During my initial research I compiled a spreadsheet of all the shared-use kitchens that I could find. This was in the fall of 2007 before the near dozen websites listing such kitchens had popped up. I broke down the list into kitchens that are run as private businesses (that list was very small then) and those that were formed as non-profits. Problems in the non-profit model were obvious. The sources of grant funding available limited these kitchens to tailoring their services to special interest groups such as minorities, low income groups or agricultural areas. While I understand the need for such programs, I feel that investing the $300K minimum required to open a fully-equipped commercial kitchen is not something that is particularly difficult only for socially “disadvantaged” groups, it is difficult for everyone!
From the first moment I decided to go through with the project, I knew that I was going to do something that would be accessible to anyone and everyone with no red tape and an easily navigable process. I swore to myself that grant funding was simply out of the question.
This was strengthened by further research on how a few of these kitchens are being run. I found a number of articles on a kitchen in the Boston run as a non-profit that was struggling and about to close down. The mismanagement of the organization was painfully obvious – a staff of five had been hired at “comfortable” salaries to do daily tasks that a computer should have handled, the kitchen was not advertised, had a hidden website missing ontact information, the program required a mountain of paperwork and interviews to gain access to the kitchen, there were no private work spaces and the spaces were being rented on an honor system where people marked usage on a white board and were billed for reported use. Although the Mayor and a few local organizations did eventually join forces to save the kitchen, they hired a new manager with a business background to address their problems.
Stories such as that of the Boston kitchen left me reluctant to consider a non-profit model. I wanted to keep the organization as clean and efficient as possible without outside investors. That’s why it is a bit strange that I somehow ended up spending over a month on obtaining a small grant!
The process started just as I had begun putting together the team that is going to make Kitchen Incubator a reality. The kitchen designer I had decided to go with invited along the coordinator for the Downtown District’s Retail Development Program to our initial meeting at the proposed future home of Kitchen Incubator. We exchanged business cards and agreed to meet in the next couple of weeks.
I had not heard of the Retail Development Program and was surprised to discover such an incredibly active grant program helping to develop downtown. The program has allowed new retail stores and restaurants such as American Apparel and Cielo to overcome the obstacles that face businesses entering downtown. Unlike a traditional grant program that provides funding to open the business, this one reimburses the business for capital expenses once they are already open. As a result, it prohibits these businesses from relying on the grant to get their doors open, but still helps them invest in infrastructure and supplies them with cash at a time when cash reserves usually hit rock bottom – shortly after opening. The more I learned about the program, the more I liked what it was doing.
After an initial meeting with the program coordinators, I decided to put in an application. Since I already had the business plan, the application process was cut and paste. Upon a quick review of some of the previous applicants, I realized that I had a stronger business background, a higher personal equity stake and a much healthier concept. It all seemed so simple and easy.
Per the application process, the coordinators bring an application to the District’s next board meeting after their initial screening of the applicant. These meetings take place only once a month, so a few weeks passed between submitting the application and getting an answer from the committee. Our initial application requested a grant in the amount of $50-100K. As this was a sizable amount and it appeared likely we would receive the $50, my bank advised that I hold out on submitting the loan request until we had a final amount on the grant. Any additional equity injection would allow us to obtain a larger line of credit from the bank. Even if we didn’t need it, access to additional cash is something any new business can not afford to resist.
The initial feedback from the Downtown District was mixed. It seemed that one member of the board had, prior to the meeting, googled the shared use kitchen and found a number of articles detailing the problems occurring at the Boston kitchen mentioned above. To make matters worse, her research did not turn up the more recent articles telling of how the kitchen had been saved by additional funding because the community need it to survive. Instead, they were the outdated press announcing that the kitchen was closing. The distribution of these articles at the initial meeting created concern. As a result, the Board decided to have Kitchen Incubator work with A la Carte Food Consulting, a trusted local firm, to review our concept and submit the findings for discussion at the next month’s meeting. I also suggested that I make a brief presentation to the Board in order to answer any questions or concerns they might have in person.
Throughout the month I met with the president of A la Carte Consulting and our grant program liason at a number of delicious venues around Houston. Chris Tripoli of A la Carte is an immediately likable fellow in every way who sets his meetings up for success by hosting them at places like Gelato Blu (coincidentally a favorite of mine from the moment they first opened) and Rustika (now a favorite of mine after trying their alfajores). We discussed the business in detail and I addressed Chris’s questions surrounding our operations and management plan. At Chris’s suggestion, I modified our business plan to include more visuals and a few case studies. I had initially prepared our business plan with banks in mind and concentrated on the financials; the grant would require a friendlier approach. At our last meet-up before my presentation to the Board for final review of our application, Chris provided a letter of approval endorsing the Kitchen Incubator concept and supporting grant approval. Everything was in place save for one crucial component: the lease!

Tags: 3 Comments