When the going gets tough, will you be able to keep going?
Poor commodity prices have prompted thousands of Canadian farmers to diversify into specialty crops, direct marketing, value-added, agritourism and other ventures. The lucky few meet with instant success, but most face a series of make-or-break challenges.
It’s easy to say perseverance is the key, but clichés won’t sustain you when you keep running headlong into brick walls.
Few know better than Rae Aust how tough it can get. Life is good now for this Brampton, Ont., entrepreneur. She recently sold Private Recipes Ltd., which produces frozen and bulk meals for institutions, to private investors. She had built it into a national food service company with 75 employees and millions in annual sales.
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But the early years seemed like one setback after another.
“I remember time after time, you’re full of enthusiasm, then you go along and you hit a real roadblock and it’s a real downer,” recalled Aust.
She gave herself a lot of pep talks in those early years. Such as when she finally had to put aside her dream of creating a line of premium frozen gourmet food. Another was when her partners quit, all four of them, one after another, deciding it wasn’t worth it. And then there were the five years she went without a paycheque.
“We’d get to a point where I’d say, ‘OK we can pay ourselves now.’ But then something would come along, maybe a piece of equipment or something, and you’d end up putting everything back in and hoping that maybe in three or four months you might be able to get paid.”
Aust doesn’t have a magic formula for dealing with adversity, but she has two key pieces of advice. Don’t spend money until you’re sure there’s a return, and only go after opportunities with big potential.
A nutritionist and dietitian, Aust went into business in the late 1980s because she was sure the old-style TV dinner was dead and the era of frozen gourmet dinners was about to begin. Aust and her partners spent 18 months developing a line of products that would launch their company into orbit.
But the liftoff never came. Grocery chains wouldn’t consider her frozen gourmet meals unless accompanied by a major promotional campaign, which she couldn’t afford. Food processors weren’t interested in giving space in their production facilities to an unknown startup with an untested product.
Specialty stores were interested, but Aust knew she couldn’t make a profit selling small orders to individual stores. So her idea was given the heave-ho.
“You can spend as much time as you want developing your product or service and your business plan because it’s your time,” she said. “But once you’re using paid labour and paying for materials or ingredients, then you have to make money on every single unit.”
It was a similar story for a short-lived foray into producing sandwich fillings and salads for restaurants. But then along came a local Meals on Wheels chapter, and Aust saw her chance.
“It was only 30 meals a week, but there are Meals on Wheels agencies in just about every community. You’d have to get them one at a time, but there were a lot of them out there and you could see the idea made sense.”
Aust had found the model that would make Private Recipes a huge success.
Even while signing up Meals on Wheels agencies, she began targeting hospitals and long-term care facilities, correctly forecasting that budget restraints would lead them to outsource meal preparation. It began in a small way, with one Toronto hospital agreeing to buy one product, low-sodium soup, but eventually grew to encompass hospitals and care facilities across the country.
But even when the window of opportunity opens, you still have to get through it.
The crises didn’t stop when Private Recipes finally became profitable, said Aust.
Her misery list includes losing seemingly irreplaceable employees, the unionization of her workforce, and a major cash flow crisis when she was hit with a GST audit in the midst of an expensive move into new premises.
“I would say you’ll probably have a major setback every year where you think that everything is going to fall apart,” she said.
It’s tempting to think of successful entrepreneurs as the ones with the best ideas.
The truth is, they’re usually the ones who are the best at picking themselves up off the floor and carrying on.
Glenn Cheater is editor of Canadian Farm Manager, the newsletter of the Canadian Farm Business Management Council. The newsletter as well as archived columns from this series can be found in the news desk section at www.farmcentre.com. The views stated here are for information only and are not necessarily those of The Western Producer.
