September 2001>> Source: Entrepreneur
Magazine
Be Your Own Boss: 100Million dollars
baked in a Pie
by
Geoff Williams
Amtrak's Acela Express, with service between Washington,
DC, and New York. A Lamborghini Diablo. Misspent youth. Some
things go fast. And some things grow fast.
Weeds. Amy's Kitchen. Or the caterpillar, the world's fastest-growing animal;
some types can eat their full body weight in a day.
Wait, wait. Back up. Amy's Kitchen'?
Are you craving vegetable pot pie? Or a can of soup with organically grown ingredients?
Perhaps some nonprocessed pasta sauce? Amy's Kitchen will deliver. Figuratively
speaking. This is not Domino's; rather, it's a brand of frozen food product you
can find in plenty of grocery stores nationwide.
Named after their baby daughter, it's the brainchild of Rachel and Andy Berliner,
who set out to start a small business - "I thought it might bring us $3
million a year," says Andy - and somehow proved you can stay true to yourself
and become filthy rich in the process. Last year, their company made $90 million
in retail sales; this year, it should exceed $100 million. They have 650 employees,
and their products can be found across the United States and around the globe.
There are no rules to starting a business, of course. But if you want your business
to grow quickly, here are some helpful suggestions, courtesy of Rachel and Andy
Berliner.
SUGGESTION #1: Brainstorm. It was 1987. Rachel, then 33, and Andy, then 40, were
expecting their first child. They wanted some stability for their daughter and
independence for themselves. So they decided to start their own business. But
what kind? Like many novice entrepreneurs, they had desire, but no idea.
The idea came when Rachel started worrying about how she was going to be able
to cook nutritious meals for herself and her equally health-conscious and vegetarian
husband once their twosome turned into a threesome. There seemed to be no satisfying
microwavable convenience-food items aimed at vegetarians. And so an idea was
born.
So was a baby. Amy arrived several months before they incorporated in 1988, and
Rachel and Andy finally decided what to make. "One of our ideas was a pot
pie, because we had - well, at least I had - grown up on Swanson's and Banquet
pot pies, and a vegetarian could no longer experience that," says Andy.
''And I thought, there have to be other vegetarians who feel that way. I mean,
it's comfort food. It's a memory from childhood. So that was our first product,
an organic vegetable pot pie."
The company name, too, came from brainstorming. "We thought of Natural This
and Natural That," says Andy, "but they all sounded like every other
health-food product. Finally, Rachel's mom said, 'What about Amy's Kitchen?' "
SUGGESTION #2: Start in a familiar field. Before starting Amy's Kitchen, Andy
had been president and owner of an herbal tea company. "To some extent," says
Andy, "I knew the natural-food industry." Enough said.
SUGGESTION #3: Think niche market. Rachel and Andy began Amy's Kitchen in their
barn, where they worked on sales and marketing and did the bookkeeping. But a
bakery handled production for a few months. "Then we got a call," says
Andy, "and they told us we had 30 days to find another manufacturer." Rachel
and Andy were doing so much business—about 36,000 pot pies a month—the
bakery said it didn't have the staff to devote to Amy's Kitchen.
For details on how they handled this setback, see Suggestion #5. Suffice it to
say, they handled it well, because by mid-1989, Amy's Kitchen was in virtually
every U.S. health food store, and as they added new products, the stores just
kept the welcome mat out. "We weren't making money, but we weren't losing
money," says Andy. "Our sales were growing, and we added a broccoli
pot pie, and a macaroni and cheese pot pie and an apple pie, all within 14 months
of starting."
They had somehow discovered a niche that entrepreneurs had overlooked and customers
were clamoring for. "The product was such a success because there was a
need for quickly prepared health food," Andy says. "We were just in
the right place at the right time."
SUGGESTION #4: Take a flnancial risk. If you can get an investor to throw scads
of money your way, then congratulations and don't forget (ahem) the business
journalists who inspired you along the way.
But be warned: Dotcom mania created something of a myth that VCs are an entrepreneur's
best friends. The truth is, they're only going to take a risk if they're sure
there isn't a risk. So be prepared to pony up some collateral. Rachel and Andy
started Amy's Kitchen with $20,000 - partially funded by pawning his gold watch
and selling her car. And for the first three years, though their customers loved
their food, "we couldn't figure out why we were doing this," admits
Andy. "We never seemed to have money. But the letters we got were so appreciative.
That kept us going."
SUGGESTION #5: Expect problems. When the bakery telephoned the Berliners and
said, "You're too big for us," that wasn't good news. "I panicked," says
Andy. "I spent the first 15 days scrambling, looking for another bakery,
and the last 15 days realizing we were going to have to make the pot pies ourselves
- realizing that nobody would put the time and care into it that we would."
So Andy hired five employees, moved the business out of the barn and rented some
space. "Our freezer was a freezing truck at the loading dock. We would mix
the raw materials and freeze things in there," says Andy.
But that didn't solve their problems overnight. "There was always the right
way, and the way you can afford," says Andy. "There were a lot of discouraging
moments, because we were working so hard, and things were going well, yet it
was hard to make payroll and buy new equipment."
"We always had to buy funky equipment," adds Rachel, who designed the
packaging while taking care of Amy.
So how will you be able to fight the urge to give up? Or freak out? "Be
realistic," advises Andy. "Forget the fact that maybe [you] don't have
enough money right now. Are things going well? Do people like the product? Are
the profit margins there? Do you feel in your heart that things are going the
right way? Don't worry about the things going on in the moment."
In theory, if you sell a product people want, you should eventually see the light
of day. That's how it happened for the Berliners. In 1988, they had three employees,
and by 1989, there were 24. By 1991, they were doing business in Canada and had
hired seven more employees. They were selling 15 different products by 1994.
In 1995, they watched their staff double from 87 to 175. Not surprisingly, they
went global, and revenue kept rushing in.
SUGGESTION #6: Don't forget who you're serving. Obviously, the business is yours,
and individually, not every customer is right. But listen to them en masse. "We
really try to please the customer." says Rachel, "and we really try
to see what people want in foods, what their palates are, what their needs are.
So instead of just thinking what we like to eat, we ask ourselves, 'What would
most people like?' "
For instance, Amy's Kitchen sells a macaroni and soy-cheese dish. "Now I
personally don't like it," admits Andy, "and I don't think Rachel does
either, but for people who can't eat dairy, it's a lifesaver. They love it."
SUGGESTION #7: Stay true to your mission. Today. Amy's Kitchen employs a staff
of 650 and has 75 products in stores around the globe. They're in freezers -
like the Grilled Cheese Toaster Pops - and on shelves, like the Puttanesca Pasta
Sauce. And this year - as duly noted - their company is going to rake in $100
million in retail sales.
"I think part of our success is that we personally care about making a good
product, and who's getting it." says Rachel. "The motivation isn't
to make money; it's to fill a need and take care of people."
And if you can do all that, you'll grow fast, and you'll go fast. In your new
Lamborghini Diablo.
Geoff Williams is a freelance writer in Cincinnati. He
drives a'93 Ford Probe.
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