I was watching a show on the Food Network about a gal who wanted to start her own business that made cookies. She has a website you can check out I think it was called Hilary’s Cookies.
She had tried to get two previous businesses off the ground but couldn’t get traction on either one of them and thought this might be her last chance at being an entrepreneur. Her father had lent her some seed money and she got started. Selling cookies she made on a small scale wasn’t that profitable and she needed to work cleaning homes to help subsidize the business. At first she was selling her cookies through her website and local stores. Then she added gift packages like a lunch box with cookies that had kind of a retro feel to it.
As the show went on, she was feeling more and more desperate about the state of her business. She felt she needed to do something bigger and started looking around for commercial space to turn it into an ice cream / cookie shop. Pricing commercial appliances she found a commercial oven started at $7,000 dollars. Keep in mind her budget to do this was $0.
I think it was fascinating to see her thought process on all of this because I think she was representative of many new entrepreneurs. They get this feeling like they need to either go big or go home. So in her mind, if selling cookies on a small scale wasn’t bringing in the kind of money she wanted, then she felt she needed to go big and rent commercial space and go into the restaurant business.
I am so glad she didn’t. If someone were to have lent her money to do that, my guess is, that she would have lost all the money.
Ultimately, she was able to find a commercial baker that would create her cookies for her and that allowed her to leverage her own image and sell herself and her cookie company to larger distribution channels without having to be in the kitchen most of the day, making these cookies.
I wish her the best in her new business.
Ultimately when you are experimenting with business. Take small steps and scale up. You will learn a lot as you go and you will improve your chances of success. Just because you are making cookies and you aren’t finding the profit margins you wanted, that doesn’t mean you need to get into a totally different business (restaurant) and try to learn that complex industry to try and sell cookies. There are many other easier ways of going about it and it seems she is well on her way.
You can join in on this discussion further at the Gopher Small Business Forum.