What's for Dinner?
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
It's 4 p.m. Families, couples and singles everywhere are getting hungry. Cornish game hens are a whimsical fantasy, but there's a fast-food joint on the drive home. You do the cooking math.
What's changing about this scenario is that more families are looking for dinner options that are fast and healthy. Working Americans are more constrained for time than ever. Over 70 percent of mothers with children under age 18 were in the labor force as of 2004, according to the Bureau of Labor Statistics--that's 35.4 million families. What's more, an estimated two-thirds of American adults are overweight, according to the National Institutes of Health, and nearly 31 percent are obese. Factor in the growing number of obese children--approximately 9 million children over age 6--and it's no wonder Americans are perking up at the idea of skipping the battered, deep-fried chicken in favor of a nice, light stir-fry.
Stepping in to fill the need are do-it-yourself meal preparation services--places where time-constrained, health-conscious consumers can prepare their meals in a hurry for up to a month in advance. It's a new take on fast food--and one that's raking in the proverbial dough for entrepreneurs nationwide.
"For at least the past 15 years, the food industry--supermarkets and restaurants-has been looking to deal with the frantic consumer," notes Jonathan M. Seltzer, founder of food industry consulting firm Corporate Resource Inc. in Minneapolis and project manager for The Food Industry Center at the University of Minnesota, Twin Cities. "[These consumers are] trying to have quality mealtime while dealing with work and children's activities." Certainly, the evidence is in the grocery aisles, where pre-cut or pre-made fruits, vegetables, side dishes, and even meats and cheeses coexist happily with more leisurely fare behind the deli counter and in the produce bins.
Indeed, in a 2005 customer survey conducted by do-it-yourself meal preparation company Dinner By Design, fully 98 percent of respondents cited time savings as their reason for using Dinner By Design, and 81 percent credited Dinner By Design for "less stress" in their lives. The Grayslake, Illinois, company--founded in 2003 by Julie Duffy--offers make-and-take meal preparation at its 24 franchise locations throughout the Midwest.
Then, too, there's the entertainment value of do-it-yourself meals--and not just from the perspective of easier dinner parties. At retail locations like Dinner By Design's, consumers can hang out with friends while they prepare meals. "It's a really good bonding time, especially if you take your children with you," says Jorj Morgan, director of life-style content for working-mom internet portal BlueSuitMom.com in Pompano Beach, Florida. "And it can mean new ways of entertainment--[as a get-together] for a group of new mothers, for instance. The entertainment aspect is very popular."
According to Duffy, having fresh, quality food on hand for a day, a week or a month-meals that go from the freezer to the oven to the table in about 30 minutes-appeals to families and singles alike. "People are really thinking about what they're serving and what the ingredients are," says Duffy, 37, who expects sales of $4.7 million in 2006, a dramatic increase over last year's $1.4 million, with approximately 60 store openings planned for 2006. "They have the control back in their hands."
It's About the Food
Naturally, if you're looking to start a do-it-yourself meal preparation business, you'll need to have control in your own hands first-by investigating your desired market and making sure you have the makings of a successful enterprise. "You might have a good product, but do you have the basis for a company?" asks Seltzer. "One good lasagna doesn't mean you have enough [inspiration] for 50 recipes."
It's questions like these that Duffy pondered endlessly in the startup stages. "I literally couldn't sleep at night," she says. "I would run numbers and marketing strategies through my head 24/7. I just knew that it couldn't fail."
That kind of passion will go a long way in any entrepreneurial venture--but particularly one like this, where you need to be more than a little inspired by food. "I enjoy cooking and entertaining," says Duffy. "Additionally, I came from a corporate working environment where my clients bemoaned the fact that they couldn't get dinner on the table--and when they did, it was often takeout or a less 'feel good' option. I knew there was a niche."
Keri Willenborg, 34, knew it, too--as did her husband, Brett, 34. It was at a Super Bowl game that the Nebraska couple stumbled upon the concept after chatting with some fellow game-goers. "They told me they had a niece who did once-a-month cooking somewhere around Seattle," says Keri. "I thought, 'What a neat idea.' I came home and did a bunch of research, and I could not find anything like that [in my area]."
Teaming up with their friends Cher and Jim Stenger, now both 38, as well as a friend who owned a diner, the Willenborgs tested the concept on a small scale with friends and family. "It was a logistical nightmare," admits Keri. "We tried to keep [ingredients] cold in tubs, and that didn't work." Ultimately, the testers loved the concept and the recipes, she says, but getting things to flow smoothly--and keeping the food at the proper temperature--was a different story.
That didn't stop them from plowing forward, however. They took out second mortgages, borrowed from savings and mutual funds and bought a facility to open Omaha, Nebraska-based Supper Thyme USA in 2003. "We put everything on the line," says Keri. The payoff was a lot of free local PR upon opening the facility--and within a few months, people were asking when they were going to franchise. "That's when we took our second leap of faith," she says. Now they have 20 franchises, with 40 more planned this year. The company brought in $3 million last year, and they project $7.5 million in revenue for 2006.
Starting on Your Own
Franchising has turned out to be a viable option for a number of do-it-yourself services that have cropped up in recent years--as well as for the franchisees who buy them. "Franchises have the brand recognition, and franchisees get ongoing support and training," says Keri Willenborg of this option's appeal.
However, both Duffy and Willenborg--along with Dinners By the Dozen founder Tracy Elceser--are evidence enough that starting your own meal preparation service is doable, as long as you are prepared for tasks like finding a facility, purchasing equipment and inventory, creating a website, hiring a chef and coming up with recipes. "Finding a spot was a hurdle, not to mention getting construction done and finding all the recipes," says Elceser, 39, who started her Davenport, Iowa, company in May 2005. "It meant freezing a lot of meals, tasting them and seeing if they retained their flavor."
Elceser, a busy mom who is also a registered nurse, prepared for these hurdles by carefully researching simi-lar companies and earmarking $60,000 in savings and business credit to finance the venture. "I looked at some facilities doing this kind of business to see what I liked and didn't like, and I researched other businesses online," says Elceser, who projects 2006 sales of $400,000. She, too, has a few people interested in franchising, so she's considering that growth strategy.
Most important to your startup success, these entrepreneurs agree, is your willingness to roll up your sleeves and commit huge amounts of time to your new business. "The food industry is a lot of work-it's not a princess job. There's a lot of standing on your feet and getting dirty," says Dinner By Design's Duffy. "But the flip side is that this is hot. The concept is hard to explain, but once you develop your client base, they come back again and again."
Heading for Greatness
Whether you choose to purchase a franchise or strike out on your own, the do-it-yourself meal concept is one that's bound to succeed in coming years. "In most cases, it's a healthier way to eat," says Morgan, who is also a home chef, cooking instructor and author of several cooking and entertaining books. "It's a great way to bring busy, time-constrained people back to the idea of having dinner at home."
Indeed, the opportunities are seemingly endless for entrepreneurs who have the right mixture of passion for cooking and passion for entrepreneurship. "I see this trend expanding and segmenting very quickly," says Seltzer. "This concept of trying to provide additional [meal] solutions to [busy] people is limited only by your own creativity."
For reprints and licensing questions, click here.