100 Million Dollars Baked in a Pie

Start in a Familiar Field

Before starting Amy's Kitchen, Andy had been president and owner of an herbal tea company. "To some extent," says Andy, "I knew the natural-food industry." Enough said.

Think Niche Market

Rachel and Andy began Amy's Kitchen in their barn, where they worked on sales and marketing and did the bookkeeping. But a bakery handled production-for a few months. "Then we got a call," says Andy, "and they told us we had 30 days to find another manufacturer." Rachel and Andy were doing so much business-about 36,000 pot pies a month-the bakery said it didn't have the staff to devote to Amy's Kitchen.

For details on how they handled this setback, see Expect Problems. Suffice it to say, they handled it well, because by mid-1989, Amy's Kitchen was in virtually every U.S. health food store, and as they added new products, the stores just kept the welcome mat out. "We weren't making money, but we weren't losing money," says Andy. "Our sales were growing, and we added a broccoli pot pie, and a macaroni and cheese pot pie and an apple pie, all within 14 months of starting."

They had somehow discovered a niche that entrepreneurs had overlooked and customers were clamoring for. "The product was such a success because there was a need for quickly prepared health food," Andy says. "We were just in the right place at the right time."

Take a Financial Risk

If you can get an investor to throw scads of money your way, then congratulations and don't forget (ahem) the business journalists who inspired you along the way.

But be warned: Dotcom mania created something of a myth that VCs are an entrepreneur's best friends. The truth is, they're only going to take a risk if they're sure there isn't a risk. So be prepared to pony up some collateral. Rachel and Andy started Amy's Kitchen with $20,000-partially funded by pawning his gold watch and selling her car. And for the first three years, though their customers loved their food, "we couldn't figure out why we were doing this," admits Andy. "We never seemed to have money. But the letters we got were so appreciative. That kept us going."

Never Hurts to Ask

Some entrepreneurs hide from creditors; Andy hired his.

Granted, Don Watts, a soft-spoken man, doesnt seem the sort to get very angry. But as a member of the board of directors of the dessert company that had sold a pie machine to Andy in 1988, it fell to Watts to do some collecting. The dessert company wanted its money, but "trying to collect was very difficult, because Andy had started on a shoestring," recalls Watts. "And then one day Andy called and asked if I could help him [manage his finances]."

Watts met with the Berliners and agreed to come in once a week. "We tried to pay the bills as best we could," says Watts. "The ones we could pay we did, and the ones we didn't have to right away, we let slide-which is typical of most businesses."

Andy's admission that he needed help worked for Watts, who says, "If you don't level with your suppliers, you're going to find that they don't believe you, and they'll shut you down."

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the September 2001 print edition of Entrepreneur with the headline: 100 Million Dollars Baked in a Pie.

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