HOW BUSINESS SUCCESS IS MADE – START-UPS

In 2005, the 13 siblings of the Keith family realized they were up against a wall, as far as family finances went.

Their father was ill and Bill, the eldest sibling, was still in university.  However, all siblings decided to pitch in and see if they could make a business go, based on their dad’s peanut butter bar recipe.  They sold the family-s bed-and-breakfast in California to generate modest operating capital to start.  And, then, all they had going for them was a whole lot of ambition, thinking “the harder we worked, the more we put into the business, the more we could try and control our destiny” (ref Forbes).  The peanut butter bar (called Perfect Snacks) tasted great and didn’t have preservatives, but had a built-in problem in that it needed to be refrigerated – which meant that few stores would be willing to give up valuable shelf space in their refrigeration sections. And it also meant that the bars would be isolated from their competitors, Cliff and Power bars.  Bill dropped out of school and was joined by the three siblings next in line (aged 19-17) to try to make a go of the business.  They decided to ignore conventional wisdom, relating that, “Our backs were against the wall from day one.”  Of their initial operating capital, 2/3 went to the purchase of a used candy wrapping machine and the rest was invested in organic peanuts and honey.  They say of that time, “With all your finances invested to the very last dollar in the company, you sure as heck have to figure out how to sell this bar.”  By 2006, a year after starting the business, they realized they had only enough cash to fund one more month of operations and they weren’t having much success getting food stores to stock the Perfect Snacks.  As it turned out, Bill met a Whole Foods store manager at a music-and-art festival, asked her to test the bar, and she loved it, figuring that the Whole Foods customers would like the idea of a preservative-free protein bar.  She gave the company a 30-day trial at her Berkeley Whole Foods store.  Bill was the in-store pitchman and they sold $20,000. worth of bars – more than they had in the last six months.  And, that was the “match that lit the wildfire,” they say.  Revenue hit $1 million two years later, and a Costco deal followed.  That was followed by an infusion of cash from VMG private equity, which allowed them to place bigger orders from contract manufacturers, and, in turn, take larger orders from grocers.  In 2018, the company did $84 million in sales.  After throwing caution to the wind when starting their business, however, the Keith siblings, who still own a majority share of the company, are taking the next steps more cautiously when rolling out Perfect Kids (for lunch boxes) and Perfect Bites.  Analysts applaud the Keiths for staying focused, rather than “extending their brand into a million other things, once they achieved initial success.”

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