When COVID Hit, She Had to Close Her Restaurant—Now Her Products Are Flying Off the Shelves at Whole Foods

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Courtesy of Ayeshah Abuelhiga

Ayeshah Abuelhiga was first inspired to open her own restaurant while working at local eateries in Washington, D.C. as an undergraduate at George Washington University. “It’s where I learned the value of a hard-earned dollar, where I learned Spanish, and where I saw people like me who didn’t necessarily have rich parents with white-collar jobs who paid their tuition,” explains Abuelhiga. “I saw the opportunity for restaurants to modernize, and ultimately, I knew that one day I wanted to own a restaurant." And after 14 years of climbing the corporate ladder, she did finally open the doors to her own restaurant, Mason Dixie, an authentic Southern comfort food hotspot, in D.C.

Although she had the make the difficult decision to close her restaurant after six years of serving the D.C. community due to COVID-19, she’s stumbled upon an even more impactful way to modernize the food industry. Like so many small business owners in 2020, she pivoted, identifying an opportunity to bring the wholesome biscuits that people would line up around the block for in D.C. into frozen food aisles across the county. Today, Mason Dixie has evolved into a clean frozen food company that makes biscuits and breakfast sandwiches that are available at over 6,000 stores, including Whole Foods, Target, Safeway, Costco, and more. And Abuelhiga is just getting started.

Below, the founder tells Create & Cultivate how she’s scaled her company sustainably, why she’s opted to raise funds from private investors (rather than through venture capital), and what major mistakes she’s made and learned from along the way.

You started Mason Dixie, in part, because you believe everyone should have access to affordable, wholesome food. Take us back to the beginning—What was the lightbulb moment for Mason Dixie and what inspired you to launch your business and pursue this path? 

I grew up poor. I was raised in low-income housing in Baltimore up until I was 11, but my parents did their best to instill the values of home-cooked, wholesome meals. We shopped at farmer’s markets and bought produce that was bruised, but we ate very balanced meals. I notice now looking back that the kids I still remember that I grew up with in Section 8 that ate out of vending machines are still in the system today, and those who had better access to food, are in better places. You truly are what you eat and I have always believed we deserve better. 

In that same vein, my immigrant parents owned a soul-food carry-out restaurant and convenience store when I was little and I got my taste for American cuisine from it. It was also a deciding cuisine when my Middle Eastern dad and Korean mother would disagree about whose cuisine would win out for dinner that night. I craved soul food even as I was coming of age in college, but I could never find homestyle, scratch-made comfort food, only fast food equivalents.  

Fast forward to college. I was the first member of my family to attend college and since my parents didn’t make a lot of money, I had to work to pay for school, so I worked in restaurants throughout my years at George Washington University. It’s where I learned the value of a hard-earned dollar, where I learned Spanish, and where I saw people like me who didn’t necessarily have rich parents with white-collar jobs who paid their tuition. I saw the opportunity for restaurants to modernize, and ultimately, I knew that one day I wanted to own a restaurant. 

So after working for 14 years in male-dominated industries, like tech and auto, and quickly climbing the corporate ladder, I realized I was an upper-level manager who was unfulfilled and had another 20  years to go before I could go after the only female C-level role that I didn’t even want. I was disenchanted and uninspired. So, I decided it was time to start my dream of owning a  restaurant. So in 2014, I founded Mason Dixie. I saw a huge opportunity in the lack of comfort food options available in the growing, better-for-you food space, and an even bigger opportunity making biscuits the focal point since there were no real, scratch-made biscuits on the market. I also saw an opportunity to make scratch-made comfort food affordable and accessible to the masses versus just doing better-for-you food in the fine dining realm by looking at the fast-casual scale and ultimately, grocery, as an even better avenue to do just that. 

You recently raised $6.3 million in Series A funding from investors—no doubt you’ve learned a lot along the way. What are three crucial elements everyone should include in a pitch deck when raising money and why?

1. Know the problem you are solving and how big the addressable market really is. Frequently I see founders who do not research the market space enough and show a $20M market opportunity. No investor gets excited about the opportunity to take up to 10% of a $20M market. If you make a seed oil and that segment is small, how big is the oil market in general? Sell the sizzle. It’s the opportunity size that gets early-stage investors going. But be realistic. Be able to defend the market size with real data. 

2. Know your sales performance and gross margins inside and out; it is ultimately how investors judge your worth. I cannot tell you how many founders I talk to that don’t even know what goes into a gross margin calculation, or where their strongest sales are coming from. This is important stuff you should be able to spat out on command. 

3. Know how you are going to use the funds. Don’t just say I need $1M. What is that $1M built from? Half to overhead/salaries, some to equipment, a third to working capital? Show in your projections how you get to that number. You will always be surprised after analyzing cash flow projections how much more you really need than you thought.  

You decided to forgo venture capital and instead opted to raise funds from private investors, many of whom are women. What advice can you share for entrepreneurs, particularly WOC, on partnering with the right investors, and what do investors need to bring to the table other than just money?

I say this until my face turns blue and people still look at me like I have three heads but choosing investors is like choosing a husband. They are almost identical on legal paper. They own your assets, you share financial responsibilities with them, and ultimately your relationship will be what allows you to succeed or fail. They are not a bank or a cash lender; they are meant to be business partners. 

You have to know the type of personalities you vibe with, what their values are, do you have the same humor even. It’s like dating. You have to ask yourself, “Could I be with these people forever? Are they my people? Do they really believe in me and what I am trying to achieve?” These are some of the top questions I ask of my investors when getting to know them and I highly recommend founders do the same when they go out to raise. This is why for WOC especially, it’s important to find your people. The check is secondary to shared values and work style. 

You launched Mason Dixie in 2014, and now the brand is available at over 6,000 stores, including Whole Foods, Target, Safeway, Costco, and more. What has been the biggest challenge in scaling your business and what lessons have you learned along the way? What advice can you share on how to scale a business sustainably?

The hardest part about scaling a fast-paced growth business is predicting growth. There are times when you get it dead wrong and over-project, and there are times you go gangbusters and hit it out of the park. Both scenarios are challenging to plan for. 

I think the way we have navigated our business growth best was by learning the hard way at first and then optimizing each year. At first, we sprinted and made some mistakes. We were lucky in that the sprint just qualified us for the next race, but we weren’t ready. We just happened to be the fastest runner in that first race. I would have preferred looking back to have trained and prepared for the second race. 

So with each misstep, we corrected, learned, and analyzed our weak points and then went in more cautiously. We chose better retailers, improved our product mix, then accelerated. I would always make sure to be cautious. If I could do it again, I would win strategically big and focus on making those wins bigger before going wider. It helps mobilize the team better, focuses your assets, and then allows you to move stronger into new markets. 

There are a lot of small business owners reading this interview who would love to have their products sold at major retailers like you. How can these founders follow in your footsteps? What advice can you share for getting a foot in the door with a big-name retailer?

Fair warning: the market has changed a LOT since we first got started. Anyone who started before a couple of years ago were the pioneers. You did a lot and asked for forgiveness later and people were more willing to grow/make mistakes with you. 

Now, the world has changed. There is a lot more competition—a lot more products out there—and retailers are getting smarter. Before you go pitch to a big retailer, you have to really know if you are ready. Do you have the marketing and trade budget to support the account? Can you keep up with the volume? Can you afford slotting fees? Do you have a sales support team to monitor and manage the account? 

Remember, these players have dealt with far more billion-dollar companies than they have thousand-dollar companies, so the rules are set for much bigger fish than you. 

Get educated, get funded, then jump into those waters with caution. Surround yourself with skilled and experienced advisors who have worked in the category/product type you are developing. Ask other companies in those retailers about their experience—both their successes and their follies. Get informed before you pitch. 

Where do you think is the most important area for a business owner to focus their financial energy on and why?

Being a founder/CEO means you need to know everything about your business—point-blank.  There isn’t one area that is more important than the other. It’s a living system and all parts of the system need to be financially healthy in order for the business to thrive. Now, this doesn’t mean you need to be the expert. Hire a great accountant or CFO early. Allow them to train your eye to see the dark spots and opportunities clearly. Focus on understanding your business over how to be a financial whiz. 

What was your first big expense as a business owner and how should small business owners prepare for that now?

People. People people people. They should always be your first biggest expense. Who is helping you to create your projections? Who is going to manage your first order, or even make it? Remember, you cannot do this on your own and the value of the people you surround yourself with will be invaluable in the long run. 

What are your top three largest expenses every month?

1. COGs – All of your cost of goods should and will be your largest expense. 

2. Trade expenses/marketing – In frozen, we invest a lot into trade since it’s not as easy for us to market and get trial by handing out free sample packs at a metro station or triathlon. Investing back into trade helps us grow and should be one of your largest expenses as you scale.  

3. People – Your people should be the best of the best and they deserve to be financially treated as such so they are spending 100% of their time worrying about their business and not if they will get paid. Remember – this industry is tough and financially risky. This is always on the minds of your people so make sure you can pay them on time, and in full. 

Photo: Courtesy of Mason Dixie

Do you pay yourself, and if so, how did you know what to pay yourself?

I didn’t pay myself for four years so that others might eat. I lived off of savings and credit cards for as long as I could to ensure I could snag the best people, finance the next purchase order, or invest in the next piece of equipment or manufacturer. I only started to pay myself once I knew I 

couldn’t cut checks big enough anymore to fuel the business and took in our first investment,  but even then I was conservative and only took what I need to pay rent and eat. As an owner, don’t forget you own the company and that is way more valuable than a salary. 

At first, conserve as much cash as you can otherwise you will burn through equity instead. Taking a big salary is a cash burn that will cost you more equity when you need to raise more money before the company has earned the valuation it deserves. So be frugal about what you need in the beginning until the business can afford to pay you. 

Would you recommend other small business owners pay themselves?

It just depends on that owner’s personal situation. If I started a business as a single mom with three kids and little savings to live off of, I probably would pay myself the bare minimum I needed to feed my family. But as a single woman with nothing to lose, I lived as bare as I could on what I had. In fact, I worked side hustles until the business could afford to pay for me. It really depends on your financial needs and situation—just be frugal is the biggest advice I can give. 

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

You are always ready to hire. No one is good at everything. I would have a hard look at your skills and experience, rate those against the different business functions your business needs,  and then hire for anything you didn’t rate yourself strongly for. When I took in a business partner, my COO, Ross, I knew I was terrible at operations and needed help. Similarly, when I  saw sales ramping up, even though I knew I was good at sales, I only had so much time so rather than spread myself too thin, I invested in the hires knowing that yes, I could still do it, but what was the opportunity cost?  

Did you hire an accountant? Who helped you with the financial decisions and setup? 

Yes. This should be one of your first hires. I rarely have ever met a founder who is an accountant/financially trained. These people are, you need them. Again, they will educate you about how to look at your business and ultimately help you finance it. They are a critical function. 

What apps or software are you using for finances? What’s worked and what hasn’t?

Every business can start with Quickbooks or any off-the-shelf software. In fact, there is a huge market opportunity for you software engineers out there to design scalable accounting software for product companies—hint hint! It’s been fine because of its ease of use and cloud-based 

access, but terrible for really using it as a business intelligence and decision support tool. At the end of the day, it’s accounting software, so decision support is still happening in Excel for us. I  don’t think there are better solutions until you advance a bit more, but I am always looking. 

Do you think women should talk about money and business more? Why? 

Yes, we are the biggest consumers in the world! We are business!! More decisions need to be made by the women who LITERALLY hold the purse strings. It can only happen with us talking out loud about it and informing the powers that be how we view money, business, services, etc.  The more we show up, the louder we are, the more we will be seen, the more will change. 

What money mistakes have you made and learned from along the way?

The funniest mistake was when I thought I was going to be Willy Wonka and open a biscuit factory in just a few months! It was actually one of the best mistakes I ever made. When we sold into Whole Foods our growth was so fast that we were getting requests for products everywhere. Naively, my business partner Ross Perkins and I decided to go after more accounts, particularly in the South because if these biscuits couldn’t sell down there, then we should just call this a good swag item and not further invest. Well, we got both Publix and  Kroger to buy our biscuits and were going to go from 100 stores to 1,000 stores in just under nine months. With no idea how to do this, Ross and I leased a drive-thru restaurant with a huge parking lot in the middle of nowhere so we could make pallets of biscuits and store them in a portable trailer freezer on the lot. 

We kept doing this for months and transporting the pallets, but the demand kept growing locally,  so we couldn’t even keep the inventory we had reserved for the new accounts. I thought we needed to build a bakery! A frozen dough bakery! In the middle of DC! I spent a ton of money on fully engineered plans for this biscuit factory that was also going to have our restaurant attached for the full Ghirardelli experience until we were about to pull the trigger on this huge spiral freezer. Turns out the freezer requires either ammonia or freon—which in DC—are banned in the quantities we needed to fuel this machine. So, we were dead in the water, and we had to pivot to find a way to make biscuits within four months. 

I say it was the best mistake I ever made because I ended up being fluent in frozen biscuit production—I knew exactly the equipment I needed, the process, the cost of things—so when I went on the hunt for the facility that would ultimately make our biscuits, I knew everything I  needed to know to make the search easy. Because I failed at building a factory, I succeeded in finding the best co-manufacturer out there for our biscuits, and that is what ultimately allowed us to scale and has brought us to where we are today. 

What is your best piece of financial advice for new entrepreneurs?

Learn about venture capital and investing before you start. It’s way more complicated,  personal, and nuanced than anyone tells you. I did my best to read and research but only as I  was hearing no’s during our initial raises. I even did a killer pitch where every investor in the room asked for follow-up discussions. But sometimes it’s not just about your business track record. Sometimes it’s about the color of the money on the table or how much more money is needed and it’s hard to stomach when you think everything else is A+ and you still can’t close the deal. 

Anything else to add?

Whenever the going gets tough, ask yourself, what have you ever failed at that you tried your absolute hardest at?  

I can’t think of a single time when I put my all into something where I didn’t succeed, so I know if  I keep trying, anything can happen. I realized if I didn’t stop trying and if I continued to persevere and stop putting a period at the end of the task, I would ultimately succeed. It’s been the driving statement that through every bad turning point in the path to getting Mason Dixie where it is today, and it is 100% effective.

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