Taking over the family business

[Saara]

... bakery, deli, and pizzeria!

My boyfriend's parents have a chocolate/candy shop and adjunct bakery/deli/pizzeria in a small beach community that they've been operating for 38 years. They're on both sides of 70 and have been wanting to retire for a few years. Since the shop includes a building and property, it has proven to be a difficult business to appraise and sell. After much deliberation, we have decided to take it on instead of allowing it to be closed down. We're just in the preliminary stages of figuring things out, but we'll be transitioning into it over 5 years (or whatever works out) and working our way into an ownership position. We don't have any cash for this so it'll be a combination of sweat equity and inheritance. Accountants and lawyers, etc. are and will be consulted.

Currently the business is primarily the "candy side" which does wholesale Easter chocolates and opens for business in May and closes on Labor Day. Hours are 11am-10pm. For the past couple of years, the season has extended to about October being open on the weekends with the addition of espresso and limited baked goods. This is the half that 'makes money' and supports the rest. Most candies are made in house with the exception of a few items such as licorice, jellybeans, etc. There is also ice cream, snow cones, cotton candy and popcorn (reg. & cheese).

The "cafe side" is also open seasonally and the same hours. The bakery portion has 3 bake days per week with cinnamon rolls, sticky buns, cookies, turnovers, brownies, and a few breads. The whole wheat is ground fresh from organic wheat for the 100% whole wheat bread. Most of the baked goods are made in house although the brownies are from a mix (Ghiradelli) and the turnovers are frozen puff pastry. There's a dough sheeter, a 20 qt. & 60 qt. Hobarts, a proofing box and a 1908 Edison electric deck oven.

There is espresso (Cimballi) and the coffee is roasted in-house by his father. Well, on the back porch. The hope is to get a proper fluid air bed roaster soon. During the day, sandwiches are served and at 5pm pizza on homemade dough.

There are about 30-40 seasonal part-time employees with some that have worked there for decades. There is a designated candy maker although during Easter production everyone chips in and most candy side employees are taught some basics such as dipping.

My boyfriend grew up in the business and used to be the candy maker and equipment maintenance man. He's been out of it for the past 20 years, but has continued to service some of the old relics. He's an engineer so is well-suited to the latter. I also work in engineering (drafting) and an a passionate home cook and baker. Since the business is operating on a shoestring and now will need to support two families, I will probably be taking on the baker's duties and cooking for the cafe (salads, dressings, pizza sauce, and possibly adding some baked special dinner items) and eventually the books. My boyfriend will be candy making, employee management and customer schmoozing. His parents will be the public face until they expire, we hope.

The easy changes are to add bake days which will add traffic to the cafe/bakery side. I'd like to add an artisan sourdough loaf and hold some dough refrigerated for baking off when needed. We're hoping to add a larger ice cream freezer to the cafe side to ease some of that bottleneck on the candy side and draw in people. The menu needs some simplification and, most importantly, needs to be more readable. It also needs a little updating. There are a lot of retirees who appreciate a good bland turkey sandwich or wrap, but there's also vacationers from Seattle who might enjoy some chipotle mayo or tapenade. We need to add some zip without getting too urban or yuppie. Either way, we're at first going to be restricted to inexpensive edits with larger changes coming down the road.

This off-season, we'll be painting, repairing, doing inventory, and learning the books and systems. Easter season will plunge us into candy making and I'll have some teaching from a professional baker locally. I will also get a chance to trail the current baker one of these weekends.

So what I need to know is what works well as an inventory system. We have discussed a min/max system with simple shelf tags. We also need to track costs with a price book and be able to generate a shopping list. Accounting is in Quickbooks so I had been thinking that there might be an iPhone app out there that could keep a shopping and price list. What works? Is that too complex? There is currently a lot of waste and shopping is somewhat haphazard. Suppliers are Cash & Carry (bulk retailer), Costco, Guittard and Foodservice. The candy side is fine, but the cafe side needs a lot of work in this area.

What else should we focus on learning? Should we get some sort of management training? My boyfriend has done project management, but I've been a solo business for the past 14 years. His parents were teachers, and, well, parents, so they're more experienced in that realm than we are. Generally, the long term employees are happy that we're coming on board, but a couple of shift managers are feeling a bit put out. We're being hailed as saviors with some of our obvious ideas that they've been trying to implement for years so that is somewhat understandable. We need to keep feathers smoothed, but also not allow childish territoriality.

Sorry this is so long, but it's a bit overwhelming. I know I'll have more questions and am really looking forward to hearing some input from professionals. I would like to turn it into a place that I'd be proud to pimp on eGullet.

[Chris Amirault]

Eager to follow along as you dive in, Saara! A few thoughts.

Not to ask the obvious, but do you have a business plan for increasing profits so substantially? I'm particularly wondering about the seasonality of the operation, which would place different inventory, staffing, and cashflow demands on you at different times of the year. That seems particularly important given the handcrafted or artisanal aspects of the business, which often seem connected to individuals who have a long history with the place (and with coffee roasting, or candy-making, etc.). Given that change isn't always embraced by everyone, I think you need to look carefully at which of those positions are critical, which skillsets you need to develop yourself, and which can be hired & trained as needed.

How is the operation currently branded? Is is a quaint little shop? Old school family destination? What makes your business stand out relative to the competition (esp national chains)? Do you see this takeover as a way to rebrand at all? I was thinking about all this when I read about your menu ideas:

The menu needs some simplification and, most importantly, needs to be more readable. It also needs a little updating. There are a lot of retirees who appreciate a good bland turkey sandwich or wrap, but there's also vacationers from Seattle who might enjoy some chipotle mayo or tapenade. We need to add some zip without getting too urban or yuppie.

Given that you are taking on P&B and your boyfriend is taking on ops maintenance, your schedules are not going to overlap much when you start up in earnest!

Finally, as a small business manager (I run a preschool in my day job) who has talked a lot with restauranteur and bar manager friends about this subject, I can say with confidence that there's no such thing as too much management training. In particular, learning how to supervise staff, hire, train, & fire are critical skills. You screw up an order and run out of lettuce? It happens. You hire a jerk and can't bring yourself to fire him? Every employee hates you for months.

[Saara]

Thank you for your comments! All have been noted. I think I definitely need to find myself a management course. Sorry for the late reply, we took off for a candy convention and it's all been a whirlwind since then with lots of work up at the shop and plenty in my drafting business as well. It was great to meet chocolatiers from the area and further afield. Lots of support in this industry!

Since I last posted, we've had a good look at the books and records for the past decade. The "candy side" numbers are good, but the "cafe side" are, frankly, frightening. COGS = payroll, for one.

I will be writing out a business and marketing plan. I hadn't originally planned on it, but it will be useful for us in consolidating our ideas and also communicating the details to his parents and key employees. Naturally, we want their input as well. I think it will also be useful to set a time limit for making the cafe profitable. I'm not really sure how long it will take to turn this ship around.

It is currently branded as a nostalgic family destination with homemade products. There is an excellent logo and tagline, and I would like to expand their use more particularly incorporating the logo shape into some products (cookies, dog biscuits, chocolate). There is a color scheme. Mostly just some organization and cohesive in-store labeling is needed. And a logo cookie cutter which I've already requested from the boyfriend.

Currently, there is no inventory, recipe book (there is a binder, but there are only about 5 recipes), recipe pricing, sales tracking, price lists or, really, much of anything. I am working on those items as well as reworking the menu a bit. Once I get that done, I can print a new menu and paint a legible menu board.

I believe that simply baking daily will help profits substantially. Currently, many customers simply walk out when faced with an empty bake case. I also want to replace wraps with sub sandwiches. Tortillas are not made in house, but rolls are. There has also been inconsistency in the sides so I will be "cafe chef" (their words) and make sure there is stock available so someone doesn't go buy grocery store macaroni salad, for example. With documented recipes, I can hopefully pick an employee and train them as well.

One thing that hasn't been done for some reason is promoting the quality of the ingredients used. Since there is no indication, my assumption had been that purchased items (e.g. deli meats) were of the more inexpensive tier. They're actually quite nice and some are even from a local quality sausage company. If *I* didn't know that, then it seems unlikely that many customers do either. The locals know that the whole wheat bread is made from flour that is fresh ground, but probably not that it is local and organic. Tourists certainly don't. Additionally, we want to source more locally (a small farm is already lined up) and generally promote that aspect. Receiving the occasional plop of Reser's salad on your plate doesn't help, however.

The competition is interesting. There is a cafe right across the street that seems quite intent on stealing ideas (although his father has been doing some mimicking himself). They're much smaller and seem to be plastered with corporate logos and products (Ivar's, SBC, Dreyer's, Hebrew National, etc.). They have wraps and hotdogs, which is another reason I want to pull those off the menu. They open and close earlier so we can co-exist peacefully since they have stopped sending their customers over to use the bathroom and park along the front of our shop finally.

There are a few other cafes along the beach drive, but everyone seems to have a slightly different niche. Our shop is the unique and vibrant one and predictability can be had elsewhere for those that wish it. There is a Subway about 10 miles away in a neighboring town and a Little Caesar's at the other end of the community.

Here is some decade-old census info:

Total housing units 5,105

Occupied housing units 2,125

Vacant housing units 2,980 (This number is large since they are predominantly vacation rentals)

Owner-occupied housing units 1,614

Renter-occupied housing units 511

Since I want to intersperse the boring (spreadsheets, demographics, financial distress) with the creative and interesting, I would like some brainstorming on the construction of the menu board. I had originally thought to do chalkboard paint with paint pens, but the other cafe has a chalkboard menu. Am I too close to their concept? What else can I do?

Oh and is it possible to make a good margin on pizza?

[Lisa Shock]

You can make margin on pizza, but, it's tough to produce when you get busy, and can have a long wait time for the customer. IMO, it's a tough item to serve to waves of tourists, especially when you can make sandwiches faster.

You may want to look at making savory pastries that can be eaten cold straight from the bakery case. These will get customers waited on very quickly. You could fill croissants or turnovers with cheese & veggies, as well as salamis. (swiss/mushroom, mozzarella/spinach, cheddar/broccoli) Danish made with a savory goat cheese and herbs like Boursin, but your own house blend, is very tasty and will keep for hours. (experiment with various flavors, things like curries and other stews can be incredibly tasty fillings!) You can also top focaccia bread (loaves or single serve small ones) with olives, roasted veggies, herbs, etc. and it can be sold cold or reheated for a minute.

I have an idea for something that isn't tested, but might work in winter: bake a cone of bread or puff pastry and have them cold and ready to go in quantity. Serve them to customers with paper on the outside like a big ice cream cone, except fill it with a savory stew-like item like curry or tomato sauce with veggies, meatballs, etc. It's all easy to make and keep on hand.

I second your idea of working on standard recipes for pasta & potato salads. You'll keep costs down, and, you have the chance to really set yourselves apart from the crowd. Make these salads signature in some way, whether it's spicy/sweet curry potato salad or a balsamic pasta salad with lots of julienned raw veggies. This way, there's never any chance that anyone will think you got the salads from a supplier or store.

Good luck!

[baroness]

You can make margin on pizza, but, it's tough to produce when you get busy, and can have a long wait time for the customer. IMO, it's a tough item to serve to waves of tourists, especially when you can make sandwiches faster.

You may want to look at making savory pastries that can be eaten cold straight from the bakery case. These will get customers waited on very quickly. You could fill croissants or turnovers with cheese & veggies, as well as salamis. (swiss/mushroom, mozzarella/spinach, cheddar/broccoli) Danish made with a savory goat cheese and herbs like Boursin, but your own house blend, is very tasty and will keep for hours. (experiment with various flavors, things like curries and other stews can be incredibly tasty fillings!) You can also top focaccia bread (loaves or single serve small ones) with olives, roasted veggies, herbs, etc. and it can be sold cold or reheated for a minute.

For a pizza-like flavor that could be made ahead and reheated, consider calzones, sausage rolls, and the like.

[Chris Amirault]

Where do things stand, Saara?

[judiu]

You can make margin on pizza, but, it's tough to produce when you get busy, and can have a long wait time for the customer. IMO, it's a tough item to serve to waves of tourists, especially when you can make sandwiches faster.

You may want to look at making savory pastries that can be eaten cold straight from the bakery case. These will get customers waited on very quickly. You could fill croissants or turnovers with cheese & veggies, as well as salamis. (swiss/mushroom, mozzarella/spinach, cheddar/broccoli) Danish made with a savory goat cheese and herbs like Boursin, but your own house blend, is very tasty and will keep for hours. (experiment with various flavors, things like curries and other stews can be incredibly tasty fillings!) You can also top focaccia bread (loaves or single serve small ones) with olives, roasted veggies, herbs, etc. and it can be sold cold or reheated for a minute.

For a pizza-like flavor that could be made ahead and reheated, consider calzones, sausage rolls, and the like.

One word: STROMBOLI!

[nibor]

Where do things stand, Saara?

I also wonder how it is going for Saara. Her original post bothered me - I was worried about her being so personally invested in a family business that was not owned by her own family. Devoted girlfriends are so expendable.....

Edited November 14, 2009 by nibor (log)

[Saara]

I'm here and haven't been expended yet! Things have been a bit hectic since my own business (drafting) has picked up a bit so we've been essentially spending long weekends at the shop painting, cleaning and organizing and then a few days here at home working and doing laundry. Compounding my problems is a broken hinge on my laptop so I haven't been able to drag it around with me. Hoping to get that fixed here someday.

Since I last wrote, a few things have happened:

We went to the FSA food show in Seattle. It was very informative and gave me some good exposure to that end. We got to do a lot of tasting and it was nice to find out who was really behind the various lines (Signature, Elite, Madrona Market, etc.). Found some better tortillas and tomato sauce for starters. Also identified quite a few local suppliers and several products we don't want to get near.

Installed Star Solutions (FSA) which will allow me to do online ordering, some inventory management, and recipe costing. Free! I can add in products that we get elsewhere too so it's a great tool to have when we get down to menu pricing. I had been looking at packages that were very costly so I was pleased to find that they offered this. It has some history too so I can see what had been ordered in the past. At least some items.

Have been painting, cleaning, organizing, and generally taking care of (or at least noting!) deferred maintenance. We've been able to store some unused equipment, remove some terminally broken stuff and start shopping for new-to-us replacements. We're hoping to eke out more space in storage so everything isn't just a jumble. Buy stock in Costco shelving units now. We just converted an antique cooler into a permanent hot box for chocolate which makes it so they don't have to switch over freezer units to that task in the off season.

Baked a morning with the baker. It was a good learning experience for me in using the big equipment and baking on that scale. I didn't master anything, but I feel confident that I could do a bake session by myself if I needed to since she has good recipes and notes. I also think she'll be staying on next season so that leaves me 4 days of baking per week to fill in.

We've been open on weekends and generally doing fine on sunny days and not so great on rainy ones. Got the Christmas candy fliers made up and mailed out! My father-out-law is supposed to be working on the online order form. I'm waiting to get control of the website so I can move it to a proper host with merchant services, etc. Meanwhile I've set up a Wordpress blog just to be doing something on that front.

I've been looking into some management training/classes at the local colleges. Trying to find something with a price and schedule that suits. I did learn to use the cash register this weekend ... sort of. The list of things to learn seems to grow daily!

We've been talking with a local (to our house) pizzeria owner and getting some great mentoring and advice from her. We've also been reading trade mags and websites and getting all the free education that we can. We hope to attend the Pizza Expo with her some year.

Stress level is up, sleep level is down, but things are moving along. In February, we start bunny season so we hope to have most of the painting done by then. Hoping to get some time then to focus on the recipes, menu boards and supply side.

Thanks for the suggestions of stromboli, topped focaccia and savory pastries. I had been thinking of a Canadian sausage roll too since we're so close to the border. I'm trying to dampen my enthusiasm for adding to the menu right now. But on that note, pizza by the slice or personal size? By the slice doesn't seem to move quickly enough ...

In other news, the pullets have started laying!