With Love and Quiches (18 page)

In addition to the caterer and disc jockey, we hired a party planner to organize relay races and activities for the children, cousins, neighbors, and friends of our employees. They were wonderful parties, and over the years we kept adding more elements, such as a magician to
perform, face painting for the kids, a row of concessions for amusement park–type games, towering blow-ups for rock climbing and slides, miniature golf, bucking bull riding, and other stuff. We also held dance contests with small cash prizes, and we had a raffle where the first prize was a TV.

Eventually we had as many as four hundred attending as the Love and Quiches family, and
their
families, grew. I was the archivist and took hundreds of pictures at each June party; we made a photo album of each and every one. One entire shelf in my office is full of them in chronological order.

________

We continued to very carefully look for talented employees to promote from within, as well as to bring in some experienced people from the outside, people who could bring fresh ideas to the table. The demand for high-end gourmet products was growing; we had to position ourselves to compete on a level playing field.

Everything happens for a reason, and one door closing opens another. We had just hired Michael G.—almost right out of school at Johnson & Wales—as our pastry chef’s assistant, and since he was too young to have had enough jobs to provide references, I called the school and spoke to the dean. I was told that on a scale of one to ten, Michael would score a fourteen. So, we never missed a beat when, shortly thereafter, Abby walked out the door after ten years with us and never came back—not even a phone call. Michael—who I’d fight to the death to keep—has been with our company ever since and now serves as VP of research and development. He works very closely with all of our larger clients and is recognized as one of the top pastry chefs in our industry.

Many of our other employees, even our line workers, have been with us for twenty-plus years. I have seen a number of them recognized for their promise by being promoted to positions such as line leaders, quality technicians, shift supervisors, warehouse managers,
and so on. Their longevity has strengthened Love and Quiches. They are all part of our team, built from the bottom up.

But building our management teams—both top management and mid-level, with areas of responsibility and orders of command well defined to avoid duplication, waste, and conflicts—took a
very
long time, and we made quite a few mistakes. As I’ve said before, failure is definitely underappreciated as a learning tool. We brought in a series of operations directors until we found the right one. We brought in a series of quality assurance directors until we found the right one. We brought in a series of purchasing directors—some howlingly incompetent—until we found the right one.

We also brought in some whom we thought would be heavy hitter salespeople, but, once again, we made some very poor, and costly, choices. Finding the right sales force proved to be the longest process of all, because it is only recently that we have developed the high-performance sales team we have always needed.

During our early decades, we had constantly evolved, first in very simple ways and then in much more complex ones, but it has always been our willingness to roll up our sleeves and get
to
it that has enabled us to achieve our current place at the table. It had been a decade-long process just to begin to achieve an effective organizational structure, and we still weren’t done as we crossed over into the 2000s.

Actually, the nineties, after the brutal 1991 recession precipitated by the First Gulf War, was a decade of strong and sustained growth in the overall economy. Love and Quiches was humming along at quite a robust pace at the time. Little did we know that very soon our business model would be completely transformed—suddenly and dramatically—as a result of one tragic day in our nation’s history. Our accidental period was about to come to an abrupt end.

What does not destroy me makes me stronger.
—Friedrich Wilhelm Nietzsche

A
ll New Yorkers know exactly where they were and what they were doing when the two airliners hit the Twin Towers on the morning of September 11, 2001. Our entire country and the world beyond stopped breathing as we watched it happen in real time. The images will never fade for any of us, but especially for New Yorkers, as well as for those near the Pennsylvania field and the Pentagon, there is a feeling of vulnerability and grave insult that just doesn’t leave us. We could taste it, feel it, and smell it. And there are very few of us who don’t know somebody who died that day, or know somebody who knows somebody who lost a loved one—a son, a daughter, a husband, a wife, a mother, a father, a friend, a relative. But we have learned to live with it. There was no other choice. For a very long time after that day,
my heart would race each time I headed into the city and had to cross a bridge, enter a tunnel, or take a train.

That morning our friends from Kraft Foods were visiting Love and Quiches. We were supposed to spend the day in the Freeport facility working on a co-branding project, but we ended up staring at the screen of a tiny fourteen-inch TV in our small conference room. As many Love and Quiches employees as could fit into the packed room watched with us. It was so surreal that we found ourselves shaking our heads, trying to clear our eyes of these images. We thought it couldn’t really be happening. But it was, and we saw it all.

Later that day, our traumatized visitors from Kraft eventually found their way home, but it wasn’t easy. The disruption was monumental. Nothing was moving.

Our buyer was in Las Vegas for a big bakery show. She had to get back somehow, but there were no planes, of course, and no cars were available to rent. She approached a complete stranger who got the very last car at one agency—perhaps in all of Las Vegas—and was heading east; she offered to share the driving. These strangers spent almost three days traveling together—each thinking the other could very well be Jack the Ripper—before parting at the George Washington Bridge. Both of them were relieved finally to be near home and convinced they would keep in touch. But of course, they never saw each other again.

I have a friend whose daughter-in-law lived downtown; she literally ran uptown barefoot in her pajamas with her half-naked newborn, dust and debris everywhere, found her way out of the city, and never returned. She left behind her clothes, her furniture,
everything.

New York had been brought to its knees, and so had Love and Quiches. We got clobbered, as did so many other businesses. Twenty-five percent of our business at the time was within the airline industry: obviously not a very great place to be just then. We suffered hundreds of thousands of dollars in canceled orders and hundreds of thousands more in losses due to what was now obsolete and irrelevant inventory, both finished and raw, already produced in anticipation of filling those orders.

We had hundreds of thousands of additional dollars tied up in inventory for our other channels of business, not to mention our lease for storage space across the street and the accompanying carrying costs. In short, our glut of inventory was a recipe for disaster.

Everything came to a dead stop. There was a mass reshuffling in our customer base, especially those segments we serviced that were heavily travel related. The phone stopped ringing. Long-standing contracts were canceled because of the severe disruption, and there was plenty of other collateral damage. Sbarro lost two units when the towers collapsed, although, miraculously, no employees lost their lives. Their hundreds of units in airports across the country suffered, however, which led to
their
distributor filing for bankruptcy. That hit us with a further loss of even more hundreds of thousands of dollars. This distributor had
never
been a good payer, and I often had to appeal to my friend Joseph Sbarro himself, who would call the distributor for us, raising his voice and demanding payment on our behalf, so that there would be no disruption of supply to
his
restaurants. But now the distributor had gone bankrupt altogether.

To add insult to injury, we were sued by the bankruptcy receiver for the last payment of about $250,000 we’d received from the company—only a
part
of what they owed us! Because of a quirk in the bankruptcy statutes, anything paid out within ninety days of the filing is deemed preferential. We ended up settling for $90,000, which we had to pay the court—and don’t forget that our lawyers in this case did not work for free. Because we were a legitimate claimant we got some of the money back years later, once the case finished wending its way through the courts. But it came to about ten cents on the dollar! I don’t remember ever being quite so angry.

Another of our distributors that exclusively serviced the airlines could never fight its way back to profitability and closed its doors, costing us $200,000. We were
not
happy people.

It was a devastating time for the country and for our business. Our reserve cash—so vital for carrying companies through downturns and
slow periods—wasn’t enough to help us weather this unfathomable storm. Our path ahead looked rocky and uncertain to say the least.

Indeed it was. With ironically superb timing, the bank that we had been with for many years leading up to 9/11, which was originally a Midwest outfit, decided to withdraw from the New York market. We found ourselves in the unenviable position of needing to find a new banking relationship at exactly the wrong time. We succeeded, but not very easily. It was another marathon, but the relationship with our current bank has grown, and we are still with them today, a decade later.

There was
one
bright spot along that path, however. We qualified for an SBA disaster (9/11) loan with an extremely favorable interest rate and a twelve-year payback because we were so specifically and negatively affected in so many ways. This helped us secure desperately needed funding. Still, once again, we had to put up our home as collateral; there are no free lunches. During this period, there were times when I feared 2001 might mark the end of the Love and Quiches story, but we did not,
could not
, give up.

Here is one of the very first lessons every entrepreneur needs to learn: you are going to suffer adversity and setbacks. There is no escaping them. But your success depends on how you handle those setbacks. If you can push through, keep your spirits, your determination, and your courage up, and if you can learn from the experience, you’ll come out much stronger than you were before.

Running a business is not for the faint of heart. Adversity can hurt. Your mistakes can be humiliating. When you find yourself in that place—when a new product fails, when your partner quits, when you’re denied a loan, when a competitor steals one of your best customers—you cannot take it as a sign from the universe that you should give up. Every success story has these dark chapters. If you want to keep your business alive, you
have
to press ahead, overcoming the situation at hand. However,
this
was adversity at an entirely new level.

I have come to think of everything that happened, from our founding in 1973 to that period in the early 2000s, as a kind of game, a
warm-up for all that was to come. It was my accidental business period: Love and Quiches Lite. The adversity brought on by 9/11 pushed us to become something new, different, and better. It served to show me that I
could
do it, that
we
could do it. On some level, it was like a magnified version of that six-thousand-case order for our delicious Pecan Brownie Pie in the late seventies—it catapulted the business up to a new level and catapulted
me
into what would be the rest of my life.

We’d found ourselves in absolutely the wrong place when 9/11 struck, but it helped us realize that we needed to completely overhaul our business model. And we sought a lot of outside advice to make sure our path would be all up from here. From that point forward, we slowly gained ground that we have never relinquished. The changes we went through in the early 2000s were transformational, and we ended up bigger and stronger. (More on how we did it in the next two chapters.)

As a business owner, it’s part of your job to prepare for the future, but we’re all subject to forces we can’t control, whether it’s an unthinkably tragic terrorist attack or a sudden economic downturn. The test of your business is in how you respond to those forces when they come—and they
will
come.

As I’ve described in previous chapters, Love and Quiches has been profoundly affected by several major recessions since its inception. And most people don’t even remember the one early in the decade—in March 2001, statistically ending in November of that year—because of the tragic events surrounding 9/11. But we were still battling the effects of that early recession when the unthinkable occurred.

In addition, the commodities debacle of 2007 was particularly harmful to
my
industry: the prices of our most basic ingredients—eggs, soybean oil, butter, flour, cream cheese—skyrocketed, sometimes doubling or even tripling. It was more than we had ever paid since our founding. We could not, of course, raise our prices to match, since our customer base fought us tooth and nail. When those items began to moderate, we then experienced the same escalations in the prices of sugar, chocolate, and nuts. And we use a
lot
of sugar, chocolate, and
nuts! These, too, eventually moderated, but they never fell back to prior levels. Other commodities will soon escalate, and so it goes.

Coupled with the Great Recession and the ensuing global financial meltdown, times were, and remain, challenging to say the least. We all now are still at battle with the lingering aftereffects. This is the new reality; the cycles are never ending.

And so it will be with your business, whether you are selling web designs or artisanal cheeses. The first key to success is staying determined and positive during the hard times so that you can emerge, newly strengthened, on the other side.