[52 Weeks - Interviewing Australian Entrepreneurs] Week 2 - Kelly Baker

[Clayton Ford]

For my second interview, I was pleased to sit down with Kelly Baker, founder of Brisbane based edible gifts company, Edible Blooms. Kelly formed Edible Blooms twelve months ago and now employees ten staff in stores in Brisbane, Melbourne, Sydney and Adelaide.

Personal background
Kelly knew she wanted to start a business from an early age, but felt she needed a strong foundation of corporate experience and university education before doing so. To this end, she completed a Bachelor of Business (major in Marketing) and a Graduate Certificate in Business Administration and began her career as a receptionist, going on to work in marketing, PR and professional services.

“I always wanted to [start a business], but I also knew I had to put in a lot of time working for other people so I would have the right skills behind me before I could do it myself”, she says. “I’ve always been someone who likes to put in extra effort, I’m not happy just to work nine to five, so if I’m going to be like that I may as well do it for myself” she adds.




Kelly (right), with Brisbane staff member Lauren Ford
Kelly comes from an entrepreneurial family based in rural South Australia and from an early age her parents taught her to approach problems and opportunities creatively. Her uncles were also a positive influence, as founders of the Southern Hemisphere’s biggest exporter of hay, Balco.

Kelly sees herself as someone who readily takes on risks, saying “the worse that could happen is that I would have to get a job working for someone else and that’s not the end of the world”.

Recognising an Opportunity
The inspiration for Edible Blooms came to Kelly when was travelling overseas. “I saw the concept of fruit sculpture as a gift. I thought it was a great idea but it could be done better”, she says. On returning to Australia she set about researching, improving and adapting the idea to Australian tastes. Three months later, Edible Blooms was born. Starting with fruit and soon expanding to chocolate, Edible Blooms now includes cookies amongst its product range.

Developing the idea
Kelly originally conceptualised Edible Blooms as online focused, rather than the retail shopfronts that have developed over the last 12 months. “When I first started I thought I wouldn’t go into retail [but] the business model has changed. Now we have a lot of people coming to visit us. People like to be able to come and touch and feel. There is also a greater portion of Internet sales than I imagined. You never know exactly how it’s going to turn out, you have to tweak it and grow with the opportunities that come along.”

Launching this month is a spin off company called Edible Promotions, specialising in edible corporate merchandise. “Once you are in business, new opportunities present themselves”, Kelly says.

Finance: Making it Happen
Kelly was able to fund the opening of the first store with her own savings and money contributed to the business while still working as a consultant during the start up phase. In all, she estimates Edible Blooms was born on approximately $100,000.

The Brisbane store (pictured right) opened in September 2005, then came Adelaide, opening in January 2006. The Sydney store opened in May this year and Melbourne followed on 2nd October.

Since opening the Brisbane store in September 2005, expansion interstate and further growth has been funded exclusively through money generated from the stores. “I’ve been approached by several investors, but so far it’s all mine and I don’t really want that to change in the near future”, Kelly states.

Part of the detailed business plan Kelly devised for Edible Blooms included her exit strategy. Now, one year into that plan Kelly is reconsidering her options, “I had an exit strategy [to sell], but whether I do or not is another thing because I really love the business!”

Marketing Research: Window to the World
Edible Blooms focuses on two key groups of clients, namely corporate buyers and general consumers. In the corporate market, Edible Bloom concentrates on executive assistants and marketing staff “because they are the gift purchasers for the company” Kelly acknowledges. Amongst the broader consumer market, customers are typically females aged 25 – 40 years. Coming from a marketing and PR background, Kelly was able to base her market estimations more on intuition and “gut feel” than on hard data.

As far as expensive advertising budgets go, there has been very little outlay. “Because we are so different, word of mouth has been fantastic for us”, she says.

Turing back the clock would give Kelly a chance to look at the business differently. “I wouldn’t spend any money on advertising. I think it was a complete waste of money”, she says. “If you have hundreds of thousands of dollars it will work, but I believe in guerrilla tactics” she adds. An example of these tactics was using life-sized strawberries to hand out brochures in Sydney to promote the new store opening.


Strategy: Keeping Ahead of the Pack
The plan for Edible Blooms was always to capitalise on their first mover advantage. “Growing quickly was a key strategy”, she says. To do this Kelly needed to rapidly establish the brand in capital cities and build efficient systems with competitive pricing structures. “I thought, this is something people are going to want to copy, so I have to be the best” she says. “We are so far ahead now, for anyone to try to copy us (without a lot of money behind them) would be very difficult”, she adds.

The downside is that it can be expensive being first, as consumers have no knowledge of your product. “The first mover disadvantage was needing to educate people. You either have to spend a lot of money or be prepared to be patient”, she says.

As for the future, Edible Blooms are keen to keep expanding, “We are already looking for locations for next year” says Kelly. For now though, the company is allowing six months to consolidate existing stores before opening any new ones. This time will be spent continuing to improve systems and processes.

To ensure a consistent consumer experience, all Edible Blooms stores are equipped with a detailed instruction manual. Called ‘The Fun Philosophy’, it is key to improving systems and processes and also represents the environment Kelly wishes to foster. “It’s designed around creating a work space that’s fun, bright and vibrant. If my staff have fun at work it’s going to be a fun experience to buy from us”, she says.

Locating new retail stores (like Melbourne’s Prahran store) close to fashionable shopping strips but not on them, is another of the smart strategies Kelly employs. “We don’t go for high street retail, that helps keep costs down”, she says.


Staffing Matters
In staff, Kelly looks for the right kind of people above everything else. “I put emphasis on personality rather than skills because you can teach skills”, Kelly says.

That being said, Kelly doesn’t under estimate the responsibility of being an employer or the fine balance that needs to be maintained with staffing levels. “One of the biggest challenges is getting your human resources right. You can’t afford to have people standing around doing nothing but you have to have enough people to provide the level of service you want”, says Kelly.

Kelly decided early on she wanted to retain control of the business as it grew, so rather than consider franchising she instituted a profit sharing model with her store managers. Store managers have a stake in the profits of their store and run it like their own business. “They watch costs and look for new ways to bring in revenue”, she says.


The Ups and Down
Asked what she likes most about running Edible Blooms, Kelly says it is the positive, feel good nature of business “Every day we are putting hundreds of smiles on people’s faces” she says.

The flipside of this for Kelly is finance and administration. “I have to lock myself in the office to do it” she laughs. While Kelly acknowledges finance is not her strong point, she has concentrated heavily on getting it right from day one. “The failure of a lot of small businesses is that they don’t watch their cash flow. They start spending money before they have it coming in.” she says.

A recent highlight came after opening the Melbourne store. Kelly received a personal thankyou note from Boost Juice founder Janine Allis after receiving her delivery of an Edible Bloom. “She is someone that I admire. I think she is an amazing businesswoman and that was a real buzz. I have the note pinned on my noticeboard in my office!” she laughs.



Edible Blooms Brisbane staff with Channel 9's 'The Shak' crew

As for sacrifices made, these mostly come down to time. In fact, Kelly became engaged early this year but due to commitments to the business she hasn’t even had a chance to start planning for the wedding. “Time’s pretty precious when you don’t have much of it” she laughs.

Kelly has also established links with the not-for-profit sector, having formed a relationship with the Wesley Research Institute in Brisbane. Working with the not-for-profit sector allows Kelly to build close ties with the community in which she operates. “It is about being in business to make money but it’s also about making a difference”, she says. In exchange for valuable exposure, Edible Blooms donates portions of Internet sales to the Wesley Research Institute. “It makes you feel good about being in business” she adds.


As entrepreneur with a social conscience Kelly offers these words of advice in closing, “Remember to have fun along the way. Everyone has bad days but they make the good ones seem even better ”, she says.


Kelly Baker’s Top Tips For New Business Owners

Definitely Do:

• Have a business plan and regularly update it.
  
• Employ good people you can trust.
  
• Be prepared to put in a solid two years of commitment before you will see the rewards.
  
• Seek advice from an accountant early on the best way to structure the business.
  
• Spend time networking.
  
• Outsource non-core activities where necessary.
  
• Have community partners from the beginning. Be prepared to support not-for-profit organisations.
  

Definitely Don’t:

• Don’t rush into employing staff. Staff represent a big cost to a small business and are a big responsibility. Give the business a chance to grow first.
  
• Don’t think you necessarily need to spend a lot on advertising. Think creatively and use word of mouth to your advantage.
  
• Don’t expect staff to do anything you wouldn’t do yourself.
  
• Don’t forget to have fun along the way.
  

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Posted By Clayton Ford to 52 Weeks - Interviewing Australian Entrepreneurs at 11/08/2006 09:30:00 PM