If you find yourself in Los Altos one day, pining for a bite of some authentic Bienenstich so good you lick your fingers clean of the vanilla custard, then you’re in luck. A small hike from Googleplex and a straight shot down San Antonio Road lies Esther’s German Bakery. You’ll have to do U-turn and probably fight over a parking space but it’s worth every bit of aggravation to get your hands on some of Esther Nio’s Echte Laugenbrezn (real pretzels) or Schwarzbrot (rye pumpernickel bread).
“And don’t worry about the calories,” Nio says, “We use organic whole wheat flour in our cakes to make them less sinful.”
Always having suffered from a little wanderlust, Nio was over the moon when the chance came to swap her native Munich for California. Leaving behind a career in TV production, Nio, her husband, Robert, and their son immigrated to Palo Alto in 1997, where Robert took a position in Silicon Valley.
Nio’s visa restricted her from working so she put in for a green card and focused on her family, adding three children to the clan in seven years. But the idea to open a bakery was with her from her earliest days in Palo Alto. She loved California and its healthy lifestyle but sorely missed German breads and baked specialties.
“Back in 1997, it was terrible, there was no selection. Everything was colored and tasted like a sponge. Even the cream wasn’t real cream, so sweet and fake. There was no nutrition. You ate something just to get stuffed.”
And then, in 2004, the bittersweet occurred. The Nios got their coveted green cards but shortly thereafter Robert lost his job due to the tech crash. They decided to stay on in California and actually open that bakery Nio had fantasized about. For two years, they lived off their savings and borrowed from family while researching the market, refining a business plan, scouting out possible bakeries, and figuring out the legalities of bringing a real life actual German master baker over to the US.
“I do bake bread, but I wouldn’t sell it! We wanted to do it right and bring the same products available in Germany here, so we had to find an expert,” Nio explains.
After placing a single advert in a German newspaper, they got 50 responses from bakers willing to cross the Atlantic and make a go of it in California. Their first choice was so good he qualified for the visa given to individuals with extraordinary ability. “He had won so many accolades, he was considered almost famous,” Nio laughs.
They purchased a bakery in an industrial zone with the intention of serving farmers markets and grocery stories rather than individuals. Along with their master baker, the Nios imported rye flour and kernels, and marzipan. The rest of the ingredients were sourced locally from carefully selected suppliers. Robert managed the logistics and the like while Nio did all the sales and advertising. They were an instant hit.
“The reception was great in the beginning, we were really happy. But the first year is always a question mark. Expenses are really high in a bakery. Everything you don’t sell is a loss, so every day is a big risk until you know your customers and what you are going to sell,” Nio explains.
After two years, the unfulfilled dream of managing her own cozy shop front became too much for Nio and she started looking for retail outlets as a companion to their wholesale premises. She found the perfect location in midtown Palo Alto, but after two years of negotiations with the landlord, it wasn’t meant to be. Nio found an alternative location but it wasn’t the dream she had imagined.
“There’s no walking traffic here. There’s very bad parking. You have to make a u-turn to get into my store, but it was all that was available and I saw the potential. It was an old coffee store with a patio that I vividly pictured as a beer garden in the summer.”
Having no experience in running a shop, she trained with the previous owner for one week and was met with many surprises.
“I cried because it was so depressing. I took it ‘as is’. The previous owner had no customers for 15 years. A couple of guys would come in on the weekends for a fry-up. I opened the cupboards and roaches came and said hi to me. It was a disaster,” she laughs. “After he left, I threw everything out. I started from scratch, redesigned the place, and immediately it got better.”
One week after she signed what she lovingly refers to as “the roach contract”, a spot opened in San Antonio shopping center where she’d been on the waiting list. “I decided to go forward with it because the two store fronts were so close to each other, but that involved a lot of racing back and forth. Imagine someone so green behind the ears, opening two stores within weeks of each other,” Nio recalls with glee.
Although the second location in San Antonio was forced to close when they tore down the shopping center in 2011, the original Esther’s Bakery has grown tremendously, mostly through word of mouth. Nio’s biggest challenges have been finding the right employees and the best ingredients.
“I have absolutely no regrets. I lost some sleep over the odd nasty customer but learned it’s never worth it. I love what I do and even got to install my miniature Bavarian beer garden out back. It’s the best of both worlds: California weather and German pretzels with Hefeweizen.”
- Don’t walk naively into a business, do your homework first!
- Check out thoroughly before buying any property.
- Be aware that you have no weekends, holidays or vacation in the beginning.
- People can be litigious over ridiculous things, so get all the insurance necessary to protect you.
- Retail is detail, so don’t overlook the little things, like is the soap topped up in the restroom?
- Taxes and other costs are more than you calculate in at the beginning, so have a cushion for those extra costs to prevent surprises.
- Intuit’s QuickBooks is a great tool to keep books up to date and finances in order.