As demand kept growing, the couple bought a used oven from a bankrupt bakery, forking over just $13,000 rather than the $120,000 the same machine would have cost new. Although they could justify the expense, they knew no bank would lend them any more money. "So," Stacy says with a sigh, "we just whipped out a credit card." But that particular investment eventually allowed them to quintuple their production. "Now we can do 700 cases a day," Mark says. "On a single shift," Stacy adds.
The Andruses' penny-wise approach is by no means limited to capital expenses. Their staffing, for example, is a variant of just-in-time management. Stacy's employs about 15 people, bringing in extras as needed to fill a big order. And initially the couple hired a few consultants. But now, Stacy says, they rely more heavily on the kindness of unofficial advisers and mentors from elsewhere in the industry. Through networking they became friends with people at other natural-snack-food companies, including Terra Chips, Boulder Potato Chips, and Smartfoods. Although all three might be considered direct competitors, "we were pleasantly surprised because not many people we approached were closed off or perceived us as threatening," Mark says. Through arrangements that they negotiated with Babson College, the two also brought in several unpaid summer interns who not only built the company's Web site (www.pitachips.com) but maintain it as a class project. In exchange, Stacy frequently speaks on the business school's campus, 25 miles away.
The Andruses have done relatively little advertising; instead they give away samples in person at trade shows, cooking demonstrations, public appearances, and grocery stores nationwide. "I haven't unpacked since January," Stacy said in late May, referring to her frequent travel. Mark, who oversees product development, often loiters in supermarket snack-food aisles, watching what people pick up, put back, and drop into their carts. From that -- and from such standard sources as snack-food-industry trade journals -- he gets a sense of what's selling: "Barbecue? Are corn chips hot? Is organic hot?" The company has also benefited from serendipity, such as the time one of its distributors got its chips into the luxury boxes at the Super Bowl and again when leaders at Weight Watchers meetings began recommending Stacy's products as low-calorie snacks to their members.
Earlier this year Stacy and Mark's story took another twist when the couple decided to divorce. But they insist they intend to keep running Stacy's as a team. "Mark and I are great partners -- and great friends," Stacy says. "We share this love for the business. This business is everything to both of us." Neither Stacy nor Mark, who are now 50-50 partners, has regrets about their choice of career. "When we talked about starting our own business, we thought, If we don't do it now, we're going to someday look back and think, 'I wish I had," Mark says. "The only regrets you have are for the things you don't try," Stacy adds. Still, they're not ruling out moving on -- at the right time, for the right offer. Maybe, Mark says, when the company reaches the $20-million mark. And that's all the more reason to keep bootstrapping now.
Anne Stuart is a senior writer at Inc.
Chipping Away at Costs
By scrounging for used equipment and making deals of one sort or another, the Andruses saved a bundle.
| Item |
Amount saved |
| Modified pita cutter |
$82,000 |
| Prototype convection oven |
$70,000 to $80,000 |
| Used backup oven |
$107,000 |
| Intern-built Web site |
$5,000 to $15,000 |
| Total savings |
$264,000 to $284,000 |
The First Sale
In 1997, Mark and Stacy Andrus, co-CEOs of Stacy's Pita Chip Co., took off for a weekend. While they were gone, a pipe burst upstairs in their home, a town house in southeastern Massachusetts. "For three days it poured like a fire hydrant from the third floor to the basement," Stacy recalls. "When we got home, we saw water coming out the front door." They waded in and began cleaning up.
Then they heard the fax machine grinding out a message in their home office, which had largely been spared from flood damage. Together the Andruses sloshed upstairs and watched as the machine printed out a request for $40.80 worth of Stacy's Pita Chips. "We were getting our first order," Stacy recalls. "At that point, nothing else mattered."
Ironically, that first customer -- a Boston-area gourmet-food store that subsequently went out of business -- never paid its bill. But to this day the slightly watermarked missive remains posted in a place of honor on the factory wall.
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