 Welcome to Adventures in Small Business. This is a collaborative effort between the Small Business Administration Hawaii District Office, the Hawaii Small Business Development Center, the Mint Center for Business and Leadership, as well as the Veteran Business Outreach Center of the Pacific to showcase the local entrepreneurs and small businesses. Welcome, I'm Dennis Wong from the Hawaii Small Business Development Center, and today we have some special guests from Dehigh Foods, which is Jason Miyamoto and Justin Enright. Welcome, thank you for joining us today. Thank you for having us. Good morning. Thank you. Good morning. Anyway, Dehigh Foods is a locally owned company that manufactures and distributes crispy jerky. How did the business get its start? So the origins of it, I had a coworker maybe 18 years ago. She used to make this type of jerky. More recently, we started dabbling and making our own type of, you know, crispy jerky for the past couple years and trying to perfect it. Once she kind of got it down, my other partner and I, Elliot, we kind of got a hold of Justin because I don't have the business acumen side of business, and I know how to create the product. So I called him up and asked if he'd be interested, and then he agreed after doing some research online that, you know, it'd be a viable business, and yeah, he's willing to be a part of it, and it's basically the very, very beginning of origins. I see. And as far as, tell me about how did you create your product? What was the type of flavors that you, what you have, and what was the origins of your product? So it's a, it's a Hawaii style of crispy jerk, you know, of jerky. It's crispy. It's thin cut, marinated, dehydrated out. So we have, you know, everybody has their own little take on it, and you know, the guy obviously has theirs, which is doing really well right now. Thank you, everybody. And we have four different flavors as far as our beef goes, and two flavors as far as the pork goes. So for the pork, we have Korean barbecue and we have klua pig, which, you know, everybody understands in Hawaii what klua pig is. That's actually my personal favorite right now. For now. We're always going to look into constantly expand our product line. As far as the beef, we have garlic, which is like a ponzu-based marinade and has garlic added. The pepper and the spicy are more like old-school traditional beef jerky. As far as the flavor goes, is liquid smoked worcestershire that deeper darker flavor. Pepper has black pepper added, spicy has black and red. And then we have our chiaki, which stands for chipotle teriyaki. So we thought we were being cute. We added the name together, but then now we're going to answer everybody to ask, what is chiaki? At the end of a Made in Hawaii event, over three days, talking to 20,000 people answering that question, what is chiaki? Your throat gets a little sore. Before, as soon as people look at you, you just already explain it. Yeah. So that we are, we used to use star pot, but we got away from that. We mix our own teriyaki sauce and we add a splash of chipotle, among other little things. But yeah, that's the basic taste profile for that one. When did your business start? And being that there's three partners, by the way, Elliot Lau could not be here today. But there's three of you that are co-founders. And what strengths did you bring to the table? And how long ago did you start your company? My strength as we find out going through all these things, and I do the more product side and creating and visuals and whatever we need for our company. Justin does pretty much anything we need for the business, keeping everything running smooth, making sure we're heading in the right direction and all that. And then Elliot fills in everything else that's needed. I see. And so when were some of the challenges or barriers or things that you needed to do to start up your company as far as operationally and financially? Well, we were fortunate enough to start our business in the era of Google, where I wrote a 40 page business plan just off of Google. I'd worked in finance, more on the financial advising side, but I've never taken any business classes or entrepreneurship classes. So being in the era of Google, we were able to kind of figure out what we generally need. And then going to the small business center definitely helped out a lot. There was a couple free expos that they did. It's usually twice a year at HCC and then LCC. And you sit through an hour long course, so you get three courses a day. And you can kind of pick how to start the what taxes, you know, GE tax license. How do you get that? It's a class that I teach too. Yeah. The DCCA, how to register on on break, you know, how to register your business and make sure that your name isn't the exact same or similar to anybody else. So that was a definite help as far as once we started the business, getting everything rolling. And then financing, you know, we started on a shoestring budget. And, you know, very, very beginning was just out of his apartment. And then it was just family and friends. And within a bottom month, we had paid enough to cover the cost of all of our machinery already. So then we each took out loans. And we moved into a little 400 square foot box, which we outgrew in less than a year. And then we had our current facility. I think in any business, there's risk elements that you have to pay too. I, there's, yes, there's risk, but we always look at it as an educated risk, you know, as a well thought out risk reward, you know, and that's why we started small, as opposed to starting in a 100,000 square foot facility on a $20 million budget. That's our end goal, you know, our, our bigger goals are to do that. But right out of the beginning, we knew that that that would be an insane risk until the concept. You spoke about starting in Jason's kitchen, but eventually you had to expand, get a bigger facility. What things that you needed to do in order to be to manufacture and distribute, or is like, is there a certain facility license or health situations? What did you have to meet and go through? So in order to get state certified, which is the green placker that you see in, on restaurants and stuff, it's pretty easy. You get an inspector come maybe once a year, check your refrigerators, make sure everything's at temperature, make sure you have hot water and a three-compartment sink, and sanitize water. That placard allows you to sell direct to customers. But if you want to get into the wholesaling side of it where you see it in stores, you have to be USDA inspected. Or online. Or online, yeah, and online. So online, across state lines, you have to be USDA inspected. So we did a build out. Everybody was telling us it was going to take about two years to get your USDA inspection. We built out our facility ourselves where the walls are completely washable, floor drain, everything you can imagine. We had to build a wall separating the bathroom from the production floor and creating a HASAP plan, which is a Hazard Analysis Critical Control Point plan. We did that all in six months. And everybody was telling us it was going to take two years. Because we were so aggressive in growing and growing and growing and growing. Because we didn't have an option. I was going to say, we left ourselves no choice. We had to get it done. So you did a USDA inspector on-premise on-site too. Daily, every day we do production, we have a USDA inspector there. Walkthrough, check logs. Luckily for us, it was a brand new facility. So everything is spot sparkling clean when you first start. It's the facilities that are 20, 30 years old that might have a little bit more maintenance issues than we do. So for our purposes, the inspector is mainly just checking the records and making sure everything is handled properly. Is that the facility where you're at right now in San Island? Yes. Correct. I see. So, you know, as far as your business started up and progressed and you've gotten into the facility, what other challenges that you had to face? Like, was there a labor type of challenge, you know, packing, distribution? Or in fact, given, must have been a challenge even finding a warehouse facility that would fit your requirements? Yes. And that wasn't in great disrepair and something that we could afford. And it was relatively close to where we all live, which is in townside. So, San Island was an ideal fit. As every business owner in Hawaii knows, the labor shortage here, the labor market here is so tight that it's really hard to find people. You put out an ad and you'll get 40 responses, resume responses, and only one person will show up to an interview. So, there's that. And there's employee retention too? Yes. Yes. There's that. And then, two days after we got our USDA inspection, we had an order for 150, 160 cases for our first account that needed to go out. Two days after that, we got, we had a fire, a transformer fire in our facility. Yes. So, luckily, thank God we were there. And the entire, because we're in a strip mall. So, not every other business burned down. We were there. We put out the fire and nobody got hurt. But we had no power for a week. I guess that's the wisdom of Jason, because when he first looked at the business, he didn't look at it just himself, but he looked at partners, people that he could co-partner with, and each one brings their own strength and collaboratively work together. Yeah. Exactly. I mean, I know my strengths and my weaknesses. And thankfully, my two business partners, they fit in where it's needed. I mean, I'm not naive to the fact, you know, I have shortcomings too. So, I mean, you know, we work really well together, and that's just looking ahead. Well, where can people find your product? If you wanted to buy it, where is your product sold? So, right now, we're currently in over 300 stores, 7-Eleven, Helle, Aloha Gas, Safeway Times, Don Quixote on the Outer Islands, Minute Stop, Beef Turkey Store in Hilo, Times, Foodland, yeah. So, pretty much every major local chain were not in Longs or Walmart, Target, Walgreens, those type of nationals. But most local chains were in, yeah. No, it wasn't just easy just to walk in and get all these stores and all that. What kind of process do you have to do in order to gain the relationships and obtain the orders from these stores? Lucky for me, in my past life, I was a financial advisor and one of my clients just happened to be a buyer and I told her about the idea of us starting this business and she recommended we join HFIA, which is Waifood Industry Association. So, we joined that and then from there we met, you know, kind of a lot of different buyers and it's Hawaii. Word spreads pretty quick of, you know, our products that are out there. We got about a minute before we take our break. If you can tell me from the beginning that you started the company to now, has the feedback changed or what kind of feedback have you gotten from your consumers and your buyers? Pretty much just positive feedback. I mean, as far as the product goes, I mean, we get a lot of people that say that they don't eat jerky. If they're a vegetarian or vegan, obviously, our product isn't for them. But if they don't eat jerky because of the texture, because it's too chewy, it hurts the jaw, you're chewing on it for 10 minutes. We get a lot of people that don't like jerky because of that, but we'll get them to come to our booth. We just did a show in Dallas. And one of the big things was we call it a jerky conversion. We convert them over because it's the easiest way you can actually eat both. It's like a potato chip. I see. You know, as far as now, I hear that you're getting some orders that not even locally, you have a lot of interest that is gaining nationality. When we come back to the program, when we start with that and you can tell us about how your company has grown and evolved and what kind of growth you've gone through. Absolutely. Sure. Hi, I am Yukari Kunisue, host of Konnichiwa, Hawaii, Think Tech Hawaii's Japanese program, broadcasting every Monday from 2 p.m. I usually invite a guest in Japanese language community who does interesting things, and I'd like to share stories with you guys. Please tune in and listen to Konnichiwa, Hawaii. Hello, I'm Mufi Haname. I want to tell you about a great show that appears on Think Tech Hawaii. It's all about tourism. In fact, we call it Tourism 101, where we talk about the issues and challenges that faces our number one industry throughout the state. We'll have some interesting guests, very informative dialogue, and allow you an opportunity to maybe learn a little bit more about why this industry is so important for our state. It's been great for us in the past. We need it today, and especially going forward. That's Tourism 101 on Think Tech Hawaii. Mahalo. Thank you, Buu, for being with me this morning. I'd like to continue where we left off as far as we talked about being that your company has been in operations for over two to three years, and what kind of changes have you seen in your company besides facility, but as far as revenue, what kind of growth and where are you getting your growth, and what kind of new opportunities do you have? We started at the very end of 2016, so 2017-18. We saw our revenues double for 100% because we moved into a bigger facility. Now we're at capacity at our current facility, so we can't sell anymore, even if we wanted to, because we just can't make enough. So this year, we're probably looking at about a 20% growth year over year. Now it's how do we make more product? That's the next challenge that we're on to. How do we make more products so we can get it out there? Even though we're selling to 300 local stores, we are still getting online orders, and we pretty much almost all 50 states, maybe North and South Dakota haven't heard of it yet, but yeah, and it's all grown organically. We've spent $0 on advertising. Number one, because if we do a commercial or we're talking about it, I can talk to somebody for 15 minutes and explain to them what Krispy Jerk is, but until they actually try it, it doesn't really register in the brain, like a beef chip. Okay, I can understand beef, I understand chip, but putting them together, and once people take that first bite, that's when it, ah, and I watch people's faces when we do shows on the mainland and stuff or even locally. I watch people's faces to see their very first reaction within the first five seconds of what their brain is thinking, and it's super interesting. Not only the texture of the chip and the thickness, but it's also the different cases because you have different flavors as well. Right, right. How are you getting your product out there? I mean, how do people know about you? You have online orders and you participated in trade shows, or what have you done? Ah, our first year we did like Swap Meet, and we did a lot more shows than we did in our second year because we had more wholesale accounts and we just didn't have the time or the product. Now, this 2019, I think we only did the Made in Hawaii show. Yeah, locally at least. Yeah, locally, but we've been doing a lot of shows on the mainland because people have no idea what crispy jerky is. So, we're introducing a completely new product to them. Most of the shows have been for buyers. We don't really get a public feedback, but we just did a show in Dallas last month, and Texas is the heart of jerky. You think of Texas, you think of barbecue, you think of steaks, and the positive feedback that we got there really helped me see, okay, it's not just the buyers that are saying it, it's actual consumers that are trying it, and it blows your mind. The first time you gave it to me, it blew my mind. I was like, it's not what you're expecting. Yeah, when we had a casual conversation, you had told me about the interest that you have gained from the trade shows. What is exciting news? Are there other people that are larger distributors or retailers that are interested in the product? Yeah, so right now, we're in talks with about 20,000 plus stores nationally, as well as internationally. We've had interest from Japan, and being a Hawaii company, obviously Japanese love Hawaii. It's just the beef exporting to Japan requires certain additional certifications. That's a lot of hoops that you've got to jump through in order to get it over there. Now, with this exciting news and opportunity, presents other challenges such as you need more labor, bigger warehouses, and different opportunities for you to explore and how to meet that demand. It's good because the opportunity is there for you. It's incredible considering that you started in late 16, really, full operation scale in 17. Yeah, and I mean, we've been fortunate. It's a fortunate problem to have where our production can't keep pace with our sales. We're selling faster than we can make it. So that's a great problem to have, but it's also something that we want to produce more. So we have to start looking at, do we build a bigger facility in Hawaii, where it's going to be way more expensive, and then we're shipping it out to the mainland, or do we start seeing looking at options on manufacturing on the mainland? Jason, when you first started out the company, what were some of the learning lessons, or were there any mistakes, or what did you grow? What have you found now, from what you started to what you're doing now? I would like to refer back to Justin as far as making mistakes. We don't make mistakes. It's all learning lessons and all that kind of thing. As you do it the same thing twice, then you didn't learn anything. So yes, you made a mistake. It's very good that we keep each other in check. We've put money into things that weren't necessary, and these kind of little lessons that we've learned. But I mean, we won't take it as a failure. We made the mistake once. We won't make it happen again, and we're moving forward. But you feed upon each other positive attitude, like you mentioned, if one person is down, or the other one's up. Can you tell me a little bit about it, being that there's three of you as partners and how you help each other out? Sure. I think the biggest part about it is, first and foremost, we started as friends. We all have different backgrounds and personalities, especially for Justin and I, which do most of the front work. He's a lot more aggressive. I'm a lot more laid back. We're constantly pushing pull, but I think that keeps us right in that sweet zone of where we need to be and not overextending ourselves as far as not moving too slow. I think everything works out really well in that aspect. Do you have downtime where you guys can just talk about issues, share about things that you see that should be done, or issues in the company? And also, being that you're longtime friends, how do you bring friendship to the table as well? Oh, I mean, we've talked from day one when we had the meeting in my apartment, sitting around my little table, that business is business, friends is friends. And we've been very adamant about keeping that separate, being very honest with each other. I think this speaks to anybody that ever wants to go into business, especially with friends, that some of the key things they tell you not to do. Don't borrow money from family, don't go into business with friends. But I think it's worked fairly well because we're very honest with each other. And we understand that that's coming from a place of business. It's nothing personal. And we reassure each other that this is what it is. This is the business talking. This is what's good for the business. And I think that understanding helps us go a long way. Yeah. I mean, when you can be brutally honest with somebody, like, hey, you're messing up here. You need to be better at this. Yeah. And it's constructive criticism. Everybody likes to say that. Yeah, we don't need to shoot that out. It just is what it is. That's easier said than done, though. When you think your personality is how you mesh throughout the years, it's carried forth in the business as well. Yeah. Yeah. When you know somebody for 30 years, there's not much that he's going to say that's going to really fly me off the handle and vice versa. And like you said, I know that it's where it's coming from. He might be angry in the moment, but it's just in the moment. And we know bottom line. When you know somebody that long and you hang out with them, it's whatever. That's been advantage to that tightness and a friendship and that you know each other well, too. Sure. I think, yeah, I think there's been a great asset. I think those are good takeaway points, too, that you mentioned that when you start a business, whether it's with friends or partners and all, you should clear the air and get the understanding done. At the very beginning. At the very beginning. Yeah. A lot of times that's what I tell my clients, too, as a business advisor that when you go into business with other people that you should even put it into writing and have certain understandings about that. So there's no miscommunication. And in fact, sometimes it applies that you may go into partnerships with three people, but something unfortunately happens to one partner and unexpectedly you might have to deal with that person's beneficiary or spouse to continue with the business. If that original partner cannot continue in the same capacity, then now you're faced with a different partner that you didn't anticipate dealing with. But, you know, as far as what are some of the important things that you've learned being in the business now, going through all what you have done, that things that you could share with other people, thinking about starting their business or wanting to start their own business. It's a lot of work. We're actually me and him, we're just talking about this the other day. There's three ways that you can become successful in business. In my opinion, number one, you're born into money and daddy gives you money and then you go ahead and you start a business and even if it's failing, you just get more money, more money into it. The other is, you're just a genius. You come up with a cure for cancer or a brand new product or that something that's going to blow the market. The third is because neither of us come for money or are particularly astute in any science that would allow those sort of breakthroughs is you got to work your whole life. So I think I get five days off a year, major holidays, Christmas, Thanksgiving, and even on days off or if I'm on a trip, I'm still going to let me go check out Minutestop because we have our product in there. It's still always on my mind. I'm reading convenience store news articles about what's the new products and those sorts of things. So for me, it's a 24-7 kind of gig. You had mentioned a test before anybody goes into business and what would you advise them to do? I'd say work two full-time jobs. Work 80 hours a week doing something that's difficult. And if you can make it through two weeks of that, then you know that you have what it takes to make it through owning your own business. Just a last question or a few more questions. We're heading towards the very end. How did the Hawaii Small Business Development Center assist you? The Expo's definitely helped out a lot. The Small Business Fair days. As you could go, you meet banks. You need to know, do I take out a line of credit or do I take out a full loan, a term loan? How does business checking account differ? Something that I just learned and we've been in business three years, something that I just learned a couple days ago was Dun and Bradstreet doesn't pull your data, which is like an Equifax or personal lines. But for business lines, they don't pull credit card data or anything like that. So the way that you build your business credit is completely different than the way that you build your personal credit. I didn't know that. So when we apply for loans or when we apply for something, and they tell me that you don't have any, I'm like, we've been in business for three years. Thank you for joining us today. It was a pleasure having you here and thank you for sharing your experiences with us. Thank you for having us.