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Go Big Or Go Home: A Tale of Expansion

FYI: This is a bit of a long read, but worthwhile. Bookmark it, save it for later, and come back with a bevvy or a snack, k? If you just want to know the learnings of opening a 2nd location, scroll to just past the photo of a storefront and join in!

 

So you've taken (maybe) the greatest leap of your life and started a small business. Maybe you started as a solopreneur or with staff; in your home or in a brick-and-mortar space.

 

Time has passed, things have happened and it looks like...yeah, it looks like this little business of yours is not only surviving, but thriving. What do you do next? Do you have the oft spoken of "entrepreneurial spirit" where you feel compelled to do and start something new? Do you just ride the high of having a business not fail?

 

Hi! I'm Lenore and this is my story of how I made the decision to grow my business and what it looked like for me. My original venture is a brick-and-mortar scratch-method bakery and bespoke cake shop located a 15 minute walk away from downtown Kitchener, ON (the 10th largest metropolitan area in Canada). We started retail sales with a very small baked goods menu and Kiwi-inspired single origin espresso coffee. Before long (and due to COVID) we actually expanded our retail offerings and hours because we weren't getting as many large bespoke cake orders because of le 'rona.

 

A year after opening and 3 employees later, my landlord said he might have a proposition for me: he'd just purchased another building in a village a 15 minute drive away and he thinks I am the only person who could make something out of it. Why? Because it was a run down less than 200 square foot shed and he'd seen me navigate creating a take-out window during the pandemic at our original shop and though that this shed could be a great place to sell in a similar manner.

 

Much like childbirth (I'm told) the pain and horror of opening a new business was far behind me and we opened The Shed (imaginative, I know) an outpost of LenJo Bakes after a quick reno to sell ice cream and baked goods.

 

We operated through the worst summer weather in history and through the winter until Christmas, despite it being FREEZING inside. Most of our customers knew of us from Kitchener or were told about us from folks who frequented Kitchener and we were met with many questions, "Do you have coffee? Do you scoop ice cream? Do you have those *insert product here* that you make in town?".

 

Again, my landlord approached me and asked if I wanted to move The Shed onto the main street of the village for higher traffic and increased visibility. This time I took it to my support network: my parents, my partner, my siblings, my friends, my staff. Most were a resounding yes, but that was just the start of it! I got to work jumping through the vigorous hoops of opening a brick-and-mortar store: permits, contractors, designing a space, imagining and re-imagining this new part of the business. All the same steps I went through when opening my first location, but now with the added bonus of actually having a business to run, staff to mind, and customers who actually expected me to pay attention to them.

 

Everything after that is pretty much the boiler plate experience of opening a new brick-and-mortar business: construction costs were higher than anticipated; trades made promises of getting things done and didn't; the bureaucracy of getting permits and approvals was still horrific, etc. etc. The only benefit was that I was transferring two of my staff from my original location to this one so I didn't need to train on culture or standards - we just needed to figure out how to do the new things together.

 

Six months after we intended to open (par for the course - we were 6 months late for my first location as well), we finally opened The Shed: A Cafe by LenJo Bakes!

The Shed, A Cafe by LenJo Bakes in Kitchener Ontario, Canada.The Shed, A Cafe by LenJo Bakes in Kitchener Ontario, Canada.

 

So that's the back story. But what's the why, the truth, the hope, and the learning? I'll tell ya!

 

I've been asked these questions a few times, so I'll answer them here.

 

1. How did you decide to open a second location?

I don't really feel like I made an active decision to open a second location. Unlike my first shop which I was intentional about seeking out a space that would work for us, this second location was basically just a result of a really great relationship with my landlord. I was offered an opportunity, it seemed like a good opportunity, and I took it. I was able to take it because I felt secure in where the business that I had built so far was, I felt secure in the team that I'd built to help run the business so far, and I was confident that I could do it again. And most importantly: if I didn't, at least I tried. I had the benefit of a pretty solid test market because of the first iteration of The Shed which really helped me to prove that there was a gap in the market that I could quite easily fill. I was also very keenly aware that if I wasn't the one to do it, someone else would come along in short order to do it instead.

 

2. What has it been like?

Pretty similar to my first location open! Frustrating as all get out! The benefit is that this time I have experience on my side to know what I need to say, who I need to call, and just how persistent I need to be in order to get things done when I need them to get done. I was pretty timid with my wants when opening my first location, but not this time! I wasn't afraid to speak up, speak plainly, and ensure that everyone in the room knew that they weren't to take the **bleep** at. all. Not with me.

 

Now that we're open? It feels like trying to learn to walk again after having been able to run marathons before or trying to live in a place where you only have a basic grip on the language. You know the mechanics of the skill you're trying to do but you keep fumbling. However, now that we're nearly 6 weeks in it finally feels like we're figuring out what works for us.

 

3. What do I wish I'd known?

Just how boring painting is. How tedious it is. How sore my body would be!

I also would work 10-12 hour shifts at my OG shop and leave and do 8 hours overnight at The Shed - painting furniture, painting walls, painting our cash desk, putting up shelves, building furniture, washing crockery.

Add to that the fact that I was getting married on June 1st, moving house, and hosting friends from Australia for 2 weeks after the wedding in the house that I hadn't yet even moved in to...I'm sure you can imagine the stress! I wish I'd known how to better prepare myself for the setbacks and have rally plans in place when I needed them. I wish I had been more proactive than reactive.

 

But there wasn't really a way to prepare well for the surprises? I couldn't have known all of the things I didn't know or wouldn't know.

 

4. What am I excited about?

Oh all of it. The potential is the most exciting thing.

It's also just the fact that I know that this was the last intense expansion project that will have the LenJo Bakes name. We have another unit (the one next to our OG location) that needs a bit of a freshen up (lighting, flooring, plumbing), but it will be NOTHING compared to this reno and it's not pressing.

 

I'm mostly excited to have a much lighter stress load. I've built it. Now I just need to make sure that everything is prepared for our customers to experience what it is we do - and I'm good at that.

 

OKAY! This was so long. Did you make it?

 

What about you? Have you thought about expanding your business? What are your fears surrounding it?

 

OR Have you already expanded? Answer the questions I answered below in the comments. We'd be so keen to hear from you!

Lenore
LenJo Bakes in Kitchener, ON
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@mksavage - Here's the whole story!

@PartyManiaMD - I think I eliminated a lot of the horror, but she's still in there lol

@ryanwanner @TheRealChipA @Twiggy @londontea @VanKalkerFarms @Bronze_Palms @Abigails_stl - wanna chime in?

Lenore
LenJo Bakes in Kitchener, ON
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@lenjobakes I’m so happy that your store 2 story had a happy ending! From all the convos we’ve had over the last few months, I was a little worried you were going to get run over by your contractors. I’m glad to see that you showed them who’s boss. 🙂

 

As for my store 2 story, well, let me just say that I think I’d break the profanity filter on this site if I said what I really felt. Oh well, live and learn I guess. 

Ryan Wanner
R&R Coffee Café
Golden Pine Coffee Roasters
Colorado Springs, CO, USA

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@ryanwanner Matey, same! There were multiple times over the last...year and some? That I thought it wasn't going to work out. From losing our 1st location, to not being able to find contractors, to not having funding come through when it was supposed to. It even looked like the expansion was going to tank our OG business, but thankfully, THANKFULLY it did work out.

 

I know your store 2 story didn't work out the way you'd hoped, but do you reckon the same inspiration/fire that had you seek out expanding in the first place will make its way back around again?

Lenore
LenJo Bakes in Kitchener, ON
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@lenjobakes  Probably not any time soon. That was a very expensive lesson I learned, and it's going to take a few years to stabilize my finances before I'd even consider an expansion.

 

What I did do, however, is do a focus on local farmers markets this year. I have a little one pound coffee roaster I converted to propane, and I go around roasting coffee at a couple of markets. It's really helped with the bottom line. I'm considering adding a few more markets just because of how successful it is. Even my youngest has been bitten by the booth bug: she demanded I let her make my coffee signage. 🙂

IMG_1217.jpg

 

Ryan Wanner
R&R Coffee Café
Golden Pine Coffee Roasters
Colorado Springs, CO, USA

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I'm not sure I'd ever open another party store, the climate for new stores as well as the current state of the industry makes it a super risky investment. Inventory alone requires a 7 figure upfront investment and the sales just don't justify that kind of inventory load.

 

While I'm grateful for the store I currently have if I end up adding another location to my portfolio it will definitely not be in the party business, most likely hospitality or a quick service concept instead, or a different retail concept. The party industry has a very interesting issue with inflation most other businesses don't experience which is that our stuff is considered "throwaway" which means people assume it's going to be cheap regardless of the cogs.

 

I hope the shed works out, at one point we had 4 stores (we're now back down to two), unfortunately covid and lease ending did 2 of the stores in.

 

Hindsight is 20/20, the biggest regret I have when it comes to opening a new location is to buy the real estate if possible. I know it adds a lot to the upfront cost but after 5-10 years you've basically saved money and you're not at a monthly risk of losing your business if it's slow.

www.PartyManiaBethesda.com
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I totally hear you on the initial investment and the state of the industry, @PartyManiaMD! Having a flagship with an ecommerce is definitely an option. I took a look at your website - you ever consider expanding your shipping to nationwide as an "expansion" instead of a physical store?

 

Oh, I've never been in a position to purchase the building, but I would have loved the opportunity to! Maybe I'll convince my landlords to let me in on half after a decade of renting 😂

 

My husband and I were just saying that if we opened something together one day, we'd want to own the land. The plan was a B+B or something like that for our retirement plan. I'm totally here for it!

Lenore
LenJo Bakes in Kitchener, ON
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Wow.  Now that could be the beginnings of a general blog conversation on the subject, @lenjobakes.  I’m very happy it has been an overall positive for you.  I’ll say that I will never expand or open another location, mostly because that is not a good idea when one has passed their 60-year milestone! Ha.  

 

If I were 30 years younger and decided I wasn’t quite insane enough yet 😂 I would definitely not do any manual labor myself.  I can’t very well hold my own feet to the fire to make things right, for example.  And, like you and paint, I now know that drywall installers are paid well because that is one of the worst jobs on the entire planet!  But, yes, I hate painting with every fiber of my being.  I’m glad you realized that opening a new location is just like starting over in so many respects.  You might have the basics down cold now, but you have different customers with different needs and tastes.  You might make the same mistakes again, but you will make different mistakes that you’ll learn from.  I remember when I was a chef and would change jobs.  It didn’t matter how much I know everything was different!  Starting a new location of the same business, seems like it would be no different.

 

And, I’ll echo @PartyManiaMD, I’ll never rent, except from myself.  Honestly, I hate landlords with a passion (and I am one.  Go figure! LOL)

 

I wish you well and all the best!  It sounds like a great start to me, bumps and all!

Chip

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Piper’s Ice Cream Bar, Covington KY USA
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Hahaha! Age is but a number, dear @TheRealChipA!

 

Appreciate your insights and reflection.

 

I want to know where you and @PartyManiaMD that purchasing your space is even a possibility! Banks would look at me and laugh laugh laugh!

Lenore
LenJo Bakes in Kitchener, ON
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Oh, I absolutely can't afford to buy the space, much less afford the rent LOL.

 

The problem with online shipping is that for mass produced products it's great to say oh yea just sell online, but once you factor in shipping there is literally no difference between company a, company b, and company 9,000 when it comes to online stores. It's incredibly difficult to build a brand or any loyalty online when you're competing against tens of thousands of other people looking for eyeballs. 

 

Don't get me wrong I'm no luddite and eventually I'd like to offer a shipping option, but our prices are consistantly cheaper than the big competitors because we don't ship. Once you factor in shipping costs, porch pirates, lost packages, damaged packages, return process, it quickly drives up the cost of doing business to an unsustainable level.

 

That's why amazon consistantly gouges in our industry, a pack of candles for $2 in our store is $6-8 on amazon for instance, it's insane considering at $2 I have plenty of margins.

www.PartyManiaBethesda.com
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Of course, @PartyManiaMD! There's always something else to consider - I didn't even think all of those "hidden" fees 😱

 

I'm glad that at your local level you're having the impact that you want/need! At the end of the day, that's all that matters.

Lenore
LenJo Bakes in Kitchener, ON
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@lenjobakes ahhhhhh just finding a space has been 2 years - and then Daphne's health condition (she is finally regaining feeling in her feet and is walking!) has us a little petrified to expand. We are reconsidering construction here at our existing space because we just don't know if we can or want to do the 10 + 8 hour shifts again after everything that has happened to us. The construction, delays, contractors, we spent 8 months with architects and meeting with the board on a space only to have the landlord put it up for sale...and I LOVED it. Now I just don't know what to do 😲

Deanna [they/them]

MudFire CEO | Square enthusiast

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thank you for sharing your story with us.

Dina
Co-Owner Amityville Apothecary
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Absolutely loved reading this @lenjobakes! Thank you so much for taking the time to put it all into words! I laughed, I commiserated, I was inspired... (if you ever decide baking's not for you, I think you could have a successful career as a writer!!)

 

I had no idea that The Shed started as an actual shed... what an incredible story. I love seeing how you seized opportunity as you came, confident in yourself that you could make it happen (even though I know it wasn't always as easy as you make it look). 

 

It's incredible how quickly all of this has happened -- it's a testament to your tenacity, talent, the team you've built! I can't wait to follow your story as it continues to unfold! I've already learned so much from you.

 

Also, I super admire your ease of being, sense of humor, and balance between levity and grit  -- such a beautiful way to be in the world, and super inspiring. 

 

We have our own tale of opening a 2nd location within a year of opening Savage Goods, although it was a completely different concept, which I think was unwise at that time. I'll save that story for another day though...it was short-lived, a painful experience, and hard-learned lesson...but a journey that I think we needed to walk. And we learned SO much. But, for now, I'm technically on maternity leave (just waiting for baby to make her arrival!), and I really need to stop checking my email, haha.

 

Thank you again so much for sharing your story, for the laughs, and for pulling out the lessons at the end -- loved this!

Michelle Savage
Co-Founder & President
Savage Goods | @savagegoods | savagegoods.com
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