Betting the farm on your customers
Organic dairy farmer Dante Hesse is hoping the customers who lap up his milk by the quart at local New York farmers’ markets will also invest in his future.
What started as a series of “low key” one-on-one conversations with customers at local farmers’ markets near his Ghent, New York farm, has escalated into a serious attempt to raise $850,000 – in as little as $1,000 increments – directly from his dairy-loving consumers.
“I learned pretty quickly that there was a lot of interest, but I also needed to find some council who could tell me how to do this legally,” said Hesse, who founded Milk Thistle organic dairy farm with his wife, Kristin, three years ago. He intends to use the bulk of the money to build an onsite processing plant that will help him ramp up production and diversify into making other milk-based products like yogurt, butter and ice cream.
“If it has to be 850 people at $1,000 each then that’s what we’ll have to do and I think we could get it,” said Hesse.
Hesse knows the math behind the milk and feels if he’s properly capitalized, he can move into more “value-added” products like butter, yogurt and ice cream, where the gross margins are 20-30 percent higher.
According to the Organic Trade Association, sales of organic milk in 2007 totaled more than $1.3 billion in the United States. While organic accounts for just 3 percent of the U.S.’s total milk sales, it has been growing at an annual average rate of more than 20 percent over the past decade (last year it dipped to 10 percent).
What’s next for Cubes & Crayons?
After the birth of her first daughter, Felicity Chapman decided she would only work part-time, but found it all but impossible to juggle both her clients and childcare. Chapman knew she needed to find some flexible childcare that would allow her to accommodate her clients’ needs, without shortchanging her daughter.
“I didn’t want to leave her with just anyone and I couldn’t tell my clients that I can only come from Monday to Wednesday from 9-12, because that’s the only time when I have childcare,” she said, echoing the sentiment of many working mothers. “I thought there has got to be a better solution.”
The seed that began as a line in Chapman’s notepad has grown into Cubes & Crayons, a hybrid business offering moms a place where they can literally take their kids to work.
One part office space provider and one part daycare, Chapman believes her Silicon Valley-based business is the answer for working moms, or dads, who are finding it impossible to get the job done from home and look after their children at the same time.
Not one to rest on her accomplishments, Chapman has an ambitious plan to expand Cubes & Crayons in 3 to 6 more cities over the next 18 months. San Francisco is first up, with other possible locations in Austin and New York.
A smart out of the box thinking entrepreneur, what a clever idea to use your products to build trust in the business and to raise cash.