Post Interview Summary for The Pantry Concept, a retail grocery store startup

Opportunity

  • New grocery store concept popular in Europe and other countries coming to the U.S.
  • Based on trends in sustainability, zero waste and locally sourced

Pros

  • Founder has done significant research and is modeling from established grocers in Canada, Europe and South Africa
  • Offline retail continues to grow (5 new stores for every 1 closing – 2018) – there is always room for new concepts that prove out

Cons

  • Hard to test this concept out without spending significant amounts; just need to open a new store and test and iterate from there
  • Team with no prior grocery or retail store experience

Basecamp InQb8r Suggestions For Growth Plan

  • Determine existing customer personas that work with this model outside of the U.S. and try to extrapolate for the U.S. – select location based on where they are located. Do these personas want in-store sitting area/coffee bar, kitchen with fresh prepared foods, community room, delivery, etc?
  • Copy what works already in grocery (processes, systems), especially for supply chain and inventory backend – get this right because it can break you if there are problems; hire someone with experience in this area. No need to reinvent the wheel.
  • Partner with local businesses and neighborhood/community groups for offline promotion. Online currently saturated and offline may work better.
  • Hire such that the founding team has consistent time each week to do marketing and promotion (test, analyze, make changes, test again). It might take time to figure out what works with this grocery concept so build in time and funding to give the runway to do that.
  • Collect as much data on your customers from the start – who they are, what they buy, when, how often, why the visit, etc…this will help in fine-tuning your offerings, targeted marketing and supply chain optimization. Lean towards making the investment now for robust data collection systems that will scale with you – it can pay substantial dividends later.

Video Interview

Audio Interview

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Interview Transcript

Ed Soehnel 0:00
Okay, I am with Marcel. Her company is the pantry concept. It is a store packaged, free food store. She joins us from Kansas City, Kansas. Marcel, welcome. Thank you for coming.

Marcelle Clements (Guest) 0:16
Thank you for having me.

Ed Soehnel 0:19
So, tell me more about your your concept your business. What is it? Give me some sort of quick little descriptions of what you’re doing with that.

Marcelle Clements (Guest) 0:31
Okay, yeah, the pantry concept is based in Kansas City. It’s the first in Kansas City and zero waste food stores already. Plastic free bulk stores where you can buy a lot of locally sourced goods to reduce the carbon footprint of food traveling and also to promote local, you know, farmers and food makers. We’re getting food that’s pesticide free, and basically just gives people the option to one buy food in bulk without any packaging. So everything sold by weight, and then also gives people the option to refill a lot of their items like soaps, Venegas oils, like zero waste, is just trying to remove plastic packaging from our food as much as possible.

Ed Soehnel 1:31
is this kind of like a grocery store concept where you’re going to have you know, a lot of the fresh stuff as well as a lot of your sort of center aisle, you know, package or durable related goods products,

Marcelle Clements (Guest) 1:44
right it is it’s going to be sold the dry goods, that’s you know, quite a large selection of dry goods, anything from Kanwar to omens. NET stations where you can run your own almond butter and peanut butter. And then yeah, food, you know, food fridges, all milk and butter and things like that. You’re good. And then we’ll have we’ll have a fresh project section working with local food growers in Kansas City.

And we’re also going to be a CSA a pickup point. So corporate or CSA is customer supported agriculture. And that’s quite huge in Kansas City. So will be as soon as a pickup location so people can support one of the farms is the roots for refugees farm, and that’s hosted and run by a cultivate Kansas City. And they’re doing a lot of great stuff in the city with urban farming. So yeah, so a lot of I mean, conventional grocery store, without the packaging. So trying to just give people everything that they would get in a little grocery store.

Minus the plastic.

Ed Soehnel 3:03
Okay, so let me ask you like that. The nearest concept, at least that I’ve seen locally here is we have sprouts, which is a chain, and they do have kind of a small section where they got nuts and grains that you can get bulk now, that seems to work really well for them. My only concern is there. Are there any kind of sanitary issues when you’re having people sort of reaching and grabbing and kind of packaging themselves?

Marcelle Clements (Guest) 3:26
Yeah, so some of the aisles or sections of the store would have to be assisted by staff members. And we’ll have notices off that say, you know, he’s hospital systems. But you know, like similar to sprouts and Whole Foods, people are able to, you know, get their food in bulk. Currently, they just don’t have a very large selection. So we’re just going to be expanding that selection. And then yeah, they are things obviously, we’re changing the bends with a new word have to we’ll have a commercial dishwasher to wash those plastic containers. And, um, but yeah, this is not a new concept to, you know, to Kansas. Well, it is to Kansas City. But this is not a new concept. It’s actually very large. In the UK, and in Europe, Australia and New Zealand, they’re very large franchises, actually, the one called the source bulk foods, they’re opening up their second or second location in the States. So they’re jumped across the pond a little bit. But they have I think, 17 locations in Australia, and they opened early six or seven years ago. So it’s not, yeah, it’s not totally new item come up with it, it is just going to be new to Kansas City. And I’ve done quite a bit of research, I’ve had a survey on for the last month and growing on Facebook and Instagram following. And I have some great results from the serving. A lot of people really want this. They’re a few, you know, quite a few people that consider themselves to be zero waste is already and are currently going to multiple places to be able to source all of their goods, plastic free. So it’s exciting to have something that’s going to be a one stop shop for people to be able to get everything they need without.

Ed Soehnel 5:27
Okay, so. So it sounds like though you’ve got a lot of other analogs and other countries and other markets, you know that you’re kind of serving a model, which is great.

Marcelle Clements (Guest) 5:38
Been so I’ve been working on the due diligence of this because I haven’t started it yet. I’m just getting old, my financial. I’m getting a convertible debt note term sheet drawn up by lawyers, and I have some investors, I’m just getting all my financial pieces together. But I’ve been doing the due diligence for a year and I traveled to Cape Town, South Africa earlier this year, and I made was nude foods that are not new foods and got a lot of you know, I had 21 questions for him. So and then there’s a store called nada foods in Canada, and the one co owner Bry on she’s helped me and given me quite a lot of information as well. So I’ve been really lucky. I’ve had some people that have already done it, you know, kind of give me a lot of feedback and some guidance. Excellent. Excellent.

Ed Soehnel 6:29
Okay. And so your distribution channels as you’ve got your location, I mean, that’s pretty easy. In terms of let’s kind of jump a little to your marketing. So you mentioned obviously, location based with Facebook, as well as probably other kinds of digital marketing, organic SEO, are you looking into, you know, offline marketing, like local flyers partnering with businesses in the community? I mean, it sounds like you’ve done a lot of legwork already. So tell me more about your marketing.

Marcelle Clements (Guest) 6:58
Okay. Yes, sir. I’m going to be working with Kansas City food circle, they have a host of local growers that they work with and promote. And if I work with three or more of their vendors, they’ll do events in the space. So there’s a food events for their members, they have membership programs that I think it’s $50 a year, and then you get invited to all of these events that they do. And they work with a lot of obviously, farmers and then shifts. There’s a lot of farm to table restaurants in Kansas City. So it’s very cool. They do a lot of cool stuff with local growers. So I will be working with their promise on have some events happening the space. Yeah, and then I think, you know, something that I’d like to do is kind of embed this in education, because I think what’s really important is knowing what to do with food. And I think that I’ve seen that with CSA, well, they give you like a digital newsletter, the day that you pick up your vegetables, and they tell you what’s in your bag, and then they also give you a recipe. So something that I would like to do is have kind of the recipe of the week, that’s kind of, you know, central to the store, and it changes and it’s seasonal. And it does give people you know, all the knowledge that they need to make this meal that we have that we’re promoting. So those kind of things. I don’t know if that answers your question. Sorry.

Ed Soehnel 8:36
No does so. So you clearly, I mean, sort of on the digital side, you want to also bring content marketing, which is great. That’s something that’s different, you don’t see that a lot offline.

Marcelle Clements (Guest) 8:47
I think what’s really important is helping one single person.

This is another great option for people that live alone. Because they can buy food, given the quantities that they need. And I think if they’re buying food specifically to do something with it with recipes involved, you know, it’s also not Ernie asst with plastic waste. So So assisting with food waste, and also helping people to eat healthy, eat seasonal, eat locally grown food, and make, you know, delicious meals. And I think that people just start reading more. Yeah, what to, you know what to shop for and what to do with this food. And I think people eat a lot. And then they get to that stage where like, I’m going to go grocery shopping, they don’t know what to buy, they buy a bunch of stuff, and it ends up going to waste. So there’s a couple of things that, you know, we want to try and help people with, I guess.

Ed Soehnel 9:47
Okay, so let’s talk about some of your customer retention strategies. You’ve mentioned mentioned a membership program, online ordering, which I’m curious who delivers and then the educational homesteading, which I think we already touched on, which is related to your content marketing. Talk about the first two.

Marcelle Clements (Guest) 10:02
Okay, cool. Um, sir, the home delivery, I imagine that at some point, you know, this kind of retail is a destination retail experience based retail, which is awesome, because that’s, like, where retails moving, um, has, we have to, but at some point, it does add probably an extra 10 to 20 minutes, maybe on your shopping experience in total, because you’re bagging everything itself and weighing at some stuff. So my idea, at least is that once I’ve gained the trust of my following in Kansas City, that we could get some of their weekly staples delivered to their door. And also then use the retail as not only a retail, but also as a fulfillment center. So we could pick pack and distribute from the retail facility. And we could do that in all five times, is at least how I pictured team it will, she’s doing things things, I don’t know how it would work in reality, but that’s the idea for the delivery. And I would just build a delivery platform on our website, and kind of similar to help grub hub, and all of that you would tip your driver. So we would have a base salary for the driver, that’s not much that’d be employed the US and then, you know, every order would have a recommended kind of 10 to 20%. To and that’s kind of where you would make you some money. So that’s the home delivery. And then sorry, remind me of the first one again,

Ed Soehnel 11:38
well, real quick on the home delivery. So you’re planning on employing the driver? And actually, instead of outsourcing it, you want to manage that whole operation, is that correct?

Marcelle Clements (Guest) 11:49
Uh, you know, that’s, that is definitely something that that’s kind of how I kind of, was also thought of just trying to get onto like a grub hub, something like that. And then I’ve also thought of outsourcing the courier service. And I did look into, like a low key, and one, that’s women, women, I think, also minority women around which I really enjoy. So I’m just going to see I’m not sure it’s not something I’m starting with either. So the retail will be the first thing I start with an all new to the homes and debris as an offer, you know, service option. My plan is within the next year.

So I’m hoping to try to figure out some of those kinks.

Ed Soehnel 12:35
Yeah, well, it it when you look at the home delivery, if you lot look a lot of existing, let’s say grocery or any retail, you know, they they’ve built their operation for people to come to them not to deliver, but you’re already thinking about how do we sort of use our location as a retail plus fulfillment, you know, you might be able to sort of cheaply figure out how to do it from the get go. So that’s great. I probably could give you a leg up on you. So let’s talk about our membership program for retention strategy.

Marcelle Clements (Guest) 13:08
So membership program, it’s not going to be a huge revenue stream. Again, I kind of want to do what Casey was doing, it’ll just be an annual membership of like, again, probably $50. And I’ll use that money. One, obviously, it’s a retention, you know, it’s a retention strategy. But the membership program is where that educational piece comes in. And that’s the members will get invited to educational programs and classes, people outside of the membership program or not. So I’ll use my ideas just to use that revenue to basically break even on being able to give people educational workshops, because I’ll be outsourcing that I will not have the capacity, nor do I have the skill set. So I’ll be looking to people to you know, provide workshops on different homesteading practices, and things like that. So I’m hoping with that it just kind of breaks even I don’t have to put any money into it. And that’s kind of my idea with the membership program.

Ed Soehnel 14:11
Okay. So tell me what is the what’s the feel of your store? I mean, relative to you want to kind of make the look and feel like a Whole Foods sprouts. We have natural grocers. I think you do too, as well. You know, tell me more a little bit at sonically how you want to design your store?

Marcelle Clements (Guest) 14:30
Well, that’s a good question. Originally, I had a way bigger location and convention, the people have done the Heron burn retails, like design. I wanted to do a loop, which is more kind of how you know, larger food stores are designed. You know, so I guide people in and they get, you know, data through the store until the tellers and then out the door. I found the smaller location and it has been two entrances. So I’m still kind of figuring out what I’m going to do and what’s going to work. I’m really wanting to always like go against the grain. I’m like, oh, everyone’s done the hairy man, I want to try something different. So I’ll see there’s a food store in South Africa called will words and they are, they have smaller and bigger locations. And a smaller locations are kind of what I’m looking at the 2000 square foot retail space. It’s super cool. It’s a very neat, it’s like black and white, you know, it’s kind of like instead of the white feel, where it’s kind of new and fresh. And it’s kind of a darker aesthetic. Um, you know, dark blue, dark roof all of the signs or you know, everything that’s guiding your on the stores kind of dark with color. So that’s kind of what I really like. I feel like it’s more classy and classic. Um, so But again, I I haven’t really I know I need a bit it out I am I going to kind of go loose? Or am I going to go ahead and burn Oh, am I gonna go kind of the white with the wood, fresh new concept or kind of more of the classic, I think like Dhaka Patiala. Yeah.

Ed Soehnel 16:21
Yeah, no, I love that you’re doing so much research elsewhere and what’s working. I also liked the classy, look what you got dark, contracting with colors. I mean, I don’t see that in a grocery store here.

Marcelle Clements (Guest) 16:34
That’s awesome. And I love that. And all it says it’s a higher end food store in South Africa. They’re all over and they, you know, they’re organic, and all of that. And it’s nice, they do a really good job. And I know that they’ve won like a store, you know, a few times. And so anyways, I got a bit to figure out. So I’m just trying to get all the financials in case and then I’ll be my next.

Ed Soehnel 17:01
Okay. Well, one of my questions about your resource sustainability strategies, which I it’s really important to me, and it’s so important to everyone. So but you touched on some of that. So I think we can probably gloss over that we don’t need to kind of rehash what you’ve done there. Let’s talk about some of your risks. You listed financial management, marketing strategies and supply chain, I think you’re right with all three, why don’t you talk through each of those a little bit.

Marcelle Clements (Guest) 17:27
Okay, so I’ll just start off by saying that I don’t come from a retail background, which I probably should have listed as the first Chris, I actually used to be an information technology, and I used to be a project manager, a year ago, I decided I’m building a spaceship, you know, I’ve been very passionate about sustainability for a long time. And I just decided I am going to do it, I’m just going to put it you know, as much time as I can into this into this idea and try and launch this. So you know, that’s obviously I come from not having a retail background. I haven’t really been involved in supply chain logistics or anything like that. And then also, you know, I’ve never really owned a business, I’ve owned a small LLC before where I did business consulting, but I never had stop. And I you know, this is a totally different kettle of fish.

Marcelle Clements (Guest) 18:19
So I guess, you know, I’m just hoping that I have done enough research that I, you know, have figured out enough of the unknowns. But I know for a fact that, you know, there are things I haven’t thought about. And I’m just trying to even at this point, still try and research as much as I can ask as many questions as I can try to get as much information as I can. Great. Okay.

Ed Soehnel 18:46
Let’s just kind of talk some about some of your numbers. I know you don’t have these, you know, maybe you’ve got some projections your head. But is there sort of an average suggested retail price if you were looking at the your entire store? You know, someone comes up to the register and rings a product through? Is there an average SRP that you’re you think you’re looking at,

Marcelle Clements (Guest) 19:07
sir, I have got my financial projections. And I’m working on a basket price. Because I don’t have one product of $80 a boss. So my projections, you know, for year one, sorry, for month, one would be kind of 11 shoppers daily, projected sales at about $866 for a day, for the first month, yeah, at at Donna baskets, and looking at about $135 revenue per square foot in month one. And then I’m growing that to break even point 12. So within the first year, so great revenue perspective, but from $135 to 313 is my goal. And that gives you know, puts me at 25 shoppers a day at that $80 basket price. Um, so those are my projections, um, you know, the square footage has been super valuable. And actually, I got that from nada. And that’s helped me like work back. You know, also just understanding breakeven points for both nada and nude views in Cape Town. And then what I did is I built out three different financial projections for different size stores. And then I kind of cross so they look started making sense, like the store the store in Cape Town, he’s very small. And he broke even at month five. And when I built up my revenue models, 4200 square foot 2000 3000 square foot spaces, those numbers started to make sense, okay, you broke even quicker, because you’re, you know, you’re, you’re still was smaller. And so I’ve that’s kind of that informations just been so super valuable. And that’s helped me kind of, you know, build all of this out and kind of check myself and make sure I’m somewhat on track, even though there’s still projections and nothing’s based, you know, on reality, and it’s been helpful to know what margins or milestones the hit points and kind of around that.

Ed Soehnel 21:28
So so you’re looking at your breakeven, it sounds like it’s about 17,000 a day. So my math right there. At times 25 shoppers a day.

Marcelle Clements (Guest) 21:39
Yeah, at times. Yeah. $2,000 a day.

Ed Soehnel 21:43
Oh, Tom. Sorry. 2000. Day. Okay. Okay. And then so your basket size of $80 each?

Yeah, that’s, that’s pretty good. You know, I don’t know about retail. But,

Marcelle Clements (Guest) 21:55
I mean, I think you could just find staples, you know, milk, bread, cheese. So that’s another thing that doesn’t exist, I’m not going to be doing I would love to have a butchery partner. Maybe that’s something I do at a later stage. But we will be doing cheese and just normal cheese. We will have fancy cheeses, sure. But I just want to be able to give people the option to buy a pound of mozzarella for the lasagna without eating plastic. So yeah, cheese, I just kind of looked at my grocery list. And, you know, did that a long time, and looked at what I was buying when I was buying weekly. It’s just my husband and I. So we don’t have any kids. And that’s one of my demographics is married without kids.

We were spending, you know, a week on going to the grocery store. And that’s kind of the information that I find and you know,

Ed Soehnel 22:48
okay. And then so can you give me a sort of a general what your cost of goods is? Or what you would buy product versus what you’d resell it? What’s that margin or spread?

Marcelle Clements (Guest) 22:58
So this is something I think definitely had a Christian was hoping you could maybe help me with. So I did a bunch of research when I found you. So I bought all of my financial projections on a 50% margin. Yep. So hundred percent markup, 50% margin. So basically buying it for $10, selling it for $20 type thing. And I was happy to see that in some of your blogs, that’s sort of what you recommend, all what you’ve stated is the average or food store like this, where it’s organic, and, you know, that kind of thing. And I will also be sourcing through unifies, I was excited to see that you made sure that and then a little confused by the 65% margin at that point. And I wasn’t sure how I accommodate that. So yeah, you know, that’s something that’s definitely just built it this way. I’m hoping that that’s in reality, how it would work out obviously, there’s some products. Some like the milk partnership that I have, you know, they the margins very low, they give you prices that they want you to sell ads. So not on things like that, but on the dry goods, and the shampoos, and you know, all the soaps, laundry detergents and stuff. I’m hoping that it can be a 50 50% margin.

Ed Soehnel 24:30
Yeah, I mean, my what I’ve seen at least selling in the specialty is like, generally, it’s a 50 margin. So. So if I sell it for $10, the retailer would mark it up to 20, you end up getting 50. I mean that Yeah, that’s a real, loose rule of thumb. So, I mean, that’s kind of something you’ll just have to play with its bore, who you’re sourcing it from and the categories, you’ll know that better than I would. But I’d say probably 50 is probably a good general way that you’re approaching it right now.

Marcelle Clements (Guest) 25:06
Yeah, and, you know, the research that I did, so we’ll talk these extensive product less. And what was when I was looking at that point, 50 was perfectly fine. Actually, across the product line. I mean, with nuts and chocolates and things that are more expensive, I had it in a smaller margin, but then I had other things that are high margin, because I could you know, but on average, I was looking at 50%. And that’s just with, that’s a different supplier, not you in nearby. So that’s kind of where I’m because I don’t have a reseller certificate yet. Well, I had one for Missouri. So Kansas City sits on two states, as you probably know, and the original location that I was looking at would be in Missouri, well, the one that I’m going with is in Kansas, so the resale certificate after get a new one. So I haven’t been able to do that wholesale account with you, and if I But anyways, I think 50% margin is perfectly accurate.

Ed Soehnel 26:09
And so kind of just to round out some of your high level financials, any sense on what percentage you’re going to allocate to marketing.

Marcelle Clements (Guest) 26:20
Good Christian, great Christian. Um, I think off the bat, I have a little bit of a budget, it’s not crazy. Um, let me have a look here, hundred and $50

Marcelle Clements (Guest) 26:36
for advertising, and I’m probably just used Facebook, because my following on Facebook, I mean, it’s such a phenomenal platform to market to market through. And then hopefully, you know, through the membership program and things like that, um, I can, you know, that would just pay for itself and I wouldn’t need to put any money in. And then there’s other fun things I know, this is probably not necessary marketing, but like will have a composting bin outside a large one. So when people come and shop, they can read a lot of apartment dwellers, you know, they want to have be able to separate their with waste and compost. What do you do with your burn ones in school and your kitchen. So kind of things like that, and then also a tear cycle drop off point at the shop so people can bring other things. And so again, I know that’s not marketing, but these are kind of value added things will, you know, keep customers at when you bring them in just maybe they just want to tear cycle drop off location that’s close by I don’t know. And they can hopefully come in and, and see some of the CSA to, you know, I’ll probably will start with doing CSA when I kick off. And that brings people in to pick up this use a bag. And that’s already doing that through these local growers. And then hopefully they buy some eggs. Okay,

Ed Soehnel 28:03
so kind of just doing some real quick math, if you’re, if you’re targeting breakeven a 2000, your cost of goods is around 50%. So that’s 1000. So your marketing is 150 months, I gives you $150. So that’s probably the 850 is probably the rest of your operating cost. Is that correct? On a daily basis?

Unknown Speaker 28:24
Yeah, I mean, I haven’t thought about it on a daily basis like that. But yeah, that sounds about right.

Ed Soehnel 28:28
You know, assuming you hit your breakeven, your goals, that’s kind of a general general way to look at it. Right. Okay. Any sense on, you know, customer lifetime value, or what it’s going to cost you to acquire customer?

Marcelle Clements (Guest) 28:43
And I liked all those questions, and I see how it is, you know, embedded in your, all of your content and something I haven’t thought about at all, which is crazy, I’m sure. You know, I would assume that at least college done my budget $150, to kind of Facebook to market to new customers. So that’s probably the cost. I don’t know how many, you know, new customers I can get from that budget. And that’s kind of the cost I guess, of getting a customer and then retaining the customer. Hopefully, again, through the compost, burn and Tara cycle dropping points and these educational programs and events and stuff like that, I need to probably have a look at what I would cause some kind of you know what that retention strategy looks like?

Ed Soehnel 29:35
Yeah, I’m I’m kind of curious is, is a customer lifetime value or the acquisition cost? Is that something that’s ever come up? In your research? Or even talking with some other markets like yours? Is this something they look at? Do they have fingers like this?

Marcelle Clements (Guest) 29:51
So when I met with Paul Rubin, from new foods in Cape Town, he told me the closest thing that I can get to what you’re asking, he said, this is what’s going to happen, people are going to come into a store for the first time because it’s new, and it’s different. And it’s amazing. And they’re not going to shop, they’re just going to come interesting. The second time, they’ll come back and the second time, they’ll buy something small, like some chocolate or you know, some they’re just testing the waters, they just want to see how all this works. And they said the third time they come in, they’re shopping, they’re getting what they need, they come with a list. Sorry, that’s, you know, that’s basically all I know, I know that. You know, the first few times besides the people that I have, it’s following me right now that, you know, I have answering all of these Christians, as part of my market survey that are writing to me regularly asked me when I’m opening, I mean, I feel like I have those people, they’ll come in and on the first day, you know, shop, but the new people where I’m exposing this kind of new concept to them, I feel like that’s pretty much what’s going to happen, they’re going to come in and they’re going to check it out. And they’re going to come in and buy just, you know, a few things. And then I have him kind of at the coming.

Ed Soehnel 31:02
So you really when you kind of look at your funnel and acquisition process, you really have to make an impression that first time, even though they’re not shopping, so they come back. So So it’s almost like you got to think about they’re going to come wants what can you do to really grab them at that point that no one else does that get them to come back? Yeah. So

Marcelle Clements (Guest) 31:27
when I was researching how to lay out a retail outlet, and I’m researching, like some of the tools, and I mentioned before the herringbone in the loop and how you design these things. And some of the information that I came across that was interesting, I never thought about it is what all of this looks like and what people experience. So what does the shop look like from the outside? And then as soon as they enter the door that says Oh, so what does that experience look like? They’re in the store, and then leaving the store again, sir. That’s definitely things that I’m thinking about as I think about how to build the store. And, and I’m hoping that yeah, that whole experience people get when they walk in, and all those different things throughout the store that that’s just super amazing. And they want to come back.

Ed Soehnel 32:12
Yeah, no, that’s I mean, that’s to me is a great problem to think about is how you make yourself different versus what’s out there. So you get greater, but I you know, I love thinking about that kind of stuff. All right. Interesting.

Ed Soehnel 32:26
Okay, so let’s kind of just jump to some of the balance sheet stuff. And then we’ll kind of start to close a few other things. You said you were funding raises about 20,000? Is that kind of your money combination, where’s that coming from?

Marcelle Clements (Guest) 32:44
I did say that maybe. No, I need like so much money, I need $200,000.   But I have done kind of designers. So basically,

I’m working with an SBA, a small business association represents to that’s going to try and get me a line through a bank and conditional financial institution. So that’s what I’m working on. And then the investors that I have, I’ve managed to secure the down payment for the loan. However, I could raise all of the funding that I need the $200,000 by basically giving away, you know, with convertible debt notes, whatever taught to be 60% of the company, and then the terms that I’ve come up with that, you know, I’ll get a lawyer to document and ratify would be basically, you know, this would be a 36 month, kind of situation where you know, every year, they would make 4% on their investments, that would be paid out annually. And then at year three, it would be the maturity date for the for the take note. And then at that point, I would have the options, you know, they would be able to convert their initial investment for 6% of the company. And I will also have the option to buy that out. So at that point, they either get 6% of the company, or I give them you know, a little bit more money. So they’re, you know, I worked out that they’re making? Well, let me have a look here. I think it’s 40. Yeah, 44% return on their investment over three years. Sure. And I’ve got 10 of these notes available. And that would give me the $200,000.

Ed Soehnel 34:40
And then you said, you said is that? So it’s $200,000 for 6% of the company?

Marcelle Clements (Guest) 34:48
No, it’s 20,000. So 20 $20,000 would give you 6%. Okay, so 60%. So, my backup plan is that if I can rate and get the money as a normal loan, with the down payment, and kind of the equity that I have that able to then go to more investors and try and get raise the money that way with convertible notes might have 1010 notes that are available to to investors got it.

Ed Soehnel 35:24
And then so your valuation then initially is around 400,000 post money, assuming you’re raised 200. That’s

Marcelle Clements (Guest) 35:31
assuming I did the evaluation correctly. You know, excuse my, I just excuse my ignorance. What I did is I just built up my financial projections for three years. I kind of know what both the retail and the online should bring in every year. And then basically, I just took that one to stabilize, I just took that amount of profit, and I times that by 2.5 years. So I’m not sure if I’ve done the evaluation correctly. I think I have and then yeah, so the evaluation would be

you know, I’m evaluating the company of Yeah, 140,000. Okay, okay, great.

Ed Soehnel 36:14
okay, let Tell me, um, I mean, we probably already covered a lot of why you got into this, sort of your long term goal and vision behind all this,

Marcelle Clements (Guest) 36:28
um, you know, our long term goal is I’d like to get it off the ground, I’d like to get the online delivery off the ground. My husband and I have 10 acres of land in Lawrence, which is about an hour ladies little university town in Kansas, super cute. And that’s where we’re building out airships and long term, you know, we kind of would move out there, and I’m starting the first retail in Kansas City. So I’d probably want to open another location out there, you know, potentially in like, two years time. And maybe, you know, and maybe at that point, once everything’s stabilized, and, you know, the processes and the systems and the stopping and everything’s like dance routine, I would probably sell is kind of maybe my exit strategy. You know, but I’m not, you know, I’m not sure. Maybe just out, I don’t know, I think selling would probably be what I’d want to do. Okay, okay.

Ed Soehnel 37:30
Okay. Um, so some constant final questions here. Is there any particular information or news or intelligence service that you follow or get the most out of that other people might be interested in?

Marcelle Clements (Guest) 37:42
Yeah, I’m from a zero waste perspective. I honor the zero a ship. She’s based in California, and she’s amazing. And you can find out all over social media, I obviously follow a lot of the zero waste.

Nada, and they’re doing incredible work Canada,

foods and Australia.

And then also good for in New Zealand, they also have a bunch of locations New Zealand.

And then, you know, I find out all the usual stuff Greenpeace,

and National Geographics, staying up to date with my shirt environmental.

Ed Soehnel 38:26
Okay. And is there like a favorite tool using to grow your business could be a piece of software, a spreadsheet model, you’ve created a process you’ve learned and

Marcelle Clements (Guest) 38:34
adapt? You know, I used to be in information technology, and I used to help businesses with technology. So there’s a bunch that I would obviously recommend I myself, I’m not using too much, using the Google suite, which is awesome. I like to have I see you do the same. You have everything. Yeah, essentially stored and accessible from anywhere, any device. So I love the Google suites, and then I Canvas, MBA. And that is a online design program. And it’s great.

Marcelle Clements (Guest) 39:12
And then, you know, all the stuff that I have, it’s just subscription, you know, I have, I have, I do have office as well, you know, and that’s a monthly subscription, I have my website on a Wix sets a monthly subscription, and my hosting with GoDaddy. And that’s a monthly subscription. Because until I’m at that point where I’m buying a year or two, I’m just paying monthly to be, you know, it’s small amounts every month or two when you’re starting up my finances and making more money. But now, there’s all the things that I’m using.

Ed Soehnel 39:48
And obviously, like this kind of is your second startup, because you already mentioned that you kind of did consulting on the side, but this is just a startup in a different category. Correct? Yeah.

Marcelle Clements (Guest) 39:57
So when I first got to the stage, because I didn’t have any work experience here, it was really hard to find another project management gig. So I just Yeah, I did a bunch of business consulting for startups, actually, and help them design processes and kind of a lot of business analyst work, and then some project management, it kind of stuff. But you know, never got to the stage where I kind of at the stage where I needed to start hiring people and kind of been outsourcing, you know, their skills and my skills. I kind of panicked. And then I was actually able at that point to get a project management job with additional block. So I did that. Yeah, so I didn’t really grow my company.

Marcelle Clements (Guest) 40:44
I mean, yeah, I just thought one, but I never really did too much with it. I had it for two years, and then kind of found out and just went back to just a normal project management job. So this is a whole new kettle of fish. For me. I’m excited about what I’m doing. And

Ed Soehnel 41:02
okay, and then. So last question is, any advice for someone else that’s looking to do a startup sort of in your sector industry?

Marcelle Clements (Guest) 41:11
Yeah, um, you know, try and grow your network as much as possible, and use what you have already sit down and think about it, because you might not think that you have much, but you probably have met people that can help you. In my case, I, a few years back with the business consulting, I made an organization called slow money. And they link farmers and ranchers with investors. And that’s where I started, I did a slow money, Shark Tank. So yeah, think about what you have try your network, I also started was just putting everything down in a business plan. And I just used Word document templates, I just literally put in business pen and then populated a template. And that was my starting point. From there, I built out my financials, you know, an Excel like em, you know, pretty decent at using so stuff came in handy. And then what I also did is it Kansas City has so many tools for entrepreneurs and startups. So I got a business mentor, through an organization called score. And he has helped me so much he’s been immensely valuable. And so yeah, over the last six months, I’ve just reworked and ratified. You know, I read on my numbers and thought so much more through. And then obviously, you know, meeting people that have done these kind of things before so yeah, just a lot of research, like do as much research as you can. And then when you think you know, you don’t know, you’re probably still about six months away from knowing so just keep plugging away. Get asked questions network, grow your network. I think that’s been super valuable to me. And then, you know, I think a lot of cities I don’t think Kansas City’s unique and having a bunch of resources available. So try and find those because there’s a lot out there to help entrepreneurs and startups.

Ed Soehnel 43:07
Awesome. Okay, well, Marcel, this concludes our interview. So thank you very much for doing this. I wish you the best best of luck and please keep in touch.

Unknown Speaker 43:16
I’ll do thank you so much for having me.