“A lot of small businesses die because they’re trying to grow so fast.”
Marshall Rader, co-founder of The Gluten Free Bar (GFB), knows how to grow. His company was on pace to increase revenue by 300% in 2014, and projects to continue at that pace for the next three to four years.
How did he do it? By starting out modestly. A lot of businesses will spend years perfecting a business model or debating packaging. While that’s a viable option, depending on how much capital you have and what your goals are, it wasn’t the path Marshall wanted to take.
We spoke with Marshall to learn how taking feedback from distributors, providing exceptional customer service and keeping distribution in-house turned The Gluten Free Bar into a successful product line.
Bootstrapping Growth to Fuel Feedback
Marshall and his co-founder and brother Elliott started out modestly, using between $10,000 – $20,000 of their own money to get off the ground. While their packaging wasn’t perfect, they believed in the integrity of their product. Marshall was confident enough to take small batches of their gluten free protein bars directly to distributors. This strategy allowed them to get valuable feedback quickly, helping them finalize their product formulas more efficiently without requiring a large infusion of capital.
“I just wanted to make the product, get it out there, and get feedback on it,” explains Marshall.
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Bootstrapping growth forced Marshall to listen closely to their customers, fail fast and adapt quickly after receiving feedback.
“You really have to force yourself to be thoughtful about all your decisions, that’s kind of an advantage of not having money,” Marshall explains. “Otherwise you can get careless.”
Bootstrapping doesn’t allow for the financial freedom to try a lot of recipes or distribution options when starting out. The GFB team followed the lean startup methodology of build, measure and learn, ensuring they could iterate on their product based on customer feedback without losing large amounts of capital up front. While self-funding worked for Gluten Free Bar, Marshall recognizes the advantages and disadvantages of this tactic.
“We’ve made mistakes along the way, but the mistakes have been fairly small in the grand scheme of things because we made the stupid mistake on the $100 order not the $10,000 order. That’s an advantage of going slower, because you make the mistakes before it really counts. And we still make a lot of mistakes today,” Marshall laughs.
To continue minimizing their mistakes, Marshall seeks out advice from as many sources as possible. Early on, he would turn directly to their distributors to learn more about their preferred process.
“They [distributors] would say ‘Hey, can you send me your spec sheet?’ and I’d ask for an example of what they’d like to see,’” says Marshall.
Asking for direct information and feedback helped cut down the amount of time spent debating everything from taste to packaging and distribution.
“You can debate virtually anything for an endless time period,” Marshall states. “I think it’s better to just launch [your product] even if it’s only 80% there to get feedback and tweak it.”
Customer Service is Key
Once a company has secured their first customer or distributor, it’s critical to share that success story with potential customers in order to further fuel growth. Marshall and his team built out their distribution regionally for that reason, taking advantage of the name recognition of distributors and stores in those areas. This increased their ability to show success and create buy in of the GFB product.
The importance of creating a success story can’t be overstated but it’s not always easy to identify what makes your business unique. In Gluten Free Bar’s case, they differentiate themselves through superior customer service.
“We do a lot of things that our competitors won’t do,” says Marshall.
For example, when you order a box of bars online GFB allows you to mix and match flavors for the same price. Not many other manufacturers offer that level of customization. To set yourself apart, consider ways you can offer these types of perks to your customers to help build brand loyalty and satisfaction.
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Gluten Free Bar also offers smaller shipping minimums, making it easier for local shops to carry the bars. If a small coffee shop wants to carry Gluten Free Bars, the low free shipping minimums and quick turnaround times help make that happen.
“We promise to ship everything in 24 hours or one business day,” explains Marshall. “We’ve got a bunch of coffee shop customers in Chicago, so if they place an order on Monday at 2 o’clock, they’re going to get them Tuesday morning or Tuesday afternoon.”
That dedication to customer service helps Gluten Free Bar set themselves apart from the larger, more well known brands available. In this case, being a smaller brand allows them to be more nimble, taking risks and doing things most competitors can’t.
“We do everything in house, so that allows us to provide the customer service that is just too expensive for our competitors to provide,” Marshall elaborates. “Basically, that means we have to invest more capital up front, but hopefully get a better return on the back end.”
In House Production Ensures a Quality Product
Having full control over production, even at a higher cost, is the only way Marshall believes you can consistently produce a high-quality product. When Marshall ran into challenges finding quality manufacturing, he chose to open his own facility in Grand Rapids, MI, where he and his brother grew up. Although many competitors in the food manufacturing industry choose to outsource their production, GFB chose long-term rewards over a short-term payout.
“Most companies like us come up with the product and end up finding someone who can make it for you. Long-term, we thought the better strategy was to make it ourselves,” explains Marshall.
Outsourcing can result in a low cost operation, but it can also result in a loss of control. If a brand operates out of a small office in one location, but has a manufacturing facility in a different state producing the product and yet another company filling and shipping orders, there are a lot of opportunities for mistakes to be made. If you’re a smaller company, and when you may not be a top priority for suppliers, it’s even harder to remain in control of your products.
Now that Gluten Free Bar manufactures in house, it’s more of a challenge to keep up with operations in order to make a quality product. Marshall worked with a former Chicago pastry chef to create the bars with an emphasis on taste and ingredients and makes it clear that they don’t try to formulate their bars to meet specific nutritional requirements.
“If you look at some bars, every bar is magically 20 grams of protein and 220 calories. That doesn’t happen by accident,” Marshall elaborates. “In ours, the oatmeal raisin bar is 220 calories and the cranberry almond is 225 or 230, based on how we wanted it to taste and what ingredients we used.”
Looking Ahead
Marshall operates with the vision statement that Gluten Free Bar will become the recognized leader for the best tasting gluten free, high protein snacks.
“That’s pretty lofty, but if we’re not trying to be that, we’re just satisfied with being mediocre,” sums up Marshall.
You can currently find the Gluten Free Bar in about 3,000 stores, about 80% of which are in the Midwest or Northeast. Later in 2015, Marshall will begin working with a national distributor, and expects the number of stores where you can find the Gluten Free Bar to quickly increase.
This article originally appeared on The Vault on Bolstr.com.
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