cc >> Jeanan Yasiri: Welcome, everyone. This is Entrepreneurship in
Society, a course that's offered through the University of Wisconsin School of Human Ecology.
I'm Jeanan Yasiri. As we begin today, I'd like to extend thanks to the partners who help in supporting this
course, the UW Office of Corporate Relations, the UW College of Engineering for their technical support, and financial
support that is provided by the Ewing Marion Kauffman Foundation which is committed to advancing academic education in
entrepreneurship. I'd also like to thank our media partners, Wisconsin Public Television and their University
Place crew for taping our lecture today. I'm very pleased to introduce our special guest today
Nancy Potter, co-founder of Potter's Crackers. Nancy grew up in Wisconsin and after receiving her degree in
dietetics from the University of Wisconsin-Stout, she had a brief career as a hospital dietician in Pennsylvania, and then she
returned to Wisconsin to pursue our own food business. Nancy was a partner in the New Glarus Bakery for 18 years
and then ran it as the sole owner for another five. Nancy sold the bakery in 2001, and in 2006 she partnered with
her son Peter to open Potter's Fine Foods, LLC, or Potter's Crackers. The initial business plan for
Potter's envisioned a small, local company but those initial sales goals were reached within months.
Twice, Peter and Nancy have rewritten the business plan for Potter's to accommodate growth and new opportunities.
They have experienced 35% growth just this year. I've asked Nancy to share with us her entrepreneurial journey
and also to share with us what it's like to work with family members as part of your entrepreneurial journey.
Please join me in welcoming Nancy Potter. [APPLAUSE]
Nancy Potter: I had no idea when I volunteered to do this, it was quite this formal. It's a good thing or I probably
would have said no. So I came prepared to tell you about my two businesses. You heard I had the bakery and I
have Potter's Crackers. I wanted to share with you my experiences starting those and the experiences I continued to
have. Financially how I did it because I think, remembering back to my college years, money and how I
was going to pursue my dreams sort of fit together. I want to talk about the surprises and challenges that
I've had along the way, and maybe a little bit of do-over advice. And I thought I would also
include I'm in business with my son Pete, and Pete is also pursuing another business at this point in time, so is my
daughter and so is my son-in-law. And they're all close to your age so I thought you would enjoy
just a little few tidbits about their business journey as well. So we'll go over starting with the bakery.
I lived in New Glarus for many years, and that's where New Glarus Brewing Company is, a place I'm sure you're all very
familiar with, and I remember Deb Carey saying people always said you must be living your dream.
People thought it was so great to have this big brewery. And she would answer and she would say yes, by the time I
would finished grade school I knew someday I would want a world class brewery. And she actually got to her
business the same way I did. She fell in love with somebody who had a passion for a specific business.
Dan wanted a brewery and Deb made it happen. And that's how it was with me. I married my high school
sweetheart, and we dated all through college and married right after college, and by the time college was done he knew
his big dream was to have his own bakery. And I piggy-backed on that dream.
It hadn't occurred to me. I was going to be a hospital dietician, but I thought, you know, it sounds interesting, it
sounds exciting and that was sort of part of the package that I wanted to be involved in. So that is how I got to owning a
bakery. It was no big dream that I had for many, many years. When we graduated we were very
fortunate. We had no college debt. He were both at zero and our assets were a car.
Back then, in 1974, you could buy a Toyota Corolla station wagon for $2,800, and that about was what I got from my grandma,
and so we had no debt and a car and a goal of owning our own business. I can tell you how we did it.
We both got full-time jobs right away. He taught baking actually. He had worked as a baker all
through high school and college and all his summers. And he thought baking in a technical high school, and I got
a job as a hospital dietician. And we pretended that I didn't have a salary. We lived on what he made, and I
never cashed a single check for those four years. We put all I made directly into the bank.
And later when he left and was baking, he'd get any overtime or any extra, we'd put that in the bank.
So in four years from zero, we saved our down payment for a business. In that four years we focused on
getting experience. Unfortunately, I made more money as a dietician than working in a bakery so I didn't garner any
front of the house experience or accounting experience. I stayed working as a dietician, but Howard worked at many
different bakeries, and then we went to Europe so that he could train in Swiss pastries because that was his biggest interest.
And we were there for four months while he took classes. And I tell that story because I think everybody's business
journey has some serendipity in it. We were flying back on Icelandic Airlines from Europe and it's
three-across. A woman was sitting with us and we had no idea how we were going to make this happen.
We just knew we wanted to open up a bakery with Swiss specialties, and we shared that with her.
We were coming back, he'd been in school and now we were going to start hunting for a business to buy.
And she mentioned New Glarus, Wisconsin. She said, have you ever been there?
We had not only never been there, we had never even heard of it. She said oh, it's a Swiss town
in southern Wisconsin, you'd really like it, it would be a perfect place to have a Swiss bakery, and we sort of filed
that in the back of our minds. We got back, moved to Milwaukee, lived there, he worked in a bakery and we started hunting
for a business to purchase. Went all over the state looking and one weekend we were visiting some friends here in Madison and
she happened to say last weekend her mother had been down and they'd visited New Glarus. And I said, oh, that's close by
here? And she said, oh, it's only half hour a way. And she said, we can go down
there now if you want to. So that Sunday afternoon we drove down to New Glarus and there was a bakery.
And we started looking at the bakery. Asked for the owners. The owners weren't there.
We went next door. There was a gift shop that was open. Started asking a lot of
questions there. And the woman finally said, why are you so curious? Do you want to buy it?
And we said, well, yeah. And she said well it is for sale. And we actually closed two weeks
later. That was a Sunday, two weeks from that Monday we closed. And my hand was shaking so much
when I signed those papers you can't even read my signature. We ended up purchasing the building, and we thought we
would certainly just be buying a business and not a building. So it was a huge thing to undertake and we actually had no
clue what we were doing. We focused on the baking. I knew nothing about accounting. I knew nothing about books.
Somewhere I had heard you should ask for the records before you buy an existing business. So I asked for the records and
she said, I can't give you those, this is a partnership, that's our personal income. So I just said okay.
The day of the closing she handed me an old piece of paper about this big, and she had on the previous 11 months and what
their total sales had been for those 11 months. And that was all the books I had to start out with and the extent
of my financial knowledge running a business. If I had it to do over, I would certainly know a little bit more
accounting when I began. We worked like crazy. That's all we did. There was no balance.
We baked constantly. And never really paid attention to anything but getting that product made and getting it out
in the store and getting it sold. And very fortunate for us, about 18 months after we purchased the
bakery there was a huge sugar crisis, and the price of sugar went up about five times. We didn't even notice that
because we were working all the time and didn't read the paper. And suddenly we realized we weren't having the cash flow we
did have. It was just the most fortuitous thing to happen that early on in the business because it was the
wake up call that I had to start paying attention to pricing, costing, and what my ingredients where they were at.
So that really helped us out in getting our bakery to the next phase when we finally paid attention to the numbers.
The challenges that we had in that business was finding this balance. We had this big image of Swiss
pastries and yet here we were in a really small town. In the tourist months, in the summer, we could sell Swiss
pastries. We also had a core of local people that wanted doughnuts and white bread, and it wasn't in
our vision of our business to do those things. We quickly realized that you have to walk both lines.
That you have to get along with your neighbors and your core, and then you have to get along with this other market that you
want to nurture and grow. And you have to find that balance between those two things.
One of the key points and I really notice it because I started one business from scratch and I've purchased one
business, if you're going to spend the money to purchase a business you're paying for goodwill, you don't want to come
in and immediately change everything. I actually had the opportunity to see a friend do that about 10
years after we purchased our business. We kept that core of white bread and doughnuts, and then
gradually augmented it with the kind of products that we really wanted to make. And that proved to be a really
good strategy, very challenging at the beginning but then worked out really well. Some surprises, I would say as
far as surprises go you need to be open to what's going to happen. You can have a plan and think
it's going to go just along that plan, but sometimes things come across your path that you see a-ha this is a new opportunity I
have to take advantage of. At the New Glarus Bakery we wanted to make stollen. It's very popular in German,
Swiss areas, and Howard had a vision for a really good stollen. So we did a lot of research,
found a really great one. It was a sophisticated product. The people here in Wisconsin weren't used to it.
The stollen they knew about was what you could get in the grocery store for $2-$3 a loaf. And there was really not the
market for it, and we really wanted to make it. So the first year, he made a batch of 12 and we had 8
leftover. We sold four stollen. The year that I sold the business we made 7,000 stollen.
When we first perfected those stollen recipes it wasn't something that we even dreamed in our wildest imagination that
it would get that big. When I sold the business I had a friend that strongly suggested we divide that off and have that
stollen business separate, and there's oftentimes I wish I had because clearly there was a mail order market and clearly there
was a demand for stollen and nobody was meeting it. So it was like when we realized this when that second year we
still made another dozen and we started sampling it all through the fall when we have a lot of tourists and then got orders and
the dozen went to two dozen and three dozen and then finally we had a mail order business where we had a 90% fulfillment which
is unbelievable in any kind of mail order business because we would send a stollen brochure right before Christmas to people
who had ordered in the past, received in the past or signed up in the bakery to get the brochure.
And the people that got those brochures ordered, and I look back and that business certainly had opportunity to grow.
I never would have predicted that when we bought it. We had another surprise is publicity, and that's why now
with Potter's Crackers I try really hard not to be judgmental because when you're in one place long enough and you work at
getting exposure, you do. And when we had the New Glarus Bakery we were in Redbook, we were in Ladies' Home Journal, we
were in Better Homes and Gardens, we were in Midwest Living a number of times, we were on the cover of Wisconsin
Trails when it was a really popular magazine and all those resulted in some sales. You saw some influence on the
bottom line. There was the number one influence on our bottom line was when we had a one page article
in Taste of Home which is, I'm sure most of you aren't familiar with it but it's a subscription-only magazine
published in Milwaukee. It's not particularly sophisticated. It's sort of home style.
I never in my wildest imagination would have predicted that that was my market, and the response to that article was
phenomenal. So I've kind of learned when an opportunity approaches me at Potter's Crackers I don't judge
like I used to in the past. I sold the bakery. Mostly I was ready for something new and my son Pete, that
ultimately became my Potter's Crackers partner, had graduated from high school, and I thought I was no longer tied to the
community with children in the schools. It was my chance to do something different.
I anticipated it taking about two years to sell the business because it would take a very special owner.
You were a worker owner. And so I assumed I had to find a baker out there who really wanted to live in a small town,
do Swiss pastries, and manage a bakery as well as working there. I thought that would be really hard to find.
I had an employee buy it, and I sold it in two months. My plan had been I'd have two years to plan what my next step
would be, and when it all happened so fast I actually didn't have a next step planned. She did not do well and she
ended up ultimately going bankrupt. I think there's a lot of to be learned from that situation.
And I can tell you the two points that come to my mind immediately. She saw, she had worked there
for many years and she was very bright and she was very capable. And I was really thrilled that she was going to buy the
business. The first thing she did after she got the business was hire her family.
Her brother and her mother and her father immediately worked for the business. Whether they were appropriate
for those jobs or not, they were immediately on the payroll. And the second thing she did was immediately get involved in lots
of extra curricular activities. She took presidency of the Chamber of Commerce three months after she purchased the
business. When you purchase an existing business, it's often that people leaving have built up a lot of
goodwill and built up a lot of financial capital and they can afford to spend a lot of time in extra curricular activities and
they can afford extra labor, but when you're coming in and you just purchased a business, you have a new mortgage on that
business that that owner going out didn't have and you need to work hard. I think that's why it succeeded
when we did is we really put blood, sweat and tears, all our efforts into it. I think she saw me and how I was
involved in the business after I had built up 20 years of equity, whereas, it's different when you're first buying it.
So immediately I think the labor cost that skyrocketed with her family and then the time she didn't spend there.
And then she said I don't really care to work in the store. I prefer to be a back end person.
But the truth is people love to see the owner. I never, even when my children were infants, missed working a
Saturday. If I couldn't be there all week, I still was there on Saturday. That was when most of the locals
went in and they could see me. I firmly believe that's made a difference on Potter's Crackers as well.
Being out there at the farmers market and people meet me. And doing tastings and they meet me.
It's Potter's Crackers and I say I'm Nancy Potter, they're really happy to meet you. It makes a big difference, I
think, in your business. If I had some advice right off the bat on that bakery experience I mentioned already,
I would know more about bookkeeping. And I would, not just accounting.
I think you really actually need to know the bookkeeping end of it. You need to start your books
right away. As soon as you start your business you should be starting your QuickBooks so that
everything's entered all along the way and you're not going back and rebuilding, but in fact it goes in there fresh.
And I also think that you need a partner. And by that I mean not necessarily a financial partner
but it was different after, we were divorced and I bought my husband out and ran the business for five years and I felt by
myself. Now in Potter's Crackers I've had my son and I've also developed mentors that own their
own businesses, and I think that's important, that pool of people that you can talk to. Whether it's a partner, actual
physical financial partner in the business, or if it's an advisory board that you build, if it's friends in business that
you go to advice, or professionals, an accountant, an attorney that you feel really comfortable with.
You need a partner in your business, I think, somebody who knows you, knows your style and knows how much you care about
that business and somebody to really talk to about it who understands. My second business was the
crackers. I thought I had a great plan. Although the business sold faster than I expected and I was
a little caught off guard, I anticipated working more or less for the rest of my life at things more for fun rather than
income. I had sold the business and that was going to be my retirement nest egg.
And I had no debt. And I had children that no longer needed me for college, college funding was covered.
I thought, well, all I have to do is make enough to live day-to-day, and I already owned my home, no mortgage.
This will be a great time for me. In fact, what happened was about 18 months after I sold the
business my little nest egg dropped by 45% in the big stock debacle we had a number of years ago.
And then it was no longer I'm going to just find something for fun and fulfillment, but I really wanted to generate some
income. And the crackers just came along in a chance comment. I knew I wanted to open a food
business. I did go to work for someone and I worked in a nonprofit for two years.
It clearly was not a good fit for me. It wasn't too long into that experience I realized I answered
more to a board of directors as opposed to what I really wanted to do. And I found over time, after the
first year, my creativity and how I wanted to see that business marketed and grown didn't jive with the board.
My creativity was gone. I knew I couldn't do this for somebody else. I was too used to doing it for
myself and answering just to myself. So I knew I wanted to open a food business.
And my first love is candy. I love it. Not so much chocolates. I really wanted to do like
nougat. If you've ever traveled in Italy and seen the stores that have the beautiful logs of nougat, I
could just picture these with toasted hazelnuts and cranberries and used some of our local ingredients.
And I just thought the world needed more nougat and I really wanted to do this, but I also remembered in the bakery being
so seasonal, and I know a candy business, it's not even just that the holidays they give it a lot for gifts but you also have
humidity issues so candy is never going to be the same in the summer in Wisconsin as it would be in the winter.
I knew it would be extremely seasonal, and I knew the challenges of that. And I also wasn't sure I wanted
to sell candy. I just thought no, I think I'd really rather do something healthier, something I felt
wasn't just fun but I could feel a little better about than nougat. So at a Thanksgiving meal, my
family was all there and I just happened so say, my son kept saying, mom, you keep talking about this candy and you're not
doing it and you're not doing it, and I said, well, if I wasn't going to do candy I think I'd do crackers.
And everybody just stared at me. And I said, no, I'm serious. I love crackers. I eat a lot of them.
I don't see any great ones out there. That's what I'd do. And then there was no more talk
about it. Everybody kind of thought I was nuts. And my son started
investigating. He started trying crackers. He started looking around. He ordered a bunch of cheese
plates in restaurants. And finally one night he called me from a restaurant where he had just ordered a cheese plate
for dessert here in Madison, and he said, mom, these are fantastic cheeses and they came with cruddy crackers, you really
should do this. And so then he's relentless. If you've ever met Pete he's like you should do, you should
do this, you've got to do this, and pretty soon it was we should do this, we should do this and we did.
We went hunting for a space, found one at the Madison Enterprise Center where you start out with just a cube.
And then being me and being the fiscal conservative that I am, we hunted for used equipment and what equipment we would need.
We did write a business plan, and I have to say that I never wrote a business plan once with New Glarus Bakery.
But if you apply for a space at a business incubator they require that. They have to see your business
plan and approve it before you get your space. So we were forced to write a business plan which was really
an excellent exercise. Once we got into it, I really enjoyed it. And I've rewritten it twice, and
I love the process because it's a visioning process. It lets you look forward. It lets you dream.
It lets you think about new things you could do and directions you want to go. And it also helps with
communication. You do a business plan, you commit it to writing, Peter and I then are both on the same
page. So the business plan idea for us was great starting the crackers. We got our equipment together.
We did a minimal amount of plumbing and electrical work and then boom we were out there with our first crackers.
We didn't want to invest a lot of money, and typically publicity and marketing and public relations are one of your
most expensive pieces. We did it with farmers markets. I would really call it sweat equity public relations because
we did three farmers markets a week that first two years. And we couldn't get into any big ones, and even the Dane County
market on the square we're still on the waiting list after five years and I think it will be two more.
We were at east side. We were at north side. We were at south side. The little ones that we could
get into. And that's a lot of hours. That's a lot of commitment every week.
I think the minimum was four hours. So you've got to figure we put in at least minimum 12 to 15
hours a week actually with people interested in our crackers and tasting them. And I think meeting those
customers made all the difference in the world for our business. We developed a personal
relationship. I think overall we're really well-known in Madison, and when you think that in five years
we've paid for one ad. When we came out with a vegan cracker, our classic wheat is vegan, I thought people should
really know about this, and so I bought little green vegan stickers, and on every wheat package we were putting those
stickers on, and I thought this is just taking too much time. So I took an ad out in the Willy Street Reader who I wanted to
anyway because Willy Street was always an early and great supporter of Potter's Crackers. We took an ad out there and said
happy cows have come to Wisconsin, we now have a vegan cracker. That's the only ad that Potter's
Crackers has placed in five years. We've put all of our energy into public relations.
We wanted to expand. We thought we want to go beyond the Madison market. So we thought how to do that and
we decided that the Green City Market in Chicago would be a great venue. That turned out to be a great
idea. Pete would go down there Friday night, stay for 30 bucks overnight at the Y downtown, and
then be out there at 5:00 in the morning setting up for Potter's Crackers at the Green City Market.
And we've gotten all our contacts there. We've had wonderful publicist this last year.
We were just in the Wall Street Journal. We were just in Cooking Light. We were in Rachael Ray.
Bon Appétit just called for samples, and all of those were people that connected with us at Green City Market in Chicago.
So obviously for us it was an extremely good investment. But Pete was your age. He was a college student and he
was giving up every single Friday night to sleep at the Y in Chicago. So we were willing to pay the
price, and it was a good thing to do. The challenges I think at the crackers, it was really
interesting because coming from a production background in the bakery, I told Pete right from the beginning production is
going to be our issue not sales. I really think we need a cracker. I don't think we're going to
have any problem selling these crackers. The issue is going to be making them.
And I was right. Production is also an issue. It just happens to be one of those products that is very
handmade, and to go from handmade to a continuous feed operation that's a big factory is kind of your two places.
There's no middle ground. Where the next step up, where almost next step up would be a belt and continuous manufacture
of our crackers. I think we'll get there someday. I used to fight that. Now more as I get used to my
recipes and my crackers, I think I can do that without sacrificing quality, but that's a huge jump from where we are
now. So we're looking at how can we maximize where we're at now. I'm on a constant look out for
new hand tools, new ideas. We expanded. The first two years we only had one space at Madison Enterprise
Center. A wall down the middle, came in the door and the storage and office was on one side, and then
on the other side was the cracker production. And two years ago we tore down that wall and made that whole
space production and moved the shipping and packaging storage and office next door. Made a huge difference.
I knew layout made a big difference in productivity. I anticipated about a 10% increase.
We had almost 30% increase in productivity giving ourselves more space and getting that layout.
So that helped us to grow to the next level and now we're doing it on every step. We go through every single step,
how can we make this faster? How can we make this more efficient? This year I invested in a
twist tie machine so we're no longer twisting all those bags of crackers by hand. I'm always looking for the next
thing, and the challenge I face is how do I maximize my productivity? That will always be with me.
And not compromise any quality. We're organically certified. That was really important to me. I had a close friend from
college and her father died of what they termed at Mayo Clinic farmer's lung. And they said basically it's
from atrazine on your fields all those years. And he was a farmer who I really admired.
He loved what he did and was totally devoted to it and was an excellent steward of the land. Loved his home, his cows, his
farm, and I really feel bad that at the end of his life not only did he die from what he did but he all along thought he was
doing the best. He thought that this is what people were telling him to have a productive herd, these are the
things you should be doing. And he died from atrazine. So I thought if I ever do another food business I would
like to be certified organic and know that my farmers weren't exposed to anything like that. So we began immediately using
all organic ingredients, but I didn't get certification right away. The word on the street was that
it was a really difficult process and really hard, so I thought I'll just make these out of organic ingredients.
Well, I was called on the carpet by that. It took about a year and a half before the state notified me
that you can't do this. And in fact, the law is you can't say organic on your front label, organic product, without
being certified. You can only not have organic on the label, you could say made with organic ingredients in the
ingredients list. So I was illegal and we had to quickly, I realized, get that in shape.
And it was a challenge to go through but it was a good process. I should have done it right at
the beginning, and I guess I do have pretty strong feelings that ultimately it's not that expensive, and I see young
entrepreneurs using organic ingredients and not wanting to go through the effort and cost of certification, and I just
think that's an important selling point and that if you're going to use organic ingredients and that's important to you, you
should definitely go the next step and be certified. I guess the other challenge that is in our business, and I would
put this under advice, I think, as well, is that you need to look at, if you're selling a product, okay if your business
is selling a product, you need to make the decision ahead of time how you're going to distribute that product.
For instance, I had a friend who really wanted to own her own business and she sewed Teddy bears and went to craft fairs on
the weekend. And she wanted to somehow turn this into a business, and she saved all her craft money and
when she had a certain amount of money in the bank she quit her job, her full-time job and started a business with gifts.
And she said basically she looked at gifts, well you can either go to shows and sell them wholesale to stores or she could
have a store that had all her gifts in it, and she just knew she wouldn't want to be committed to a store so she
said, well, I'm going to have to go to gift shows and sell my product there. What kind of markup do they
expect and what am I going to have to produce my product for to sell it at this price at the show and then the retailer can
sell it at this price. Well, food, it's even more complicated than that. I came from a retail bakery.
I never really thought about distribution because people were walking in my door. If you're going to develop a
food product, you have to have a distribution system. I don't have a store. And it didn't occur to me that
you can't just say well, I think they could sell this at Willy Street Co-Op for this. I've looked at all my
competition and this is a fair price for my crackers, so I'll produce it for this price and they sell it for this price,
I've got it made. That was really as far as it went for me in my head when I was first doing this.
I didn't realize that you need to work in distributors. And you needed a whole other cut in there.
And then I also didn't realize that, in our particularly instance, our crackers are an artisan product.
They're handmade. They're certified organic. They're whole grain. They don't do well on the
cracker shelf. Most places don't put them on the cracker shelf. They put them in the specialty
cheese department where they sell three to one from a cracker aisle to specialty cheese. But specialty cheese departments
also have a much higher margin than they expect on a grocery item. So my product being changed from
being grocery item to specialty cheese item made a huge, huge difference on my bottom line. So it's a challenge I face now
and my advice to anybody who wants to be selling something, particularly something you manufacture, you need to look at
your distribution system ahead of time and work back on how many cuts you're going to have to have and what margins people
expect in all those areas. I think that's probably a pretty thorough window of my bakery experience and my crackers
experience. As you can see, I'm a financial conservative so both businesses we grew organically.
We self-financed all our expansion. We took no loans. And I'm still that way.
So I know a lot of start-ups today aren't like that. They look for investors, they do it differently.
So I realize this is only one model, but I have to say I'm really glad I've done it this way.
I like this low control growth and it just being organic and self-financed. I wanted to tell you a little
bit about my kids' businesses just because, again, it's one more window into entrepreneurship and they're
more your age. I thought you would really relate. Pete did the crackers with me
while he was an undergrad here in Madison and then he went on, actually, to right here get a degree in systems management
because he knew he wanted to own some sort of food business and he needed to know the systems end of it as well as the food
end of it. And then he wanted to know the business end of it and loved school, so he went out to Davis,
UC Davis, and got his MBA. And he just finished this last spring. So I lost my partner,
physically. For him being there, helping me with all those farmers markets. But even when he left
California, we talk frequently on the phone and we discuss everything, but he loves California has a significant
other there and said he was committed to staying there at least another year. And during his business school
he was supposed to serve an internship between the two years, and instead of serving an internship he opened up a
business with another partner because they knew they wanted to be entrepreneurs and they thought it would be a really
worthwhile experience. And he did gourmet jalapeno poppers, and they actually did really well.
They have a line of five. They got them in at all the Whole Foods and a lot of northern California stores.
But when he graduated from school he didn't want to leave there because of his significant other, and he sold that business
to the partner and he's running the poppers, and he decided to open up a Potter's Crackers California mostly because we
want to capitalize on the local that has been really important with Potter's. We're trying, we've always
gotten all our flour here in Wisconsin, all our butter, all our milk and cracked wheat, so that right there covers like 90%
of your ingredients in crackers, but more and more we're trying to get as much as possible, like garlic can be easier to get in
California. We're trying really hard to go local. We want to do as much local as
possible, and we see a real appreciation for that in our market. California even more so.
There is strong interest in Potter's Crackers, but they did not want a Potter's Crackers from Wisconsin.
They wanted an artisan cracker that was made there with their ingredients. So he now calls me up on the
phone and says, oh, gosh I was just at the Olive farmer, mom, I picked up Kalamata olives for seconds.
This is the best cracker in the world. Too bad you can't make Kalamata olive crackers in Wisconsin.
He's got a lot more to work with than I do. He's doing an orange graham. He's doing an orange coconut
graham. He's using local ingredients there and is really excited. He just got in to Whole Foods
northern California region, and he just got in to one of the really large supermarket chains. And so he's growing that.
He started really small. And he bought the equipment and he and a friend started baking and he is doing the baking three
days a week and then Jeremy is staying there baking while Pete goes and calls on customers. And he's finding out what it's
like to do both. And it's been a great experience for him. He's excited to grow it big, and
he'd like to do another one somewhere. The local thing is a really great thing to work with.
My daughter's business is really interesting because she and her husband graduated from Minneapolis College of Art and
Design or MCAD, I can't think of it. So two art degrees. And they really wanted to own
their own business and didn't know what they were going to do. So they worked in a hardware store for a while because they
knew materials. They both graduated in furniture design, and they know how to manipulate all sorts of
materials. They were working in a hardware store and she did some decorating and realized she
couldn't get some of the products that she was used to in the bakery when she grew up there.
So she took $50 and she bought some items and put them on Etsy. And now, three years later, it's completely supporting both of
them. She has a website, layercakeshop.com, and sells things that amaze me.
I think, how could there be this giant market for sprinkles and cupcake papers? It boggles my mind but she's got
a good eye. She's very artistic. She does all her own photography so her expenses are low.
Josh, her husband, can do a lot of the website things. And for them it was a $50 investment that now they've
bought a home here in Oregon and support their family on. And I think it's fascinating that you can do it with so
little. And then Josh actually has done the same thing. He calls himself an importer.
He has found products in China and brought them in direct. He's been selling a camp stove is his latest.
And his first order he ordered 10 camp stoves, and now he orders about 500 a month and sells them on Amazon.
And that is his complete, the way he supports himself. So they've done really different things, and it amazes me that
they've done it with little investment but their own ingenuity. And it's fun to watch, fun to
watch the growth. I guess that is about all I have. And we have time for some
questions. >> We definitely do have time for questions. Nancy, it's a fabulous story and
there are themes of fearlessness in there as well as risk, and I appreciate your self-describing yourself as a fiscal
conservative because I think that that's not something we've necessarily heard from some of our other guests, and I think
it's an important part of your success. I look out to the students and look for their hands up as they
have questions. And I see one at the very end. Oh, you've got one here. I will come down to you in a
second, Sarah. >> My name is Cora. First, kind of maybe a silly question, but what's a stollen?
It's a Christmas bread with marzipan in it, and ours were particularly good because it was with Myers' rum and raisins and
it didn't have citron in it which some of the others do, but it's with candied fruit, marzipan and nuts.
Thank you. My actual real question is you talked about distribution in grocery stores and at the
farmers markets but you said one of the ideas was sparked from your son being in a restaurant and realizing that the crackers
weren't the best with the cheese, have you guys done any distribution through restaurants?
We have, we have, thank you. We have a number of restaurants here in Madison that purchase from us direct, and we do work
with a distributor. Elegant Foods here in Madison takes our crackers by the pound, and then they sell them by the
pound to different restaurants. >> I was running across and I don't think that you answered this question.
It does also have to do with distribution. How do you get into Whole Foods? This is an area I'm just not
familiar with. You mentioned that you did and that your son did, and I don't mean it specifically to Whole
Foods so much as organizations like that. You make the call? You work through a middle
person? >> You know, it's interesting because you hear stories about Whole Foods that you have to get
to the regional guys and those are the people that you need to win over. Well, ultimately that's true,
but our experience has been is if you get advocates in the local stores in the cheese department that want to bring in
your product and they're the ones taking it to the their regional offices, it's the most successful.
So most of our marketing has been person to person. >> Hi, my name is Natalie. Kind of a couple of questions.
How many employees do you run through your business, and then also what are kind of your plans to possibly be leaving the
incubator and having your own business out in an own building outside of that for your Potter's Crackers?
The first part, employees, making the crackers is a three-person process. We have a baker making the
dough, and then somebody sheets the dough and puts it over on the pans, and a third baker cuts them and bakes them and then
bins them after they're out of the oven. So we have three bakers and a production manager that work
Monday through Friday, and then my packaging is done by students. That's economical but also
packaging is a rote activity which is not too exciting. I can't imagine someone who could come in for eight hours
and package. So coming in fresh and just working four to six after school is great for them and it's great
for me. And another issue in that regard is we were cutting string and stringing our tags.
Our tags are put on, we use an organic hemp string and we tie the tag on to the bag. And we, for years, cut all that
string. I would usually cut it at home and string tags every free moment, and this year we farmed
that out to a sheltered workshop, and the relationship has worked beautifully. It's a rote activity.
And in the past I'd actually approached a number of sheltered workshops, and they would give me a quote that was just way too
high, and I said, well, I can get an able-bodied high school student and it really costs me this.
It really came down to about two and a half cents per tag. So I said I can't pay a sheltered workshop to do it for
10 cents a tag. And we had somebody approach us and I explained that, and she said let's do a time study, and
they did a time study and the state approved it and said yes, three cents a tag is a really reasonable amount to charge for
this, and so we have that all outsourced which has been a real boom. And then, I'm sorry, I couldn't
catch the second part of your question. >> I think it had to do with whether or not you have plans to
leave the incubator? >> Me leave the incubator? >> Yeah, or the organization. >> Well, I'm in an incubator.
Okay. Maybe you can describe what that is. >> Oh, sure.
Business incubators are, at least the ones I'm familiar with, are incorporated as a nonprofit, and they are there to
encourage business growth in their area. Commonwealth Development here in Madison has two incubators
buildings. One on Main Street and one on Baldwin. I'm on the Baldwin facility.
And essentially it's a building that is a suite of rooms. They're square cubicles that businesses can come in and rent
at a reduced rate. And then it goes up accordingly every year, and then it's supposed to be where you
incubate. And then you're only there three to four years and you go off then and get market space.
We had to invest quite a bit of money in infrastructure, the plumbing and the electrical, to begin with, and then we had to
spend quite a bit this last year in ventilation and so our stay has been extended. We can stay indefinitely and
we're applying for status as a cornerstone tenant, but we can stay longer because of the investment we had to make.
It's interesting because all these business incubators, we have two here in Madison, but there's a number around, it's a
very popular concept and a great one, but most of them were developed for office space. Well, what they realized is some
of the office spaces, number one, there hasn't been as much demand as they had hoped and, number two, they don't always
employee a lot of people. And a lot of these business incubators, particularly for Commonwealth, one of their goals
is the business would employee people from the area. And we do that. So they're really happy that
we're there and want us to stay because all our employees come, we don't have a single employee, actually, that drives.
They all walk or bike to work and are from the neighborhood. And there's the demand for food spaces and food manufacturing is
really growing. So our building is trying to work with us on the ventilation and things to turn more office
space into what could be appropriate for a food manufacturer. >> Hi, Nancy, I'm Becca.
I was wondering how you went about finding local suppliers and if there was any issue at first because you weren't
organically certified when you were looking for suppliers? >> Well, I've had challenges looking for suppliers.
Some things are really easy and other things aren't. Locally, I don't think it's too hard because there's lists
online of farmers markets in the area that we participated in and we met people there, and there's also listings of people who are
at farmers markets that you aren't at where you can find local farms and local contacts. It gets a little more
complicated then when you want to go to a next level like flour. We do have a local flour and
we're actually working with them now and I think we'll use their cracked wheat but flour has to be spec'd out.
It has to be consistent year-round, and wheat, you have to blend the wheat to get the consistency.
So we have to go to somebody bigger and we're fortunate to find a mill here in Wisconsin that has that capability.
We wish we could get that a little more local, but so far we haven't been able to do all local wheat, just partially
local wheat, the mill in Fountain City, Wisconsin blends. But other ingredients that's been really hard that aren't
available locally, there aren't that many organically certified distributors and they both require, there's two main ones
here in Madison and they both require minimums, and we have no problem meeting the one minimum but a lot of problems meeting
two minimums. For that very reason we buy as much local as possible and as little from a large distributor
as possible. So to meet two minimums we can't, and it's really hard to find, we have to get salt with
no flowing agents in it, and I have often had to go and actually buy my salt at a retail price.
And just recently Elegant Foods agreed to carry my salt. But as a little organic producer, some of those
ingredients can be hard to source. >> Hi, my name is Hannah. You mentioned that when you sold
the bakery in New Glarus, the owner right away hired her family, and I was just wondering how you made that work with your
son because obviously it was successful for you. >> Yeah, I just realized you even mentioned that in the
intro, and I didn't say much about that. I think that it's probably unfair to use a mother/son combo
as the working with family. I think it would be different if it was siblings. I think my son, there were times
that he, he has a different attitude. He wants to really get out there and he's like go, go, go.
And I was let's slow down, let's slow down. And I think as his mom he felt like he could only yell at me so
much. I could tell there were times he just really wanted to say something and he curbed himself,
this is my mom, I can't do that. So I think for Pete it was much harder than for me because you'll never get away from that
mother/son dynamic there. But I love working with my family and I think that all of us are in business for ourselves
and so we share that and really have a deep appreciation for being in business for yourself and end up having a lot of the
same issues and the same problems to talk about. It's a much better relationship in terms of working with Peter
now that he's doing it himself. Here he was a student, I was the day to day person. He was kind of coming in with a
lot of advice. He'd have the ideas and I'm the one that had to carry them through.
And so now that he's actually doing it himself, I think he's much more understanding of where I was coming from.
I think what's more critical than working with a family member is the two people's good communication and not feeling
like, how do I describe this? My son and daughter-in-law before they opened their own businesses were in a partnership
relationship with a family friend and it did not work at all. It was really poor.
And I think it's because they did not feel like they were equals, and they didn't speak up and ask the questions that they
should have. And I guess in a family maybe you are able to do that more. I really loved, and then my kids
grew up in a family business. So I guess I'm painting a pretty good picture of it now for us. I also would say that it was the
business that contributed a lot to my divorce, ultimately, because I think we worked all the time, and I don't think we
had good balance. So that's something you always have to keep in mind too. >> Well, Nancy, I know the
students join me in thanking you very much for joining us today and sharing your entrepreneurial journey.
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