Monday, September 1, 2014

Risky Business

When we first started, we didn't want a store. It was too risky. We were afraid of all the issues that came with a store like rent costs and equipment breaking down. We were worried about the variables and the unknowns.

Things changed for us in 2011 when I went back to school to study Culinary Management at ICE. Throughout my six months there, we worked on creating a business plan for our future business. Since I already had Macaron Parlour, I wrote a business plan for a tiny store somewhere out of NYC. I pictured us in Hoboken. Even though we got our start in NY, I was just afraid of the seemingly cutthroat environment and the idea of failure loomed too heavily over me. Even though my teacher told me that I had a very reasonable business plan with very reasonable financials that showed us to be profitable, I couldn't believe that we would ever make it in NY.

While I was writing this business plan, Simon and I got it into our heads that we should be at the Union Square Holiday Market. It was four months away, but we felt like the next step from being a business that was at one weekend market and doing wholesale for maybe 2 stores into one that people take seriously was to participate in a serious event. It would test our ability to run a business - like a test run for a storefront. Before, we had like 5 days to plan for a weekend of sales, but never anything to challenge us to spend every day engrossed in the business. To do this, we applied to Madison Square Eats (owned by same company, Urban Space) and Simon swung by the office to try to convince them that we were a serious business. I quit my job, and suddenly had incredible amounts of time to dedicate to making the worst photoshop diagram of what I thought our booth would be. The diagram had no depth, perspective, and it did not (AT ALL) show our aesthetic. I'm pretty ashamed of how it looked, but someone liked it enough to give us a booth.

Our booth was less than 25 square feet, but it was still a real challenge to keep it stocked. We had to hire our first sales employees and beg to borrow pastry cooks from our fellow food friends at our commissary kitchen. We'd be filling macarons until 3 am and I would have a lot of difficulty in making it to our booth by 10 am. Nights when we weren't at the kitchen were spent trying to figure out financials and forecast production. It felt like we were selling out every day and unable to keep up, but in reality, we always had macarons to sell and our booth was always open. It was a totally new and amazing challenge and we ended up being able to participate in the Union Square Holiday Market.

Participating in long term markets put us in touch with customers on a daily basis and they asked us for a store. Forgetting all our fears, we started looking in the East Village. It's close to our home and we figured that there are no other macaron shops there. I found our spot quickly, but Simon hated that I chose a 1100 sq ft space because he felt that it was too big. Our space is made of two storefronts and he wanted us to take just one to minimize our costs. The price was right and with two storefronts, I pictured having a kitchen on one side and our retail space on the other. I wrote a business plan, did the financials, had everything checked over by my teacher at ICE and it just made sense for us. I knew it was too big for us at the time, but I hoped we would grow into it. For the first six months, Simon was right. We used half of the kitchen, our menu didn't seem big enough to cover the whole display counter, and I couldn't get my act together on developing our classroom. Even family started to intervene and say that we were wasting space. Other small businesses started coming by and asking to rent space, but I was adamant that one day, we would use all of it.

We were very pleased that as we grew our staff, we grew into our space. It wasn't until we started having days off that I realized that the true benefit of having the bigger space was the fact that we were able to get the staff to allow us the time off. If we had only half of the space, we wouldn't have been able to really train people. Training a large enough staff to cover all of our needs while we're absent is a blessing. We were even able to take two trips since opening. We had more vacation days after opening than we did before we opened.

This all could have gone poorly. We could have gotten too large of a space and never grown into it. It was a real risk we took and it paid off. It was a big financial risk and we were lucky enough to have an existing reputation that helped us speed through the process of growing. Perhaps if we were opening for the first time and no one knew about Macaron Parlour, things wouldn't have gone so well. It could have taken us over a year to grow into the space. While St. Marks Place is busy, excitement about our opening helped people get in. When we first started, we couldn't afford to fully staff our place because of our rent costs so Simon and I worked like crazy. Once our business kicked off, we were able to hire more people and scale back our own hours at the shop.

Now, we're really grateful for that seemingly poor decision. If we didn't have the larger kitchen, we never could have continued to participate in markets because we would not be able to get the staff to do enough production. I love that our retail side has enough tables in it to be packed on a Friday night and to hear the excited voices of people as they eat through a box of 12 macarons. Now we have a second store and over a dozen staff members. Simon and I get two days off a week (not consecutive, yet). We bought our first car together for our business (macaronmobile?!). I have enough people in the kitchen and they're capable of producing so much that I don't need to be there as much as I used to. I'm pleased with how things have turned out for us.

I generally live my life on the safe side. When it comes to our future, we had to take a risk and it paid off. As a business, we have to weigh every single decision we make. We have to look at the upsides and the downsides and see if the upside is worth the difficult journey it's going to take to get there. For example, our second store cost more to make than the first store despite being less than half of its size and it's in a neighborhood with high rent and very little food options. It seems risky to be in a place where other businesses have not survived before, but we hoped for the best. It's been 6 months since we have opened and it's been a great decision so far.

1 comment:

  1. As a customer of Macaron Parlour, I appreciate that you and Simon worked so hard to make pretty and delicious macaron, and I appreciate that you were brave to open stores so that we can have chance to taste wonderful desserts. Thank you, Christina.

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