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3 Fellers Bakery

In: Business and Management

Submitted By sauce123
Words 709
Pages 3
3 Fellers is a bakery located in Goochland, Virginia and specialized in gluten-free baking goods. The business was founded by Susan Feller in 2007. Susan was a guidance counselor, who was passionate about baking. However she was diagnosed with Celiac disease, which forced her to eat gluten-free. But as she didn’t want to give up her passion, she developed flour mixes and recipes for gluten-free baked goods. Started a hobby, her goods triggered such acceptance and demand in her private network that she decided to sell them to the broad public. Without any prior business experience, she bought and transformed a 2.499qm2 house into a commercial bakery with her own money as she doesn’t like to borrow money. By July 2009 her business turned out to be more successful than she could have imagined and she managed seven part-time employees. Customers loved her products. By that time she was operating at 70% capacity. At this point she manages new-product development, sales, and accounting. She also oversaw production, managed inventory, and ordered supplies. Susan kept accounting records by hand and paid bills the week she received them even though her grocery clients paid her between 30 days and 45 days after delivery. She self-financed her business; she did not advertise; and she did not buy anything she could not pay for with cash. She had no computerized inventory or accounting system, no employee manuals, and no automated processes. Susan uses competitive pricing for her goods instead of prices calculated by cost. A big flaw is that she doesn’t know her prices-per-unit. She lacks an appropriate accounting system and has no strategic plan/ forecast in which direction the business has to head in the future.
As business was running very well and the demand for gluten free products has been much higher than she expected, she got offered various promising opportunities for expansion. Whole Foods took her products were approved and been displayed and Whole Food showed interest in increasing demand and orders. Also in the rest of the U.S., there was a lack of competitive gluten-free products such as her frozen cookie dough or biscuit products. To expand into the national market, Susan would need to buy the equipment to produce, package, seal, and deliver her products big quantities to sell to national grocery chains as Walmart or Kroger. She was offered to team up with two local business man who wanted to include her in building and operating a gluten-free baking plant. It would be a joint venture as the three of them would be partners in the baking business and use her recipes. Her original store however would be excluded.
Susan started the business out of passion to bake delicious cakes and biscuits. Now she has several options to grow her original goal and is uncertain in which direction she wants to continue. Many of them would drive her further away from her passion to bake and to bring happiness to people through her goods, and instead lead her into the very different life of a big-business career, something she is not passionate about, and do not have the right skillset for.

Susan should continue what she loves to do – to bake delicious goods in her bakery and bring smiles to her customers. She started this business out of passion with the intention to do what she loves. Turning her bakery into a big business is not her passion. My advice to her is to improve and grow slowly.
However,
Susan has a son, Mike, an MBA graduate. In my opinion she should bring Mike into the business and let him do administrative work. Mike should take over control about financials, the company`s structure and deal with expansion. He has the required expertise to run a company. In my opinion is advisable to continue with Whole Food first, as 3 Fellers and Whole Foods already have a working relationship and expansion into that direction would be fewer efforts than the other alternatives.
By bringing in Mike into the company, he can fully exploit 3 Fellers great business opportunity while Susan can focus on what she loves – working her bakery and make her customers happy.

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