The idea started simply. Irvine resident Smita Salgaonkar bought an ice cream maker to exercise her creative flair to make unique desserts.

As often happens to people with a tasty family recipe, friends told Salgaonkar that she ought to take her ice cream to market. Here's where the idea became complicated.

Those who have never started a business think it's a snap; those who have could write this column about the difficulty of converting an idea to profitable reality.

"I didn't know the first thing about ice cream. I had so much research to do," Salgaonkar said of launching Neemo's Exotic Ice Creams in 2001.

OVERCOMING INEXPERIENCE
To her credit, Salgaonkar did that research before leaping into ice cream manufacturing.
She planned on using saffron and other flavors she loved as a child growing up in Mumbai, India, formerly Bombay. So she sampled ice cream at every Indian market and restaurant in the area.

"To me, none of it tasted good," she said.
She learned she didn't have to open her own manufacturing plant. Contract food manufacturers often fill surplus capacity in their plants by accepting work from outside businesses.

She went to SCORE, a volunteer business counseling group with an office in Santa Ana, for help in writing a business plan and advice on production, pricing and other matters.

"She was a neophyte in the industry," SCORE counselor Joe DiStanislao said. "But she had a unique product and a fire in the belly." Even today, Salgaonkar continually studies her market and industry. She goes to national food expos and takes college classes in dairy production.

DEFINING THE MARKET
DiStanislao thinks Salgaonkar's decision to concentrate on the ethnic market is wise. "The world didn't need another vanilla ice cream, but Neemo's has a niche. She placed her product with the ethnic group," he said.
Having a specialty niche allows her to charge more. Neemo's wholesales for $18 to $25 a gallon. A scoop at her retail location, Saffron Spot, costs $2.50.

She chose to sell her ice cream through distributors rather than direct to retailers but has had to resist distributors' demand for exclusive territories and bigger revenue cuts than she can afford.

PROTECTING QUALITY
Converting homemade treats into mass production was harder than Salgaonkar expected.
She could only access the contract manufacturer at 5 a.m. to run test batches as she worked out her original formulas. Even then, she had to compromise.

Making Saffron Silk, her signature flavor, a gallon at a time produces a smoother texture than commercial production does, she said. As her business has expanded to include catering, Salgaonkar faces new challenges.
"I have to baby-sit ice cream constantly," she said. "I deliver catering orders myself, and I don't leave until I make sure it goes into the freezer at the right temperature."

BUILDING PROFITABILITY
Neemo's has expanded to restaurant and hotel accounts and catering business, but profit is always a challenge, Salgaonkar said.
Because Neemo's is small, producing about 400 gallons a month, she doesn't get the biggest price discounts on ingredients.
Also, Neemo's uses unusual ingredients whose prices fluctuate widely. Cardamom, a ginger spice, had cost $2.99 a pound, then shot up to $8.99. Pistachio nuts have increased from $2.85 a pound to $5.75.

Opening a retail store, Saffron Spot, has helped build the business, she said. Its location in Little India in Artesia gives her more visibility in the ethnic community, produces steady sales, helps build her brand and develops customers who have acquired a taste for Neemo's exotic flavors.

It has expanded from the original four – Saffron Silk, Mango Magic, Chikoo Crunch and Cashew Cream – to 25 flavors.
Salgaonkar is researching whether to grow through franchising. But even that has risk. Franchises would probably be limited to Indian communities spotted around the country.

"But I'm optimistic. I keep moving forward and coming up with new treats," she said.