spend it and focus on family.

 

Kisha: Yeah.

 

Jennifer: Because, yes, it’s hard to be a happy baker if you don’t have a happy home life.

 

Kisha: Absolutely.

 

Jennifer: I really appreciate you sharing your story. Like I said in the very beginning, there’s a lot of people listening who either run cottage food businesses or have toyed with the idea but haven’t taken the leap yet. For them, it’s always nice to hear from somebody who’s in it right now and going through it and some of the things they can look forward to and some of the challenges that they might be able to expect.

 

Kisha: Absolutely. Thank you so much, Jennifer. I appreciate it.

 

Jennifer: Oh. Thank you.

 

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One comment on “Baking Up A Home-Based Food Business (PODCAST)

  • Anne Zander on said:

    I got a chance to listen to Kisha’s podcast that you did…..Thank you so much for not only contacting Kisha to do this but to put in up as a Podcast! BRAVO. Getting the word out about cottage food producers whatever their product is that they are making in their home kitchen and selling to consumers! BRAVO….