‘Laine’s Bake Shop is an artisan baking company with a social mission. Right now about 70% of our business is wholesale. We supply companies like Starbucks and Whole Foods with artisan, baked-from-scratch goods. We exist to connect people through authentic, good food as a way to revitalize urban communities, starting with the south side of Chicago. We have a three-pronged approach to achieving that mission, and we believe adhering to our mission will make us more profitable in the long term. There’s a common misconception that making an impact and making a profit are mutually exclusive, thankfully the data shows that the converse is true. We are part of a movement of socially conscious companies seeking to make money while changing the world.

It’s mostly wholesale right now because we don't have a retail outlet. We still get about 25% to 30% of our business from retail customers. We are a full-service bakery, so we do everything from breads to cakes and pies. The items that we wholesale include traditional cookies, but we also do unique flavors like an oatmeal rum raisin cookie or bourbon caramel thumbprint cookie. We also have a red velvet cheesecake brownie that we wholesale to Starbucks. Outside of the normal bakery goods like cookies and pies, we do custom work. We do corporate gifts for organizations like The Obama Foundation, McDonald's, Google, and YouTube, crafting neat cookies and treats with their logo on them for different events.

My degrees are in finance and accounting.  Most recently, I worked in the financial services group for a Big 4 accounting firm doing tax compliance for private equity companies. While I was there, I baked as a form of stress relief. I would bake and decorate things, and I'd bring them into the office just so my husband and I wouldn't eat them all. I thought maybe when I retired I’d start a bakery. My colleagues would often ask why I didn’t launch a business crafting baked goods, and I’d brush them off saying that’s probably the worst reason to start a business, just because you have a craft that you enjoy. I decided to launch the company to test the marketplace. The first event that I participated in was a community revitalization effort in my neighborhood where a vacant storefront was turned into a shopping center for a weekend with booths from a variety of small businesses. At this pop-up event, someone who tasted our product said Whole Foods was looking for local vendors and they wanted to connect me to their team. Whole Foods partnered with a local community development non-profit to offer a three-month training series for small businesses that were interested in working with them. I followed through on this suggestion and participated in the entire series. At the end of the event, I got a meeting with the bakery buyer hoping to get into a store they were working on opening in a year. The buyer loved our products and said they were ready to bring us on board immediately. We started off with one store in September of 2015. Several months later, Whole Foods helped introduce us to Starbucks when they were looking for a local pastry provider. After a few months of onboarding, we started to supply our first Starbucks store in September of 2016. At this point, we were in all of the Whole Foods stores in Illinois. Throughout this time, we continued to hold pop-up events which helped develop our base throughout Chicago. We also received some organic press partly because of the work we were doing with Whole Foods and Starbucks and partly because our social mission resonates with a lot of people. As a result, we developed a base of people that aren't just customers but are also ambassadors for our brand.

The first year I worked full-time on the business was 2016. I worked out of a shared kitchen, so our capacity was very limited. We ended 2016 with sales of just under $100,000. In the middle of 2016, we moved into our own facility. Last year our sales were a bit over $160,000. We're still pretty constrained because our facility is just a little over one thousand square feet including storage, office space, and production.

We currently produce almost everything to order due to our limited cash flow. We have standing ordering schedules for Whole Foods and other wholesale customers. Most of our wholesale clients have between one and two ordering days per week.

On the wholesale, side our three biggest customers are Whole Foods, Starbucks, and a local restaurant. On the retail side, our customers include the base we cultivated with our pop-ups, people who have read about our story, and people who taste one of our items at one of our wholesale partners and reach out to try additional things from our menu. Our customers tend to be very interested in natural foods, unique offerings, and our social mission.

We search for the highest quality things we can get our hands on. That’s all that goes into our cookies – no mystery ingredients, no preservatives, no artificial coloring. When we're able to connect with the employees or families behind our suppliers, sharing those stories with our customers has been something that has resonated with them. We also work really hard to create new twists on classic flavors and innovative flavors that set us apart.

We are trying to position ourselves on the wholesale side as the premier artisan baking company. When companies like Whole Foods are looking for something that is natural without any preservatives and meets their strict guidelines, we want to be their go-to business. On the local side, our two biggest competitors are Jennie and Vera's Cookies and Simply Delish. They are the two other Illinois-based companies supplying cookies to Whole Foods. Then on a national scale, you have Carol's Cookies, Gianna's Homemade cake, and Tate’s Bake Shop. Those are some of the companies that we track and compare ourselves against.

There are two things that make us stand out from the competition on the wholesale side. First is our approach to partnering with our retailers. Our cookies in Whole Foods, for example, are on their cookie stations. Generally, people just go there, pick up cookies, and are not going for specific brands. We've taken a different approach. We tell our customers what our cookies look like, so if they talk to the people in the bakery they’ll show them which ones are ours. We actively drive traffic to those stores, and then we work with the regional marketing team to develop support strategies. Instead of just putting the products there, we want to make sure the product is moving, whether it's passive sampling or demos. Those kinds of wrap-around support services help us stand out. Instead of going to Whole Foods and saying we have a chocolate chip cookie, because we know you can get that anywhere, we say we have this chocolate thumbprint cookie that's filled with a bourbon caramel sauce. We have a twist on the oatmeal raisin cookie that is an oatmeal rum raisin cookie. We're talking to the people in the stores to find out what their customers are looking for. It helps that companies are looking for local products. We are really focused on operations and scaling our company, which makes us a great partner. A lot of companies that have local programs lose money on those programs because they are working with a lot of small vendors. The fact that we come in armed with our financial and sales reports and are able to talk with companies about our experiences makes us stick out to our wholesale customers. The second way we stand out from the competition is product differentiation. We continue to bring unique flavor profiles to the marketplace. We are not allowing our products to get stale, and we are continuing to work with our wholesale partners to make sure we're bringing them products that are the best fit for what their customers are looking for. So far, these strategies are paying off. Starbucks invited my husband and me out to its headquarters in February of 2017. While we were there, we actually had the opportunity to sit down with Howard Schultz, the founding CEO of Starbucks, and talk to him about our company. He sent us to two bakeries that carry his favorite non-Starbucks pastries. He encouraged us to create items like these. We took that advice to heart and visited both of those bakeries and have even finalized one of the products that he mentioned.

That question gets to the story of why the company is 'Laine’s Bake Shop when my name is Rachel. The quick story is that there are three ’Laine’s in my family. My grandfather is named Lane, and he grew up on the south side of Chicago. He's the one who was always telling me stories about how the south side of Chicago was once a thriving epicenter of commerce and culture. He planted the idea that revitalizing urban communities was something that could be done. My mother Elaine was named after him. She homeschooled me and taught me to bake. My mom taught me my fractions with a brownie recipe, which was the first time that I liked math, so people always joke that both of those lessons stuck because I grew up to be a baking accountant. I'm Rachel Elaine, so I'm the third ’Laine in the series. I've been baking with my mom, my grandmother, and other family members for as long as I can remember. It's something that I've done for fun since I was a kid. I've been selling baked goods pretty much my whole life, but I don't have any classical training. I learned how to decorate cookies and cakes by watching YouTube videos and have honed my skills over most of my life even though I was not initially planning to bake professionally.

Our success is based on starting with great food, focusing on operations and efficiency, continuing our relationships with our core customers, and pursuing relationships with new retailers and food service clients. To do this, we need to open in a space that allows us to produce enough food to fill the demand of our customers. We also need to diversify our base. Right now we're very heavily concentrated in Whole Foods. That relationship is great, but we need to make sure that we have other key anchor clients so that ‘Laine’s remains stable if our partnership with Whole Foods changes. Our goal in the next 18 months is to bring on four to six additional anchor clients. One of the big issues that has impeded our ability to raise capital is that even if you have a demonstrated history with a company, a bank isn't as comfortable with that as if you have a contract. Most stores only offer a contract to farmers or anyone who has a long lead-in time to produce their product. Everything with Whole Foods and Starbucks is ordered on a weekly basis, and it’s the same with our restaurant clients. With food service you can get contracts, however, because of our limited capacity, we haven't been able to go after these food service contracts. So we've identified a new production space to increase our capacity, and are working to position ourselves for this necessary diversification.

We have a lease signed for a production space that is more than three times bigger than our current space, plus it has a full basement we can use for storage. It's within a bigger building, so there's space next door that we can expand into in the future. In terms of our capacity, industry experts who work in the food manufacturing space think our maximum output capacity in that space is between $4 million and $4.5 million. It gives us plenty of room to grow. We are also working to identify suitable co-packers because if Starbucks said they want to take our red velvet cheesecake brownie national, for example, we could not do that in this production facility. Cultivating these co-packer relationships is key so that once one of our products is positioned to grow quickly, we can produce that outside of our space while we work to increase our internal capacity.

Our mission is to be a catalyst for revitalization in urban communities, starting with the south side of Chicago. There are three ways that we try to approach that mission. The first is with the people we hire. We've partnered with two nonprofit organizations with job-training programs that specifically reach out to individuals who have been chronically unemployed. Some of them have been incarcerated, some of them have been homeless, some of them might have had a substance abuse problem. The programs allow them to obtain their food safety certifications and puts them through a rigorous training program where they learn everything from production and food safety to conflict resolution and personal finance. Once they graduate, the program provides us with a pool of candidates that we can hire from. We do that because of the impact it has on the community and because it tends to be more cost-effective than creating an internal recruiting and full-time training program. Turnover is also significantly lower with graduates of these programs.  The second way we accomplish our mission is through our purchasing. We try to purchase from companies that share similar values to us. We also try to work with companies that are employee-, family-, women-, or minority-owned. The third piece of our mission is our Community Partner Program.

Our Community Partner Program is the third way we work on our broader mission of helping revitalize urban neighborhoods. Chicago gets a lot of flack for crime and violence. I decided to look into some of the underlying issues that drive crime and violence. What can we do to directly impact those things? What organizations are out there doing meaningful and measurable work in these areas? I found nonprofits that were doing that work, and then looked at how we could support them. The crux of the community partner program is our loyalty program. We've set up our loyalty program so that whenever someone joins it, they get to pick which of these organizations they want to support. Anytime they make a purchase, a percentage of those proceeds are donated back to that organization. The organization, in turn, refers customers to us because it's fundraising for them and because we're amplifying their impact and their voices. The program has been on pause because we don't have the retail space right now. The loyalty program is not active but the structure is already in place.

That program will always have a hyper-local approach. It's something that can be replicated in other markets, but by its very nature it's not scalable in the traditional sense. The parts of our mission that are scalable in the traditional sense are the hiring programs and who we're purchasing from. We see the community partner program growing if we create additional retail shops in the future. This is something we're planning to do in the next two or three years. We can duplicate the community program throughout Chicago and in underserved communities where demand for a bakery and cafe is not being met. Maybe down the line, we can do that in other cities, but that's not really our focus.

We like crowdfunding for two reasons. One reason is that we've successfully done it twice before on a much smaller scale. The second reason is that we have customers come to us all the time saying that they want to be a part of what we’re doing and asking how they can invest in the company. Because our customers tend to already be brand ambassadors, we think this provides a great opportunity to raise money from the broader community and from people who believe in what we're doing and want to play a role in it.

One of my biggest fears is that because we've been undercapitalized for so long and haven't been able to grow as fast some of our partners would have liked that we could lose out on an opportunity because we're not financially prepared for it. We've done a lot with very little, and we're proud of that, but it concerns me that we might not be able to get the pieces in place as quickly as we need to and keep up with partners that can be very demanding at times.

We were recently awarded a non-recoverable grant by the city of Chicago to go towards the build-out of our production facility in Chicago’s Woodlawn neighborhood. The grant covers about 50% of our building expenses. To receive the grant, we must contribute $140,000 to the project. The first $140,000 of funds from this raise will go into our construction escrow account where the City of Chicago will deposit the remaining funds and construction will begin on the project. Currently, our architects and engineers are finalizing the plans so that we can submit the project for permit this month. We plan to begin construction in June of 2018 and estimate that the project will take 5-6 months to complete.

I'm Rachel Bernier-Green, the CEO. My responsibilities are overall strategy and execution, operations, infrastructure, capital generation, financial reporting and analysis, training and development, and more. Then there's Rebecca Cortes. She's the Director of Retail Operations. She is responsible for operations (design, infrastructure, marketing, hiring and development, reporting) and sales for retail stores, farmers markets, catering, and online sales. Elaine Rodgers is our Production Manager. She oversees production, inventory, and ordering.  Jaryd Bernier-Green is in charge of sales. He's the account manager for current channels and manages sales in wholesale and food service. Darryl Cheeks is the CEO and Managing Partner of Black Rhino Financial Group. He will serve as our virtual CFO. He has deep food manufacturing expertise. He helps with business strategy and risk management, bookkeeping, financial statement compilation, operational reports and operating budgets, budget variance analysis, payroll processing, and tax filings.  Amber Johns and Mary Vendiola will be our general counsel at Jackson Corporate Law. They review contracts and leases, legal structure, intellectual property issues and filings, HR, and employee manuals.  Andrea Keirn and her team at Black Rhino Marketing will act as our marketing professionals. They study brand identity and help with strategic business planning, analytical reports, digital marketing, and social media. Thea Polancic is a Leadership Development Consultant at Clear Space Consulting. She will provide leadership development, culture strategy and execution, and executive coaching. Then there's Monica Chadha, who is an architect at Civic Projects Architecture. She is the architect and consultant for the build-out of our production facility in Woodlawn.

One thing that's been key to our success thus far is the fact that I have a background in accounting and finance and I’m focused on operational efficiency and scalability. That’s not to say that I know it all, but I'm acutely self-aware and know enough to know what I don't know, and surround myself with people that can fill in the gaps. When compiling the appropriate team to take our company to the next level, I tried to make sure that the people we're bringing in don't just have general product development knowledge or general startup knowledge, but that they have knowledge focused on food companies, social enterprises, and/or profitable scaling. After months of vetting candidates, I have pulled together a team that has repeatedly demonstrated that they can help companies of our size profitably scale. I'm also an alumna of the Good Food Business Accelerator out of the 1871 Accelerator here in Chicago. I have a mentor that works with me, and I also have access to a variety of people in my cohort who have created food companies and have successfully scaled them. That provides me with a wealth of resources, including people with connections to distributors and additional outlets to sell our products. They also offer support services to make sure the infrastructure that we're building can handle that scale. In addition, people interested in investing with us believe in what we're doing and our company's mission. They've seen what we've accomplished so far and the impact that we've made. If we continue to do that, then I think they'll continue to set me aside with potential partners and potential investors.