Rachael, Direct Incorporation Staff
Among the most common types of small businesses in the U.S., “Farm and Food Production” ranks number 12, and “Restaurants, Cafés, and Bakeries” stands at number 5. In some ways, Argus Farm Stop in Ann Arbor might seem like a simple combination of these two types of businesses: a grocery store/coffee shop that sells locally sourced food. Yet, it is so much more than that. This week I had the joy of speaking with Kathy Sample, Co-Founder of Argus (which she owns with her husband Bill), about her experience with Argus for the past two years. Not only is her story inspiring, but she also offers great advice for anyone thinking about starting a business–especially one with a social mission in mind. Here’s our full conversation:
Can you start by telling me a little about yourself and what you do?
“Argus Farm Stop is an L3C: a Low-profit Limited Liability Company. So we’re a for-profit company with a mission to grow the local food ecosystem in Washtenaw County. We’re essentially a grocery store for which all the farmers own the produce and meat and dairy products, and we sell their products for them on consignment so that they don’t have to stay at a farmers market. You might have one guy who just has raspberries and wants to have an outlet but doesn’t want to sit in a farmers market, so we provide that space. We’re open every day all year, so we not only give them an additional approach to get to customers, we also offer an every day, year-round market for customers to access local food. So if they cant make the Saturday or Wednesday Farmer’s Market, they can come into Argus and get the same products from local farms. We started with about 40 farms but now we have about 150 different producers growing things or making things from local ingredients.”
How did you come up with the idea for Argus?
“We went down to Ohio to take our kid to college and saw a place that was similar to this called Local Roots in Wooster, Ohio. My first reaction was, ‘Why doesn’t every city in the United States have something like this?’ Where local farms can bring their stuff, and it can be sold but the farmer doesn’t have to stand there all day. Because you want to be working at your farm when it’s a nice day, and if it’s not a nice day, you’re not going to get a lot of traffic at a farmers market. We’ve made our famers work into a really weird model. You wouldn’t make somebody who sells gas stand there and sell their gas one day a week at an outdoor market. So I don’t understand how this has happened and its just a little boutique-y thing (well actually I do know: industrialization of food and the ability to call a 1-800 number and order everything at a big grocery store is what happened).
So we saw this place and said, ’We could do that in Ann Arbor.’ We came back here and called people at U of M that are in the sustainability area, asking ‘Has anyone ever done this in Ann Arbor? Is anyone doing this in Ann Arbor?’ We just kept making phone calls. Then at the Local Food Summit we introduced this concept to farmers and customers and got really good feedback. We wanted to make the Ann Arbor Farmer’s Market a full-time enclosed area, and they said, ‘It’ll take too long to get approved, but we love your idea so we’ll help you do your own thing.’ We started looking for locations, and this [building] was abandoned, and affordable, and we thought, ‘It’s kind of a cool part of town,’ so we took a chance. We did a demographic analysis with the Small Business Development Center, which is a fantastic resource, we used Michigan State University Product Center, we talked to people about what its like to go into business with your spouse…A couple people were like, ‘Grocery retail is really hard,’ but we both have business backgrounds and we thought the coffee shop would help us. The model is that the farms get eighty percent of the price they set and we get twenty percent, which you can’t run a business on. But the coffee bar gives enough margins to support the whole model. When we have this robust coffee bar with this community, (which is what the whole thing’s about: people who love local food) it works.”
Kathy and Bill inside of Argus
What do you like about having your own business?
“I was in the corporate world for my whole career, as was Bill, my husband, who started this company with me (we also had another partner, Scott Flack, who now works in Detroit). So coming from a corporate background, I like the fact that I have complete autonomy to make decisions about what happens here. If I see that something needs to change, I can address it by working out something with our staff and everybody’s opinions—but the point is, I can make a decision and get it done.”
Do you have any advice for someone who is thinking about starting something similar?
“My advice would be: make sure that you form a network. It takes a village. To do something with a social mission like this and a mission that involves a local community, you need to have a whole network of people who support you: in our case it was farms and customers. You really have to have the ability to contact people that you need at different points, you need a really deep net of contacts. You need to know people in the food industry, the people who do food policy, local people like the farmer’s market people (because they need to be supportive of you—it’s a community, we’re not trying to out-perform the farmers market, we’re trying to make everybody’s local food access better, so we work in concert with them). So I’d say at a very minimum, cast a wide net and find a lot of supporting characters. And then do your homework. Know what you’re getting into. Know what the rules and expectations are. If you’re doing something that copies another model, spend a lot of time with that model. We have about ten different entities working with us to form ‘Arguses’ in their own way around the country. They spend time with us, shadow us, learn our systems…they ask the right questions, the hard questions. So, learn a lot before you do it. Spend some time upfront, don’t just think, ‘Oh that looks like fun, I’m gonna do that.’ It doesn’t work that way.”
So what is it like running a business with your spouse?
“It’s great. One of the things people told us (and it would be the same rule for any kind of business partner), is to pick your tasks and stick to them. Bill’s analogy is that it’s like playing soccer: if the ball goes by, not everybody goes after the ball. You know when you go after the ball, and the other guy knows when he goes after the ball. We know what our roles are and we know what our skills are, so we’ve divided it that way. And then we hired an awesome staff. If you don’t have great people that are committed to your mission, its not the same. This is about food, and it’s about local farms. So all our people have farming backgrounds, or do some farming, or have sustainability interests, or cook…but they all can tell the story of local farms. That’s the important thing.”
When talking to Kathy, it was clear that she absolutely loves what she does. She’s managed to create a business that is successful financially, successful in food sustainability, and successful in working towards a mission that she is passionate about. That sounds like a pretty good business model to me.