Industry articles on co-working and community kitchens.
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http://www.latimes.com/features/food/la-fo-incubator21-2009apr21,0,2104164.story COLUMN ONE Where culinary dreams take shape, batch by batch Chef's Kitchens and other incubator kitchens give cooks a place -- fully stocked -- to share and nurture their food-related businesses. By Mary MacVean April 21, 2009 In one kitchen, Bob Suchyta perfects his muffins and brownies, trying to build a business in case the economy costs him his radio job. In another, Chelsea Britt, a recent college graduate, bakes in hopes of keeping her dad's panforte panforte business going. In a third kitchen, Robyn Chandonnet prepares vegan raw cheesecakes. There are dozens of stories behind the bowls and stoves and recipes at Chef's Kitchens, an incubator for food businesses. Stories of people shedding careers or adjusting to new and unexpected challenges. People with a dream and a cleverly decorated cookie or a family tamale recipe or the goal of owning a restaurant. A small food business often starts at home -- cooking or baking after a day job, handing out samples, asking friends and family for advice. But after that, the home cook must confront the reality of insurance, permits, packaging, marketing. And a kitchen. Selling food from most home kitchens is illegal. Building one can cost tens of thousands of dollars; rental kitchens are scarce. Enter the "incubator kitchen" -- for rent, stocked with equipment and licensed by health authorities. "We want to be a place where people can start from nothing and grow -- and grow out of us in some ways," says Andrea Bell, the owner of Chef’s Kitchens Co-op, in the Pico-Robertson neighborhood of Los Angeles. CC Consalvo would like nothing better than to outgrow Chef's Kitchens. She and two part-time employees of Clean Plate Meals make and deliver organic "farm-to-table artisan" meals that accommodate dairy or gluten intolerance and other special requests . Her dream is to own a cafe. But for now, she says, she feels at home at Chef's Kitchen, where the five kitchens are open 24-7 for the 40 or 50 businesses operating there. Rents at the 25-year-old facility -- a stucco building whose front door leads to a narrow hall, with two kitchens to the left and three to the right -- run from $16 to $25 an hour, depending on how much time a cook, teacher, photographer or other tenant needs. Last fall, Bell says, the economic news left her worried that "things could get pretty rough" for her incubator, but that hasn't happened. In fact, she says, her office is getting more calls, five or six a day, inquiring about the kitchens. The recession has hurt some specialty food manufacturers, but overall, the industry reported $48 billion in retail sales nationally in 2008, an increase of 8.4% over 2007, according to a report by the National Assn. for the Specialty Food Trade. Experts say that tough economic times inspire creativity. s
Where culinary dreams take shape, batch by batchChef's Kitchens and other incubator kitchens give cooks a place -- fully stocked -- to share and nurture their food-related businesses.
By Mary MacVean
April 21, 2009
In one kitchen, Bob Suchyta perfects his muffins and brownies, trying to build a business in case theeconomy costs him his radio job. In another, Chelsea Britt, a recent college graduate, bakes in hopes of keeping her dad's panfortepanforte business going. In a third kitchen, Robyn Chandonnet prepares vegan raw cheesecakes.
There are dozens of stories behind the bowls and stoves and recipes at Chef's Kitchens, an incubatorfor food businesses. Stories of people shedding careers or adjusting to new and unexpected challenges. People with a dream and a cleverly decorated cookie or a family tamale recipe or the goal of owning a restaurant.
A small food business often starts at home -- cooking or baking after a day job, handing out samples, asking friends and family for advice. But after that, the home cook must confront the reality of insurance, permits, packaging, marketing. And a kitchen. Selling food from most home kitchens is illegal. Building one can cost tens of thousands of dollars; rental kitchens are scarce.
Enter the "incubator kitchen" -- for rent, stocked with equipment and licensed by health authorities.
"We want to be a place where people can start from nothing and grow -- and grow out of us in some ways," says Andrea Bell, the owner of Chef’s Kitchens Co-op, in the Pico-Robertson neighborhood of Los Angeles.
CC Consalvo would like nothing better than to outgrow Chef's Kitchens. She and two part-time employees of Clean Plate Meals make and deliver organic "farm-to-table artisan" meals that accommodate dairy or gluten intolerance and other special requests.
Her dream is to own a cafe.
But for now, she says, she feels at home at Chef's Kitchen, where the five kitchens are open 24-7 for the 40 or 50 businesses operating there. Rents at the 25-year-old facility -- a stucco building whose front door leads to a narrow hall, with two kitchens to the left and three to the right -- run from $16 to $25 an hour, depending on how much time a cook, teacher, photographer or other tenant needs.
Last fall, Bell says, the economic news left her worried that "things could get pretty rough" for her incubator, but that hasn't happened. In fact, she says, her office is getting more calls, five or six a day, inquiring about the kitchens.
The recession has hurt some specialty food manufacturers, but overall, the industry reported $48 billion in retail sales nationally in 2008, an increase of 8.4% over 2007, according to a report by the National Assn. for the Specialty Food Trade. Experts say that tough economic times inspire creativity.
s
"I think the economy will stimulate the entrepreneurial mind," says Mari Fassett, who "searched high and low" for a kitchen after she began her successful Marimix snack company in 1993, and who now is building a four-kitchen incubator in Orange.
"Everybody has a dream of some kind of food . . . a favorite dish they really think people would love," says Bell, a former caterer with 25 years of experience. "People are a lot more interested in what goes into their food, the ingredients, the health aspects. By buying from people who are also concerned about that, you can get food of the caliber you would make at home."
Chef's Kitchens is one of about 60 such incubators around the country. La Cocina in San Francisco was conceived to help low-income people develop businesses. Others help farmers get their products to consumers. Mi Kitchen Es Su Kitchen is a consulting firm in New York that operates threeincubators in the off-hours at kitchens run for another purpose, such as job training, says Kathrine Gregory, owner of the firm. Rents are around $20 an hour.
These days, Gregory says, she encourages people to "think small and package small." While a shopper might hesitate to buy a big box of expensive cookies, they're likely to feel comfortable with a $5 splurge.
At Chef's Kitchens, Bell and partner Sarah Cawley say some of their tenants work full time, andothers work as little as four hours a week.
There's a bookcase of cookbooks for sharing, as well as informal advice about getting a spot at a farmers market or shelf space at Whole Foods, and referrals for packaging or insurance. (The cooks who use the incubator must get certification in food handling, and insurance. If they want to sell food in L.A. County, they also need a business license.)
And should a cook need an egg in the middle of the night, he or she can usually borrow one.
"Sometimes, you go in and the music is playing and people are dancing and singing and cooking," Bell says. "You are not stuck in your kitchen."
Cawley, who came to the U.S. from Ireland in 1982 and worked for Bell at her catering business before becoming her partner in Chef's Kitchens, has a reputation as a mother hen. Tenants say she can quickly get an oven fixed or a scheduling problem solved.
"The people who are here -- they put their faith in me," she says. "They have faith in me and I have to give that back. I don't want them to worry."
Sometimes, it's worry that leads people to the kitchen in the first place.
Robyn Chandonnet was a hairdresser when her husband's multiple sclerosis began limiting his activities. After seeing many doctors, he turned to alternatives, cut out all processed foods and eventually began eating only raw food.
For a party, when her father-in-law turned 70, Chandonnet tried to make a cake that her husband could eat, consisting entirely of vegan ingredients. An idea was born, and Chandonnet went to work trying to perfect a product.
"A lot of cheesecake went into the toilet in the process," Chandonnet says, but in 2005, when she had a recipe she thought was marketable, she went to Chef's Kitchens.
"It was like coming home," she says. "I love Sarah. Without this place, I would never be in business."
Her Nude Foods cheesecakes -- raw and vegan, in seven flavors, including lemon-blueberry, chocolate and pumpkin spice -- are sold in some Whole Foods stores. She began alone, and now has three employees; her gross sales went from $32,000 the first year to $122,000 in 2008.
Bob Suchyta hopes his muffins and brownies will prove just as appealing.
He worked in his father's Dearborn, Mich., bakery from the age of 5. By the time he was 20, he'd had enough. Now 43, he's worried about the future of his radio job.
Last year, he brought his low-fat apple muffins to El Segundo's town fair. Soon, he was sinking money into equipment, and in January, he started working at Chef's Kitchens. He sells his baked goods at the Torrance Farmers Market on Saturdays and has been trying to get a contract with a cafe.
He still has his day job, but he says he's closing in on breaking even as a baker.
Chelsea Britt, 25, also hopes to use what she learned from her father, Randy, a farmer in Chico who, along with the produce he brought to a farmers market, ran a business that sold a California-style version of the Italian cake called panfortepanforte, made with almonds, dried apricots, and nectarines and dates.
"I remember him practicing," says Britt, who designed the label featuring a stylized almond tree.
Last April, her father died. Britt had already moved to Los Angeles and wanted to stay. She went home temporarily to his kitchen to learn the ropes. She's now working on the business at Chef's Kitchens, with a hoped-for fall debut at a Santa Monica farmers market.
There's no guarantee any of them will succeed, but the dreamers keep coming. Chef's Kitchen alumni include Akasha Richmond, who used one of the kitchens as a caterer and to test recipes for her well-regarded Culver City restaurant, Akasha.
Bell says she doesn't know what percentage of her tenants go the distance, but she advises people not to plan on making a living in food for at least two years.
"You really need to not just be a good cook, but a good businessperson," she says.
"People who think they are going to jump in and cook a few chocolate chip cookies and make a living at it are probably setting themselves up for failure."
Two young men came in recently to take a look at the kitchens; they want to make healthful, organic food, Cawley says.
She advised them to keep their computer business jobs as they work on their food careers.
"Maybe they'll last a week," she says. "Maybe five years."
DEBBIE BONNER’S carrot cake, with its moist, macadamia-spiked layers, pineapple tang and aroma of candied
ginger, could have come straight from her family’s kitchen in North Carolina.
The ruisleipa rye bread that Simo Kuusisto bakes is a dense, chewy, faintly sour taste of his homeland, Finland.
And crunching into a pickled cucumber barrel-fermented by Jon Orren practically transports one to an
old-fashioned New York deli counter.
But all three foods come from the same place — a squat industrial building in Long Island City, Queens.
Ms. Bonner, Mr. Kuusisto and Mr. Orren are among three dozen food makers who rent space at Mi Kitchen Es Su
Kitchen, a community kitchen and entrepreneurial “incubator.”
Created by Kathrine Gregory, a former restaurateur, Mi Kitchen solves a perennial problem for start-up food
businesses in New York City: where to do all the cooking.
The options are limited. Using a home kitchen is complicated by health and insurance regulations. Renting
space for a professional kitchen and equipping it is prohibitively expensive for most beginners, and commercial
kitchens are scarce and often don’t allow the flexibility that new businesses require.
For the last two years, Ms. Gregory has rented sections of the 5,000-square-foot teaching kitchen of the Artisan
Baking Center, a nonprofit worker-training center. The kitchen is available only when classes are not in session,
and she charges $180 a night or $220 for a day shift.
“I was very lucky to find this space,” said Mr. Orren, who started his small-batch pickle company, Wheelhouse
Pickles, in 2005. He has made pickles at Mi Kitchen since April of last year. “If Mi Kitchen didn’t exist,” he said,
“I think the only other alternative for me at that point in the company’s growth was to try to find a restaurant that
would allow me to use the kitchen in the off-hours.”
Ms. Gregory said about 60 percent of those who use the kitchen are “talented home cooks.” Among them are
producers of granola, toffee, hummus and chocolate-covered pretzels. Many still have day jobs.
“Most of the people, this is their dream,” Ms. Gregory said. “One night a week or one night a month they’re going
to work a 9-to-5 job and then come over here and work another eight hours standing on their feet in a hot kitchen.
“Their passion is so strong that they’re willing to subject themselves to this.”
That’s certainly true of Mr. Kuusisto. A chef for the Canadian ambassador to the United Nations, he first picked
up bread-baking as a hobby, spurred in part by his craving for the Finnish rye bread he grew up with. Now he’s
considering a career switch.
“This is my first step toward maybe doing a bakery,” Mr. Kuusisto said as he shaped loaves around midnight on a
recent shift at Mi Kitchen. He paused to knock on the wooden countertop. “Who knows? Maybe we’ll conquer
America with this bread!”
After a full work week, Mr. Kuusisto bakes at Mi Kitchen from 6 p.m. to 2:30 a.m. on Friday nights, producing
150 to 200 pounds of bread to sell at a farmer’s market on Long Island.
“It’s a good playground for me,” he said with a slightly bleary smile. “To see if the bread sells.”
Mi Kitchen fits in with the Artisan Baking Center’s mission, said Rebecca Lurie, the center’s director. Mi
Kitchen’s rent helps pay for the classes. Ms. Gregory runs Mi Kitchen as a business but offers free mentoring and
entrepreneurial workshops. And Ms. Lurie said, “You can see how there’s a quick tie-in — because as those
businesses grow, they need trained workers.”
Mi Kitchen is one of a number of similar incubators across the country to help entrepreneurs. The National
Business Incubation Association includes 21 kitchen incubator programs, said Meredith Erlewine, the group’s
director of publications.
On a recent Saturday morning at Mi Kitchen, Anthony Brisbon, a graduate of the baking program, assembled
fruit and cheese plates for Two Mamas and a Cook, a catering company he recently started with two other
graduates. Ms. Bonner mixed cake batter for 12 fudge layer cakes. Kelli Bernard, the owner of Amai Tea & Bake
House, wandered over with a tray of her fragrant tea-infused butter cookies to ask Ms. Bonner’s opinion on some
shapes she was testing.
As useful as Mi Kitchen has been, Ms. Bernard said, there have also been frustrations. Access to the kitchen is
limited by class times, and sometimes the foods juxtaposed there have had disastrous interactions — early
batches of sour pickles got moldy because of the bakers’ yeasts in the air; doughs have absorbed the smells of
foods cooling beside them in the refrigerator.
“Pickles and cookies don’t go together,” said Ms. Bernard, who plans to open her own cafe in Gramercy Park this
fall. “Nor do salmon and cookies.”
Still, for Ms. Bonner, who left a career in marketing to start her company, Debbie’s Soulful Sweets, the kitchen’s
community feeling is a great advantage.
“Baking alone, isolated, you don’t last very long,” she said as she sliced a German chocolate cake. “I want to be
big. I want to be manufacturing nationally and selling mail order. But before I can be big, I want to be good. And
in order to be good, I have to be here.”
Copyright 2007 The New York Times Company
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Being own boss is upside to getting downsized, say new
biz owners
BY LORE CROGHAN DAILY NEWS STAFF WRITER
Sunday, December 21st 2008, 4:00 AM
When the brass warned layoffs were coming, Vilma Villatoro thought she'd be spared. She was wrong.
"We're downsizing," the accountant at the United Bank branch at Rockefeller Center was told. "Pack up your things and leave today."
Her only job prospect paid beginning bookkeeper's wages, so last spring she took charge of her employment. She opened a shop called Chila's Department Store near her Crotona Park East, Bronx, home that sells bargain-priced, brand-name shoes.
"Every woman wants to have many pairs of shoes - like Imelda Marcos," said Villatoro, 53. "If they come to me, they don't have to pay a fortune for them."
As job losses mount citywide - Controller William Thompson predicts 170,000 by late 2010 - more and more New Yorkers will launch their own businesses. The trend is starting to pick up momentum, experts said.
A third of the 150 students in Prof. Bruce Niswander's entrepreneurship classes at Polytechnic University in downtown Brooklyn have lost their jobs or fear they will.
Calls are pouring in to Kathrine Gregory's office at a new business incubator called Mi Kitchen Es Su Kitchen from jobless or soon-to-be jobless New Yorkers seeking advice about starting food businesses.
She tells them they don't have to spend $100,000 to lease and equip commercial kitchens when they can use hers one day at a time. She runs three facilities where new business owners on tight budgets can cook.
Even in a recession, help is available for New Yorkers who decide to create their own jobs.
Incubators like Gregory's offer low-cost workspace to people who are short on rent money. Microlenders dish out funds when banks won't. Colleges and government agencies provide free counseling.
"Starting your own business is going to be very scary if you're used to getting a paycheck, but it's liberating to be your own boss," Gregory said.
Villatoro recently got counseling at the Small Business Development Center at Lehman College and applied for a $50,000 microloan for Chila's.
She opened her shop with money from the $96,000 she got in severance, her 401(k) and personal savings but still needs more cash.
She wants the money to fund a move to a storefront at a new apartment complex on Louis Nine Blvd. built by the Women's Housing and Economic Development Corp.
Villatoro gets her goods dirt cheap from liquidators, so the pricing's enticing at Chila's: $69 Steve Madden flats and $85 Jessica Simpson patent-leather pumps go for $29, and the "deal of the day" shoes by the front door are $5 a pair. But her shop is tucked away on a side street, and it generates less revenue than her online sales.
"If I didn't sell on eBay, I would be losing money," she said.
Laura Paterson got laid off last month from the Museum of the Moving Image in Astoria, Queens. She knew the economy was bad, but it was still a shock.
Paterson, 33, was hoping to keep her job as marketing director for at least a couple of more months. She had already launched a startup, Hot Blondies Bakery, with a former co-worker who had left the museum last spring. They wanted at least one of them to have a paying job for a while longer.
Now Paterson, a Nolita resident, is baking and filling orders for brownies with business partner Lorin Rokoff, 30.
Doing Well by Doing Good
Jessica ChenEntrepreneur.comFriday, October 19, 2007; 12:00 AM
In June 2006, Bill Gates announced he was stepping down from his full-time role at Microsoft and shifting his focus to the Bill and Melinda Gates Foundation. When the world's richest entrepreneur decides to take a step in the nonprofit direction, he may be onto something.
In the last decade, a generation of social entrepreneurs has become increasingly visible by creating self-sustaining businesses. Social entrepreneurs are similar to regular entrepreneurs with one main difference--their gains aren't measured in financial profit, but by the impact they have on society.
Many entrepreneurs have started social enterprises, breaking nonprofit tradition by blending mission with money, referred to as "double bottom line" businesses. Jerr Boschee, executive director and founder of The Institute for Social Entrepreneurship, says for a while, nonprofits were hung up on the double bottom line because it seemed contradictory to merge doing well with doing good. But Boschee says self-sufficiency has become necessary for many nonprofit groups to operate. "We have today three times as many nonprofits as we had 30 years ago, and they're all at the same watering hole."
No longer limited by philanthropic donations and public subsidies, these organizations now have a way of being self-sufficient while still helping others in social need. And for some of these organizations, helping others means helping them start their own businesses.
Helping Others Get Started Mi Kitchen es Su Kitchen ï¿Â!is a kitchenincubator in Queens, New York, dedicated to helping struggling entrepreneurs start and develop food businesses. The kitchen offers business counseling, mentoring and support for entrepreneurs who have a line of goods, but are limited in funds and business knowledge.
"We go through the whole thing," says founder Kathrine Gregory. "How do you market?ï¿Â! How do you write a business plan?"
The 55-year-old food industry veteran is an entrepreneur herself and offers her know-how by partnering with nonprofits that house kitchen facilities. In 1996, Gregory started her kitchen incubator concept with an organization that had an 850-square-foot kitchen in Brooklyn. The facility was being used for job training, but operation costs were quickly eating up the funding. Gregory convinced the board to let her test the kitchen incubator concept, and the resulting profits helped turn the nonprofit into a self-sustaining business.
Today, Mi Kitchen es Su Kitchen operates in conjunction with the Consortium for Worker Education and Artisan Baking Center. With a 5,000-square-foot facility, the kitchen is used for culinary arts training, general education and ESL courses during the day. At night the kitchen transforms into a
bustling entrepreneurial atmosphere, complete with a dough press, chocolate melter, and a variety of mixers and ovens.
According to Gregory, most entrepreneurs at Mi Kitchen es Su Kitchen--who pay $180 to $220 per shift to use the space--turn a profit within the first six to 12 months. The revenue made from rentals has totaled about $200,000.
"People think this is an amazing concept," Gregory says. "It's really a win-win, everyplace that you look." She believes that leveling the playing field for low-income entrepreneurs is one reason her idea has hit home with the local community.
Kiva founders Matt Flannery, 30, and his wife, Jessica, also took the business partner angle with their Kiva.org microlending website. The two started Kiva after traveling to Africa and learning of the enterprising atmosphere there.
"We interviewed people every day for weeks and talked about people's business plans," says Matt. "I thought it was fascinating that I was talking about business, business plans and scaling an inventory challenges in a place that I only associated with deep poverty."
The experience stayed with Matt and Jessica when the two returned to California and partnered with four others, working out of coffee shops and a tiny San Francisco apartment to develop the Kiva website and concept. Their goal remains showing people the business dynamic they experienced in Africa. "It was a different take on poverty, a different take on Africa than you typically hear when you're out here in the United States," Matt says.
On the Kiva website, lenders can donate to entrepreneurs trying to start a business in third-world countries. Loans start at $25, which goes a long way in the third world. The entrepreneurs pay back the loans 99 percent of the time--a remarkable default rate in the finance world. "[It's] connecting as an equal or a business partner, an entrepreneur, rather than as a charitable endeavor or benefactor or taking pity on someone else," Matt says.
And pity is something Matt says the media has thrived on for some time. "Often we want to hear about war and bloodshed and disease and that's only a small part of the story about what goes on in a huge continent like Africa," he adds.
Like Gregory, Matt also struggled to convince others about the viability of his idea. "One attribute of good ideas is that they challenge people's existing mindset," he says. "Now that I know that, I wouldn't have put so much weight in other people's opinions."
Why It's WorkingDespite some skepticism, "Social entrepreneurship is really taking off around the world," says David Bornstein, author ofHow to Change the World: Social Entrepreneurs and the Power of New Ideas, which has been translated into 16 languages. In his book, Bornstein chronicles the work of Ashoka, an international organization that helps fund entrepreneurs with innovative solutions to social problems.
According to Bornstein, the relentless won't-take-no-for-an-answer quality of entrepreneurs is what gives them their edge in business. "They absorb the failure, they learn, they surround themselves with a good team and then they redirect." These same attributes, when applied in the social realm, can result in community-changing solutions.
In the end, Gregory says it's the energy of the entrepreneurs she comes into contact with that sustain her in her business. For Matt and Jessica, being part of something larger than themselves has inspired them.
"It's not about me, it's not about my organization," Matt says. "It's about people connecting to people and using technology as a conduit."
June 23, 2007
For Women, a Recipe to Create a Successful Business
By LAURA NOVAK
SAN FRANCISCO — One morning in May, Veronica Salazar stuffed refried beans into sandal-shaped masa
cakes, concentrating to block the commotion in a cavernous kitchen here in the Mission District. The chopping of
vegetables added to the din as the clang of metal pans against stainless steel equipment competed with
background music from a local Spanish-language radio station.
But this kitchen, known by the Spanish name La Cocina, is no ordinary restaurant or commercial operation.
Instead, the chefs here — all women, most of them immigrants — work side by side to achieve a common goal:
starting their own food businesses and, in some cases, elevating themselves out of poverty.
Known as a “kitchen incubator,” La Cocina (la-koh-SEE-nuh) is a shared-use space created two years ago to
provide a platform for women entrepreneurs without assets. Offering a low hourly rate for access to 2,200 square
feet of restaurant-quality kitchen space, the nonprofit La Cocina also provides training from high-profile mentors
and technical assistance on creating business plans and building marketing programs.
“There’s an entrepreneurial gene,” said Valeria Perez Ferreiro, executive director of La Cocina. “And we are
finding amazing entrepreneurs who are already cooking or have a product that is so promising that it deserves to
be seen in the market and that we think has a chance for success.”
Ms. Salazar, 32, was one of the first participants in La Cocina and is one of its bigger successes. Her company, El
Huarache Loco, makes traditional foods from Mexico City.
Working with intensity, she needed to produce 700 of her trademark huaraches, the bean-filled cakes, for her
weekly booth at a farmer’s market and hundreds more for Carnaval San Francisco festivities over Memorial Day
weekend. She also prepared fish and shrimp ceviche as an employee stirred 30 gallons of carnitas in a brazing
skillet for a catering job for 100 people.
“I come here to learn all the business, and I need to learn more every day,” Ms. Salazar said, while dicing pounds
of tomatoes for a salsa roja. “Tomorrow, I have three parties. So if I do this tomorrow, I know I can do something
by myself.”
The specialty foods prepared here are a reflection of the ethnic makeup of La Cocina’s participants. More than
half the women are Latina, with another 8 percent African-American. The rest are Asian or Caucasian. Their
products, both fresh and packaged, range from Mexican street fare to Irish chocolates, vegetarian sushi, South
African meat pies and Brazilian cakes.
La Cocina has opened its own booth at the high-end Ferry Building Marketplace, where it sells its participants’
packaged products along with house-made charcuterie, pricey olive oils and $8-a-dozen organic eggs.
Every day La Cocina’s calendar is replete with participants preparing packaged products and hot food for
catering jobs, coffee shops and a busy farmer’s market near the airport. Anna Shi’s Gourmet has a standing
weekly order for 900 of her vegetarian tofu egg rolls for the Berkeley school district. Maria del Carmen Flores sells
1,500 of her yucca and plantain chips in 50 stores. Independent grocers around the Bay Area and Whole Food
Markets throughout the state have picked up many of La Cocina’s specialty products.
“The really cool thing about a business incubator is that when you get entrepreneurial people in one place,
there’s a synergistic effect,” said Tracy Kitts, vice president and chief operating officer of the National Business
Incubation Association, a nonprofit membership organization. “Not only do they learn from staff, they learn tons
from each other, and this really contributes greatly to their success.”
The association estimates there are 1,200 incubation programs in the United States. Only 19 of them are kitchen
incubators, Mr. Kitts said, because the start-up and operating costs are much higher than for a mixed-use space.
Eight of those programs are in urban areas, including Rochester, New York City, Denver and Minneapolis.
La Cocina is housed in a starkly modern structure wedged among tattered row houses and apartment buildings in
the Mission District. Residents are primarily low-income people from Mexico and El Salvador, where Ms. Perez
Ferreiro says there is a strong tradition of entrepreneurship.
La Cocina was created by the California Women’s Foundation in response to a survey that indicated that 90
percent of women in the Mission District said they needed adequate equipment and proper permits to run their
businesses, but that commercial kitchen space in San Francisco was either unaffordable or geographically
inconvenient. Many of them said they were cooking illegally out of their homes.
The foundation and government grants make up more than three-quarters of La Cocina’s $575,000 annual
budget. About 17 percent of its funding comes from rent charged to six commercial tenants (including men), who
pay $30 to $40 an hour, depending on the type of equipment being used. The program participants pay $8 to
$10 an hour for the space, utensils and small ware.
“We are not creating a parallel nonprofit world where they are in a sheltered workshop,” Ms. Perez Ferreiro said.
“The reason we charge a fee is that we want them to have a business model that is sustainable. If they don’t
incorporate the cost of doing business, it’s artificial, and it’s going to crumble.”
To avoid that, Jason Rose, La Cocina’s culinary director, and Caleb Zigas, the program director, both of them
bilingual, meet weekly with the women to review food costs, recipes and sales and marketing plans. Participants
also pair with consultants from partner organizations who work on finances and cash flow statements.
Ms. Salazar of El Huarache Loco employs five family members at her booth at the Alemany Farmers’ Market,
where Mr. Zigas says she takes in $3,000 every weekend. Costs of goods, licenses, employee wages and kitchen
rental means she nets $1,000. But he points out that Ms. Salazar will soon be able to afford to buy a home; he is
searching for commercial space for her to open a restaurant, a prospect he calls “thrilling.”
“It’s the translation from informal economy, which is cash-in, cash-out, to a formal economy, which is concept,
then investment, then growth,” Mr. Zigas said. “It’s a really hard conceptual translation to make, to go from
knowing how much you’re making every day to thinking about money in a longer-term vision.”
When Jill Litwin applied to La Cocina, she had abundant vision but needed help with what she calls her “road
map.” Ms. Litwin is the owner of Peas of Mind, a line of frozen organic toddler food that she developed in
Vermont.
At first, she was only capable of making 12 mini-casseroles at a time. The staff brought in a food scientist to help
Ms. Litwin recalibrate her recipes so that each batch would turn out 400. They also introduced her to a human
resources specialist and made a critical introduction to a food buyer for Whole Foods Market.
“They are helping people produce products that are high quality and of great integrity,” said Justin Jackson,
executive coordinator for purchasing at Whole Foods in Northern California. “If it wasn’t well thought through
and executed properly, our interest wouldn’t be what it is.”
Peas of Mind is now in 80 stores in California, 20 of them Whole Foods Markets, which is discussing plans to take
her product national. Ms. Litwin says she has doubled her 2006 sales in the first quarter of this year.
“If you are an entrepreneur, you are in your own world and you never know if you’re on the right track,” Ms.
Litwin said. “This is definitely a community you can bounce ideas off of. And if they don’t know the answer, they’ll
find somebody who does.”
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WINTER, 2005
BW SMALLBIZ -- STARTUPS
Hatching For SuccessBusiness incubators are back -- and ready to transform your startup
Here's no doubt that Arthur "Mac" Jones knows how to build a company. A former Arthur Andersen accountant, Jones was CFO and later president of drugstore chain Big B Drugs during a 19-year expansion that resulted in more than 400 locations across five southeastern states. In 1998, he signed on as CEO of International Pharmacy Management, a five-person mail-order pharmacy and prescription-benefit card company. By 2000, the company had 25 employees and $10 million in sales. That year, Jones sold it for $40 million.
But Jones, now 57, also has the good sense to know when to accept a helping hand. That's why his next venture -- a nutritional supplementsmanufacturer -- is being launched from the Entrepreneurial Center, a business incubator in Birmingham, Ala. IPM was housed there when Jones came on board and it's where he met the venture capitalists who put $3 million into that startup. "Once you've been in an incubator, you know you want to be in one the next time around," he says.
It's easy to see why. Jones pays about two-thirds of the market rate for rent, and receives free marketing and accounting advice from localprofessionals who volunteer their services to resident companies. His current company, Health Care Supplements, now has five employees and revenues of $1 million. Jones expects it to strike out on its own in about a year.
Just a few years after hundreds of them imploded in the tech bust, business incubators -- which provide office space and professional advice tostartups -- are making a comeback. About 1,000 incubators now operate in the U.S., a 10% increase over 2001. Incubators typically take in young companies that have a clear business plan but need access to specialized facilities or advice. They generally offer below-market rent and the expertise of staff or outside consultants willing to work at reduced rates. Companies can "graduate" from the incubator once they reach milestones such as completing a big round of financing or winning a hefty contract -- goals incubators can help them achieve. "Incubators take companies that are missing something, and give them the resources they need to get to the stage where they can get funded," says Kala Marathi, managing director of the Houston Angel Network, which invests about 25% of its portfolio in companies that have graduated from incubators.
Incubators can afford to be picky about who they choose to host. Typically, they want local entrepreneurs with a full-fledged business plan and oneto five employees. (If you need help developing a plan, most incubators offer assistance to entrepreneurs who aren't quite ready to be full-time tenants.) To get in, you'll then have to pass muster with the incubator's director, and sometimes a selection committee. Be prepared to answer hard questions about your business' growth strategy. "I'm looking for companies that can really do something unique, that can add a lot of jobs to the community," says Charlie D'Agostino, director of the Louisiana Business and Technology Center in Baton Rouge. Companies that already have an established management team, receive significant funding, or generate substantial profits usually won't be accepted.
Whether an incubator is right for your startup depends on what type of company you own and what assistance you need. Some incubators are opento all companies; others welcome only those in certain sectors. And their different sponsors -- universities, corporations, private investors, local governments, and economic development agencies -- often determine the services they offer and the types of startups they accept. If your company needs plenty of funding to grow, a for-profit incubator that invests in tenant companies can be a good choice. But enrolling in one is no guarantee you'll get cash, because most take equity stakes in only their most promising tenants. Start by finding the incubators in your area or industry. Then ask a few important questions before you sign up.
FINDING THE RIGHT FITA good place to start your search is the Web site of the National Business Incubation Association, nbia.org/resource_center, which lists itsmember incubators by state and links to about 20 state incubation associations. Overall, incubators fall into two broad categories: mixed-use incubators, which accept companies from a variety of industries, and sector-focused incubators, which work only with companies in certain industries.
Mixed-use incubators are ideal for entrepreneurs who have an established product or knowledge of their industry but who need help with the ins
Close Window
WINTER, 2005
BW SMALLBIZ -- STARTUPS
Hatching For SuccessBusiness incubators are back -- and ready to transform your startup
Here's no doubt that Arthur "Mac" Jones knows how to build a company. A former Arthur Andersen accountant, Jones was CFO and later president of drugstore chain Big B Drugs during a 19-year expansion that resulted in more than 400 locations across five southeastern states. In 1998, he signed on as CEO of International Pharmacy Management, a five-person mail-order pharmacy and prescription-benefit card company. By 2000, the company had 25 employees and $10 million in sales. That year, Jones sold it for $40 million.
But Jones, now 57, also has the good sense to know when to accept a helping hand. That's why his next venture -- a nutritional supplementsmanufacturer -- is being launched from the Entrepreneurial Center, a business incubator in Birmingham, Ala. IPM was housed there when Jones came on board and it's where he met the venture capitalists who put $3 million into that startup. "Once you've been in an incubator, you know you want to be in one the next time around," he says.
It's easy to see why. Jones pays about two-thirds of the market rate for rent, and receives free marketing and accounting advice from localprofessionals who volunteer their services to resident companies. His current company, Health Care Supplements, now has five employees and revenues of $1 million. Jones expects it to strike out on its own in about a year.
Just a few years after hundreds of them imploded in the tech bust, business incubators -- which provide office space and professional advice tostartups -- are making a comeback. About 1,000 incubators now operate in the U.S., a 10% increase over 2001. Incubators typically take in young companies that have a clear business plan but need access to specialized facilities or advice. They generally offer below-market rent and the expertise of staff or outside consultants willing to work at reduced rates. Companies can "graduate" from the incubator once they reach milestones such as completing a big round of financing or winning a hefty contract -- goals incubators can help them achieve. "Incubators take companies that are missing something, and give them the resources they need to get to the stage where they can get funded," says Kala Marathi, managing director of the Houston Angel Network, which invests about 25% of its portfolio in companies that have graduated from incubators.
Incubators can afford to be picky about who they choose to host. Typically, they want local entrepreneurs with a full-fledged business plan and oneto five employees. (If you need help developing a plan, most incubators offer assistance to entrepreneurs who aren't quite ready to be full-time tenants.) To get in, you'll then have to pass muster with the incubator's director, and sometimes a selection committee. Be prepared to answer hard questions about your business' growth strategy. "I'm looking for companies that can really do something unique, that can add a lot of jobs to the community," says Charlie D'Agostino, director of the Louisiana Business and Technology Center in Baton Rouge. Companies that already have an established management team, receive significant funding, or generate substantial profits usually won't be accepted.
Whether an incubator is right for your startup depends on what type of company you own and what assistance you need. Some incubators are opento all companies; others welcome only those in certain sectors. And their different sponsors -- universities, corporations, private investors, local governments, and economic development agencies -- often determine the services they offer and the types of startups they accept. If your company needs plenty of funding to grow, a for-profit incubator that invests in tenant companies can be a good choice. But enrolling in one is no guarantee you'll get cash, because most take equity stakes in only their most promising tenants. Start by finding the incubators in your area or industry. Then ask a few important questions before you sign up.
FINDING THE RIGHT FITA good place to start your search is the Web site of the National Business Incubation Association, nbia.org/resource_center, which lists itsmember incubators by state and links to about 20 state incubation associations. Overall, incubators fall into two broad categories: mixed-use incubators, which accept companies from a variety of industries, and sector-focused incubators, which work only with companies in certain industries.
Mixed-use incubators are ideal for entrepreneurs who have an established product or knowledge of their industry but who need help with the ins
and outs of growing a new business. They're often funded by state and local governments or economic development agencies, and their chief aim is to spur local job creation. While the staff at mixed-use incubators probably won't have an in-depth knowledge of your industry, they can help with the day-to-day problems and questions common to most small businesses.
That's exactly the kind of help James Prinster and Steve Kramer needed. After the manufacturing company they had worked for shut down in 2002,Prinster and Kramer decided to start a contract-electronics manufacturing outfit. They met with Thea Chase Gilman, director of the Business Incubator Center -- a nonprofit mixed-use incubator in Grand Junction, Colo. -- who asked them tough questions about potential buyers, cost structures, financing options, and equipment needs. They worked together to draft a business plan.
After securing a $100,000 bank loan, Prinster and Kramer founded Canyon Electronics and Cables. They rented a 1,200-square-foot manufacturingfacility in the incubator at about 25% below the market rate. The incubator's 11 employees helped with critical issues such as payroll and financing options. "We knew about the manufacturing side of the business. [The incubator] helped us with the stuff we didn't know," says Prinster.
Canyon Electronics quickly outgrew its facility and rented additional space in the incubator. "When I was gone on vacation they even took over myoffice," says Gilman. The 28-employee company had 2004 revenues of $850,000, up from $60,000 in 2002. And in December, 2004, Canyon moved into a 6,000-square-foot manufacturing facility of its own in Grand Junction.
NARROWING THE FOCUSSector-focused incubators, also called clusters, are becoming increasingly popular. They now make up more than half of all incubators and aredesigned for entrepreneurs who need specialized facilities or access to particular markets. But finding one that's right for your company might be difficult. Clusters are usually limited to big cities or areas where a certain industry is particularly strong, such as software in Silicon Valley or defense technology in Maryland.
While some cluster incubators are funded by state or local governments, universities and corporations are becoming players in this field as well.University-sponsored incubators, often focused on technology, provide access to a broad range of resources, such as volunteer business school students, faculty research and expertise, and state-of-the-art laboratories. Corporate incubators, such as Panasonic's Linux Collaboration Center in San Jose, Calif., or Nokia's Innovent incubator in Annapolis, Md., accept startups working on innovations that promise to expand the corporation's existing product line.
Greg Woodworth was in search of a more unusual type of sector-focused incubator -- a kitchen incubator -- for his Stony Brook Cookie Co., whichnow sells gourmet cookies and gift baskets through its Web site. He investigated prospects in Boston, Portland, Ore., and New York before settling on Nuestra Culinary Ventures, a Jamaica Plain (Mass.) incubator designed for small to medium-size retail food and catering businesses. For Woodworth, who'd spent 12 years in the restaurant and catering business before launching his company, the draw was mainly financial. He estimates he would have had to spend about $30,000 to set up a commercial kitchen that met Food and Drug Administration regulations. Instead, he was able to launch Stony Brook with a meager $3,200.
Woodworth rents NCV's 1,600-square-foot kitchen for $27 an hour during the day and pays $62 a month for dry and freezer storage. He shares anoffice equipped with fax, copier, and Internet access with NCV's 47 other tenants. The incubator holds seminars on everything from menu pricing to tips for running a catering business, and local suppliers often give NCV companies discounts. "It was the perfect place to start my business," says Woodworth. The three-employee company had 2004 revenues of $65,000, and sales have quadrupled in 2005. Woodworth hopes to move to a permanent location next summer.
Once you've managed to find an incubator that appears to suit your needs, it's time to dig in and do some homework. Find out about the incubator'sgraduation requirements, and how flexible the rules are. You don't want to be kicked out before you're ready. Many incubators increase their tenants' rent and other fees after an initial period, so ask about long-term lease arrangements and fees charged by outside consultants. And take a look at companies who've recently graduated: Are they where you want your company to be in a few years? Perhaps most important, talk with current tenants and recent graduates about their experiences. If they're anything like Arthur Jones's, you'll want to enroll right away.
By Michael Patterson
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From In Business MagazineNovember/December1999, Page 20
chicken wings, cheesecake ... and more
KITCHEN INCUBATOR CREATES NEW CAREERS“Build a commercial kitchen in a business center, and they will come.” That’s thestory in La Crosse, Wisconsin.
Molly Farrell
Former executive Nancy Davenport is now a lunch lady, thanks to a commercial kitchen installed at the Coulee Region Business Center in La Crosse, Wisconsin. The 35,000-square-foot center leases space to incubator businesses and currently has 15 tenants, including a screen printer, sculptor, driving school, environmental consultant and kiln manufacturer.
Davenport was looking for a career change after working at the Franciscan Skemp Medical Center for21 years, most recently as its patient financial services director. “I was talking to the mother of one ofmy daughter’s friends about starting a catering business and told her that the kitchen would be an issuebecause health regulations require that any food prepared for the public be made in a commercialkitchen,” remembers Davenport. “I approached a number of restaurants about renting their kitchens atnight, but wasn’t getting anywhere. The woman called me a few weeks later and said the Coulee Centerwas building a kitchen for incubator businesses, and I dialed the number right away.”
David Loomis, executive director of the Coulee Region Business Center, says he began seeking funding for the kitchen in 1998 after several people expressed interest in starting food-related businesses at the center. The $85,000 kitchen was completed in May, 1999 with federal, state and local funds, as well as donations of student labor and staff expertise from Western Wisconsin Technical College. The students put up washable fiberglass wallboard and a seven-by-11-foot walk-in cooler. Other renovations to the 1,400-square-foot space included installing a trench in the floor to clean up spills, false walls to hide the plumbing and electrical wiring, and a new lighting system.
The kitchen equipment cost approximately $40,000 and includes two ovens and two ten-burner stoves, aconvection oven that can bake 16 trays of cookies at a time, two 21-cubic-foot freezers, two powerfulmicrowaves that can be used for thawing food or melting butter, a commercial dishwasher, slicers,mixers and a meat grinder. There is a tilting “braising table” that can cook ten turkeys or 30 gallons ofchili at a time. The table has a crank that turns it 90° to drain away grease. “We don’t have deep fatfryers,” notes Loomis. “We didn’t want to encourage that kind of cooking because it creates a biggermess in the filter and exhaust systems and is a fire hazard.”
Loomis relied on his years of experience in the food service business as a sausage maker, deli andconcession stand manager and caterer in selecting the kitchen equipment. “I’ve been around food so Iknew to make the kitchen portable,” he says. All four of the kitchen’s stainless steel tables are on castersso they can be wheeled to the ovens or cooler for loading and unloading. “When tenants are ready todeliver the food, they can wheel the table out the back door to load up their truck,” he adds.
CULINARY TENANTS
Davenport, the first culinary tenant, began using the kitchen in early June. Her business, Serves YouRight, provides meals to the employees of local companies. Since June, she has been serving lunchMondays and Wednesdays to 60 of the 300 employees at The Company Store, a manufacturer of downproducts. In September, she began serving lunches on Tuesdays and Thursdays to 80 of the 300employees at APAC, which provides customer service functions for other companies’ customers.
Brian Collins, owner of Knuckle Suckin’ Chicken Wings, began leasing the kitchen in October. CatererMike Tessmer, owner of T-Bones, uses the kitchen to clean his equipment. Tessmer specializes inbarbecue and brings a portable cooker to the client’s site. “Food preparers who sell to the public arerequired by city, county, state and federal health department regulations to clean their equipment in acommercial kitchen, so Mike comes back to the center if the client doesn’t have a commercial kitchen,”says Loomis.
Two other businesses, Muddy Paws and Hmong’s Golden Egg Rolls, are close to moving into thekitchen incubator. Tami Cabrera Weinmann, owner of Muddy Paws, makes ten varieties of plain andflavored cheesecakes, as well as dozens of special-order cheesecakes. Cabrera Weinmann lives inMinneapolis and will make the three-hour trip to La Crosse one Sunday a month to use the kitchen.
She test marketed her cheesecakes for two years before incorporating Muddy Paws in November.“Cheesecakes are considered a dairy product, so my business has to meet the regulations of both thestate’s Department of Agriculture and Health Department, and I was looking for a commercial kitchenthat could meet them,” says Cabrera Weinmann. She found a small commercial kitchen in Minneapolisthat she can lease for freezing and storage, but it didn’t have a large oven. “It’s worth it to me to drive toCoulee because I can make 30 to 40 cheesecakes in those ovens in an hour or two,” she says. “There arealso tons of space for dry food storage and equipment, a shared office for the tenants with a computerand fax, and a woman who can do our accounting for six dollars an hour.”
She plans to sell the cheesecakes wholesale in both Minneapolis and La Crosse to restaurants and coffee shops, businesses for meetings and executive gifts, fundraisers, weddings, graduations and birthday parties.
HOURLY RATES
Kitchen tenants pay an hourly rate based on the time of day. Davenport leases the kitchen for 30 hours/week during prime time, from 6:00 a.m. to noon, and pays the highest rate of $13.50/hour. Tenants pay $12.50/hour to use the kitchen between 1 p.m. and 9 p.m. and $12/hour after 9 p.m. and on weekends. The kitchen can also be rented for $20/hour for catering events or class reunions.
Davenport gets to the kitchen by 6:30 or 7 a.m. and leaves by 10:45 a.m. to serve the first employeestheir lunches at 11 a.m. in the companies’ lunchrooms. Davenport takes her own warming unit, chafingdishes, insulated carriers and catering equipment, which she purchased for about $3,500. She serveslunch until 1:15 p.m. and then goes back to the kitchen to clean up. Davenport describes the food sheprepares as “fairly simple Americana,” although she does make Italian and Mexican dishes. A recentlunch included Salisbury steak, baked potato, vegetable, salad and a cookie for $4.
Up to seven businesses can lease the kitchen, depending on the hours they need it, says Loomis. “Tamiwill only be making cheesecakes on Sundays, so someone who catered weddings could use it onSaturdays,” he notes. “However, there comes a saturation point where they’re bumping into oneanother, so we have to be knowledgeable about who the tenants are and what they do.”
The kitchen can also be used as a back-up by city restaurants. “We want to serve the community as wellas private businesses,” says Loomis. “Our kitchen is bigger than the kitchens in 90 percent of therestaurants so if their ovens went down, they could rent space and keep operational.”
COMMITTEE APPROVAL
All kitchen tenants must be approved by a selection committee composed of members of the center’sboard. The committee usually includes a lawyer, banker and business owners. Loomis meets with thepotential tenant first. “Sometimes they only have an idea about what they want to do,” he notes. Potentialtenants are required to submit business, financial and marketing plans. “It doesn’t mean that theirbusiness will develop in the same exact way, but it gives them a road map of how to get there,” says
Loomis.
The selection committee reviews the three plans before meeting with the prospective tenant. Loomisattends the meeting as an ally of the tenant. “The committee looks for problems like whether there couldbe a potential cash shortfall,” he says. “In reality, customers try to stretch payments to the limit and theremay be three or four months when nothing is coming in even though the tenant has been supplyingproduct every month.”
In Wisconsin, 87 percent of businesses that start out in incubator programs are still operating after five years, higher than the nationwide success rate, says Loomis. There are more than 600 incubators in the U.S, including 30 in Wisconsin. Loomis has been president of the Wisconsin Incubator Association since 1994.
The Coulee Center first opened in 1987 in half of a 20,000-square-foot building, but had to move intothe basement when the rest of that building was leased. Trane Co., a large manufacturer of HVACequipment, donated its original plant to the center. “We had to sell that building because it wasn’thandicap accessible, had asbestos problems, steep stairs and no elevator between the first and secondfloors,” remembers Loomis. Northern State Electric Power Co. then donated a piece of land for thecenter to build on. “That parcel didn’t fit what we needed, so the City of La Crosse took it in exchangefor a former railroad right of way,” notes Loomis. “We got the better end of the deal.”
CENTER OPERATIONS
A new one-story, 20,000-square-foot building was constructed on the right of way with the proceedsfrom the sale of the Trane Co. building as well as a $377,000 federal grant from HUD’s Office ofCommunity Services, a $100,000 state Community-based Economic Development grant, and a $40,000grant and $90,000 low-interest community block grant loan from the City of La Crosse. “The city hasbeen very generous in helping us,” says Loomis.
The Coulee Center opened in March 1993 and was fully occupied within 14 months. The first incubator tenant, RiverFront Industries, employed developmentally disabled people. A 15,000-square-foot addition was put on the building in 1997 and the kitchen was constructed in that addition in 1999.
Of the 28 incubator businesses that started at the Coulee Center, 12 have moved into their own spaces. The average tenancy has been two years and eight months, says Loomis.
Davenport hopes to work full-time at her catering business, but holds a part-time job at APAC in themeantime to receive health insurance benefits. “My focus is the employee at businesses, but I’m tryingto build up executive lunches, business parties and other catering jobs,” she says. “Private parties aremore profitable but sporadic.” She gets most of her business through word of mouth referrals. “There’sa lot of support in the area for small businesses,” notes Davenport. “The Small Business DevelopmentCenter at La Crosse has been very helpful with financial issues and marketing and has also thrown somebusiness my way. The La Crosse Area Development Corporation has also been very helpful with leads.It’s nice to know that there are organizations out there that want to help.”
For additional information, contact David Loomis, Coulee Region Business Center, 1100 Kane St., La Crosse, Wisconsin 54603; (608) 782-8022.
GETTING STARTED December 17, 2007, 8:21AM EST
Kitchen Incubators Get Food Businesses CookingWhile shared kitchens are a steal for entrepreneurs starting food businesses, incubators are
unwieldy, expensive projects that don't always survive
by Kerry Miller
Many aspiring entrepreneurs dream of turning their grandmother's cookie recipe into the next Mrs. Fields. Yet because
stringent food-safety regulations make it illegal to sell many types of food products from home, starting a food
business legally (BusinessWeek, 9/26/07) typically requires working out of a fully licensed commercial kitchen. Enter
the kitchen incubator.
The culinary translation of the traditional business incubator, kitchen incubators offer shared workspace, equipment,
and business advice for small catering companies, pushcart vendors, bakers, and specialty-food makers. Many of the
latter are recent immigrants, struggling farmers, or low-income workers who can't afford to invest a large amount of
startup capital. At a kitchen incubator, entrepreneurs pay only for the kitchen time they need, typically at
below-market-rate prices of about $10 to $40 per hour, plus storage fees.
The kitchen incubator is a still relatively new concept, but it has proved to be a seductive idea for dozens of
municipalities, universities, and not-for-profit and for-profit companies. The Association for Enterprise Opportunity
(AEO), a microenterprise development organization, estimates there were about 20 incubators in operation in 2001.
Spokeswoman Sara Ignas says AEO estimates there are closer to 150 today and expects that number to continue to
grow.
HIGH UTILITY BILLS ARE A PROBLEM
Yet despite the promise of sustainability and economies of scale, a food incubator is hardly a guaranteed recipe.
Dinah Adkins, president of the National Business Incubation Assn., says anecdotal evidence shows that bringing a
steady stream of revenue into kitchen incubators is notoriously difficult. Utility bills for kitchens are much higher than
for standard office space. And even though food businesses do create jobs, the high risk and small scale of most
food startups make them unattractive to investors, she says.
When Nuestra Culinary Ventures (BusinessWeek, Winter, 2005) opened its doors to Boston-area entrepreneurs in
2002, its nonprofit parent organization, Nuestra Comunidad Development Corp., expected the facility would be
self-sustaining within three years. But after five years. Executive Director Evelyn Friedman says the incubator was
still hemorrhaging cash, draining more than $300,000 from Nuestra's annual $6 million operating budget. Nuestra's
kitchen was set to close last year until the city of Boston intervened with a last-minute grant to cover some of the
shortfall. Now, Friedman says the kitchen will stay open. But her advice to those considering starting a shared-use
kitchen of their own? "Don't do it."
Although a kitchen incubator is often a godsend for an aspiring entrepreneur, running the operation can be downright
hellish from an administrative standpoint. Renting blocks of time on an hourly or daily basis is more time-consuming
than dealing with regular monthly tenants, and finding a qualified kitchen manager with the right combination of
food-industry experience, management acumen, and entrepreneurial savvy to do it can be a tall order on a limited
budget.
INSPECTIONS EAT UP PRECIOUS TIMEIn Boston, the city's Health Dept. requires an in-depth inspection of the kitchen facilities for each new tenant, and
Friedman says the frequent inspections—as often as one a week—were eating up precious hours of the kitchen
manager's time that could have otherwise been spent on technical assistance or outreach activities.
Still, Friedman seconds others when she hastens to add that the kitchen incubator has been enormously successful
for the clients involved. "It's just the economics of it," she says. "If you look at the other kitchen incubators, they're
all struggling to make it work financially."
Friedman is right. Kathrine Gregory's consultancy, Mi Kitchen Es Su Kitchen, has helped start four kitchen incubation
programs at existing kitchens around New York City. Two have since closed, and one exists as a shared kitchen
space but no longer offers real incubator-style services for startups.
GAUGING DEMAND IS DIFFICULTGregory says the remaining incubator—Artisan Baking Center Kitchen Innovations, a program of the Consortium for
Worker Education in Queens, N.Y.—is not only breaking even after two and half years but is turning a small profit,
thanks to 45 active clients at the 5,000-square-foot kitchen. (The secret, Gregory says, is the same advice edict she
gives to the startups using the kitchen: Keep overhead low.) But Gregory admits such successes are the exception
rather than the rule. She estimates that at least 10 similar facilities across the country have closed their doors within
the past year or so, having failed to make their numbers.
Cameron Wold, a consultant who has done kitchen-incubator feasibility studies for about 25 nonprofits and
municipalities over the past 10 years, says part of the problem is that gauging demand is difficult to do. "Many
communities have people without any business or [food industry] experience, saying, 'Everyone loves my Grandma's
cookie recipe. I'm going to use the incubator 40 hours a week' without having any basis for understanding what that
meant," says Wold.
At the same time, most incubators say it's exactly those inexperienced people who stand to gain the most from their
services. Rebecca Soon, director of economic development for Pacific Gateway Center (PGC) in Honolulu, says for
social services organizations such as PGC, even businesses that fizzle aren't complete failures. "A lot of people want
to get into the food business, and it's really not for them," she says. "If they find that out here, it's a lot easier for
them to get back on their feet. They haven't invested thousands of dollars and aren't now struggling to meet their
loans."
Wold says as the cost of starting a commercial kitchen has risen (in part because of rising steel prices), communities
today seem to be taking a more cautious approach toward incubator investment than they were during the late-'90s
bubble. Still, he says: "Someone always feels they have a bigger, better mousetrap."
Click here for a slide show of kitchen incubators across the country.
Miller is a reporter with BusinessWeek.com in New York .
THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING
YVONNE ABRAHAM
Nurturing a dream city
By Yvonne Abraham, Globe Columnist | July 25, 2007
If you want to see what this state could be, head down to the former Haffenreffer Brewery complex in Jamaica Plain and knock on the door at Nuestra Culinary Ventures.
Depending on when you stop by, you might come upon Carlene O'Garro mixing muffins for her baked goods business. Or Kenny Perry chopping collard greens for his catering clients. Or you might find Mohamud Abdirahman, a stately chemist from Mogadishu, overseeing workers frying up sambusas, pastries filled with meat and spices, and laying the golden brown triangles neatly in trays. His food ends up at Logan Airport, as hot meals at $7 apiece for cabdrivers. He sells out within 90 minutes every night.
With him, you'd find Saida Joseph, a Moroccan immigrant who is his right-hand woman. And Dorchester's own Lemmie Horton, an African-American man in a hairnet and a hurry, who helps to keep the operation moving.
Abdirahman, O'Garro, and Perry pay $35 an hour to use the huge, airy, stainless steel kitchens, spacethey share with about 30 other entrepreneurs. Without the site, they'd be cooking in church basements orin their homes. Or nowhere.
What happens inside this place isn't important just to them. It's a model for our future, too.
The people who sign up for kitchen time here are immigrants and locals. They are Latino, African-American, and white. They are men and women. They are middle class and low income.
Outside this red brick building, Boston -- in fact, the whole state -- remains remarkably balkanized. Even in this majority-minority city, there are few places that bring a true cross-section of the population together: Wally's Cafe in the South End, maybe two or three others.
The fact that we're not around each other more often isn't just unhealthy. It's dead boring.
Which is why the sight of all of these people working side by side at Culinary Ventures is such a beautiful thing.
"This is a unique situation right here," Horton says, with some pride.
But late last year, the kitchen facility -- begun by Nuestra Comunidad Development Corp. in 2002 -- almostclosed. Rental fees weren't meeting the considerable operating costs. One fan of the place, MayorThomas M. Menino, bailed out the group with a $75,000 Boston Redevelopment Authority grant. Localcompanies gave $50,000 more.
That paid debts, but Evelyn Friedman, executive director of the development corporation, says it will betwo years before the kitchen breaks even. And that's only if it starts doing better now.
The kitchen is now charging its tenants $50 monthly membership fees. It's seeking corporatesponsorships. And Friedman's troops are increasingly focused on teaching those who rent space here how to grow their businesses.
J. D. Walker, a gregarious veteran of umpteen restaurants in North Carolina, is Nuestra Culinary Ventures' new director. On the job only a few weeks, he has already steered catering contracts to his clients. Hedreams of jobs that would require cooks here to band together and feed thousands at a time.
The only problem Walker wants to have in a couple of years is overcrowding, his tenants so busy that the kitchen is bursting with activity day and night.
"We're ready to take off," Walker says. "A lot of our entrepreneurs are really hungry. We have to get them to the next level."
His success would help take all of us to the next level. Keeping Nuestra Culinary Ventures alive isn't just about a Somali immigrant's sambusas. It's about helping to create a city, and a state, where everybody can feel comfortable, neighborhoods are more mixed, and residents are less suspicious of one another.
There are plenty of corporate titans in Boston and beyond who care deeply about making this whole place look more like Walker's kitchens. Any of them with employees to feed should call Nuestra CulinaryVentures.
Yvonne Abraham is a Globe columnist. She can be reached at [email protected].
By Sacha Pfeiffer, Globe Staff | November 16, 2006
Nuestra Culinary Ventures lives on.
The nonprofit Jamaica Plain kitchen incubator, which rents cooking workspace to food-service entrepreneurs, was saved yesterday from the brink of closure by a $75,000 grant from the Boston Redevelopment Authority and $25,000 from developer Steve Samuels.
In disclosing the rescue plan at the Germania Street facility, Mayor Thomas M. Menino urged other privatebusinesses to collectively contribute at least another $50,000 to the program, which gives culinary entrepreneurs a chance to start catering companies and specialty food businesses without having to build expensive commercial kitchens. Citizens Bank has already committed at least $10,000.
The city stepped in with financial backing after the kitchen said it would close at year's end due to continuing operating losses.
The contributions by the BRA and Samuels, founder of Samuels & Associates, will help cover the kitchen's immediate $150,000 funding shortage.
The kitchen has bled money every year since it opened in June 2002, racking up about $700,000 in total losses. It charges for hourly workspace rentals and receives some corporate grants, but that income has not kept pace with expenses.
To help the kitchen become self-supporting, Menino said, the city will start a new program that teaches entrepreneurs business management skills.
The city also will try to locate city-owned properties where Nuestra entrepreneurs can store their supplies and products, since the kitchen lacks sufficient storage space.
BRA-owned Marine Industrial Park in South Boston is one possible site, city officials said.
Saying that "small businesses are the backbone of a strong economy," Menino called Nuestra Culinary Ventures, which is home to nearly 70 entrepreneurs, a "fantastic organization."
"It's really an investment in the spirit of entrepreneurship," he added, "because Nuestra serves as a springboard for so many people looking to start their own businesses."
(Correction: Because of a reporting error, a story in yesterday's about the city's plan to help a Jamaica Plain kitchen incubator remain open gave an incorrect first name for Boston Redevelopment Authority director Mark Maloney.)
Greg Woodworth of Stony Brook Cookie Co. started at Nuestra Culinary Ventures and hasdoubled sales annually. He laments that other entrepreneurs won’t have the sameopportunity. (Erik Jacobs for the Boston Globe)
Food start-ups losing their kitchen incubatorFirms grew; host's funds fell shortBy Sacha Pfeiffer, Globe Staff | November 14, 2006
They often began with only a recipe and a dream.
Now they create gourmet cookies and home-brined pickles, Southern-fried catfish and spiced pecans, cinnamon buns and handcrafted mozzarella. Some have grown into thriving businesses that sell their products to restaurants and national markets such as Whole Foods and Trader Joe's.
In nearly five years, about 70 entrepreneurs, many of them minorities, have built specialty food businesses and catering companies at Nuestra Culinary Ventures, a shared commercial kitchen in Jamaica Plain that rents workspace equipped with ovens, fryers, walk-in freezers, and other cooking tools.
But just as the busy holiday season begins, the kitchen incubator on Germania Street has announced it will close at the end of the year, a victim of years of red ink and meager state and private funding for small-business development. That has left scores of food-service entrepreneurs scrambling to find new workspace -- and some wondering if they can survive.
"It's such a sad situation," said Deborah Taylor, whose company, Deborah's Kitchen, started at NuestraCulinary Ventures and now has three salespeople who sell her low-sugar, spreadable fruits and relishes at local grocers, farmers markets, and online. She will work out of a kitchen incubator in western Massachusetts while she searches for new space.
"I wouldn't even have considered doing a food business if Nuestra hadn't opened," said Taylor, who with the program's help wrote a business plan, became licensed and insured, took a food safety course, and learned about small-scale financing. "The biggest loss is there won't be an opportunity like I had for anyone in the Boston area to even conceive of having a business like this."
In some of the city's poorest neighborhoods, especially its immigrant communities, the kitchen incubator offered aspiring food-service entrepreneurs a chance to start a catering company or launch a specialty
food business without having to build an expensive commercial kitchen. But while incubators can pave the way to commercial success, they are costly to run and often face insurmountable hurdles.
Unless they attract major grant funding or generate income in addition to workspace rentals, many kitchen incubators "just don't bring in enough revenue to be able to support the program," said Meredith Erlewineof the National Business Incubation Association in Athens, Ohio, which estimates between 50 and 60 kitchen incubators operate or are in development nationwide. Incubators are also used to kick-start other types of small businesses, from auto repair shops to high-tech start-ups.
Nuestra Culinary Ventures has housed or given birth to numerous local businesses: MoonBrine pickles, Fiore di Nonno cheese, Lizzy's Homemade fudge sauces, Perry's Gourmet Services, Specialty BBQ. Kenton Jacobs, owner of Jake's Boss BBQ, a Jamaica Plain restaurant that closed last year, hasmaintained a catering business at the kitchen. And Nobel Garcia used it to continue catering after hispopular Hyde Square eatery, El Oriental de Cuba, was firebombed in July 2005; the restaurant reopened this month.
The kitchen, in the former Haffenreffer brewery building, is run by Nuestra Comunidad Development Corp.,a Roxbury community development organization. A kitchen incubator was a new type of venture for NCDC, which anticipated the program would lose a "substantial amount of money" initially but would break even by its fifth year, according to executive director Evelyn Friedman.
It produces income by charging about $30 an hour for workspace, supplemented by corporate grants. But that revenue could not offset its $6,000 monthly lease, as well as costs for equipment, utilities, taxes, and maintenance, Friedman said. Raising rates would have made the program too expensive for many entrepreneurs, she said. The kitchen typically rents 400 to 500 workspace hours a month and would need 800 hours monthly to survive.
"I don't think anybody felt the kitchen was a failure in terms of what it's done for the entrepreneurs. Quite the opposite," Friedman said. "And that's why the decision was so difficult, because it was doing so well for them. It was just a financial question of how an organization like ours can sustain this."
On a recent weekday morning, the kitchen -- outfitted with eight-top burners, convection ovens, prep tables, three-bowl sinks, and other tools of the trade -- played host to a handful of entrepreneurs bottlingpickles, labeling spice jars, basting turkeys, and assembling boxed lunches for a catering gig. The facility is open round-the-clock, with bakers there before dawn and caterers working on weekends.
Some entrepreneurs will move to a kitchen incubator in Greenfield, but for many the 100-mile commute is impractical. NCDC is trying to find church kitchens they could use. But several entrepreneurs said they are concerned churches would not offer the 24-hour access their businesses require .
"There are a lot of small businesses in there that will probably shut down, and people who live in the area who are employed by those vendors could lose their jobs," said Laura Courtemanche, who hasquadrupled sales and hired four employees since launching her baking company, A Dozen Eggs, at the kitchen three years ago. She plans to relocate to Vermont.
Many successful kitchen incubators keep costs down by owning their buildings, operating in rural areas, or renting sub prime properties. Others launch secondary businesses, such as cafes or in-house catering, to generate additional income. Even so, "kitchen incubators quite often need subsidies, and some can break even and some can't," said Glen E. Weisbrod, president of the Economic Development ResearchGroup, a Boston consulting firm. "But their purpose is not to make a profit; their purpose is to spin off businesses."
More than a half-dozen entrepreneurs interviewed by the Globe said stronger management might have improved the kitchen's chances of survival. The program has gone through at least four directors, who sometimes had little time to teach business fundamentals critical to long-term success, such as financing and human resources management. Several entrepreneurs said the kitchen might have booked more hours if it had cultivated more entrepreneurs, and that it relied too much on rentals by caterers, whose work can be sporadic, rather than specialty businesses that make more stable tenants.
The donors who supported the program included Bank of America and State Street Corp., but critics said
food business without having to build an expensive commercial kitchen. But while incubators can pave the way to commercial success, they are costly to run and often face insurmountable hurdles.
Unless they attract major grant funding or generate income in addition to workspace rentals, many kitchen incubators "just don't bring in enough revenue to be able to support the program," said Meredith Erlewineof the National Business Incubation Association in Athens, Ohio, which estimates between 50 and 60 kitchen incubators operate or are in development nationwide. Incubators are also used to kick-start other types of small businesses, from auto repair shops to high-tech start-ups.
Nuestra Culinary Ventures has housed or given birth to numerous local businesses: MoonBrine pickles, Fiore di Nonno cheese, Lizzy's Homemade fudge sauces, Perry's Gourmet Services, Specialty BBQ. Kenton Jacobs, owner of Jake's Boss BBQ, a Jamaica Plain restaurant that closed last year, hasmaintained a catering business at the kitchen. And Nobel Garcia used it to continue catering after hispopular Hyde Square eatery, El Oriental de Cuba, was firebombed in July 2005; the restaurant reopened this month.
The kitchen, in the former Haffenreffer brewery building, is run by Nuestra Comunidad Development Corp.,a Roxbury community development organization. A kitchen incubator was a new type of venture for NCDC, which anticipated the program would lose a "substantial amount of money" initially but would break even by its fifth year, according to executive director Evelyn Friedman.
It produces income by charging about $30 an hour for workspace, supplemented by corporate grants. But that revenue could not offset its $6,000 monthly lease, as well as costs for equipment, utilities, taxes, and maintenance, Friedman said. Raising rates would have made the program too expensive for many entrepreneurs, she said. The kitchen typically rents 400 to 500 workspace hours a month and would need 800 hours monthly to survive.
"I don't think anybody felt the kitchen was a failure in terms of what it's done for the entrepreneurs. Quite the opposite," Friedman said. "And that's why the decision was so difficult, because it was doing so well for them. It was just a financial question of how an organization like ours can sustain this."
On a recent weekday morning, the kitchen -- outfitted with eight-top burners, convection ovens, prep tables, three-bowl sinks, and other tools of the trade -- played host to a handful of entrepreneurs bottlingpickles, labeling spice jars, basting turkeys, and assembling boxed lunches for a catering gig. The facility is open round-the-clock, with bakers there before dawn and caterers working on weekends.
Some entrepreneurs will move to a kitchen incubator in Greenfield, but for many the 100-mile commute is impractical. NCDC is trying to find church kitchens they could use. But several entrepreneurs said they are concerned churches would not offer the 24-hour access their businesses require .
"There are a lot of small businesses in there that will probably shut down, and people who live in the area who are employed by those vendors could lose their jobs," said Laura Courtemanche, who hasquadrupled sales and hired four employees since launching her baking company, A Dozen Eggs, at the kitchen three years ago. She plans to relocate to Vermont.
Many successful kitchen incubators keep costs down by owning their buildings, operating in rural areas, or renting sub prime properties. Others launch secondary businesses, such as cafes or in-house catering, to generate additional income. Even so, "kitchen incubators quite often need subsidies, and some can break even and some can't," said Glen E. Weisbrod, president of the Economic Development ResearchGroup, a Boston consulting firm. "But their purpose is not to make a profit; their purpose is to spin off businesses."
More than a half-dozen entrepreneurs interviewed by the Globe said stronger management might have improved the kitchen's chances of survival. The program has gone through at least four directors, who sometimes had little time to teach business fundamentals critical to long-term success, such as financing and human resources management. Several entrepreneurs said the kitchen might have booked more hours if it had cultivated more entrepreneurs, and that it relied too much on rentals by caterers, whose work can be sporadic, rather than specialty businesses that make more stable tenants.
The donors who supported the program included Bank of America and State Street Corp., but critics said it wasn't marketed widely enough to prospective investors and other entrepreneurs. And because the kitchen has no night or weekend supervision, its scheduling honor system -- in which entrepreneurs mark on a chart what hours they plan to work and are trusted to pay for that time -- is sometimes abused, according to some entrepreneurs.
"It was often unsupervised, so they couldn't track people on weekends, and it could have been structured better and more promoted," said Jacobs, of Jake's Boss BBQ. "But this is such a great concept that I'm really surprised investors haven't come up."
Friedman, of NCDC, defended the kitchen's management but acknowledged the honor system has been a "big problem." Because NCDC rented the building, lease payments have been a constant burden, she said. And although NCDC considered other ways to make money, including starting a specialty food business, "our business was running the kitchen, and any of those things would have taken us away from that," she said.
In the end, "we couldn't raise more money. We tried and we couldn't," Friedman added. "And we marketed it very heavily, but you can always market more and more and more."
"Something like this is what the city of Boston needs," said Greg Woodworth of Stony Brook Cookie Co.,which started at Nuestra Culinary Ventures and has doubled its sales every year. It now counts the Park Plaza Hotel among its clients.
"It provides access to facilities for people who can't afford it," said Woodworth, who plans to relocate to upstate New York, "and it provides opportunity and momentum to build on a microeconomy in areas like Jamaica Plain and Allston-Brighton."
