Small Business Credit Profile: Cowboy Cricket Farms
How the Rolins family created a sustainable edible business with two credit cards
Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Small Business Credit Profiles,” a weekly column featuring small business owners' journey with credit and credit cards for CreditCards.com.
Imagine a farm and acres of crops or cattle will likely come to mind. But bugs? Add them to your vision, says Kathleen Rolin. Rolin and her husband, James, own Cowboy Cricket Farms in Belgrade, Montana. Since 2016, the couple has been devoted to raising the critters and transforming them into nutritious product ingredients.
Though the venture is thriving now, starting it was a challenge. Capital was necessary, but a recent bankruptcy and the edible cricket concept made lenders skittish. “Bankers saw us as a potential fail,” says Rolin. “So, with credit cards, we pushed forward. We could see that insects as food were needed and wanted.”
Rolin was right. Cowboy Cricket Farms is on the forefront of a booming industry and their products are carried in nearly 50 retailers throughout the country. The state of Montana awarded the company with research grants to develop additional cricket-based products, and SCORE named it a 2018 American Small Business Championship finalist. And had it not been for a couple of credit cards, none if it would have happened.
First the obvious: Why crickets?
I was a nutrition student at Montana State University and when they brought out insects as a sustainable food source, I thought it was interesting. People were excited, and I wanted to be a part of it. I had to convince my husband, though!
Once I did, we created our business, which raises crickets that are rich in Omega 3 fatty acids. We dehydrate them whole as snacks, turn them in a supplement powder and make baked goods with the crickets, like cookies and chocolate candy.
Crickets are good for everyone, including farmers. We help them start their own cricket farms. In fact, we have contracts with five farmers who are raising crickets for us. It’s hard work and a lot of responsibility, but it’s also profitable.
How did credit cards help?
In 2014, we declared bankruptcy. The only loan we could get required that our house be put down as collateral, and the interest rate was very high.
We decided to just use credit cards. At first we charged things to our personal accounts, but that didn’t last long, and we opened up a Capital One Spark Cash for Business card in each of our names. Truthfully, we didn’t have many options with the credit card companies either. We had included our Chase and American Express credit card debt in the bankruptcy, so they wouldn’t grant cards to us at that time. But the two Capital One cards worked out. We used them to buy supplies to construct our farm, buy a freezer and packaging materials.
How did the bankruptcy affect your approach to credit cards?
The bankruptcy was the result of a failed business, which was a family fun center. Batting cages, go-carts, that kind of thing. It was only profitable during the warm months, so we used credit cards to get us through the winters. That was a huge mistake. The cards were soon maxed out, we couldn’t pay, and we got a lot of angry calls.
After the bankruptcy, we said we’d never open another business again, but a year later I got the urge to do this. I have to say, when we first considered using credit cards again, we were terrified, but the entrepreneurial desire to jump into the entomophagy (insect eating) world outweighed the hesitation.
Our attitude about charging has totally changed. We always make more than the minimum payment, and last month we paid off one of the cards completely. It felt great to send $6,000 and zero it out! It’s also helped our credit ratings. They’ve improved quite a bit from what the bankruptcy did to them.
See related: 7 times when bankruptcy can make sense
How are you using cards now to achieve higher aspirations?
The cards allowed us to grow much faster than what we were expecting. We can buy materials in bulk, which saves money, and we are preparing for automation, which is expensive machinery.
Our success has inspired a lot of people. We’ve had visitors from other countries - especially Mexico - fly in to learn from us. We’ve also been invited to South Africa and China to teach them the business model. The state of Wyoming wants more of these farms and Montana asked us to bring this industry to reservations. We’re also in the prison system teaching inmates something that’s legal and profitable that they can do after they’re released!
Also, our crickets are a complete source of protein with a light environmental cost. The Food and Agriculture Organization of the United Nations declared edible insects as a solution to global food insecurity.
Any credit lessons or advice to share with other entrepreneurs?
Yes, don’t rely on credit cards to get out of a bind. With our last business, we never should have turned to the cards to survive when there was no hope. You have to know when to give up. Pride kept us trying too long, and we even stopped eating to pay the credit cards, just making sure our kids had enough food. Bankruptcy exists for a reason. In the end, I’m glad we did it. You can start over. Here we are today, with a great business and credit cards that we use well.
And eat crickets! Try them in a taco;
that’s my favorite.