Healthy Foods Entrepreneur Succeeds with NxLevel Training and SBDC Counseling

The client is a highly educated professional female who left a University environment to start her own business. She originally came to the SBDC for feedback on her business plan to open a retail establishment offering natural health care and beauty products, as well as a small eatery featuring “healthy” foods. She participated in and completed the NxLevel for Entrepreneurs course and continued working on her business plan. Six months later she returned to the SBDC to seek a review of her business financials and advice on inventory control, SBA loans and how to improve sales for the eatery part of the business.

The counseling strategy at the beginning was to review and provide comments on her business plan prior to approaching a local bank for a loan. The SBDC counselor noted items missing from the pro forma financial statement and strongly encouraged the creation of a monthly cash flow analysis, especially for the first and second years.

The strategy used in her second visit was to review the first six-month financials. The natural food grocery was doing well, however the eatery was not as successful as anticipated. She was given advice on inventory control as well as ideas for changes that would increase sales in the eatery.

An initial bank loan of $135,000 was used to renovate the retail space, purchase inventory, and fund initial operating costs. In 2004, an additional $20,000 for operating costs was borrowed. She has initiated additional activities to enhance/promote the eatery, such as offering exclusive high-end coffee and opening for breakfast at 7 am; focusing more advertising on the fact you can eat in the store, and offering outdoor dining in the warm months. She is looking at expanding her seating for the eatery into an upstairs room at lunchtime; often there is insufficient seating available.

The economic impact was as follows: The business opened July 1, 2003. Gross sales for the last six months of 2003 were $108,000. In 2004, gross sales for 12 months were $275,000. In comparing the last six months of 03 with the last six months of 04, gross sales increased by 47%. She opened with two full-time employees and 3 part-time; in 2004 she hired an additional part-time employee. In addition, she works in the business full-time and her husband works part-time.

"I wouldn’t have missed this experience for the world," she said. She noted her two biggest challenges were staffing (finding people who will stay), and cost containment.