When America’s oldest ice cream company — Philadelphia’s Bassetts Ice Cream — first opened in1861, international product distribution was unthinkable. Founder Lewis Dubois Bassett, a Quaker school teacher and farmer, made and sold ice cream from his backyard using a mule-turned churn. But, over the four generations of family ownership that followed, the Bassetts grew their home-based business into a household name across the eastern United States. From Bassetts’ headquarters in Philadelphia’s historic Reading Terminal Market, the company won customers up and down the East coast and as far west as Chicago. Thanks to Bassetts’ heirloom family recipe and nearly 150 years of dedicated work, national prominence was in sight, but exporting internationally remained completely off the radar screen.
But, in 2008, everything changed — both for Bassetts and for ice cream lovers as far from its Philadelphia home base as China. That year marked Bassetts’ President Michael Strange’s first meeting with SBA’s exporting experts, setting Bassetts on a course to tap exploding opportunity in international markets.
Today, ice cream is almost everywhere, and almost everyone has a favorite flavor. But in 1861 – when Bassett’s Ice Cream founder Lewis Bassett began producing and selling it from his farm – ice cream was just beginning to take hold in America. That novelty, combined with the quality of Bassetts’ secret family ice cream recipe and farm-fresh ingredients, earned Bassetts a strong foothold in the growing ice cream industry, propelling the company to early success. Soon, Lewis Bassett opened a store in Philadelphia on Market Street near Fifth Street. Then in 1892, he moved production and his retail store to Philadelphia’s then-newly-opened Reading Terminal Market, where the Bassetts Ice Cream store remains today as the market’s last original tenant.
Over the ensuing years, Bassetts remained in the spotlight. High-profile projects ranged from making 50 tubs of borsht sherbet for Soviet Premier Nikita Khrushchev in 1959 to producing signature flavors for a variety of Philadelphia-area celebrities and special events. With each passing generation of family ownership, Bassetts burgeoning brand could be found in an increasing variety of restaurants, clubs, independent ice cream shops, and, grocery stores. Ultimately, the Bassetts brand came to thrive in both the wholesale and retail arenas, and the company grew into a full-service dessert distributor serving much of the eastern United States.
Opportunity Knocks: Overseas Opportunities Put Bassetts On Brink Of A Boom
From the beginning, Bassetts has been a business pioneer. Bassetts’ company founder Lewis Bassett set the standard, starting an ice cream business boldly before most Americans had even tasted the creamy confection. Now — with the help of the SBA — his great-great-grandson, current company President Michael Strange would take up the torch, opening whole new markets for the company through international export of its now-iconic ice cream.
By 2008, generations of dedicated work had primed Bassetts for a chance encounter that would change everything. At a networking event that year, Bassetts President Michael Strange connected with a fellow entrepreneur whose business partner had ties to a food distributor in China. Through these new contacts, Strange shipped ice cream samples to the Chinese distributor, sparking a torrent of demand from the far east and securing Bassetts its first product order from China. The wheels were now in motion: Bassetts was on a runaway train hurtling towards becoming an international brand. A blind taste test in China ranked Bassetts ice cream ahead of some of the world’s largest brands and Bassetts’ Chinese distributor was poised to place the brand in grocery stores, restaurants, and ice cream shops across China. But like most American small business owners, Michael Strange had no idea how to do business in China. How should foreign receivables be handled? Where can overseas shipping insurance be obtained? How is a growing export business best financed? The future of Bassetts’ international business opportunities hung in the balance; if these questions were not answered and answered fast, the very overseas market that could carry Bassetts to next-level success could just as easily break its core business that five generations had invested everything to build.
Enter: The SBA
Once again, chance intervened and Bassetts locked in its overseas opportunities for the long haul. Just after Bassetts received its first Chinese order, Michael Strange’s new international business contacts connected him to exporting expertise at SBA’s Philadelphia District Office and its Small Business Development Center resource partners. SBA’s exporting counselors connected Strange with counselors at local SBDC’s, other federal agencies, and export-focused organizations to guide Strange step-by-step through the exporting process. With that SBA guidance, Strange learned how to structure foreign receivables, secure export-import insurance through the Export-Import Bank of the United States and tap into the USDA’s Branded Program to fund up to 50% of certain overseas marketing costs up to $600,000 per year. That guidance built Bassetts a strong framework for its export business going forward, setting it on the track for long-term exporting success.
Today Bassetts Ice Cream has approximately 2,000 customers in China, where it has opened two retail locations and sells to a variety of grocery stores, ice cream shops and restaurants. The company also has a growing export business in the Bahamas and Anguilla and hopes to export to even more countries over the coming years. Bassetts President Michael Strange continues to strengthen his export business through SBA, participating in exporting classes at local SBDC’s and working closely with exporting experts at SBA’s Philadelphia District Office.
Kathy Wolper has some advice for fellow-small business owners: take full advantage of every business-building opportunity.
But, for Wolper, as with many small business owners, opportunity isn’t always easily recognized or easily tapped. So, when opportunity seems out of reach, Wolper simply creates her own. And, according to Wolper — with the right mix of research, passion, and tenacity — other small business owners can do the same.
Wolper founded her successful cooking instruction and specialty baking business — Kathy’s Just Desserts/Cooking Wizards — when her then-employer’s bankruptcy left her unemployed. Wolper turned that unemployment into to opportunity when she used her technical training and elementary education experience to found a business based on her life-long passion: baking. And, when Wolper faced the challenge of financing her firm’s growth, she, once again, created her own opportunity—this time, with the help of the SBA.
Do What You Love
In 2001, Kathy Wolper was an experienced education professional, a passionate baking hobbyist, and she was unemployed. Wolper spent her early career as an elementary school teacher and parlayed that experience to become a technical trainer. All the while, she spent her free time baking elaborate confections for family and friends. Wolper had found outlets for her skills and passions and was busy balancing the demands of both, when the events of September 11, 2001, brought life as she knew it to sudden a halt.
Wolper lived and worked in eastern Pennsylvania, far from the New York City and Washington, D.C. areas so economically hard-hit by the terrorist attacks. But the overall economic lag that followed the attacks left Wolper’s employer in bankruptcy, and left Wolper to look for her own “next chapter.”
Wolper had always dreamed of starting her own baking business, but, before September 11, life’s track had led Wolper in another direction. But, now, the stage was set for a new start for Wolper. Wolper’s unemployment benefits included a Women’s Opportunity Resource program about how to start a business, and Wolper seized the chance to learn the practical side of making her dream of business ownership a reality.
Just one month after September 11, 2001 turned her life upside down, Wolper opened Kathy’s Just Desserts/Kitchen Wizards for business. The “Kathy’s Just Desserts” arm of the business offered a variety of baked goods, ranging from cookie trays to elaborate wedding cakes, all baked in her at-home kitchen (which was fully certified by the Department of Agriculture). The “Kitchen Wizards” part of the business taught students of all ages how to cook through in-school programs, summertime cooking camps, scout workshops, and adult “Supper Club” classes.
Wolper was finally doing what she loved.
Taking the Next Step with the SBA
By 2008, Wolper’s business was on track to expand. Seven years in business had proven that there was a strong market for her business’ services. Now, Wolper wanted to expand her business’ geographic footprint to capture even more of that market. Wolper had funded the business’ start-up and early development herself; Wolper’s home-based business model allowed the business to flourish in her East Norriton, Penn., hometown without a large overhead. But, now, Wolper had her sights set on expansion within her own community and across the country. She knew that she would need to hire a business development team, expand her marketing efforts, and invest in legal counsel to guide growth, but Wolper didn’t know how she would finance all of those expenses. Expansion on that scale would require outside financing, and conventional bank financing seemed out of reach — the business’ historic cash flow volume, while healthy for a local business like Wolper’s, was not commensurate with the larger scale business she envisioned.
So, once again, Wolper searched for a new opportunity. She researched her options, worked her contacts, and attended a variety of economic development events, forums, and lectures. But, it was not until she attended a 2008 business networking event at Montgomery County Community College that her financing plan began to come into focus. At that event, Wolper learned that SBA’s “Meet the Lenders” lender-borrower matchmaking event could help her find the financing that she needed — fast.
“Meet the Lenders” helps entrepreneurs find financing fast and connect with onsite business counselors for mentorship and technical business education. The event’s “one-stop, speed-dating” format puts potential borrowers in front of a host of active lenders in a single day. “Meet the Lenders” is made up of a series of 15-minute “pitch periods,” during which each entrepreneur presents their financing need to a lender one-on-one before moving to the next lender to present again. Lenders then schedule detailed interviews for a later date with entrepreneurs whose needs may be a match with their lending portfolios. Representatives from SBA’s Resource Partner network (SCORE, Small Business Development Centers and Women’s Business Centers) are also on hand at the event offering technical business advice to help entrepreneurs reach their financing goals.
In Fall 2010, Wolper attended an SBA “Meet the Lenders” event in King of Prussia, Penn. She brought with her to the event her business plan and all documentation pertinent to her loan requirements and presented them to a variety of lenders. After a series of post-event meetings with several lenders, Wolper secured an SBA-backed line of credit through Univest Bank and Trust Company.
Wolper’s SBA-backed line of credit allowed her to pursue her business expansion, one step at a time. Today, Kitchen Wizards operates 50 cooking camps in the Philadelphia metro and New Jersey shore areas, along with its successful battery of classes. As Kitchen Wizards continues to grow, Wolper’s next steps include expanding her business’ footprint to include operations in inland southern New Jersey and the Boston area.
Along with that growth, Wolper’s plans include giving back to the community; her business will donate a portion of proceeds from any kids' program during the calendar year 2012 to the Mommy's Light Lives On Fund, a charity founded to help bereaved children through the grief process following the death of their mothers.
Home-Grown Philadelphia Firm Preserves 180 Jobs and Reinforces City’s Maritime Industry Prominence, Thanks to SBA Funds
Not so very long ago, much of the storied Philadelphia Navy Yard lay dormant. Once a vibrant hub of the nation’s maritime industry — employing 40,000 at its height during World War II and building and launching the likes of the battleship New Jersey into U.S. Naval service — the Yard closed in 1995, and 7,000 jobs were lost. Although the Navy maintained some military facilities on the Yard’s western end post-closure, acre after desolate acre of the sprawling 1200 acre shipyard lay abandoned.
For many, the decaying Navy Yard stood in silent testament to the broader decline of industrial America. By the turn of the last century, untold numbers of industrial and manufacturing sector firms were shuttered in Philadelphia, alone. Marketplace changes and foreign competition ravaged those sectors, and industry stalwarts like Rhoades Industries, a mechanical contracting and fabrication firm doing business in Philadelphia since 1938, were no exception.
But endings often make way for new beginnings, and, thanks to resourceful leadership and SBA financing, Rhoades Industries is, once again, no exception to the rule. As traditional opportunities dwindled, Rhoads tapped into new markets, re-shaped its customer base, and wrote its own ticket for success in the modern economy, complete with a new address at the now revitalizing Philadelphia Naval Shipyard, re-dubbed the Philadelphia Naval Business Center.
Setting the Stage for Success
In 1890, Rhoads Industries’ owner, Daniel Rhoads’, great grandfather, Samuel Rhoads, opened a sheet metal fabrication shop in Philadelphia. The business grew with the city’s development, and Samuel passed it on to his son, Samuel, who, in 1938, named it Rhoads Industries. In the years that followed, Rhoads Industries evolved to include mechanical contracting and produced many large and complex metal structures and devices for both local and international customers. That work lead Rhoads to team with The Department of Energy, as well as a number of Fortune 500 firms such as DOW, Northrop Grumman, Lockeed Martin, and Air Products.
By the turn of the last century though, industry tides were turning. Foreign competition was seizing hold of the industrial and manufacturing sectors’ customer base, and Rhoads’ competitors were failing. To survive, Rhoads’ would look to its own upstart roots. Just as it had at its founding, Rhoads needed to identify a new customer base and tap into it with products tailored to its needs. In short, Rhoads needed to re-invent its business model to survive.
Charting a New Course
As more traditional customers fell away, Rhoads’ work for the U.S. Navy increased. Rhoads mechanical engineering and sheet metal expertise was a perfect fit for the Navy’s needs. Work repairing Navy ships and harvesting spare parts from retired Navy ships for use on other Navy vessels was plentiful. By mid-decade, Rhoads had won federal government contracts with the U.S. Navy had developed substantial goodwill with the Department of the Navy and other defense contractors at the Navy Yard Industrial complex. This created a solid new business segment for Rhoads.
By 2006, it was clear that Rhoads’ next chapter would be inextricably tied to the maritime industry, and company head Dan Rhoads focused on developing that business. Rhoads already knew his company’s Philadelphia headquarters’ proximity to major waterways and ports had given it an edge. So, in a move that would literally re-shape the entire company, Rhoads set out to make the most of his Philadelphia homebase by moving the entire operation — then located in two separate facilities in Northeast Philadelphia — to the old Philadelphia Navy Yard
To insure further development of its maritime and non-maritime business, alike, Rhoads purchased buildings at the Navy Yard in 2006 through a Philadelphia Industrial Development Corporation financing program. Rhoads’ new Navy Yard location made it possible to consolidate its two original Philadelphia-area sites into a single location while expanding its capabilities on both maritime and non-maritime-related projects. Rhoads could continue to offer traditional mechanical contracting and fabrication services in heavy steel and sheet metal fabrication, complex precision assembly, and equipment installation contexts. But its new facilities boasted a unique 150-ton overhead crane capacity, precision build platforms and sandblast and paint capabilities that could take its capabilities to a new level. And the Navy Yard’s location – right on the Delaware River and complete with dry dock and pier – allowed Rhoads to offer regionally un-rivaled ship repair and ship building services.
By 2011, time had told the tale – Rhoads’ move to the Navy Yard was an unmitigated success. The firm’s traditional customers, including some of the area’s largest and most prominent manufacturing and industrial services companies, were able to route an even greater variety of projects to Rhoads, thanks to its upgraded facilities. Meanwhile, Rhoads’ new shipbuilding and repair services had won it a variety of new federal government contracts with the United States Navy.
But financial reality was setting in. Full payment on the original loan financing Rhoads’ Navy Yard facilities was coming due before Rhoads’ full consolidation into the single Navy Yard site could be completed and before it was possible for Rhoads to tap into all of the promise for profit that the new facilities held. Rhoads’ 180 jobs hung in the balance as Rhoads’ leadership sough new financing to secure its future.
That’s when Rhoads turned to SBA for help.
In 2011, Rhoads looked to SBA and Philadelphia-based Certified Development Company (“CDC”) DelVal Business Finance Corporation to refinance the PIDC loan that had financed Rhoads’ initial move to the Navy Yard. The new financing that that deal put in place for Rhoads under SBA’s 504 loan program bought Rhoads the time that it needed to make a real go of its new Navy yard facilities – thanks to the 504 Program’s favorable interest rates and generous loan pay-back period – saving Rhoads’ tens of thousands of dollars, saving the 180 jobs on Rhoads’ employment roster, and saving yet another generation of commercial enterprise from closure at Philadelphia’s Navy Yard. With much-needed capital now freed from burdensome loan payments, Rhoads could expand and improve its Navy Yard facilities and capabilities and complete its consolidation into a single Navy Yard site, fast-tracking job growth.
SBA’s 504 Loan Program is a tiered financing vehicle that provides growing businesses like Rhoads Industries with long-term, fixed-rate financing for major fixed assets, such as land and buildings. 504 loans are available through CDC’s like DelVal Business Finance Corporation, which are economic development organizations that work with SBA and conventional lenders to offer loans under the 504 Program to qualified borrowers. Typically, a 504 loan is 50% funded by a conventional lender and 40% funded by the SBA’s 504 Program, requiring only a 10% borrower equity injection. Loans through the program are often an affordable option for borrowers because they require a relatively small borrower equity injection and generally offer favorable blended interest rates and repayment terms that are often longer than standard.
Today, thanks to SBA 504-Program financing, Rhoads’ place at the Philadelphia Navy Yard is secure. The 180 Rhoads jobs that were saved by the new financing have meant continued revitalization of the six acres of the historic Navy yard that Rhoads controls and untold savings for the U.S. Navy through Rhoads’ continued contract work at the Yard harvesting ship parts from decommissioned naval vessels for re-use. But, more than that, those 180 Rhoads jobs have meant hope – hope for continued and growing employment opportunities in eastern Pennsylvania, hope for a maritime industry once counted out, and hope for a national economy fighting for recovery.