FROM CHRISTMAS PRESENTS TO A BUSINESS
Ten years ago, Kerry Caloyannidis was making her signature recipe for muesli in her kitchen, packaging it for Christmas presents.
Today she has a commercial kitchen, a café and shop in Medlow Bath in the mountains west of Sydney, and an extensive range of gourmet muesli products sold in up-market food and gift stores.
Kerry had trained as a pastry chef, and had worked in some high end kitchens around the world before returning to Australia to give her four children “the lifestyle I had myself as a child”.
However, her own recipe for muesli was the foundation for turning a hobby into a “profitable hobby” and eventually into a business.
EARLY PRODUCTION
Starting in her kitchen at home, Kerry initially bought 400 kilos of ingredients in bulk to make four muesli products, to be packed in 600 gram and 1.2 kilo bags.
If she was starting today, she would be buying 400 kilos of ingredients @$2 which would give enough to fill 200 bags each of 600 grams plus 200 or the 1.2 kilo packets. Total cost $800.
The only other significant cost today would be to have labels made and printed. You can find a design you like by visiting gourmet food shops to obtain ideas for your own labels. Then allow $500 for the graphic design and another $500 to print off your first batch of labels.
Then you simply fix the labels to the zip and seal clear cellophane and pour in the muesli mix.
You’d start selling at your local weekend market.
PRICING
Pricing should always be set at what it will need to be in five years time to make a profit when your overheads have ballooned. Never sell on the basis that you are covering your costs for the moment, and making a profit working from home.
For a start-up today for Whisk & Pin, you would have expenses of say $3-$4 per packet, but when you get into up-market stores, they will want to be able to make up at least 40%.
So you would set your price for a 600 gram packet at what the retailer can sell it for – let’s say this will be $12 and the 1.2 kilo pack at $20.
So your wholesale prices would be 70% of this – around $8.50 and $14.30.
If your ingredients, overheads, wages, and profit can come in at around half of your wholesale price, you are onto a winner. Of course, every retail sale you make yourself provides extra revenue, however those sales should be only a small percentage of the total.
You can see that all you have to do is keep marketing the brand name and the range, which is what Kerry has been able to do with style.
MARKETING
Always conscious of marketing, Kerry named her business Whisk & Pin (after the egg whisk and rolling pin that were at the core of her home-based kitchen production) and used these as a simple logo. That logo is still used today.
She was able to differentiate her products by (a) product quality and (b) presentation. She contrasts her muesli to breakfast cereals that either highly processed, or natural but bland, and set about to bring a quality of taste, nutritional value and innovation to the breakfast table.
Her attitude is “Breakfast Is King” and she started initially selling at local weekend farmers’ markets.
With outstanding packaging, Kerry was able to build in a substantial profit margin for her products, which enabled her to satisfy the criteria for being in upmarket stores.
Whisk & Pin is based upon a simple philosophy to maintain that
home made quality, featuring generous quantities of real fruits and fresh nuts, hand cut and blended in unique and tantalizing combinations.
Kerry is always focused on marketing, and has adopted the strategy of constant, integrated marketing. This means that each month she updates her marketing calendar for the next 18 months, and is often found at breakfast demonstrations at up-market food halls, at local weekend community markets, and as often as possible in food and lifestyle magazines.
She remains the enthusiastic face of the business, leaving the actual production in the hands of her small kitchen staff, telephone sales to the office staff, and the shop and café in the hands of her manager.
Today Kerry’s product range includes muesli, dried fruit, cookies, and baking mixes. The shop also sells other gourmet foods by other small producers, and a range of gift items that particularly appeals to tourists.
Labels: hobbies, home based business, lifestyle, micro business, microenterprise, profitable hobbies, profitable hobby, retirement, small business, work from home |
