Business Financing Success Sto

INDUSTRIAL BANK HELPS “SPROUT” UNIQUE BUSINESS When Nurit Berger saw the ranch in Topanga she fell in love with it on immediately. She and her husband, Jacob, were on an outing looking to purchase a property in the Santa Monica mountains after having lived for ten years in a rental house in the area. They came to look at an adjacent lot, which they didn’t like, and ended having a tour of a sprouts farm on Old Topanga Canyon. To the left of a steep driveway climbing the mountain there stood a dilapidated, funky greenhouse, shaded by a giant oak, in which sprouts were growing–alfalfa, clover, and the like. Peach trees, apricots, grapes and figs decorated the hillside along the driveway. A goat announced its existence and a chorus of four dogs and some twenty cats added to the delightful sound. Huge oaks and sycamore hovered above a seed shed at the mouth of the creek, and hidden from sight was a large size mobile home overlooking a vast and magnificent canyon with unusual rock formation. Berger’s mind started working overtime, how can I get this place? It must be paradise on earth! After 25 year as a teacher and school administrator and a five-year stint as a seamstress and clothes designer, Berger decided she wanted to grow sprouts. She knew nothing about sprouts growing nor did she know anything about horticulture, but she knew..immediately and passionately that she wanted the place. She saw the possibilities. It took some convincing work, it took some tough negotiation, and it took lots of time to find the right bank that could secure a loan. In fact, it seemed that all avenues of financing were closed when Industrial Bank of Los Angeles stepped in with an SBA guaranteed loan. Berger and her husband bought the little ranch. Jacob was busy producing movies, and so, from one day to another, Nurit Berger transformed herself into a sprout farmer. For three months, she drove from Santa Monica to Topanga early in the morning, to observe, learn, and operate. Having a keen eye for details, and experience in management, she quickly grabbed the art of growing sprouts and immediately introduced new procedures and processes. By the time she moved with her husband to live on their newly acquired property in Topanga, Berger was running the company as if she’d done it all her life. She had two part-time employees and a driver filling half a position, delivering sprouts four times a week to a handful of stores. She worked, she managed, she watered, she took care of the daily calls to customers, she filled their orders, she packaged with her employees, she took care of all the paperwork, deposits, payments, seed ordering, packaging material–and still had time for a five-o’clock-coffee on the porch, with her family. Their first summer on the ranch was a dream come true. There was a bumper crop of fruit that they ate straight off the trees-they didn’t even bother to take home. Summer was mild, albeit dry-that was the last year of the southern California drought-and the sprout farm started to grow and show profits. Diligently, Berger and her husband managed to repair public relations damages caused before the time of transfer. They rebuilt their customers’ confidence in the company by providing high quality sprouts and exceptional service. They designed new labels that gave their packaging a fresh and colorful look. Additional clients called and asked for Kowalke Family Sprouts’ renowned products, and after a successful sale campaign the company increased sales by 35% that year. Berger had two dogs guarding fifteen cats from the neighborhood coyotes (those cats earned their living, mind you, cleaning the area of rodents–an important task when you store 20 tons of seeds to be sprouted). Once she had a grip on her market she started developing new products-sprouts combinations like alfalfa with onion, clover with radish and others. By the end of the first year she was sending to the stores sixteen different sprouts products, compared to four when she had just started. Her husband decided to experiment with sunflower greens and wheatgrass. Sunflower proved to be problematic at the beginning, but the wheatgrass took off. The stores gobbled the first nine wheatgrass flats and ordered fifty. They produced fifty and sold one hundred. Soon they started looking for some land to lease in order to expand the growing demand in wheatgrass. That winter, while Jacob was shooting a film in France, a mudslide burst into the greenhouse and destroyed a wall. Berger was alone, irrigating the sprouts for the last time that night when she heard the rumble of the crushing wooden wall. She acted quickly and managed to save most of the crop along the wall, all while the mud was pouring in. No insurance company covered mudslides, so Berger took a personal loan, built a concrete retaining wall and just when she was ready to attach the walls to the new foundation, the fire of November 1993 swept through the canyon. The greenhouse burnt to the ground just minutes after the fire had started, while the fire fighters were saving horses from the neighborhood and scrambling to regroup. Jacob was on a delivery route so Berger and her employee managed to collect the dogs and as many cats as possible and drove three cars and animals to safety. When they convened back at the ranch, the greenhouse was gone along with all the seeds and supplies, and five other structures. The damage was unimaginable. Along with the greenhouse, most of the trees burnt down. Berger’s paradise was stripped down to a hardened clay surface with smoldering sticks. Luckily, the house was spared. Berger and her family lived without power for 21 days, looking for assistance from FEMA, which helped with $400 as a loan to restore power. “You belong to the Farmers Administration, it’s not our mandate to help you,” they said. They lost their biggest customer-a distributor who provided 40% of their sales. To all their friends who asked whether they could help they replied, yes, come and plant a tree. Restoring nature was the first order of the day. Two weeks after the fire they threw a planting party in which 60 people-friends and strangers–planted some 70 new trees. “Are you going to rebuild?” asked one journalist. “Yes,” they replied. Berger and co. looked for a rental space until they could rebuild. Most of their customers remained faithful and said they would wait. They called scores of greenhouses and drove all over Los Angeles and Ventura Counties in search of a greenhouse. Someone took pity and shared with them his greenhouse in Moorepark. It didn’t fit the needs of a sprouts’ greenhouse,(the plantsare too finicky),but they kept hope alive and they managed. In six weeks their sprouts graced the stores’ shelves again. One of the keys to the business’ survival was actions taken by Industrial Bank who had provided them their loan in the first place. Under the auspices of the SBA, Industrial Bank declared moratorium on mortgage payments for six months. In six months, Berger and her husband relocated to their current location, another rental greenhouse in Northridge, which required lots of repairs and refurbishing. In a year they closed the gap created by the loss of clients, paid the moratorium debt to the bank and doubled their sales. Despite all odds, the operation grew, incoming orders continued to increase, and the Kowalke Family Sprouts name became synonymous with premium sprouts and superb service. The little van matured into a big, new, refrigerated truck aided by two refrigerated vans delivering every day of the week, sometimes in shifts. From two thousand square feet they expanded to eleven thousand. Berger and her husband’s business has become the biggest grower of wheatgrass in Southern California. In seven years the company quintupled its sales. Currently, the couple plan to acquire their current location and double their sales in the next three years. Thanks to determination, hope and a little help from Industrial Bank, Nurit Berger has realized her dream to grow sprouts. Kowalke Family Sprouts is just one of the success stories produced by Industrial Bank’s SBA guaranteed loans. To find out more about Industrial Bank and it’s SBA guaranteed loan program, contact Dorothy Walker at 818-904-9600. For more information about Kowalke Family Sprouts, call them directly at 310-455-1901.