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."
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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."
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