June 27, 2016

CTNext funds free help for 'stage 2' companies

HBJ PHOTO | John Stearns
HBJ PHOTO | John Stearns
The MetroHartford Alliance's CTNext grant is helping Paul Finney's October Kitchen search for new markets.

Fact Box

Want to know if your company is eligible for the MetroHartford Alliance's free consulting services? Lalitha Shivaswamy is generally seeking companies with:

• Revenue between $500,000
and $50 million;

• Five to 100 workers, located in the Hartford labor market, which includes 17 communities in Litchfield, Middlesex, New London and Windham counties.

More information on Helios is available at www.innovationhartford.com/is-your-company-poised-for-growth/.

A decade ago, personal chef Paul Finney ran a one-man operation cooking meals in the homes of approximately 30 Greater Hartford clients.

Today his Manchester-based company, October Kitchen, has eight employees serving a much larger customer base in north central Connecticut.

But Finney's not content to stop there. He wants to double the size of his business and he's using the help of a former customer to do it.

October Kitchen is one of the first few beneficiaries of a new, free consulting service developed by the MetroHartford Alliance with a $100,000 grant from CTNext — the state-funded startup and entrepreneurial ecosystem overseen by Connecticut Innovations.

The Alliance used the grant to hire Lalitha Shivaswamy, proprietor of a Simsbury consultancy called Helios Management Corp., which she founded several years ago while living in South Korea. She's an Indian native who moved to Connecticut with her husband, a United Technologies executive, in the 1990s, attending UConn School of Law and working in analyst and fund-management positions for Citigroup and Horizon Technology Finance. She's also one of six "entrepreneurs in residence" in the CTNext universe.

The Alliance's contract is one of 23 single-year deals CTNext has with various partners around the state, including individual consultants, co-working spaces and other programs. Active grants currently total $2.4 million.

Helios' charge is to help Hartford-area businesses — specifically second-stage companies — with strategy, operations and organizational development, marketing and raising capital.

Finney's company has grown a fair bit since he first met Shivaswamy 10 years ago, when he began cooking vegetarian meals for her and her husband.

October Kitchen now has eight employees, half of them full time, and $1 million in annual sales. October is among Shivaswamy's first clients under the Alliance's free program. She's still seeking more area companies to help.

The services aren't just for Alliance members, but for companies in the Greater Hartford area, which consists of Hartford and Tolland counties and some bordering towns.

CTNext was founded in 2012 and focuses mainly on aiding Connecticut startups in their earliest stages. But as it evolves, CTNext has recently taken deliberate steps to help companies that have entered their next stage of development.

Those so-called "stage 2" companies have employees and revenue, but they face a new set of challenges and often find it financially difficult to hire a paid consultant to help, Shivaswamy said.

"These are businesses that have their head down and are taking on staff for the first time and becoming a full-fledged, revenue-generating company," said Jessica Dodge, a senior associate at CTNext. "It's kind of a different mindset."

Another entrepreneur in residence, Gary Breitbart, provides similar services to second-stage companies in Fairfield County under a contract with the Business Council of Fairfield County, Dodge said.

John Shemo, the Alliance's vice president and director of economic development, said the grant is helping his organization evolve its service offerings to help both startups and more seasoned companies.

The Alliance provided $100,000 last year to reSET Social Enterprise Trust — another CTNext partner — to help build out its programs and media lab for startups, and is also maintaining a regularly updated website, www.innovationhartford.com, highlighting Connecticut entrepreneurial activity.

"While we have been focusing on startups in the last two years, we have always had in our minds that if we're serious about creating jobs and capital investment, we have to get to the point where we're supporting second-stage companies," Shemo said. "It's time we wanted to jump into this."

Shemo said Shivaswamy was one of several people who applied to fill the consultant position, and he sees her as the perfect person for the job, given not just her background, but her bubbly attitude about Connecticut.

Shivaswamy's as big a Connecticut booster as anyone, Shemo said.

"I think as a state, we have a tendency to be very self-critical because we are thinkers," Shivaswamy said. "As far as business is concerned, I think any business can survive here."

Shivaswamy said she hopes the services she's providing under the grant will help developing companies feel welcome in Connecticut, and ultimately stay and flourish here.

Targeting a new market

Finney reconnected with Shivaswamy on Facebook recently, after she and her husband returned to Connecticut from living and working in Singapore and South Korea for five years.

They discussed the consulting business she had founded overseas, the Alliance contract and how October Kitchen had evolved from an in-home model to a chef service that prepares meals from scratch in its Manchester kitchen, and then packages and delivers them to customers' homes in under 24 hours.

As Finney recalls it, Shivaswamy told him that he should consider adding a shift and running his business around the clock. They also plotted carving out a new niche in the corporate sector.

Right now, October Kitchen's clientele is mainly senior citizens and busy residents who find it difficult or too time-consuming to prepare meals on their own.

Finney said his business has strict standards about healthy meals and portions. He forbids adding too much salt to meals, or delivering food too high in fat content. A nutritionist reviews his menu.

But with Shivaswamy's help, Finney has envisioned a new potential market.

Many companies, or their insurance plans, reimburse workers for some or all of the cost of a gym membership. The theory is that exercise leads to better health, which leads to lower medical costs.

What if, Finney wonders, those companies or insurers reimbursed employees for ordering healthy meals from a service like his?

The two are trying to figure out the best way to test the idea with one or more companies.

There will be hurdles, such as convincing employers and insurers to give the idea a shot.

"That's going to be hugely challenging," Finney said. But he plans to leave many of those details to Shivaswamy.

Meantime, Finney is about to kick off a $75,000 expansion/redesign of his Manchester kitchen, including purchase of a high-end oven that can steam, bake and roast food and give him added capacity.

He's also focused on increasing the amount of retail sales out of his Manchester facility.

If everything goes as planned, Finney could hire five more people before year's end.

And two years from now, he hopes to add a second location, perhaps in the New Haven area.

"This has been in my head for two or three years," he said. "How do you get from point A to B to C without breaking the bank?"

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