Twenty years ago, mechanical engineers Lois Ford, 53, and Lou Ciercielli, 52, decided to go into business for themselves. This Valentine's Day, the brownies and cookies the couple bakes at their Bellows House Bakery (www.bellowshouse.com) in Walpole,N.H., will be featured in the Costco (COST) catalog, and they'll begin negotiating with exporters to sell their goodies overseas.
Ford's and Ciercielli's story is proof that while a few entrepreneurs enjoy overnight success, for most the road to prosperity is a long one. Ford spoke recently to Smart Answers columnist Karen E. Klein about perseverance, climbing a steep learning curve, and what she would do differently if she could go back and start over. Edited excerpts of their conversation follow:
Why did you and your husband decide to start your own business?
We both worked for GE (GE), and we realized that in order to move up in the company, we would have to transfer and move around the country. We wanted to stay in New England, and we were interested in the food business. We thought that opening a restaurant would be too risky, so we opened a bed-and-breakfast.
We have an historic home built by Josiah Bellows, where we still live. But we only had four guest rooms, so it was hard to be profitable. We shut down the B&B in 1999 in order to concentrate on the bakery full-time.
How did you go from a B&B to a bakery?
We would serve cookies and snacks in the afternoon and put plates of cookies on the guestroom nightstands every evening. People really liked them, and they started asking us to send them a dozen when they got home, or send a dozen to their friends or relatives.
We were stupid enough to believe it would be a lot easier than it has been, so we incorporated the bakery in 1988. All of these things you think, when you're starting out. I remember I thought that if the bakery didn't take off within two years, I'd give up. Well, I barely had letterhead in two years! Seriously, what was I thinking?
The best thing about the B&B, along with it being the best marketing tool for the bakery, was that it proved to us we could do something on our own, and it introduced us to so many people who were doing different and unique things with their lives. We met people who lived on houseboats, people who had started eclectic travel agencies. It opened our eyes to the fact that we could do something creative and different, too.
What were the early years like, trying to run the B&B and establish the bakery?
I didn't quit my full-time job at GE until 1990, and my husband didn't leave until 1995, so I was losing my mind. For a couple years, we tried to find a private-label manufacturer that we could work with to produce our baked goods. I visited many, many bakeries and finally converged on a bakery with whom we worked for a little over a year, during which time we learned a lot of hard lessons.
Everybody going into business thinks they can take their idea to someone else and let them do the work, but it rarely works that way. It's usually true that if you want something done right, you have to do it yourself. So after about 18 months, we brought the bakery back to our house, and then in late 1994, we moved to a true commercial location. We knew at that point that we had to either really make a go of it or shut it down.
Was the volume of orders overwhelming from the start?
No, actually the volume of orders was small. It was just that I personally couldn't keep up. I had a couple of employees helping me scoop, mix, and pack, but it was hard to make money after paying those salaries.
What I've realized since is that, although I was an engineer and a project manager at GE, I had never sat down and written out all the details involved in running the business. I didn't know what all the costs were, and what all the tasks were. Once I quantified all that, it was a tremendous turning point for the business.
How did you develop your full product line from a few cookies on nightstands?
At the B&B, we made muffins and scones for breakfast, and brownies and blondies for the afternoons. So we had a repertoire of four to five product lines. When we moved into the commercial location and became acclimated to what retailers were looking for, we also developed a shortbread line, so we would have products that were more shelf-stable.
Did you ever consider going the retail route and opening a storefront bakery?
I can't even believe we did this now, but for about a year we would rent a little retail space in the village on Saturdays. On Friday afternoons and into the night, I would bake a dozen kinds of muffins and all different kinds of cookies, and at four in the morning I'd bake bread dough.
Then we would take everything down to this shop and open the store for about five hours or until we sold out. Then we would order Chinese food for dinner, and the profits for the day would be gone. We weren't charging enough, and we were reluctant to go into retail because we didn't really understand it. That experience was enough to prove to me that I didn't want to do it.
So how did you get into wholesale?
We were very lucky early on to get an order from the Popcorn Factory in Illinois to provide them with oatmeal-raisin cookies for their catalog. This was around 1993, when I had been sending samples all over the place, trying to sell them, and nothing worked. But there was a lovely buyer at the Popcorn Factory who tried our cookies and loved them.
She taught us how catalogers buy fresh items for drop shipping directly to customers under their labels. This made us understand that there was a huge potential market for fresh products where we could be the supplier but we weren't at risk for the marketing.
Where did the business go from there?
We still produce private-label products for several companies. We started selling to Costco about five years ago. A few years ago, we talked to them, and they encouraged us to put out product under our own label. So we started doing our own branding, and we sold to Mauna Loa, until they were purchased by Hershey, and BJ Wholesalers, and to a Texas company called Pittman & Davis.
Today, we have 12 workers in our 7,500-square-foot factory in North Walpole, and we bake up to 30,000 cookies, brownies, scones, and whoopie pies a day. Just recently, we talked with representatives from 13 countries about doing some exporting. It looks like we'll definitely sell some product to Mexico and Singapore this year.
What are the most important lessons you've learned over the past two decades?
An entrepreneur needs persistence, perseverance, patience, and a terrific work ethic. You can never give up, ever, as hard as it might get. We've had some incredibly low moments, but from those, many of the clearest answers emerged to our problems. You have to trust your gut and believe in what you're doing.
What would you go back and do differently if you had the chance?
I certainly wish I had never trusted customers who didn't pay us. One year, I got an order for 6,000 chocolate-chip cookies from a company that offered me a very expensive price for them on a rush order. So I and one other person made all these cookies and shipped them out in the middle of winter, during a blizzard.
The UPS delivery truck couldn't get up the driveway to our house, so we loaded the boxes onto toboggans and our garden cart and we slid them down the hill to the truck. Just as the whole order had been shipped, the company president was arrested for fraud. Now, we process credit cards up front and check credit references. I've never again trusted someone who pays too much and needs everything in a hurry.