Royal Reputation Diane Knight’s persistence and a passion for baking has kept her Lady Di’s Cookies in Valencia a local favorite despite news events beyond her control By MATTHEW A. GILBERT Contributing Reporter Who doesn’t enjoy a good cookie? But, for Diane Knight, owner of Lady Di’s Cookies in Valencia, baking the cookies that bring others joy is her real reward. A lifelong entrepreneur, Knight’s passion for her profession began at the age of 12 when she realized making people happy through her creations was her calling. “They’re not just cookies,” Knight says. “That’s what makes us different.” Founded in April 1994 as a mail-order and delivery business, Knight cooked up first-year revenues of $30,000. Initially, she baked and wrapped the cookies in her home, but eventually sublet space in a local bakery. She hired additional bakers and individuals as needed to wrap her packages in festive adornments one of Lady Di’s trademarks. Knocking on doors and making cold calls, Knight chipped away at her competitors. Combining determination with inspiration, Knight left samples of her all natural cookies at entertainment companies throughout Los Angeles. She repeated the formula with law firms, medical organizations, pharmaceutical companies and others with great success. “I knew they were ordering from my competitors so I asked them to try my product,” Knight recalls. “My prices weren’t any cheaper but my quality was a heck of a lot better. That’s how I got in.” Lady Di’s Cookies offers 19 flavors including traditional cookies such as loaded chocolate chip to more outrageous options like Swiss orange chocolate. They are free of preservatives and contain all natural ingredients. Lady Di’s also offers five flavors of brownies and six types of caramel apples plus a full espresso bar. By 1997 Knight’s revenues increased five-fold to $150,000. However, that same year Knight faced her biggest challenge: the death of Princess Diana. Her revenues fell by as much as 35 percent for a full year after the tragic event. “People who didn’t know who I was thought I took her name to capitalize on her death,” Knight recounts. “We had clients that were so concerned about other people’s perceptions that they stopped ordering. It was a really tough year. But it gave me grit and made me work hard again.” In 2001, Knight’s inner strength was again tested when her plans to open a retail store were hampered by the events of September 11. This was coincidentally the date on which she was set to sign the lease for what would have been her first retail location in Valencia’s Promenade Shopping Center. Knight held off on her decision and postponed her plans. “A lot of companies lost their gift budgets. Or, instead of giving out holiday gifts corporations donated money to the fireman’s fund,” Knight said, explaining that holiday sales account for her most significant source of annual revenue. “We’ve had some major tragedies that have affected us severely. So, whenever that happens, we hang in there and move forward.” Retail location In October 2003 she finally opened her first retail location: a 1,100 square-foot facility that combines her delivery and mail order operations with her inaugural retail effort. Located in the new Westridge Village Shopping Center, that prime location seemed an ideal place to launch the next level of her business. However, adversity arose again when, just as Knight opened her doors, the grocery strike erupted delaying the opening of the nearby Albertson’s designed to anchor the center. Despite the end of the strike and the opening of the Albertson’s, the damage was already done. “We’re a full year behind on our financial projections. And, we’re a year to two away before this is a real established retail center,” Knight admits, while acknowledging that there are brighter days ahead. “Once people find us they keep coming back.” Knight remains confident that the $250,000 she invested into the new location will eventually yield a significant return. (No external funding was invested into the facility everything came from Knight’s personal savings). Completely confident in the quality of her cookies, Knight continues to seek new opportunities to grow her business. “It’s been one thing after the other, but we keep going. I think it speaks to our perseverance and knowing that we have great products. I don’t think anyone out there makes a better cookie,” says Knight, who estimates that ingredients account for 25 percent of her overhead costs. “We don’t use preservatives; we use pure butter, and the best quality chocolate and vanilla. There’s nothing artificial in my products.” Emphasis on staff There’s also nothing artificial about her positive personality. She manages a part-time staff of nine that cross-trains on everything from baking, to wrapping to helping customers at the counter. A firm believer in equitably rewarding her employees and treating them fairly, Knight pays her employees well above minimum wage. For 17-year-old Lady Di’s employee and Hart High School senior Brittney Lloyd, Knight’s generosity, pleasant demeanor and willingness to teach the tricks of the trade are great fringe benefits. “My brother who is a chef and I want to open our own restaurant, but he doesn’t like baking. So, I thought this experience would help. You can learn a lot from Diane,” Lloyd says. Nick Alexander, owner of Alexander BMW and Mini in Los Angeles, hands out gift baskets from Lady Di’s Cookies to people who purchase a new car. “Customers rave about how good the cookies are; they love them,” said Karen Ab & #233;, customer relations manager for the dealership. “And we sample them all the time. Lady Di’s always sends us cookies for our managers birthdays or Nick’s birthday. They send us a huge basket so we get to all share.” SPOTLIGHT: Lady Di’s Cookies Year Founded: 1994 Employees in 1994: 6 Employees in 2004: 9 Revenues in 1994: $30,000 Revenues in 2004: $500,000 Goal: To make the best cookie possible and bring joy to people. Driving Force: To continually improve the core business, focusing on quality and creativity.