Michigan Farm Market’s purpose is to contribute to our community, improve the lives of our team members and their families, and help food entrepreneurs realize their dreams. But of course, we can’t do any of these things unless we generate consistent, predictable cash flow to grow our business.

Holiday Gift baskets, retail stores, and food entrepreneur services have historically generated the most revenue for our businesses, but also have the highest seasonality. To solve this problem, the management team has spent the first 6 months working within our growth plan, increasing sales in our core businesses while examining new revenue channels that would generate consistent, year-long profits. These included monthly food subscriptions, chocolate distribution to wineries, order fulfillment for food entrepreneurs, and wholesale dessert distribution of our Underground Cheesecake line. After reviewing the data, it turns out our most profitable line is wholesale restaurant desserts: preparing pre-portioned specialty desserts in our bakery and delivering them to top chefs and restaurateurs to add to their menu.

As we’ve watched the data come in we found that a restaurant desserts customer generates almost 3 times more monthly cash than a customer in our next highest category. For example: We picked up 8 new restaurant customers in September. During the months of October and November, those 8 customers generated about $4,000 in cash. It would take 177 online customers to generate that same amount of cash in that period. I’ll be the first to admit that Wholesale Restaurant Desserts wasn’t my most obvious choice. But I couldn’t argue with the data.
This month - along with our holiday efforts – we are reaching out to restaurant distributors with the intent to find a partner who can help us reach restaurant customers in Grand Rapids, Lansing, and the greater Detroit area. Our sales manager Sheila has already begun working to acquire customers in Grand Rapids to make us more appealing to a distributor. There are roughly 33,000 restaurants in the state of Michigan. Our goal is to turn 96 of them in to lifelong customers over the course of 2017. That is equivalent to just 8 new customers per month. Acquiring 8 new desserts customers each month would add an additional $237,000 in gross profit to our income statement. Maintaining a healthy gross labor margin, we estimate we would add one full time job per every 30 new restaurant customers – which equates to about 3 new jobs added to the desserts line in 2017.

I’ve attached a comparison of our most consistent cash generating lines to this post. My goal is to always lead with questions not answers. So if anyone has questions or feedback I’d love for you to get in touch.

Many thanks,
Scotty
517-897-2532

Hi Everyone,

I hope you are all having a great holiday season. We are in the midst of our busiest season of the year up here in Ellsworth. If anyone still has some online shopping to do, please check out our brand-new website: https://mifarmmarket.com/ We have 43 new gift arrangements this year, including a first time offering of a selection of Michigan made wine gift baskets. You’ll notice my smiling face on the live chat icon as I lead the way with customer communication for our team.

Michigan Farm Market’s holiday marketing plan includes distribution of 60,000 print catalogs, Michigan focused pay-per-click advertising, targeted paid and organic social media efforts, and PR reach through our “Gift Crates for Veterans” initiative. We’ve hired five seasonal employees in Ellsworth to help with the push. And we were very fortunate to tour the Zingerman’s Mail Order facility last month to learn some best practices in Lean Tactics. A big thank you to Zingtrain founder and Michigan Farm Market investor Maggie Bayless for helping facilitate that meeting. This Christmas our warehouse has been happier and more efficient than ever!

With the Christmas music humming and the orders flowing in, I wanted to talk a bit about 2017. Our capital raise ends at the end of the month and we are currently $36,000 short of our goal. We’ve made some notable progress in the last 6 months, gathering data as we’ve increased sales in each of our core channels (Non-seasonal revenue is up 32% over last year and Christmas revenue is expected to see a 100% increase). My goal is to make two posts per week leading up to our deadline, to get everyone caught up on the numbers side of our progress and re-emphasize our 2017 goals. These include: Widening the reach of our wholesale programs, recruiting new entrepreneurs to our recipe commercialization platform, opening our Ellsworth farm market, and having our most profitable holiday season to date. All while continuing the leadership development of each one of our team members – both current and future.

But we can’t do it alone! If you know of anyone who you think could benefit from looking at our company, please send them an invite to our page. If you’ve expressed interest but are on the fence, please take a look at our profile or get in touch with us. And of course – Anyone who still has shopping to do, please check out the products from 80+ Michigan food artisans on our site!
https://mifarmmarket.com/

Our offering will be closing on 12/31. If you remain interested you'll need to complete investment by then. You can log in to our Localstake profile to complete investment.

More updates coming soon.

Scotty
517-897-2532

Hey Everyone,

I hope you are all having a good autumn. Michigan Farm Market is heading in to what we expect to be our busiest Christmas season in company history. The capital we've raised to date will be used for targeted holiday marketing initiatives across social media, pay-per click, e-mail advertising, PR and catalog distribution. Luckily, we spend a great deal of time listening to our customer’s feedback; which allows us to make sure we are crafting the right promotional communication that will resonate with our core audience. One of the biggest debates we've had as we prepared for the season is whether or not to continue with our print catalog. Catalog printing and distribution has be an expensive marketing initiative in previous years.

Our core customers - female Michiganders ages 45-65 - have consistently voiced their enjoyment in having a print catalog on hand. Often times a customer who found and completed their order through our website have still request to have a print catalog mailed to them. So with this in mind, the challenge becomes trying to manufacture and distribute our catalog as efficiently as possible.

As a result to the catalog debate, we decided to partner with Traverse Magazine this year to print and distribute our catalog to their 24,000 readers. Our catalog will be inserted to their December issue which hits newsstands the week before Thanksgiving. Traverse Magazine will also print additional catalogs for our own use at 1/5th of the 2015 cost. These additional catalogs will be displayed and distributed through shopping mall kiosks - eliminating expensive postage and projecting a higher conversion rate than a cold mailing lists.

Our catalog will go to print early next week. As a preview, I've created a draft for our investor community to view. Any feedback, suggestions, or even just initial thoughts on this year's catalog would be greatly appreciated. I've also uploaded a copy of our catalog from last year so you can see how we've updated the imagery and layout. This year's catalog cover is green and last year's is blue. I will be working on edits over the weekend so feel free to message, email, or call me anytime. If you're already an investor you will receive a copy of our catalog in the mail. If you're still thinking about investing and would like to receive our catalog, let me know and I will put you on our list!

Thanks for your time and feedback,

Scotty
517-897-2532

Hi Everyone!

It has been a while since my last update but rest assured we have been working diligently behind the scenes to fine tune our operation for growth. The topics, concepts, and challenges we discussed at our advisory board meeting last month have since been formulated in to real world initiatives. I will be sharing the three main action items that developed as a result of that meeting in future posts. But for now I can share our most recent one:

This summer we faced some real challenges as we grew and acquired more customers for Charles Layton Chocolates and Underground Cheesecake. With more customers being added and more orders going out the door, it became very apparent where the inefficiencies and shortcomings were in both our production and sales channels. Orders were going out late, the wrong product was being delivered, communication broke down often, and even our own retail store was getting shorted on product from the bakery. I was convinced that we were going to have to separate each of our lines into "divisions" so all inventory and sales could be tracked as if each company were it's own independent unit. Similar to the model Zingerman's uses for it's community of businesses.

Convinced on what we needed to do, I put the proposal in front of our advisory board at our inaugural meeting - They immediately shot it down. Our board member Brian said it best "It doesn't sound like an operational issue. It sounds like a strategic issue." After much debate it became apparent that with better forecasting and employee cross training we could accommodate our increase in sales with little investment in new staff, structure, or procedures. As a result we are now implementing a "Training Report Card" system across the 4 "Lines" of Michigan Farm Market: Chocolates, Retail, Bakery, eCommerce. Within those lines, team members can have a level of proficiency that ranges from 1 to 6 - Level 1 being not proficient and Level 6 being highly proficient.

The goal we set for ourselves was to have everyone in the company achieve at least Level 3 proficiency in each line by October 8th. And to have at least 3 people at level 5 or higher in each category. We are tracking everyone's progress on a big whiteboard in our office. Each week the team sees the progress each member has made as they announce their previous week's training. We have two weeks until our deadline and it looks like we are going to be able to achieve our goal without interrupting our current productivity. ALSO we've already seen the system start to pay off as people have been able to step into new roles when someone is absent or we need to "surge" to a particular line. We've added 8 new bakery wholesale customers this month. Each time we add a new customer, Stephanie, Sheila, and I forecast the bakery production schedule for the next week in conjunction with online orders and retail sales. We then allocate our workers across each of the lines accordingly. This allows us to generate higher sales volumes - AKA more cash, AKA higher investor return - without increasing our labor costs.

We’ve found that the cross training is not only creating efficiencies, it’s also fueling engagement. As the process continues, team members have requested to add a theme to our report card system. So far the most popular idea is to name each line after a Disney movie; you can progress from least to most important character in that particular movie. Even going as far to reward "Character Buttons" to be worn with pride for each level achieved. I'll let you know what we come up in a future post. In addition I’ll be sharing the other two initiatives that came out of our board meeting and our progress on each.

Have a good weekend,
Scotty

Hi everyone!

To help us achieve our vision, Michigan Farm Market has created an informal advisory board. This four person board will provide non-binding strategic advice to the management of Michigan Farm Market. This board will help provide insight on major decisions in our company and ultimately help hold management accountable to our growth plan. I'm very excited to have assembled such a talented group of people. My hope is that our advisory board will receive as much reward in communicating with each other and knowing their time directly impacts food entrepreneurs all over Michigan. Our advisory board does not have authority to vote on corporate matters or bear legal fiduciary responsibilities. Our first advisory board meeting takes place next Tuesday, August 9th. During the meeting, I will be updating the board on our progress and seeking their advice on some of Michigan Fam Market's greatest challenges.

I have provided brief bio's for each of our board members below:

Brian Breneman – Altus Brands – Grawn, MI
Brian graduated with a Bachelors of Business Administration from Western Michigan University and went into public accounting, earning his CPA designation in 1992. While in Private Industry Brian has led and managed rapid growth and international expansion, handled numerous business financing projects and led a turnaround and restructuring that resulted in a sale of a Company for $45mm. Brian also has extensive experience in acquisitions, due diligence, deal structuring and post-acquisition integration from both the buyer and seller perspectives and has spent a good part of his career on the operational side of finance. In 2008 he co-founded Altus Brands, LLC with two partners and has worked with them to build up a business that acquires small manufacturers in the outdoor products market. Brian continues to be a part of Altus Brands, LLC and he acts as CFO and oversees the Operations on a day to day basis.

Frank W Leonard - Lenbeck LLC - East Jordan, MI
Frank graduated from Minnesota State University Mankato with a Bachelor’s Degree in Business and Marketing. After graduation he joined the family furniture business in Traverse City. In 2005, Frank and son-in-law Scott Roggenbeck established a successful Save-A-Lot grocery business, gas station and convenience store in East Jordan. Currently, Frank is a six year member of the East Jordan Area Chamber of Commerce and serves a vice president. He is a member of Leadership Charlevoix County, serving on the mentoring committee. Since the founding of the leadership program five years ago, sixty participates have graduated from the nine month program. Frank also completed the John C Maxwell Laws of Leadership Program, a mastermind study group on leadership.

Brad Canada – Stryker Corporation – Indianapolis, IN
Brad graduated with a Bachelors Degree in Finance from Bradley University in 2005. After graduating, he worked for 2 years in Corporate Finance with Cardinal Health giving him exposure in Distribution Finance, GPO Reporting, and Lease Accounting. Brad then took a Sales role with Stryker - servicing and supporting a Territory outside of Washington DC with a focus on selling capital equipment, service, and consumables within the Minimally Invasive surgical space. After 5+ years of selling, Brad took a National Mgmt role supporting over 250+ reps and 30+ Managers. In early 2016, Brad accepted another leadership role with Sales and Marketing responsibilities for a $60M product/service line.

Melanie Nelson – Learning Zone Express – Minneapolis, MN
Learning ZoneXpress was established in 1997 in Owatonna, MN to satisfy consumer demand for consistent quality in affordable nutrition and life skills education resources. Melanie’s passion and energetic personality are reflected in the company’s products, along with her dedication to educating and meeting the needs of raising a healthier generation.
Melanie is a leader in her profession. She was named as a finalist for the Ernst and Young Entrepreneur of the Year Award in 2007. Learning ZoneXpress was recognized by Inc. 5,000 as one of the fastest growing companies in the United States. Melanie is also the winner of the 2011 HEIB (Home Economists in Business) Award.

I hate job interviews.

I’m sure this isn’t the case for everyone - but I’ve always struggled with meeting someone out of a list of names and trying to decide over the course of 2-4 meetings if they’re going to maintain a high sense of ownership for the company I co-founded in my parents’ garage. Professional references, trial employment, and behavioral interview questions can help remove some layers of gloss from a potential candidate. But ultimately you’re still observing them through the skewed window which they’ve presented to you. So when recruiting our management team I decided to modify the traditional interview process. Mostly by starting it three years before I had any job openings.

I’ve known each member of our new management team for at least three years. I have been close enough to their lives where I have been able to listen to their perspective of their work over a beer or two - but far enough removed from their lives where I could observe their work objectively. I first saw Anne’s borderline obsessive attention to detail in 2013 while she was interning in the National Cherry Festival’s social media department. Sheila started out in our warehouse – carefully hand packaging most of the items she now sells to Michigan retailers. And I remember running into Slik on several different occasions where he was still highly caffeinated from a several days long coding binge. In my short-list of potential leadership these three were at the top. But I wasn’t just looking for candidates – I needed co-conspirators. Idealists with hammers. To find out if they fit the bill, I decided I’d start my “interview process” by inviting each of them out for a beer.

The first invite was a friendly one-on-one catch-up during which I asked them about their current projects, gauged their willingness to make a move, and ultimately let them in on Michigan Farm Market’s vision. A week or so later, I got in touch with each of them again for another beer. This time I explained to them the vision I had for a specific role in our company. I ultimately left them with the understanding that they had an opportunity to fill that role if they wanted it. If they expressed interest (which all three did) we went through the traditional application process: Resumes, team interviews, references, etc. After that I invited them out for one more beer. With this final beer I quite frankly wanted to scare the crap out of them. “Yes this is going to be an exciting journey, but ultimately it’s probably going to be the most challenging job you’ve ever had. Our investors aren’t wealthy portfolio managers. We’re not a sexy tech company that’s going to file an IPO in a year. If we fail it’s not only going to cost us our jobs, but it’s going to cost your co-workers their jobs. Not to mention it’s going to cost a lot of people their hard earned savings. But I can promise you this: We’re going to help a lot of food entrepreneurs realize their dream, we’re going to build something that’s going to be around for a long time, and our work is going to improve the lives of our co-workers and people in our community. Go home and think about that. And if it sounds like something for you – I may have a job for you.”

And like the crazy people I thought they were – they all stepped up. I’ve been amazed over the last month how each of them maintains their sense of purpose and idealism through the stress of grinding out the day-to-day tasks of growing a company. There comes a great sense of relief when you realize you have the right people for the job. Luckily it’s not long before my sense of urgency takes over and I remember there is still a lot of work to be done. But now I get to share that urgency and that workload with a group of strong people.

No matter how big our company gets, I hope we never lose that nagging sense of urgency. Which shouldn’t be a problem if we keep recruiting our new leaders three years before we have a job for them.

Michigan Farm Market has closed on $203,000 in investment capital through our Localstake campaign. Reaching this capital threshold has allowed us to execute some of our priority hiring and marketing initiatives. We’ve added three key leaders to our management team: Anne Varga is our new Overall Marketing Manager, Chris Vanderslik (“Slik”) is our new Digital Product Manager, and Sheila Dhillon is our new Wholesale Manager. All are Northern Michigan natives and were recruited by me after a Michigan Farm Market-specific courtship process (More on this to come in a future post). The team has been operating out of our new office for about 3 weeks. This Thursday we will launch our first major marketing initiative - A sales campaign to gain 300 members to our subscription services by July 16th. We will be promoting 3 programs - each with its own recurring monthly billing of $49.99. Our offering includes close to 40 products from Michigan Farm Market, Underground Cheesecake, and Deering's Jerky.

When looking at promotional spend data - our cost of customer acquisition came out to about $40 - $50 using Facebook ads and 3rd party media partners. But our leadership team realized - including marketing materials and prizes - our cost of customer acquisition comes down to about $8 - $10 by holding a rewards based membership drive with our staff. We put the idea in front of the team at last week's all team meeting and they quickly became excited to compete and do something fun that would make an immediate contribution to their company. So for one month all 13 Michigan Farm Market staff members will be living the lives of Girl Scouts. Each of us will receive our flyers and order forms from the marketing team and are expected to bring in as many new signups as we can by July 16th. Since we're naming the campaign "The 300" we have a cardboard cutout of Gerard Butler in the office. He is one of several prizes up for grabs including a company party if we reach our overall goal. I expect this campaign to not only build a sense of team-member ownership but ultimately give us a base-set of demographic data through which to build future marketing campaigns.

Of course we still take pride in the little things. We were 2nd place in Traverse Magazine's Red Hot Best in the Dessert category. We finished only behind Amical Cuisine who is actually a wholesale customer of ours. So if we were going to lose that's the way I'd want to do it. We also won the Colantha Walker Dairy Festival Grilled Cheese Grill Off for the 2nd year in a row with our menu’s signature grilled cheese. The store has been revamped with a new logo and new signage and we are adding more products and menu items for the summer.

I will be focused on 2 numbers more than others this month: $50,000 in capital needed to finish our raise and the 300 subscribers we'll be looking to signup. So if you’re reading this, expect me to send you a monthly club membership link or flyer shortly :) If you’re one of the folks who has been on the fence about investing with us, I recommend signing up for one of our subscriptions. Once you see the quality and service we kick out, I’m confident you’ll be hard pressed to find a better way to put your capital to work.

Earlier last week I was very fortunate to attend a training workshop at Zingerman's in Ann Arbor. Anyone who has spoken with me or even just read our business plan knows that I've always looked at the Zingerman's Community of Businesses as a role model for Michigan Farm Market. My hope is that someday we can have the same impact on our community that Zingerman's has had on theirs.

The class was led by Zingerman’s co-founder Ari Weinzweig. He shared how Zingerman’s has used visioning to grow their community of businesses from a single deli to a family of specialty food brands with 700+ employees and $58+ million in annual revenue. He spoke of his passion for not only great food and great service, but for empowering and championing the people who work with him. He sees Zingerman’s as a tool through which to create goodwill in others’ lives.

Michigan Farm Market has a vision for where we want to be in five years. But I want to make sure I’m doing all I can to communicate our vision to our team and make them feel that they have a chance to participate in and shape that vision. With this next group of hires coming on board, it’s important to me that they feel the same sense of purpose in their work that the founders felt when we first started building gift crates in my parent's garage.

Zingerman’s passion for place making as much as profit margin is exactly the kind of culture we are working to create at Michigan Farm Market. It was inspiring to see an entrepreneur who stuck to his idealism and used it to create a successful company. The people who told him that it was a bad idea to open a deli in an odd neighborhood in Ann Arbor are the same kind of people who tried to tell us it was a bad idea to open a food business in Ellsworth. More than inspiration, I also left Zingerman’s with the practical tools needed to fold visioning in to our everyday operation. To show people that they’re not just laying brick – they’re building a cathedral. And I also learned that maybe wanting to build a food business in Ellsworth does make us a bit crazy. But as it turns out – most of the best people are.

It has only been two weeks since Michigan Farm Market launched its funding campaign and we've already closed on $70,000 worth of funding. Not wasting any time, we've already begun putting your capital to work in the following arenas:

New Recuring Revenue Products - We are launching 4 monthly club subscription programs that will charge customers a recurring fee of $40 to $50 per month, allowing them to receive regular shipments of gourmet food. Categories include: Michigan Fruit of the Month Club, Deering's Beef Jerky Club, Cheesecake of the Month Club, and Ice Cream Pint Club. These will all be launched by the end of the month and our goal is to get to 300 subscribers by the end of May.

New Marketing Campaigns - We are attending 3 wholesale shows this month in order to connect with new wholesale customers. On the eCommerce front - We have laid out the promotional campaign for our new product launches. These highly targeted online campaigns will measure customer cost of acquisition, categorize new customers into segments, and then invest in the marketing needed to pursue new customers within those segments. This will have a huge impact on eCommerce top line revenue.

New Hires to Increase Production Capacity - Bakery Assistant, Retail Store Manager, Two Kitchen/Retail Team Members, Truffle Chocolatier, and Digital Marketing Manager. Most of our new kitchen and retail team members start next week.

So as you can see, we are rolling! There is still plenty of work to be done. So if you know of anyone who would like to join in our mission to make Michigan food entrepreneurs more accessible, please send them our way. If you yourself are considering investing but are still on the fence - please feel free to reach out to me with any questions or feedback.

As for me - I'm getting back to work!
Scotty
517-897-2532

To our valued investors,

We are excited to announce that our investment offering is now officially live. We've gotten a ton of great feedback from our interested investors over the last month. And the folks at LocalStake have been working closely with us to get all of our paperwork together to get this thing live.

Final offering details have now been posted to our profile and are ready for your review and sign-off. We will then begin closing funds incrementally. If I can answer any questions, please don't hesitate to get in touch - either directly or through the platform.

After all of this planning and paperwork, I am excited to finally get to work!

Scotty
517-897-2532

Hi Everyone!

We've been working diligently since the new year to gather investment interest and get everything together to move forward in our capital raising efforts. We've now reached a point where we've posted preliminary investment terms. Those who've expressed investment interest in our company can view these terms under the "Investment Terms" heading on our profile. If you have any questions or feedback on our preliminary terms please feel free to send them across. Otherwise if you are happy with the preliminary terms please commit to invest on our profile. We will be posting our actual offering documents to committed investors in the near future. After many months of planning we are excited to finally be getting started on our growth plans! Please feel free to post comments or questions on our preliminary terms. Otherwise you can message me directly,

I'm looking forward to working with each of you to promote Michigan's hard working food entrepreneurs!

Scotty Bruce
CEO/Co-Founder