Meal Prep Company Cooks up Profits with Customized Orders

This transcript was generated from the episode audio and may contain minor errors.

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The great American diet isn't doing anyone any favors. I don't have to tell you the statistics. We all know that obesity is an epidemic, not just in America, but elsewhere around the world now as well. Thankfully, a lot of people are fighting back these days, being intentional about their diets and trying to avoid fast food. Even so, these good intentions come with problems of their own.

For example, who has time to do weekly meal prep? Well, today on the program, I'll introduce you to three side hustling partners who create a healthy meal prep and delivery service. It grows faster than they imagined, going from a $2,000 investment into $2 million in less than five years. In fact, Shaquille O'Neal even became a customer. Welcome to Side Hustle School.

My name is Chris Guillebeau. The business I'll tell you about is called Local Foods, but this is a high calorie dense episode. We could say it's the Greek yogurt of stories, and it all starts in just 30 seconds. [Music]

Sandeep Rajbandari had a good life. After immigrating from Nepal to the San Francisco Bay Area for college, he was now a new graduate and had been hired for a job in finance that he enjoyed.

But he also had a major problem. His health was deteriorating and he was becoming obese. The culprit? It was what he calls the corporate American diet. Lots of sugar, salt, fat, and carbs.

It didn't help that he already had a history of health troubles. As a child, he'd survived a near fatal parasitic disease and was then plagued for years by periodic seizures. Then came an up and down battle with weight throughout his teenagers. In his first year in college, he had made some positive changes. Through diet and exercise, he lost more than 40 pounds and began to feel better.

So that's why it was especially disappointing when his weight and health problems returned. At dinner one night, Sandeep complained to two friends, Jenny and Rachelle, about his unhealthy lifestyle. He knew that meal prepping would help him avoid making poor diet choices throughout the week, but he felt like he never had enough time. Hearing his gripe, one of those friends remarked, "Imagine how many people out there have the same problem." That instant, the three friends saw both a universal problem and a potential opportunity. Sandeep, Jenny, and Rachelle immediately started thinking about a meal prep side hustle.

And right there at the table, they began brainstorming. They even got off their phones to ask friends on social media if anyone would be interested. The immediate feedback they received gave them even more motivation to proceed. As they worked on the idea over the next few weeks, they sought out valuable feedback from potential clients and experts, including personal trainers, supplement store employees, and nutritionists. This outreach also helped build an awareness so they could sign up many new customers for their soon to be open business.

The early research also showed them some ways to stand out. They noticed that other meal prep companies had basic menus with limited or no customization. Sandeep and Co. decided to offer a much more extensive food selection, customizability, and shorter delivery windows. Just one month after first discussing the idea, locale foods was open for business.

The name is a play on the word local. Startup costs were just $2,000, much of it for ingredients and the incubator kitchen they rented in hour-long blocks. They made a conscious decision to limit production until they nailed down their process. They prepared meals two days per week to start, then three days, and eventually ramped up to five. This approach allowed them to keep it simple and keep those startup costs so low.

It also gave them some time to figure things out and tweak. For example, Sandeep coded the website himself, but it was basic and couldn't actually take orders. Customers could check out the menu, but they didn't have to call to place their order, which wasn't ideal. That's why when their first order arrived, the team took 10 minutes for a quick champagne toast before they went right back to work. It was a crazy time.

The three partners were all still working nine to five at their jobs. Sandeep as a financial analyst, Denny as a restaurant manager, and Rochelle as a lab associate in a biotech firm before traveling to the prep kitchen at night. Almost from day one, the business was profitable, but the partners decided to keep it as a side hustle and let it grow organically until its demands couldn't be met without working on it full-time. That point came sooner than expected after just nine months of operations. All three partners quit their jobs to work at Lochelle, and that year the project earned over $350,000.

That's right, this is year one, and revenues and profits have grown each year since. Sandeep says that he's now happily outsourced web design and customers can order everything online. Lochelle's menu offers a la carte options as well as pre-designed plans based on several popular diets and eating programs. They provide delivery anywhere in California as well as pick up at select partner locations in San Francisco. Of course, it hasn't been easy.

Stressful workloads, especially in the early days, sometimes led to frayed nerves and squabbles. Also offering those highly customizable meals that made them popular presented many challenges. There's a reason why most services like this keep options limited. With so many unique dishes, Lochelle can't use the normal assembly line method that's common in restaurants. Everything needs to be ready at just the right time or the food could go to waste.

This made scheduling the kitchen like one big puzzle, one they struggled in putting together. Finally, after months of trial and error, countless hours working out a formula on a spreadsheet, they solved the problem and business continued to boom. The team expects their one time side hustle now in its fifth year will have annual revenues of over $1 million within the next 18 months. They're looking to expand nationwide, cooking up healthy meals with lots of options for as many mouths as possible. [Music]

All right, so what can we take away from this?

Well, first of all, congratulations to Sandeep and Jenny and Rochelle. They started with this problem that I think we use the word universal. It might not be quite that magnificent, but a lot of people had this problem. A lot of people are interested in meal prep, but who has the time, et cetera, especially if you're in an urban area, there's a lot of people there that are trying to do that. Now, I also think it's interesting that they have this three person partnership, which we've seen a few times in the program, but it's much, much more common for a side hustle to just be one person, and then secondly, for it to be two people.

And I mentioned something about how when they were getting going, they occasionally had some squabbles and frayed nerves, which is normal. And Sandeep told us that the three partners have complementary skill sets, I think is really important in a partnership, and strong communication skills, which allowed them to work through each issue. So both of those points seem critical for a partnership to survive five years, become a seven figure business, doing something that isn't easy. And speaking of not easy, customization is how they were able to stand out in this market, but it's hard. There really is a reason why most companies don't do it this way.

So not sure exactly how they figured it out, that must have been that Excel spreadsheet and keeping their production limited until they solve problems. And now it seems like they're ready to go nationwide, or at least that's their plan in the future. So hopefully low-cal foods will come to the rest of the country, and maybe inspire some other projects elsewhere around the world as well. All right, that's it for today. Inspiration is good, but inspiration with action is better.

Today's show notes are at sidehustleschool.com/935. I'll be back tomorrow with another story. Be sure you're subscribed. This is Chris Guillebeau for Side Hustle School. [Music]

From the Onward Project.