At first glance, Southern Kitchens Inc. looks like most other growing companies. A maker of sandwiches for vending machines and cafeterias, it has trouble with cash flow, is in the process of going public, and has had to fight to survive against two much larger competitors. So much for the similarities. The major difference lies in the work force. Almost half the 35 jobs at the Minneapolis company are held by newly released convicts.

The unusual venture traces its origins to a meeting in 1983 between a prayer group of area businessmen and Austin Timms, an ex-felon with a local street ministry. Timms told the group that the toughest problem former offenders face is lack of work: since no one will hire them, they quickly return to crime. Some of the businessmen began working with Timms to form a company that would hire ex-convicts just out of prison. The group eventually decided to specialize in high-quality sandwiches -- a market in which they hoped a small company could compete while creating unskilled jobs.

In the past two years, about 30 ex-offenders have passed through Southern Kitchens. Most of them work for a few months at $4 to $5 per hour, establishing an employment history to show other employers. "We want this to be a bridge," explains cofounder Cy Laurent. "It is not intended to be a place to stay."

Company president Phillip Crowley, a food-service veteran, insists that his work force has been the least of his troubles. Convicts getting out of prison, he says, are at a point where they most want to change and are loyal to a company that gives them a chance. "We have fewer problems [with them] than with the general population." Of course, it helps that job candidates are screened by streetwise vice-president Timms, who makes sure they have a sincere desire to work.

Southern Kitchens' greatest challenge has been to operate profitably -- something the founders consider crucial to their mission. Otherwise, they feel, the business community won't take the company seriously. "It was a struggle right from the start," says Laurent, who admits the group would have given up had this been an ordinary venture. The founders are glad they hung on, however: in fiscal 1988 sales climbed 250% to $1.5 million. And in fiscal 1989, Crowley says, the company is showing its first profit. Now, its founders hope the company's example may encourage other businesspeople to take hiring risks. "We feel these problems can be solved only if the private sector gets involved," says Crowley.

-- Martha E. Mangelsdorf