An SBA loan can be worth $600 million

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Inc. magazine recently profiled Turkish-born Hamdi Ulukaya, the founder of New York’s Chobani Greek-style yogurt, on his company’s meteoric rise in the dairy aisle. As Ulukaya told the business magazine, sometimes you’ve got to go with your gut.

Ulukaya’s purchase of the 90-year-old, about-to-be-shuttered Kraft plant revolutionized the American yogurt category. But it wasn’t without struggle. His advisers were dead set against it. His small cheesemaking company couldn’t support the loan necessary to get the bank interested, nor could he raise the equity on his own. But Ulukaya had a feeling about the yogurt market.

“I knew something was going to happen with yogurt,” he told the magazine. “For years, I had asked why yogurt was so bad here. I was always told yogurt had to be sweet to appeal to Americans. But when people go to Turkey or Greece, within 15 minutes of their return they start talking about how much they enjoyed the yogurt there. There was this imported yogurt from Greece, and it was available in cities here, and people were enjoying it.”

Ulukaya eventually found out about SBA 504 loans and hoped the agency might help. He wrote the business plan in story form and submitted it with fingers crossed. And it worked.

“I hired five people from the original 55, and they’re still with me. The first board meeting was me and these five people in this closed plant. It was quiet. A closed plant is like a cemetery, it really is. The walls will talk to you, the machines will talk to you if you really talk to them. One of the guys said, ‘What are we going to do now?’ And I said, ‘Well, because this plant was run by a large company, no one ever turned off the lights. We have to turn off the lights. I’ve seen the bills, and it’s crazy.’”

“We can make good products and be passionate and convince our consumers that they can like it,” Ulukaya says. “If the consumer likes you and likes your product, they’ll take it to the top so fast.

“The problem is that you come up with something unique and cool, and you sell it,” he adds. “The large companies just wait around to see what’s going to work. Then they talk to you. And they say, ‘Hey, you’ve got two options: You either sell to me, or I’m going to do the same thing you’re doing.’ So we have to be really smart. We started with an idea of quality yogurt, and the challenge was, how are we going to start this? Now, we will have to stay ahead of it. All of the time.”

Of course, Chobani now has more than 1,200 employees, annual revenues of more than $600 million and an additional plant under construction in Australia. That ought to help. And if there’s another Greek yogurt-type of product waiting to be discovered, Ulukaya now has the confidence and the track record to strike gold again.

 



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