4 Steps These Business Owners Took to Solve a Major Industry Problem These entrepreneurs created a business that helps people run their food ventures.
By Carren Jao
This story appears in the March 2016 issue of Entrepreneur. Subscribe »
Artisan chefs have so many opportunities. The specialty food market is worth an estimated $109 billion, growing nearly 22 percent between 2012 and 2014. Whole Foods, Kroger and other national retailers are hungry for the next tasty thing. And yet, few small businesses have the funds to build out their own, fully permitted commercial space -- and they can't go far in cramped, unlicensed home kitchens.
When Mott Smith and Brian Albert realized this, they knew they could create a great business solution. Their company, L.A. Prep, now rents kitchen space for an average of $3,000 a month and provides around-the-clock security, an office space and even an on-site USDA office. This is how two 'treps solved a lot of their peers' problems.
Step 1: Clear the path.
Smith and Albert are local real estate developers, and they knew their kitchen spaces would need some time in the government's oven. They helped rewrite Los Angeles's regulations on shared food production facilities so their foodie tenants wouldn't have to worry about passing the county's stringent permit process.
Step 2: Design the space.
They built out an $18 million, 56,000-square-foot food production facility but designed it for a variety of uses. Some of the private kitchens are as small as 140 square feet, used for preparation of chocolate, ice cream, cheese and other foods that may not require a ventilation hood. The larger spaces are designed "so artisans can do full line cooking and large-scale production," Albert says.
Step 3: Promote the model.
L.A. Prep opened in April 2015 and has championed its success stories -- like Semolina Artisanal Pasta doubling production in just seven months, and Tava Life (maker of Grass Fed Pure Spreadable Butter) scoring national expansion in four major retailers. That's helped draw in some more established names as well, like Blue Bottle Coffee, which operates a bakery at L.A. Prep. "It's everything from the new guys to the old guys," Smith says. "We love it."
Step 4: Add the perks.
L.A. Prep's founders are now experimenting with new programs to help their tenants, such as group buying -- so multiple companies can band together and get bulk discounts on ingredients -- and one-on-one coaching services, to help chefs get their products into people's hands (and mouths). 
