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Goodbaker News:
"Micro-lending Spawns Goodbaker.com"

This article was excerpted from June 2 2004, The Somerville News


Micro-lending spawns Goodbaker.com

by Ryan P. Ives

In the Brickbottom building at 1 Fitchburg St., Lee F. Busch, a 1988 Tufts University graduate, lives and works in an attractive artist’s loft. Busch, a graphic designer by trade, has recently launched his second business, Goodbaker, www.goodbaker.com, an Internet start-up that sells prepared mixes of vegan baked goods to people across the country.

While Busch has always been health conscious, his research into vegan products began when he developed a dietary restriction. “In 1999, I visited friends who were teaching in Chiang Mai, Thailand, and I got food poisoning. When I came back, I couldn’t eat any dairy products. I really like sweets, and I couldn’t have anything conventionally made, so I started experimenting for myself with new mixes,” he said.

Busch said his initial experiments were very scientific. He pulled ingredients from a variety of sources and kept close track of the amount of each ingredient he was using.

“I don’t use eggs or dairy, which are the foundation of Western baking. I use different types of starches to replace the eggs, like tapioca, and I based some of my mixes on Depression-era recipes, from a time when eggs and butter were scarce. In 2000, I started formulating mixes that could be sold, and testing the mixes on my friends—that turned into Goodbaker,” he said.

When he realized the commercial potential of his recipes, Busch sought out and took advantage of a variety of resources. “The Massachusetts Specialty Foods Association provided peer-to-peer advising and a support network, and Nuestra Communidad in Jamaica Plain has a commercial kitchen which allowed me to test-market the products,” he said.

After an initial testing phase, Busch decided to move forward, but he needed a start-up loan to do so. “When I decided to take the plunge, I was referred to Acción from a friend in MSFA, and that money allowed me to find a copacker to produce the mixes,” he said.

Busch launched his Web site in March of 2003 and received a loan from Acción USA, a micro-finance non-profit, five months later. Before the loan, Busch was running the entire business without a third party. “I’d been selling mix and producing it by hand, and I was losing money on every sale because of the man hours and kitchen costs,” he said. With a co-packer producing the mixes in advance, Busch was able to focus on marketing.

Acción USA, the largest micro-lender in New England, has been working in the greater Boston area since 1993. They provide loans to small businesses and start-up businesses at a level tailored to the specific needs of the client.

“We offer small business loans between $500 and $25,000, and we focus on the smaller loans. Commercial lenders usually start at around $25,000,” said Erika Eurkus, the New England program director of Acción. This allows businesses like Goodbaker to get off the ground without incurring a large initial debt.

For Busch, the choice to work with Acción instead of a bank came down to the amount of risk he was willing to take. “The great thing about Acción is they operate on a level that most entrepreneurs operate at. Most banks prefer to give larger loans, but I wanted a smaller loan to minimize risk. And I wanted to borrow in my business’s name to start building a credit history for Goodbaker,” he said.

“The reality is it is getting tougher for small businesses; there is a big credit gap between $500 and $75,000 loans,” said Livingston Parsons III, the vice president of lending and model development at Acción, and a Somerville resident. “I was a banker for ten years, and I did some huge loans. These guys are as sophisticated as the CFOs of multinational companies,” he said.

Parsons sees a lot of changes coming for Somerville and said micro-credit is one component of a healthy and vibrant community. “Somerville is a market that we’re really interested in; it’s a community that has a growing number of small businesses. It’s such a diverse community that has a high history of self-employment and entrepreneurship,” he said.

A little more than a year after Busch started Goodbaker, he is seeing a growth in the market for vegan desserts, as well as for his business. “A lot of people, when they talk about dessert, say if it’s not bad for [them], then they won’t eat it; it’s almost a point of pride. I try to choose ingredients based on nutrition—I try to increase fiber levels, for instance—without having it taste like health food,” he said. “I sell 90 percent to individuals, and I have a large amount of repeat customers, many of whom are not vegans,” said Busch.

Busch has noticed an increased interest in vegan products. “I think people have a wide spectrum of nutritional needs. I’m not a person who is extreme in his views, but I do think our factory food production is unsustainable and inhumane.” Busch, who said he thinks people should eat less meat, said that there has been a greater interest in vegetarian and vegan issues since the mad cow scare.

Busch continues to run his two businesses from his three computers out of his Brickbottom loft. He said the company has already grown to the point where he is looking for part-time help.

“I have six products now, and I’m bringing out four more next month. I feel very lucky that I found the Massachusetts Specialty Food Association, Nuestra Communidad, and, through them, Acción. Goodbaker would not exist without these resources.”

Photo Credit: Ryan P. Ives

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