By Richard Eisenberg
San Francisco didn’t have a good bagel. When the doors opened on the first day there was a line around the block.
This article is reprinted with permission from NextAvenue.org.
Over the years, Noah Alper, 75, has opened and run five businesses and a nonprofit school. Four of his ventures — including Noah’s Bagels and the natural food and home goods chain Bread & Circus, now owned by Whole Foods Market — were huge successes. Two, by Alper’s admission, were failures.
“I like to say I had a .666 batting average, which is good in baseball,” Alper says. “But if you run away, it’s real money!”
These days, Alper—author of Business Mensch: Timeless Wisdom for Today’s Entrepreneur—spends most of his time in Berkeley, California, running Noah Alper Consulting, helping aspiring entrepreneurs launch their businesses.
“I think one of the things I’ve been able to do in my career successfully is see emerging trends and jump on them,” he says.
Given Alper’s impressive story and the lessons he learned from his business failures, Next Avenue wanted to find out what he wishes he knew before starting his own companies.
Speaking by Zoom (ZM) during a recent visit to Israel, Alper shared lessons that can help people over 50 become more successful in starting their own businesses. Here are the highlights of that conversation:
Next Avenue: Do you remember when you first realized you wanted to be an entrepreneur and why?
Noah Alper: I had a lemonade stand since I was eight years old in Boston. Even when it was almost March, I would set a mark in the snow and set off. I’ve just always liked the trade back and forth.
Start small, think big
Was your first business Alper International when you were in your 20s?
Yes, it was. But it started as something else.
My first business was Wood Salad from Vermont. I was at a friend’s house and saw these wooden bowls where she was serving salad. In the late 60s and early 70s, everything was natural and back to earth. So repurposing these wooden bowls into salad bowls for tableware for people who were into a natural life was something I jumped at.
I ended up selling money to my brother-in-law’s bookstore in Cambridge (Massachusetts) out of the back of my car. They sold out in an hour. Then I brought in other lines that eventually expanded into a wholesale business for them as well.
This developed into the Alper Wooden Bowl Company, which eventually added more imports, such as glassware. He joined the gourmet housewares business, which became Alper International.
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Another natural step
At the same time, my ex-wife was very interested in natural foods. There were health food stores where you could buy vitamins and supplements, but you really couldn’t buy natural foods. So I went in and made this natural food store, part natural food and part housewares and other gift items.
We called the store Bread and Circus, because (the stock) was the essential and not the essential. We ended up selling Bread and Circus to an Irish immigrant who built it into the largest health food chain in the Northeast. He then sold it to Whole Foods Market.
What do you wish you had known before you started your housewares business and before you started Bread and Circus?
I really wish I knew a lot more about finance and accounting.
I sold the housewares business in 1984 when we were doing the better part of a million dollars in sales. At some point in that process, I went to my dad and said, ‘Dad, we’re doing very well with the business, but I don’t understand: I’m broke!’
Turns out I had a cash flow problem, not a profit problem. I had no idea. My father took me to the bank and introduced me to a banker to get a revolving line of credit for the company. This was very helpful.
What about Bread and Circus?
I spent a lot of time with the health food store half and the home half; it was like my wife and i had this little competition. I finally realized that the food was doing work and that it had to be made faster.
If this had gotten bigger sooner, we would have made more money.
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Know your weaknesses
It sounds like you’re saying you knew how to start businesses, but not how to grow businesses.
Right. I’m kind of a concept and quality control freak.
If I had known how difficult running a retail store was, I probably wouldn’t have done it. (Laughs.) I think that’s true with a lot of businesses I’ve started.
I basically didn’t know much — or anything — about any of the businesses I started.
Your next business was an unsuccessful one: Holy Land Gifts. Tell me about it.
After selling Bread and Circus and Alper International, in 1984 I decided to move to Israel. I had read that a third of Americans accepted a born-again Christian conversion and thought, ‘Wait a minute. They must be interested in things from Israel.’ So the new company began selling food from the Holy Land — crackers, olives and water with personalized labels and a distinctive logo.
Then I concluded that the show was the gift; it was not food. So I turned to a custom gift catalog.
It just never worked.
I read that you lost about $50,000 on Holy Land gifts?
Sounds about right.
What do you wish you had known before starting Holy Land Gifts?
Two big lessons.
One was: Know your customer. Really know your customer. Don’t know your customer. Understand what they like.
Most importantly though, when you are running micro businesses that have a social mission to them, understand the basics of the business. This comes first and causes come second. Otherwise, a business does not exist, and you cannot help anyone.
At one point my older brother Dan said to me, ‘Is this a crusade or a business?’ In retrospect, I wanted to help Israel as a passion of mine. And I was trying to squeeze this round peg into a square hole.
What did you do after the Holy Land Gifts failed and you were 42 at the time?
It was very devastating because I had these two successful businesses. I got a little lucky and started looking for businesses to buy. I didn’t like anything and I was running out of money. The money from Alper International had dried up.
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A bakery was born
What did you do?
My brother had come back from Montreal and showed me a picture of a famous bagel place there. He said, ‘You have to do this at Berkeley [where I lived].’ I said: ‘I don’t know. I don’t know how to bake.’
I spent a year researching it. What I discovered was that bagels were becoming very popular. They were leaving the ethnic pockets of the Northeast and crossing the mainstream. Pizza was being made.
In the course of this exploration, I was referred to a bagel equipment dealer in (Queens, New York), who said, ‘Look, I have a customer in Pittsfield, Massachusetts, who has been very successful with this.’ (She) had also been a client of mine in the housewares business.
So what happened?
I went to meet her and she showed me her surgery. I said, ‘You know, I think I could handle that.’
It was doable, but it was less doable than I thought. Because there are many nuances in baking — climate conditions, store conditions — as I learned.
(She) sent me to a baker in Rhode Island and we made a deal. He would give me the recipe and basically be our mentor for a fee.
I was like, ‘Yeah, we’re going to do this,’ because we’ve completed two pieces of the puzzle. We have a request; San Francisco didn’t have a good bagel. And on the supply side I had a great product. I just had to take it to market.
The first location we found (for Noah’s Bagels, in 1989) was a predominantly Jewish neighborhood near a college campus. So we had a customer base that was right for the product.
how did it go
We opened the doors and there was a line around the block. On Sundays, it was so intense that at the end of the day, I enjoyed a primal scream with all my employees.
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Building on success
How did you end up expanding and starting other Noah spots?
A year after opening the first store, my brother approached me and suggested that we open stores and split the functions.
So we developed a complicated licensing agreement. We never actually signed the license agreement. (Laughs.)
We opened our second store two years after the first opened, but in the meantime we opened a central commissary, which would serve the two stores and the other stores we were going to build.
What skills did your brother bring, a graduate of the Stanford Business School?
He thought much bigger. He was a kind of banker; he had financed businesses and understood the systems.
We executed our expansion plan very successfully and ended up with 38 stores.
Deciding to sell the business
How did the sale come to Einstein Bagels?
We weren’t looking to sell. But we were breaking into the big leagues by 1994 and 1995. We eventually sold the company to the same people who had founded Boston Chicken in 1996. I became the ceremonial vice president of this Einstein Bagel/Noah corporation.
We didn’t get their deal initially, but they came back a year later and offered us more money. It was an offer we couldn’t refuse.
How did things go for the new owners after the sale?
They were interested in the day-to-day profits, but much more interested in the ultimate sale of the entity and where it could take them, which resulted in their bankruptcy within a year of buying our business.
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