The person I contacted was Jon Smith, the owner of the local bakery. His operation produces delicious bread and rolls that are later sold in local stores with the logo “Smith’s Bakery”. His success was undeniable, which motivated me to ask him a few questions about his path to entrepreneurship.
It turned out that Jon was helping his parents in the family bakery business in his childhood. However, his parents, unfortunately, both died in a car crash when he was young, so his family’s business disappeared together with them and he had to start from scratch. His mother and father remained forever the main role models whose integrity and commitment to quality Jon tries to imitate.
Another influence was the two friends with whom he teamed up while studying in the culinary college. Jon decided to obtain an education to give him a broader scope of expertise in cooking, and he says he never regretted his choice. The three friends launched the venture, putting together their funds right after college. To Jon the choice between employment and his own venture was obvious: he had wanted to have his own business from the start and did not see a reason to delay it. Although Jon personally had little business or marketing experience, one of his friends had worked for a bakery before in the salesperson’s functions, so his contacts and expertise were of great help.
Planning their venture, they screened the territory in the area close to their homes and found a place where neighboring bakeries were relatively far removed. After that, they talked to the owners of local grocery stores, trying to find distribution channels for their products. When they had a few tentative agreements, they jotted down the plans for their finances, calculating how much cash flow they could expect in the first two years. In doing a very basic financial analysis, they found out that they could expect a break-even after the first year and decided to go ahead with the project.
Starting the planning while still at college, Jon and his two friends, Michael and Andrew, spent another four months before they were able to open the doors of the bakery to the first clients. At first, they also sold their rolls and bread to clients inside the bakery, but later on gave this idea up because of time one of them had to spend in the store. This was inconvenient because, in the first days of business, they had to spend at least 12 hours working. Although this was a heavy toll on their lifestyles, they reduced their working time only after their venture began to bring a steady profit.
Although the three friends at once started to build a clientele for their products, they did have some unexpected challenges. Their financial planning turned out to have left out many necessary expenses, and the inflation causing prices to rise did not make it any easier. The bakery successfully avoided borrowing, but extra expense meant that almost all cash flow had to be reinvested in the business, and the amount of money available to the entrepreneurs was barely enough for survival. Preparation of financial statements also proved a challenge, which made them bring in an outside accountant. This relieved them of the need to sort out the financial mess, but added to their expenses.
With time, the bakery achieved a more stable demand for its products, allowing its owners to assume more managerial functions and spend only about 8 hours on the job. At this point, Jon does not plan any significant expansion, preferring to harvest what he has now before he retires in about 10 years. In the meantime, he would be happy to work two or three days a week.
Today he has fully met his personal financial goals including the purchase of a home and saving for retirement. Jon is proud he was able to pay for his two children’s college education. Although he did face conflicts with his wife over his long working hours, he thinks he has passed the main test, learning to deliver excellent value to clients, also balancing this with his personal life.
In speaking with Jon, I was surprised that he takes a very modest perspective of his accomplishments, seeing his venture primarily as a result of hard work and dedication to clients. He shuns any high words about entrepreneurship and specific skills, reiterating that it is important to use common sense when balancing one’s finances and good work ethic with customers and colleagues. Maybe the reason that Jon does not have a salesman’s approach or much respect for marketing his services is that he was mostly in the organizing function all his life, letting his friend take care of sales and marketing. From this conversation, I have gathered that a person with the commitment to quality and less emphasis on marketing one’s product can be an entrepreneur if teaming up with other people who have the missing skills. I think in general partnership is a good idea since people can combine different skills.
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