Gracious Bakery is an example of how to deal with the unexpected.
The ability to hit a curveball is a valuable skill not just in the major leagues, but in the entrepreneurial leagues. How owners deal with life’s little surprises can be critical to their business’s success.
Take the example of Gracious Bakery, which recently and with perfect timing opened its third location along the St. Charles Avenue parade route. The timing for the opening of the first Gracious location was somewhat less propitious: August 2012, two days before Hurricane Isaac hit New Orleans.
“Our friends were already calling it ‘the bakery in the middle of nowhere,’” laughed Megan Forman, the executive chef and owner, recalling the event. “But we felt that if we offered good coffee and good food and good service all in one place, it would be Gracious all around!”
“That little area is really underserved,” added co-owner Jay Forman, speaking of the stretch along Jeff Davis Parkway between the interstate and Earhart Boulevard. “Originally we were mostly doing a weekday business, but now we have become a destination on weekends.
“Within a year we outgrew our production capacity, and we began getting wholesale requests,” Jay continued. “We knew we wanted to continue growing, so we started looking for a commissary location to consolidate production.”
Continuing to demonstrate their pioneer spirit, the Formans located a building in what was then a slightly sketchy stretch of Earhart and opened a significantly larger baking facility in March 2015. They quickly realized that the timing and logistics for meeting the increased demand were very different than simply baking for one location. They also realized that their production capacity had gotten well ahead of demand.
“The biggest curveballs were all the hidden costs,” explained Megan, citing among other things taxes, equipment, employee costs and insurance. “As you grow, these all go up.”
The couple also found that the expense side in general was a lot more difficult to project than the revenue side. The bakery business does not have a big profit margin, which meant they had very little room for error. “It’s really hard to earn your way out of a hole,” Jay pointed out.
Despite the growing pains, the Formans remained committed to expansion on the theory that economies of scale would ultimately make their business more profitable. Clearly they have been able to hit those curveballs. The new Garden District location came with a packaged liquor license, which will increase profits, and Gracious also provided premium king cakes for all three New Orleans Whole Foods Markets. Whole Foods is just one of their 25 wholesale accounts, which include a variety of restaurants and markets.
The Gracious baking style is “distinctly American,” said Megan. “Pies, cakes — I’m into the rustic approach, the comfort food.” The product line also includes a wide variety of breads, including those for all the sandwiches they serve.
“All products are made from scratch, no mixes,” Megan continued. “It’s all very high labor, but it comes through in the flavor.”
The Formans are clear about what kept them from striking out while they were striking out; They had a vision, and they had a plan. Megan had experience at top local restaurants, and took lessons and advice to heart. “A mentor who is willing to share their experience is incredibly helpful,” she said.
“Model everything,” Jay advised. “Do your projections, get everything on paper. You do not want to get into the game haphazardly. This is the hardest thing I’ve ever done — and it is the most rewarding thing I’ve ever done.”
Keith Twitchell spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, nonprofit, micro- and macro-business levels.