Inspiration to start a business can appear when you least expect it. In 2005, Jennifer Carlson was introducing solid foods to her six-month-old daughter when she discovered that the baby food products on the market were lacking in flavour and appeal. “I didn’t want to serve anything to my daughter that I wouldn’t eat myself,” she says. This revelation inspired her to begin creating healthy, organic home-cooked meals that her baby would love to eat and that she could feel good about serving.
By talking to mommy groups and friends, Carlson uncovered a need for more wholesome and good-tasting baby food in her home town of Calgary. Fast forward to 2014 and Carlson’s successful Baby Gourmet business was just awarded the TELUS Trailblazer Award at the 2014 RBC Canadian Women Entrepreneur Awards.
I recently spoke with her to learn how she was able to grow her business from the local farmers market to the shelves of big stores like Loblaws, Wal-Mart, Target and beyond.
Do your research
Having never built a business before, Carlson says she spent two years testing her product and gathering consumer feedback by selling her homemade baby food at the local farmer’s market in Calgary. To get started, she convinced her sister (who is now her business partner) to help her out and within a few weeks of applying to the farmer’s market, Carlson had rented a booth and found a commercial kitchen at a local community centre to mass-produce frozen ice cube trays of baby food for local moms.
“We would buy the fresh food from the market on a Sunday, cook it all up early that week and then freeze it to sell the following weekend,” says Carlson. This strategy went on for two years because Carlson says she needed that time to understand her market and build her business case story to raise capital from investors. By the time she was ready to take Baby Gourmet to mass market, Carlson and her sister were generating $30,000 per month in sales through the farmers market alone – primarily through word of mouth.
Carlson used all of that time to model out the business and to develop sales forecasts. She now advises other startup businesses to “make sure you’re going to make money before you try to grow too fast.”
Be prepared for increased demand and production
To bring her product to mass market, Carlson pitched her product to Wal-Mart in 2010. “I knew that as soon as I had them on my side, the other retailers would sign-on,” she says. And sign-on they did. Baby Gourmet is now distributed in retail and grocery stores across Canada.
But Carlson warns that if you’re going to pitch to Wal-Mart and other large grocers, you’d better have the infrastructure in place to meet the demand. This sales opportunity is “not always good to small businesses and you can go bankrupt if you’re not set up to support the rapid growth in production,” she says.
Don’t relinquish control too early
Carlson says that you have to “sell your soul” a bit early on if you want to attract investors to help your business grow. But she suggests that business owners try to maintain as much control as they can, for as long as they can. One of her regrets was not having the confidence in the beginning to remain as the chairman of her board of directors. She now wishes she could have had the foresight to know that she would have that confidence today.
She also warns that as you are building a new business, even your employees will want a piece of the pie. And while she believes that startup founders should offer incentives to employees to help grow the business, they need to be careful not to give too much away.
Get ready for a long road ahead
“It takes a lot longer that you’d expect to make your business a success,” says Carlson. For example, it took her four years to go from selling frozen food ice cubes at the farmer’s market to mass producing Baby Gourmet resealable pouches for grocery store shelves. And while she spent a lot more time than she would have expected gathering research in the field, she knows that the preparation and information gathering paid off in the end.
I hope Carlson’s advice for growing your startup inspires you to reach for those big goals, and not to get too hung up on the time it takes you to get there. A lot of entrepreneurs get easily discouraged that their business is not an overnight success, or that it takes a year or two longer than they projected. But it is important to take advantage of this time in order to really know your market and experiment with perfecting your product or service.