Nonprofits can SCORE with local business counselors
Local SCORE Madison counselors increasingly provide entrepreneur education to nonprofit organizations like FEED Kitchens and the fledgling business entities that rely on them.
Josey Chu, proprietor of Madame Chu, a local producer of special Southeast Asian delicacies, prepares her Ginger Garlic sauce at FEED Kitchens. Chu says she has depended on counsel from SCORE Madison advisers to grow her business “in the right way.”
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For more than 50 years, retired businessmen and women of the Service Corps of Retired Executives have provided free business counseling to entrepreneurs hoping to get their new ventures off to a strong start and established businessmen and women who are pondering their next move. Now, local SCORE Madison counselors increasingly provide entrepreneur education to nonprofit organizations and the fledgling business entities that rely on them.
One of the nonprofit beneficiaries of this business counseling is the 6,700-square-foot Food Enterprise and Economic Development, or FEED Kitchens, a food business incubator of the Northside Planning Council of Madison. Without the business acumen of local SCORE counselor Dennis Leong, it would be more difficult for many of the 80-plus businesses that use this facility.
Leong, a member of SCORE’s Nonprofit Committee, heard of FEED Kitchens through a contact at the Small Business Administration, which provides funding to SCORE, and learned that tenants needed business coaching. “It’s not typical that we serve nonprofits,” he notes. “This is something new, even though a number of our counselors are from the nonprofit sector.”
Under the Northside Planning Council’s new MarketReady initiative, which is designed to diversify the vendors that operate in the Madison Public Market when it launches in 2019, Leong has been working with 30 different food vendors, about one-third of which are startups, to help them with fundamentals such as crafting business plans, exploring financing, and reading profit-and-loss statements.
As is often the case, these food entrepreneurs have the expertise to make a product or offer a service, but they need help on the business side. “Most of them are food-oriented businesses because it’s an incubator kitchen,” explains Leong, a former restaurateur. “This is a licensed commercial kitchen. A lot of people come there to prepare food because they would not need a license on their own, so they rent space there.”
At its Sherman Avenue location, FEED Kitchens tries to make life easier for food entrepreneurs by offering five commercial kitchens and equipment for baking, produce preparation and processing, deli prep, and meat processing. The facility, which generates its revenue from hourly and monthly rental fees, government grants, and private donations, is available for food businesses and individuals seeking to sell food because not all of them have a legal or affordable place to prepare their food. In addition, it has a training kitchen so that nonprofits and cooking instructors can teach food service and preparation skills.
Adam Haen, business development director of FEED Kitchens, views SCORE as a valued partner in the organization’s work to develop local food-based businesses because he doesn’t have the time to offer a full complement of business counseling to every vendor that uses the kitchens. He notes that SCORE’s free business counseling services helps the facility save staff positions and expands what it can offer. “Having a resource like SCORE is phenomenal, and you don’t have to reinvent the wheel on everything,” Haen states. “Especially a group like SCORE, where you have people who have been very successful in their professional lives and now are retiring and stepping back from it, but still want to be part of the community and share what they’ve learned.
“You have people with a lifetime of knowledge who will teach a class and even more importantly, do one-on-one counseling with startup businesses or businesses that are looking to grow and expand.”
As a result, Haen adds, FEED Kitchens is actually doing what it set out to do — incubate businesses.
Producers of baked goods, salsa, and barbecue sauce, and food cart operators are among those who can be found prepping products at FEED Kitchens. One local entrepreneur who relies on the facility is Josey Chu, proprietor of Madame Chu, a local producer of special Southeast Asian delicacies. A native of Singapore, Chu contends that authentic Southeast Asian cuisine, her definition of comfort food, is under-represented in the western culinary world.
Chu, whose products are handmade in small batches at the FEED Kitchen, has brought her grandmother’s recipes to life with three condiment products — Sambal Nyonya, Ginger Garlic, and Satay Peanut Nyonya — all condiments “you add onto your finished product,” she explains. At the moment, all three are sold at the Willy Street Co-op, but she’s also considering expansion into other grocery stores and acknowledges that she will need the expertise of SCORE to help expand her business.
Thus far, Chu says she has depended on Leong’s counsel to grow her business “in the right way,” with a focus on the cost aspects. For example, she’s learned to be more diligent in not co-mingling personal and business funds to purchase raw ingredients, which she had a tendency to do, and that labor is often a better investment than depreciating equipment when it comes to growing production capability and business value. The counseling with Leong, someone who has “been there,” is boosting her confidence.
“It’s about how to grow wisely,” she states, “and how to grow by investing rather than trying to grow with capital depreciation. That was quite an eye-opener because I always thought the best way to do things is buy a machine and speed it up. For a small business, that might not be an ideal approach.
“Growing doesn’t mean putting the money into a bank,” adds Chu, who now has four employees if you include as-needed help from her husband. “It’s hiring another person who will eventually take over the process of producing the product with other hires, while I’m at the forefront of the marketing and business development.”