Dumping Startbucks Can Be A Good Thing For Your Biz

NicheGeek:

Like many entrepreneurs, Jim Christy set out to boost revenues by reaching a bigger market. But the founder and CEO of Incredible Foods, a dessert delivery service in Gibsonia, Pa., soon found that bigger sales don’t necessarily equal better business.

Christy, 55, was inspired by a San Diego bakery’s cheesecake. He bought a slice during a West Coast jaunt in 1994, and found love at first bite. After ordering 30 more cheesecakes from the same bakery, he launched Incredible Foods to sell the pastry to local food vendors in Pennsylvania, his home state.

The business soon expanded beyond its flag-ship product, landing accounts to provide universities, hotels, and restaurants with everything from tortes to Danishes. Christy hired outside drivers who delivered his sweets across the state.

Incredible Foods quickly landed one of the biggest accounts of all: Starbucks.

“They were opening new stores in northeast Ohio and Pennsylvania in 1998 and wanted me to distribute a single product, a crumb cake,” says Christy.

But as Starbucks locations multiplied, Christy’s workload ballooned. Revenues reached $3.4 million in 2005, but soaring overhead wiped out Christy’s profits. Read more.