Help! I Can’t Find Kitchen Space! (and other items related to your food business)

Must be the start of a new year as I’ve been receiving calls and emails from people asking questions about getting their food businesses launched and looking for kitchen space. We’ve stopped renting to small companies and individuals as it’s not feasible for us to have others in our space, but I still like to try to help when/where I can as getting off the ground is not easy.

I don’t have time to answer many of the emails individually, but thought grouping them together in one blog post could help everyone out.

How much does kitchen space in the Portland area cost?

That’s subjective, as in my previous post a lot is tied to the overhead of operating the space. However, for those of you looking for short term or every once in a while rentals you should expect to pay more per hour/day. Why? Because most kitchens that rent space to businesses are looking for longer term reliable tenants (which equates to rent). Landlords tend to give better deals to companies willing to commit to terms. You as a short term rental could be disrupting other tenants production time, and you have no basis of relationship with the kitchen to trust you with the equipment, other tenant’s ingredients and/or products thusly increasing everyone’s risk.

What if I can’t find kitchen space on sites like Craigslist?

Craigslist really is the go-to place in looking for space. Second to that I would try getting in touch with local churches (almost every basement/reception hall has a commercial kitchen) and stopping in to your local (small) restaurants to see if they’d be interested in some extra rent off hours (be prepared to be flexible with your time/usage demands).

I need special equipment to produce my product.

Be prepared to buy it yourself. Not all kitchens have buffalo choppers, robot coupes, or double boilers. Most outfitted kitchens that rent either have equipment the landlord uses or a broad scope of items based on what they think the majority of their tenants might use.

I’m working with common allergens or potentially noxious ingredients.

Be upfront with whomever you speak with about your product. Some kitchens are specifically “free” like “nut free”  or “egg free” environments. Also if you’re roasting things like a lot of garlic or chiles some places may ask you to produce during off hours or in times of light usage to prevent scents from permeating other products.

Ultimately, don't give up if you think you've got a good product. Building a business is much about resourcefulness and (at times) sacrifice.

Can Portland Support a $50/hr Rental Kitchen?

Yes, I’m back, well at least for now. Time will tell. As you can see, something incited me to put fingers to keyboard. I almost titled this post “The dudette does not abide”, but in the interest of not attracting just Jeff Bridges fans, I thought better of it.

When I was still living in NYC and doing cost analysis for whether it was feasible to get my business off the ground there (which, it wasn’t), commissary (or rentable commercial kitchen) time was running about $25 an hour. Yes, costs have gone up everywhere so I imagine the same space, if it was available would be closer to $50/hr. However, everything is relative to location and what the market will bear.

So let’s do some math, I’m assuming you’re just starting out or have been in business for a short time. Let’s take the $50/hr as a base hourly rent you’re paying for kitchen rental space. Now let’s assume you’ve budgeted rent as 20% of your forecasted income (Note: everyone has their own formula of how much rent/sales ratio should be, I’ve seen it as low as 8% and high as 32%). This means you need to produce $250 an hour of product, outside of additional labor, food costs, and packaging.

Perhaps you’re a cake baker, and selling your cakes wholesale at $25. Can you bake, cool and frost/finish 10 cakes an hour to stay with your budgeted percentage? Say you’re scheduled for a four hour kitchen rental - $200. That’s $1000 of product (or 40 cakes).

The pricing could work a little better if you were a caterer and only needed 4 hours to put together a $1500 event, where your margins tend to be higher than wholesale.

Is there a market demand in the Portland area for this level of pricing? Time will tell, and if so, prepare to have your favorite $2 coffeehouse cookie set you back $4. 

Been Caught Stealing... The Past Few Weeks Digested in List

I’m stealing, erm, borrowing the format of this post from another blog post I read recently (maybe even today). It’s well published enough the interwebs will show it to you if you hunt around.

Instead of rolling with a quiet January (and into Feb) while you all were on diets and budgets, we’ve been embracing it by doing some new product development. I’m not ready to talk about what it is yet because 1) I want them to be in production for a few weeks first and 2) I’m working on perhaps having the local press actually give it some, um, press.

However, here’s a list of how my weeks have gone:

1. Sample commercially produced versions of like products. Hmmm…
2. Source some sample ingredients. Tour of Trader Joes, Fred Meyer, New Seasons. Try not to buy other ingredients not related to project (like Candy Cane Jo Joe’s)
3. Create sample recipes
4. Taste with staff. Hmmm… Refine.
5. Create next batch of sample recipes
6. Taste. Taste with staff. Too much acid pucker… Refine.
7. Create next batch of samples recipes.
8. Taste. Taste with staff. Wooo… we like those.
9. Source more sample ingredients. Tour of Trader Joes, Fred Meyer, New Seasons. Try not to buy other ingredients not related to project (like Pirate’s Booty which is on sale)
10. Recreate batches of recipes to be production candidates. How much of what did I put in that again?
11. Write down better recipes, notes, tips and tricks. Scale to larger batch sizes.
12. Make batches of production candidates again. 
13. Taste. Yup. Got it.
14. Email clients, talk about pitch and set-up dates and times to present samples.
15. Create production candidate samples to give out at said dates and times.
16. Think about where to store new ingredients. Rearrange one of the freezers. Harvest out ghosts of projects past.
17. Look at paperwork that goes with product launch. Think about marketing materials.
18. Ignore paperwork, eat extra samples.
19. Remember I owe accountant some forms for how-grateful-am-I-2010-is-ovah filings.
20. Eat more samples.

Enjoy the pic of the building across the street from us. I shot it with an iPod camera which is marginally better than my current cellphone. Still working on it… but perhaps more another bite?

There’s No Crying In Baseball (Jumping in on the End of Year Wrap-Ups)

Photo by Allison Jones

The past year has been frightening enlightening, and while we reached for our goals (like some below), it was tough not to get sidelined by every hurdle, sand storm and trial by fire this tough economy has thrown at us. In many ways, it’s made me a far better manager and (I think) stronger business owner, while reminding myself if running a business was easy, everyone would be doing it.

So, how did we match up to my goals for 2010? My philosophy with the goals to make some progression large or small, keeping our momentum moving forward.

Here’s a brief recap of a few of them:

Gluten-Free Tarts: Soft launching and test marketing a gluten-free line of tarts. From past posts you can tell we spent time (lots of time), working out our gluten-free crust. The response has been highly positive - to the point of a few emails from fans crankily succinctly requesting we add them to our online store. Working out how support a larger scale production of them (which includes investing in some additional equipment) will be part of 2011.

Expanding our Social Media: I’m social! I really am, if you were sitting next to me in a bar, on a plane or in the stall next to us at a farmer’s market, would you hear an ear-full about all sorts of things. Just starting this blog was a huge step. I like the tweet and try not to over load anyone who likes us on Facebook. I aim to tell you more about our company culture, what we are working towards and what I like/dislike. A content plan is something to aspire to, until then, I’m shooting off the cuff.

Growing our Distribution/Sales Region: The year was about loss and gain. We lost some of our smaller coffee house clients but in turn upped our sales and distribution a bit to larger clients (I’m not going to say our sales wildly grew, however I see a chance at a turning point in making gains). We’re dipping our toe into the Seattle market (w/PCC Natural Foods) and we’ll see where this takes us. 

As the year wraps up, I’m pretty grateful that I was able to keep us floating through. More than a few of my peers can’t say the same, and while there’s no crying in baseball, every small business owner has some emotional attachment to the thing they’ve built and some days, just opening the door and turning the lights on is the largest (and most satisfying) goal achievement.

2011 goals are rattling around and being vetted, then we’ll be social. Really!

Oh, and a friendly elf promised me a new phone soon, so with a better camera you might actually get some decent pics to peruse. Progress, eh?

The Figlet Made Me Do It (or What We’ve Been Occupied With)

Holy carp have the holidays landed on us like frozen turkeys falling from the sky and I can’t say I’m complaining (well, my feet might be a bit more tired and there’s certainly less laundry getting done at home, but who really complains about not doing laundry?).

I haven’t abandoned you, my few readers, but the coming weeks will be a bit content scarce as we truck ahead on our projects, like making pies (Pecan, Vegan Pumpkin, Apple Cranberry) for New Seasons Markets.

The photo above is one of the specialty items we’re “trying out” with them. This one is a fig tartlet (smaller format than our regular tarts), with our vegan crust and a spiced fig filling. At the sampling I did back in September, one person remarked that it “tasted like Christmas”. Hopefully customers will enjoy them enough at Thanksgiving we’ll have them through December. It is a little product trial by fire, but I am thankful to have a supportive client that is willing to take a risk.

Upcoming things I’m thinking about (when not scaling pecans or corn syrup in my sleep):

-       Website revamping (or at least updating)

-       Review of goals from the past year (I’m sure I wrote them down somewhere)

-       Goals for the coming year

-       List of cleaning projects around our kitchen (see top parens)

-       A better camera… maybe… someday

So bear with us as single handedly split our kitchen into sweet & savory, which I’ll recap once I unglue my fingers from the sugar and cranberries (and our regular tomatoes, spinach, mushrooms…)

You’ve Come a Long Way, Baby. Five Lessons I’ve Learned in the Past Five Years.

As we progress as a company, everyday I learn something new in running Little Pots & Pans Co. While most days, I feel like that old cigarette ad “you’ve come a long way, baby”, it hasn’t been without learning a few lessons along the way.

Sometimes these lessons come gracefully and sometimes they drop on you like the anvil in an old cartoon scenario (Beep! Beep!). The best you can do is absorb the knowledge, take it in stride and keep moving forward. Below is a selection of five, which, um, struck me.

Business is not predictable.

Really, if the past 18 –24 months have taught us anything, it’s to expect the unexpected. We’ve seen sales rise with some clients only to loose others along the way. It’s not always an even one to one, and just because you’re on an upward trend doesn’t mean there won’t (or can’t) be a dip.

There will be snap decisions, go with your gut.

We are still small, and moving fast. Opportunities, ideas, recommendations present themselves and can’t always wait for analysis, review and/or discussion. Trust that you’re making the right decision. You know your vision and your company best.

You can never have enough cash.

I could have five times the cash banked in our company bank accounts and I’d want more. There’s always an expenditure lurking on the horizon. Equipment breaks, you need more inventory/equipment/employees to increase sales. Unfortunately, item #1 has a direct effect on what can be in the bank at any given time.

HR is it’s own special entity. 

I’ve come to appreciate people in the past who uphold a company’s policy, screen candidates, deal with hiring and firing (and all the associated paperwork). It becomes necessary at a certain point and I’ll take it as a sign we are growing.

Embrace risk.

You can’t run a business without embracing a certain amount of risk. Everyday presents a challenge and if you’re not able to take some leaps of faith with your risk to gain ground or reach for a business success, you’re not the right person to run it. (This is not to say I don’t lose sleep some nights agonizing over said leaps of faith).

I’ve certainly grown a lot in the past five years with the company, and while we’ve come a long way, I quite expect, we still have a long ways to go. I’m already working on the next post of five things… 

The Possibilities of a Monday Morning

One of the tasks during Fridays in our kitchen, as I’ve mentioned before, is to scrub down and organize for the coming week.

Walking into kitchen on Monday mornings, before anyone has arrived, when it’s quiet and still gives me an opportunity to envision the coming week and it’s possibilities. Soon the counters will be cluttered with all the things that make our day go and the clatter of dishes along with the roaring of ovens have us moving quickly through our end tasks.

But until then, it’s mine to fill with thoughts and ideas.

Data Geek (or For Once, It's Not My Math!)

I like data, which is interesting for someone who failed badly at math in school.

Unlike my dislike of calculating distances/points/planes/lines to get from x to y (or some days, just simple addition), data gives me answers right off the bat. Basically, someone else did the math and I get to review the outcome.

Mostly I am referring to our various web-tracking services. In running any business, you can never have too much information. For this case, I’m interested in how people are looking at our website and reading our blog (yes even you, good friends!).

Information such as how much time someone is spending and what content they’re looking at while visiting us helps form plans for updating our content (yes, it’s probably time) as well as the types of content users (which could be customers or potential clients) are looking for.

I consider our website a constant work in progress (much like owning anything else) some projects get taken care of and some languish (erm, sorry about the farmers market calendar this year folks!).

However, the average visitor spends 1.5 minutes/90 seconds on our site looking at an average of three pages (I filter out bots like search engines, so it’s not all Google downloading our site). The industry “norm” is about 30 seconds. Yeah, I am awed and impressed.

I also enjoy where visitors are coming from (esp. outside the US). Hello Finland, Australia and Japan!  There’s been many a week when I’ve walked into our kitchen and said “who knows someone in absolutely-no-clue-where-this-is Minnesota?” No one? Cool! Wonder how they found us…

Advice for Renting Commercial Kitchen Space (Portland Edition)

I find it encouraging that our phone is ringing more and more with people looking for kitchen space to either launch or upgrade their food start-up into. Regardless of if I am looking for a tenant, I’ll gladly spend a few minutes chatting with callers about where they are at in their process and what their next move might be. Based on the questions I get asked, and what I went through when starting LPPCo., it appears (and please send me some links if I’m wrong) that there really aren’t good resources getting a food business launched.

As much as I am full-force working on our company growth, I actually enjoy having a small tenant or two, as much for the overhead offset, as being able to help foster another food business.

The first questions I always ask people who call are, Where are you in the process? And/or where are you producing out of currently? This tells me a lot. First, it tells me if your product has legs or if you are a “tire-kicker”. Secondly, how much time/usage do you need in a commercial kitchen initially?

Generally the conversation then turns to licensing and insurance. In Multnomah County (where we are based out of), a food company is required to: be licensed by the health dept (either Multnomah Health, or Oregon Dept of Agriculture), have a City of Portland Business License and business insurance.

Not everyone realizes all of the above, and often they’re stymied as to what to do first. My advice is to get your business license and insurance in order first, as the health department licensing will be tied to the address of the kitchen you rent.

And speaking of rent, rent for kitchen space is based off of overhead. Almost everyone I talk to who runs their own commercial kitchen knows exactly how much it costs per hour to run. This is something you have to factor into your own business plan. The “friend” who could be lending you his (restaurant/kitchen/catering) space for some cheap hourly rate, while helping you out initially, could be also doing you a disservice at the point you want to grow. Understanding what the market rental rates are will help with your growth plans and mitigating any surprises when you start calling around to other kitchens.

There are a few scenarios for renting kitchen space.

One is a pure commissary kitchen, which will rent time & space to as many companies as will fit. They tend to be more accommodating with schedule and usage, as well as allowing you to move specialty equipment into their facility. The downside is, depending on how crowded the kitchen is when you want to use it, there could be a wait to use the equipment (like ovens and the dishwasher).

Another situation is a kitchen that was formerly (or is) something else. An event space, restaurant, or a church kitchen. It’s always best to ask up front what the restrictions are for usage.

Food companies which have their own production space, and might want to lease out the off times to a smaller company (where we fall) are another option. We tend to be your least flexible options in what we’re interested allowing for time and usage.

I once had someone pitch to me that they needed to extend our hood system to include their 80 gallon boiler for their bagel making business. Um, no.  A friend who runs a vegan food company is not interested in sub-leasing space to companies who work with meat. Then there are a few newly-sprouted gluten-free only kitchens.

In these scenarios it’s important to realize that these are facilities where companies (and their employees) are making their livelihood and sometimes your company is just not a good fit for us, whether it be how much time & space you need or the types of product you’re producing. Luckily, we are a small(er) industry here in Portland, and I try to refer inquiries to other kitchens who I think I might have time/space available.

As of now, I might take in one small tenant, a company who doesn’t need a lot of storage space and is interested in working at night. Which is based off of how I see my own company needs expanding. Should I see it change, you can bet you’ll see our rental ad up on Craiglist.