Client Profile: Parties that Cook
In 1997 when Bibby Gignilliat quit her corporate career as a marketing manager for Williams-Sonoma to pursue her true passion, cooking, she had no idea she was embarking on an entrepreneurial adventure. In the 13 years since then, she founded a company, disbanded a company, founded a new one with greater success and discovered a business structure and management style that's making it thrive.
It all started when she enrolled in a San Francisco cooking school. After completing the training, she began to teach cooking courses on her own. In 1999, she taught a course to a group of particularly rowdy attorneys. She found it necessary to be very directive in order to keep things rolling. Afterward, the head partner of the law firm and his wife said they enjoyed the way she took charge and asked if she'd be willing to lead a cooking course at their home for a group of 40 Japanese businessmen who would be visiting the U.S. to negotiate a deal.
At the luxurious home of the head partner and his wife, the group was very formal and uncomfortable at first. Bibby gave a lively cooking demonstration and split the group into teams to recreate a recipe. They loosened up and had a great time. Later the hosts told her that it was the highlight of their guests' two-week stay in San Francisco.
The success of this experience inspired Bibby to start her own cooking events company based in the southern San Francisco Bay Area. She called it Gourmet Gatherings and took on two partners. Beyond San Francisco, the company hired chefs to manage events in Chicago. Unfortunately, the partners didn't share common values and often disagreed on how to manage their staff of contracted chefs.
"I think it's really important to do little things to let employees know they're valued," says Bibby, "whether it's listing them on our Web site, giving them chef's jackets with their names on them or taking them out to dinner a few times a year."
Despite the risk of losing brand recognition and the difficulties of starting over, she knew she wanted a change. She bought out one partner, but the other was reluctant to sell. Because she owned two-thirds of the company, with legal assistance she was able to dissolve the company in 2006.
The very next day she founded Parties That Cook, and just 11 months later revenues were up 75 percent compared to the prior year at Gourmet Gatherings. The company's hands-on cooking parties and corporate teambuilding events were a hit with clients including Genentech, Google, Yahoo and Intuit. Participants would work together to create small plates or full gourmet dinners in about an hour. A cooking challenge inspired by the Iron Chef television program was especially popular. The company began to partner with restaurants, wineries, cooking schools and kitchen showrooms to make use of their cooking facilities and to cross-promote their offerings to their customers.
Within a year, Bibby hired five employees in addition to the contracted chefs, and the company outgrew its office space in the loft above her home. In November of 2007 the team moved into an office complete with a warehouse for their equipment in the Dogpatch neighborhood of San Francisco's Potrero Hill area, an up-and-coming, entrepreneurial section of the city. They also continued to offer events in Chicago.
Business was booming. Within a period of a few weeks that December, Parties That Cook executed 60 events. They began to update and refine their systems and operations. The following year they lost some momentum due to the economic crisis, so they got creative and developed lower-cost offerings such as "Date Night" cooking classes for couples and "Gourmet Dating" events for singles. "We now have two marriages under our belt," says Bibby.
"This is not a highly-paid industry, but we are located in a highly paid area," says Bibby. "We are able to pay our chefs two or three times more than restaurants do. In a lot of ways, they're more proud of this business than I am."
Throughout its development, Parties that Cook took advantage of support offered by Pacific Community Ventures, a non-profit organization that helps companies gain access to capital and provides business advice. Bibby met Beyster Institute Director Tony Mathews at a Pacific Community Ventures event, at which he explained how employee ownership can be incorporated into a business strategy. Bibby saw this as an opportunity to reward some key employees who had been instrumental in building the company, and to motivate new employees who held critical roles in leading the company's development in Chicago and its latest venture in Seattle.
Parties that Cook is an S corporation, so to reward employees who already treated the company like it was their own, Bibby offered a combination of phantom stock and stock appreciation rights. Today everyone who works in the company's main office receives equity compensation in addition to their usual pay.
Phantom stock was awarded to some exceptionally dedicated team members, including a chef who has worked with Bibby for over nine years and an operations manager who has gone the extra mile to ensure a smooth transition throughout the company's growth. Like a share of stock, phantom stock has value at the time it is granted, and thus serves as a reward as well as a stake in future growth. Several newer employees in critical roles received stock appreciation rights as an incentive to help drive business growth and in turn increase the value of their ownership.
"I wanted everyone to be invested in the same goal," says Bibby. "All of these employees were hard workers to begin with, but now they are really going the extra mile and looking at things differently. I think sharing ownership is the right thing to do from an ethical standpoint, especially in a startup without a huge bottom line. In a tough year like this one, it served as a pick-me-up when I couldn't give significant raises. It has allowed me to step back a bit. I hope to work fewer hours and take some much-needed vacations. I know that the company is in really good hands."