Lessons Learned From This Small Business Growth Story
It’s not just New Yorkers that are crazed about bagels. Turns out, Oregonians are also very into their bagels and they let their top vendors know it. Recently, we had a chance to speak with the owner of Spielman Bagels to learn more about the company and its substantial growth over the past year.
Spielman Bagels is based out of Portland, Oregon. However, their story begins in a suburban town called Hillsboro, where the company was based out of for 17 years. It was not until December 2011, that the owner, Rick Spielman, decided to move to a small 720 square foot space on SE Division Street in Portland, Oregon, with sights on the big city foot traffic. At the time, coffee was the core product and the goal was only to make a dozen bagels a day.
When they first moved to Portland, Kettleman’s was the major bagel shop in the area. They were producing over 12,000 bagels a day or a thousand times as many as Spielman Bagels. However, that didn’t last. The Einstein bagel chain stepped in and purchased Kettleman’s and changed their prized recipe. That ended up being a big mistake as customer demand dropped significantly. The result was that bagel lovers in the area and the local Press began looking for the, “best new bagel shop.” Soon, Spielman’s became the go to bagel shop in town. They received an explosion of interest and the business soon expanded from producing 12 bagels a day to now 500 bagels per day.
The company has not looked back and has expanded their product offering. Specifically, they’ve initiated a program to purchase unsold bagels from other producers to create their famous bagel chips. The acclaimed bagel chip product has garnered the attention of Kroger, who recently placed an order for over 4,000 bags of bagel chips to be sold in 65 different stores.
What was the biggest challenge the company faced?
They needed to have the right infrastructure to manage their growth, which started with expanding beyond the 720 square feet store. The only problem was that they needed funding to finance this expansion quickly. As Rick Spielman had commented, “Banks are often too slow and I needed the funding immediately. Luckily, I stumbled upon a New York Times article that featured Fundation. I was able to get the funding I needed very quickly. We have now expanded our operations in terms of space, equipment and I expect to increase headcount.”
Advice for other small business owners
When we asked Rick if he had any words of wisdom that he could share with other small business owners, he replied, “Take full advantage of the opportunities in front of you. If you can expand with financing, then by all means go ahead. However, be cautious and careful to ensure that you’re working with the right lender.” In short, even with the right intentions and good business planning, the type of financing product you choose can be equally as important. If you are a business looking to expand, choose a product that is designed for that purpose (one that has a longer repayment period) and make sure you have clear plans on how you intend to spend the cash.
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