In 2009, ten years ago, I started a food brand called Milk Truck. I started it because my current gig as a freelance creative in advertising was not doing so well (see Great Recession) and I thought I’d start a business (in concept) to serve as a kind of case study to show off the breadth of my thinking beyond creative, to include strategic and business development. And while I possess those skills, what I was really trying to do at the time was cast the widest net possible to get some work. So when “Milk Truck” turned into a real business, thanks in part to the folks at the Brooklyn Flea (and press from Village Voice and Pete Wells, among others), I had to figure out how to run it.
Ten years down the road, we’ve had a lot of success, some failures, and are currently pivoting Milk Truck into a wholesale brand, which is super exciting (and which was part of my original business plan, but more about that later).
Today, I am also working with other small businesses, with revenues from $250K and up, helping them “grow up” their business. From my own experience as a small business owner and from observing dozens of other small businesses at my former workplace, I’ve observed that most people get into their businesses, especially in food, because they love the product they’re selling. But a some point, they have to learn how to take care of a lot of other parts of the business that were not on their radar when they started it. What I’ve found is that these other parts are absolutely vital to the health of your business, not only to grow and to make a profit, but to actually stay in business. I know this from my own experiences and from seeing a lot of businesses with good products fail. The good news is that the pain and money spent learning these 7 things have created some permanent lessons that I’m happy to pass along to anybody who owns, or is thinking of owning a small business.
#1. YOU NEED TO LISTEN TO YOUR BUSINESS.
Don’t spend too much time on your business plan because once your business opens, it will take on a life of its own, and start heading towards its destiny.
When I was working on my business plan for Milk Truck, I envisioned it as a wholesale brand that was going to leverage its retail exposure to get into all the big stores. I had a friend who worked for Boston Consulting Group helping me. We crunched numbers, we strategized, we wrote a really nice business plan. Then on Jan 16th, 2010 I opened to the public at the winter Brooklyn Flea market. We were in the weeds from the moment we opened, had a line 25 deep, ran out of product at some point and made about $1700 in sales. What I discovered that day was that we made grilled cheese and soup and people bought it. Which made Milk Truck a retail business, i.e., one sale at at a time. I had no operational idea how to do that before that day. There was no “wholesale” business. The possibility of that was a distant point on the horizon of my business plan. From day one, we were in survival mode trying to figure out how to operate this beast that we hadn’t really planned for. At that point, I could either pick up my ball and go home because it wasn’t going according to plan, or I could listen to my business tell me where the oxygen was. I chose the latter and saw my business grow almost 10X in less than four years.
#2. YOUR IDEAS ARE ONLY AS GOOD AS YOUR ABILITY TO EXECUTE THEM
Figure out how to actually scale up what you’re making before you start selling it.
How tough can it be to make a grilled cheese? Now how about making 200 grilled cheeses for a couple hundred people who only have an hour for lunch? Houston, we have a problem. All businesses have to figure this out, how to scale the production of their product, whether that’s at retail or wholesale. Some companies have products that are easier to scale than others. This is an obvious attraction in tech, where software or a platform can be scaled exponentially as fast as you can ship. In the food business, Chipotle figured out how to feed a lot of people in a short amount of time, using a factory production line model (which everybody has since copied). And while we never did figure how to grill our grilled cheeses faster, we did use that experience with slow throughput (how many sandwiches we could produce in how much time) to create another item that proved to be wildly popular, our made-to-order Mac & Cheese, using the omelet station model. From order to customer, we could get an order out in under 2 minutes. And it only took us about 3 years to figure that out. Which is about 3 years longer than it should take.
#3. The 80/20 rule
People open businesses for a lot of reasons, some good, some not so much. The best ones start with passionate founders who are either a. trying to solve a pain or b. believe fiercely that the product they’re making needs to be experienced. But passion is only part of the business. About 20% of it, actually. The other 80% is spent running the business.
Now, I am a very good concept person, but operations are hard for me. I’m not a natural. So it probably took me longer to learn this stuff than it might other people. I had to learn how to read numbers in a meaningful way. I had to learn how to create a P&L. I had to learn that most of business is selling and you’re always selling because selling means revenues and revenues mean profits and profits are the lifeblood of the business. You need profits to invest back into the business to help it grow. And you always have to be growing, or you are moving backwards.
As my business got more successful, I spent more time in the office (where the 80% happened) and less time in the kitchen (the 20% I loved). I had to become a quality expert and hold regular meetings with the crew to go over really basic things (that really mattered), like, how to wrap a 1/3 pan properly with plastic wrap. These types of things were DEFINITELY never in the business plan, but were acutely important to our business. And there was no other way to learn it than to be there and go through it, day by day, step by step. Employees I hired were enormously helpful because they often knew more than I did about how certain operational things worked.
Along the way I became a competent operator, which is to say that I became a competent business person. Because operations really do drive the success of the business. The business is in the details, which for a concept, big picture guy like me, was a real object lesson in small business practices. But you know what? I felt more proud about learning how to run a business than just about anything else I did.
The other important thing that I learned was, even if you are only spending 20% of the time on that thing you love, the reason you started this business in the first place—never, EVER forget that that is the reason why people buy from you. It has to be the absolute best thing you do. If you neglect it, people will notice and they’ll stop buying it. The only reason to do the other 80% is to keep the business healthy so you can keep giving people what they love from you.
#4 ALWAYS BE MARKETING
For the past few months I’ve been working with a brand that’s been in business for nine years. It’s owned by two women who are extremely good at what they do. They’re warm, authentic, talented and have a client roster that includes some of the biggest, most powerful names in tech, finance and media. And they are clueless about marketing. Credibility from their former careers and working on a couple of TV shows has helped them, but they feel like they should be a LOT better known (I agree) and easier to find. The problem is this: they are busy selling their services and they don’t have a lot of time to work on their marketing. nor the money to hire someone to work on it. I’m working with them because I know them, and worked out a back end deal that let them hire me.
So far, here’s what we’ve done for them:
SEO and SEM
Created an email marketing campaign and email list (we’ve sent four blasts in the past month)
Started a blog and post regularly (2X month)
Social, especially curating Insta to be more consistent visually and in postings; added social platforms
Added them to Google MyBusiness and other lists
Wrote a communications platform to unify messaging tone and content
We’ve just started unifying message and brand across omnichannel touchpoints (places where the brand meets consumer)
Mentions in articles (Two so far)
What we haven’t started on:
Their branding (both internal and external)
A PR push
If all this sounds like a lot, it is. It’s also necessary if you want to grow your brand and business.
However, there are a couple of other ways to get found. One requires some work, planning and time, the other requires some connections and some luck.
If I were a startup (and I regard pivoting MT to wholesale as a start up) I’d start a pre-launch campaign on social and email to gain exposure and start to build an audience. I’d write posts on a blog and get them published on places like Medium, Linked in and Apple News. I’d start a crowd-funding campaign to continue to build audience and test the concept. I’d create t-shirts and hats and give them away to my friends. I’d pimp myself at launch to any and all contacts I knew to get press. And then I’d build from there. Neil Patel has a great blog that breaks down how to build a pre-audience here. https://neilpatel.com/blog/generate-buzz-launch-new-product/
Or, I’d do what I did at Milk Truck. We were a known brand almost from the beginning. We got lucky in some ways, because we were part of two trends. One was the growth of dedicated food markets and halls, the other the rise of food trucks. And because we were part of that trend and had a good brand graphically and a tight communications platform we got a lot of press early on that gave us a lot of momentum. We are also very consistent in posting to social media. All that early exposure put us on page 1 of Google search for best grilled cheese, Milk Truck, markets, best food trucks, etc. We couldn’t of done it better if we’d been paying a fancy PR shop 10K a month. But like I said, we were lucky.
#5 BRANDS MATTER
When we were approached by a well known company for a possible acquisition, the biggest asset on our balance sheet was our goodwill, which was generated almost entirely by our brand. Milk Truck was inspired the values of Americana and that gave us not only a great platform for design, but it also helped us define our own ethos and values, which we used to build our communications platform on.
Our brand helped us grow the business from a single stand to nearly 1MM in sales, gain over 25K followers organically and develop brand awareness and reach that was far in excess of our size in just four years.
Because of our brand (and of course, our food), we got a ton of recognition: voted 10 best food trucks in NYC; 50 best in America. Our classic grilled cheese was ranked best in New York by the New York Times and in the top 50 by New York Magazine. Our Mac & Cheese was voted #1 in New York by the Village Voice. We got into, and won the annual Big Cheesy event and we’ve been featured on Good Morning America and Fox 5 News.
But the biggest boost we got from our brand were the employees it attracted to us. In the mobile food space, we had the best, most committed, smartest crew in New York. Because the brand was well defined and authentic, our people believed in it. When we told people what we were doing, that’s what we did. We didn’t apologize for being more expensive because we used better ingredients or for being slow because we were making our sandwiches from scratch. We had a mission to create delicious food that made people happy, and that’s what we did. What our people did was make the Milk Truck culture come alive. From the beginning, we believed in the brand and it created much more than we imagined. Never forget your brand.
#6 YOU’VE GOT TO LEARN YOUR NUMBERS, BASTA.
Your vision may be the motivation and the dream, but the numbers are the engine to get you there. I know a lot of businesses that make a decent amount of revenue, but they have no idea what their margins are, what their COGS are, or labor cost, or EBIDTA. You can start a business without knowing your numbers, but it’s really hard to grow one without that knowledge. It’s not just about making a profit, it’s about how efficiently you want to use your money to grow. This gets back to operations. An efficiently run business probably has 10-15% (or more) cash that they can apply to their profit than one that runs with no more than a general sense of what things cost to make and sell. A fews years into our business, we’d had the best year we’d ever had up to that point, but our net profits were crummy. I remember asking my Operations manager, “how can that happen”?! But here’s the truth: I didn’t know my numbers at the time, or rather, I wasn’t paying close enough attention to them. It was painful because shortly after that, someone approached me who was interested in purchasing our brand (and they were a nationally recognized company, so they were LEGIT). But after looking at our numbers, they were not impressed. Ouch. I became much better at numbers after that experience. There are tons of books out there. The one I like the best for being plain spoken and really useful is Financial Intelligence for Entrepreneurs by Karen Berman and Joe Knight.
#7 LOve your people
The biggest mistakes I made and the best decisions I made were with people. When I first started, I had no idea what kind of people to hire or how I was supposed to lead them in this business I was still learning and making tons of mistakes in, mistakes that were costing me money out of my own pocket. The people I hired those first couple of years probably suffered as a result of my inexperience. And I’m not sure that any of them actually really got our brand. And that’s on me. Something changed when I hired the second wave of people. They were smart, well educated, individualistic, and they cared. I had become better at expressing what we were doing and more importantly, I began to understand that a business was only really as good as the people who worked there. So I made sure that the people who worked there knew that. It wasn’t only how much they were paid, or what perks they got; it was about how I treated them. I knew that they were the reason for our growing success; I knew how hard they worked and how much they cared, and I let them know that I knew and appreciated it deeply. I made sure our customers knew, too. I gave the crew props on social all the time. We had pizza Fridays. We threw parties when someone left, (although for a stretch of time, people didn’t leave. Our people stayed 4-5 times longer than the industry average). Eventually, when all of that crew left, and I made some terrible hires, which cost me much more than money—it shifted our culture and tarnished the brand. And again, that’s on me. I somehow forgot how important people were to my business. That’s a mistake I won’t ever, ever, make again. Hire people who share your values, believe in what you are doing and let them know that you love them. For a better understanding of how to hire great people, I recommend you read Laslo Block’s book, Work Rules!. https://www.workrules.net/ Block is the SVP of People Operations at Google.
So there you go. 7 things that I learned that will help you grow up your business. Because starting a business is hard. There are so many ways to fail. But it can also be the most rewarding experience of your life. Do these 7 things and your business will not only grow, it might just grow up into the business it was truly meant to be.