Smart Answers

Using a Kitchen Incubator to Get Started


When Bonnie Henderson decided to return to entrepreneurship after a corporate layoff in August 2008, she says the puzzle pieces seemed to fall into place like answers to her prayers. Her mother was in a position to lend her some startup funding, for instance, and friends found a terrific location for her restaurant.

But the most fortuitous accident came about when her partner, Betty Miller-Henderson, stumbled across a brand new commercial kitchen in May 2009. Not only was it convenient and affordable, but it was also more than just a kitchen facility. It was Mama's Small Business Kitchen Incubator, a Pasadena (Calif.) facility that exists to educate, encourage, and nurture budding food businesses.

"We had worked out of some commercial kitchens further away, but that was a real trek. So when we heard about Mama's, it was a godsend," says Henderson, whose Bonnie B's Smokin barbeque business started catering and delivery in 2009 and—just last week—staged a grand opening at its new restaurant in Altadena, Calif.

State-of-the-art

Henderson was the first tenant at the $3 million nonprofit incubator, says Larry Bressler, a chef instructor at Le Cordon Bleu and Mama's general manager. The facility, which has hosted 63 entrepreneurs to date, is an outgrowth of the economic development arm of the Episcopal Diocese of Los Angeles. The group owns and operates 200 units of affordable housing in Southern California as well as Mama's Hot Tamales, a job training restaurant in Central Los Angeles that started as a place to provide street vendors with a licensed facility to prepare their wares.

The kitchen incubator was the brainchild three years ago of Executive Director Joe Colletti, who located the site on a busy street near a freeway. Originally a livery stable that housed horse-drawn fire engines, in more recent years it has hosted a series of restaurants, many of which failed due to limited parking.

Overhauling the property and outfitting it with state-of-the-art kitchens, offices, and a classroom where a 10-week business startup series is held meant raising money from a variety of public and private sources, including a loan from the city, funding from private and corporate organizations, and a $1 million grant from the Henry T.Nicholas III Foundation, established by the co-founder of Broadcom (BRCM).

Kitchen incubators are extremely expensive propositions, due to energy costs and frequent, time-consuming health department inspections. Getting for-profit incubators to self-sustaining levels is notoriously difficult. But Bressler says he has funding to continue operating Mama's as a nonprofit venture for at least two years and will rely on Colletti's fund-raising prowess after that.

Easy Startup

There's no doubt that the incubator is a boon to the low- and moderate-income entrepreneurs it targets (though Bressler says he is not turning down any interested tenants, regardless of income, at this point). Bressler requires each to complete a state-mandated food handling class, put down a $250 deposit, and obtain liability insurance. After that, they pay $25 an hour to use the licensed, inspected commercial facility to create recipes, test batch sizes, and produce product for sale. They can use the kitchens as needed, without having to sign costly contracts or put down first and last month's rent, as many commercial kitchens require.

Not only are the costs reasonable and the fully equipped new kitchens sparkling, but the incubator offers intangibles that can make all the difference to startup entrepreneurs, who often become overwhelmed as they struggle to master all the moving parts of a new venture.

"I thought that having the licensed commercial kitchen was going to be the biggest benefit, but it's the people," says Christine Hanson, founder of Auntie Früf's Aahsome Fudge. The longtime marketing and communications consultant tried to start a fudge business five years ago, but she wasn't able to get it off the ground until she found the incubator last summer. "Interacting with people who've been to culinary school, people like Chef Larry and others with entrepreneurial spirit, really took me out of the isolation that a lot of entrepreneurs work in," Hanson says.

The tenants sample each other's creations, share advice on ingredients and cooking techniques, and swap experiences in the food business. Bressler is on hand to taste-test and consult on important issues like product pricing and wholesale purchasing.

Pros and Dreamers

Henderson is a veteran restaurateur, having owned a successful San Diego barbeque joint during the 1980s, and needed just a few months at the incubator as a stepping stone to opening her restaurant. But other tenants range from experienced professionals, already working in the food industry, to what Bressler calls "passionate dreamers."

"They need guidance to see whether they have a feasible concept," he says. Often, for people who don't understand all the costs and time involved in starting a food business, a few weeks in the incubator's kitchen provides a reality check. "They need to learn that they're not going to nail the Costco (COST) account on their very first time out. Somebody already invented sliced bread, right?" he notes.

But Bressler sees his mission as providing resources and encouragement, not discouraging the dreamers who come through his doors. "Someone could walk in here with the next best big idea. Who knows?" he says.

One entrepreneur who hopes her idea is the next big hit is Niceole Levy, who for now is sticking with her day job doing post-production and closed captioning for television. "I had never been in a commercial kitchen before I walked into this place," she says. But for the past decade, she's had increasing interest in her low-calorie and healthful cookies and desserts. After making them for parties and giving them as gifts, she decided to try selling them.

"I got serious about 18 months ago," says Levy, whose business, Niceole's Cookies, sells "decadent desserts for a fit lifestyle." For now, she is baking the treats on the weekends to fill orders trickling in at her Web site.

Friends and Relatives

So far, she says she has invested $3,500 in the startup, most from her own savings. A network of talented friends have pitched in to set up her Web site, design her labels, and help her find sources for low-cost packaging. A brother with a background in accounting devised her pricing model and a friend who's a marketing expert is doing her sales and marketing plan.

But for most people, getting a restaurant, food business, or catering operation off the ground is an expensive proposition. Hanson says she has put $15,000 into her fudge operation and expects to spend $25,000 by the time it is fully launched. Henderson laughs and says only that it has taken "vast quantities" of money to open her new restaurant.

Various family members dug into their savings to help, she says. "I've worked two and three jobs all my life. So, you put a little aside and you hope and pray. I believe that to live a full life, you really have to get out of your comfort zone and do something you love and believe in."

Karen_klein
Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

Your Small Business Questions, Answered

Send us your questions on challenges you face in your business. Journalist Karen E. Klein will interview experts and distill their insights into answers.

(500 characters max)

Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus