Serendipity Cafe Uses Kabbage to Keep Espresso Flowing and Cinnamon Rolls Baking
Laura and Johnny Hobson worked in food service, music and education before starting a baking business in their home in the small town Maynard, Massachusetts. Part of the enjoyment of baking cookies, muffins and cinnamon rolls is selling directly to customers at events like farmers markets – even delivering cinnamon rolls to people’s homes. “We really try to connect with the community,” Laura says. “I think that’s one of the reasons we’ve been successful.”
In 2013, Laura and Johnny agreed to become the in-house bakers for the newly opened Serendipity Cafe using crowdsourced funds. When the owner realized he wasn’t cut out for café ownership, Laura and Johnny bought it with the help of a private loan. “We’ve never been people of extraordinary means,” Laura says. “You hear those stories about investment bankers who decided to throw it all away and open a barbecue joint or whatnot. That was never our situation.”
Four years after buying the business – now called Serendipity Cafe & Hobson’s Homemade Bakers – Laura and Johnny have built a solid reputation for homemade and healthy baked goods, breakfast and lunch dishes. “The quality of our ingredients is one of the things that sets us apart,” Laura says. “Right now we’re the only place where the majority of the menu is organic or natural, made from scratch or comes from local vendors.”
Investing in espresso
When Laura and Johnny took over the café, they reduced all possible costs to save money. “Payroll was something like 80 percent of the total operating budget, which was way too high,” Laura says. She looked for tasks that she and Johnny could take on instead of hiring outside help, like paying bills and managing payroll and other administrative tasks themselves.
Although Laura and Johnny watch budgets closely, they’re willing to invest in tools that maintain their reputation for quality. At one point, an inherited espresso machine was breaking down. “It was really hard to turn off – we were dealing with hot steam, and some of the younger employees were afraid to use it,” Laura says. Coffee makes up 50 percent of the café’s sales, so a smoothly operating machine is critical.
After learning about Kabbage on social media, Laura initially used her loan to buy a slightly used but vastly better espresso machine.
“It’s much more efficient than the old one,” Laura says. “I can have two baristas use it at once, and it’s safer.” At about $12,000, “the machine was something we could never have afforded without Kabbage.”
She also used a Kabbage loan to pay a large vendor bill. “It was nice to pay the bill in one lump sum without having to drain all the savings I had,” Laura says.
Slow and steady expansion
Laura and Johnny have been careful to grow the café business slowly, surveying customers on which new baked goods they like most or whether there’s demand for evening hours or specific menu offerings. They’d like to expand their baking capacity since all the baked goods currently come from a single oven in the café’s back room.
“It’s like ‘Food Network Challenge’ every day,” Laura jokes. “There are opportunities for us to expand, but I want to make sure we can keep our quality up. Our dream scenario would be to have a place where we could a cook a little more.