Bonnie Smith ran a non-profit venture for almost three years. It wasnt that way intentionally. It just took her that long to realize she was undercharging.
Smith launched Wigs on Wheels, an in-the-home wig distributor, in 1994. Today, not only does Smith earn enough so that she could quit her job, but she also has sold two franchises, in Cleveland and Columbus.
She finally learned her lesson: If you have a good service and if you charge the right price without hurting the customer, she says, youll stay busy.
Smith, a former executive secretary at Goodyear Tire & Rubber Co., stumbled into her business somewhat accidentally. After both she and her 17-year-old daughter started losing their hair because of a genetic hormone imbalance, she was forced to shop for wigs. Her daughters hair has improved, but Smith still needs a wig.
I hated shopping for them. I didnt feel the salespeople were helpful and I just felt conspicuous, she says. I thought, There has to be something better.
She became inspired to provide an alternative, but says, I wanted to do something different than just another wig store. I wanted to be more like a friend.
Working full time at Goodyear during the day, Smith started her business slowly: She spent evenings and weekends for most of 1993 researching the industry, talking to the manufacturers and developing a marketing plan and brochure. She began marketing it in January 1994 to doctors offices and hospitals but initially got a lukewarm response because she was a newcomer.
Occasionally they would send me someone, she recalls. She made those referrals count, however, and built the business on word-of-mouth. Customers liked her personalized service and the privacy of an in-home consultation.
Most of her clients are cancer patients, and Smith reasons theyre going through enough without the stress of shopping for a wig. In addition, the patientswith reduced immunity are more vulnerable to the germs in open public places like stores.
Patricia Latham of Summit Oncology Associates in Akron says Wigs on Wheels is the only local in-home service of which shes aware. She includes Smiths card in referral packets for new patients.
Its a service thats very much needed, Latham says. She really has that empathy for people, and its turned out very well for the patients weve referred.
Based on strong feedback, Smith got serious in 1994, hiring Cleveland franchise attorney Thomas Brule of Buckingham, Doolittle & Burroughs and spent $3,000 to trademark the name Wigs on Wheels. Brules other clients have included KFC and Physicians Weight Loss Centers. I wanted to do it right, Smith says.
But in 1994, she was still working full time at Goodyear. She generated only $25,000 in sales. A wig that cost her $30 might be priced at $65. That allowed for barely any profit after she figured in for her time, travel expenses and other costs.
It was bad, she muses. Because it was only me I had to answer to. If I felt a person was struggling, Id adjust the price even lower... I provided a great non-profit service.
By 1995, Smith began getting better prices from the manufacturers. As they got to know me and I did more volume, I was able to secure the best price, she says.
Smith also raised her prices slightly to allow for a modest profit. She maintains that shes able to charge slightly less than most stores and still make money because she doesnt have the overhead of rent, utilities, signage and cash registers. She also doesnt have to pay someone to sit in a store all day.
Last year, Smith sold nearly 1,000 wigs while working part-timethe result of a job-share program with Goodyear. Smith retired this April after 15 years. Now shes confident Wigs on Wheels will prosper.
Smith projects sales will exceed $100,000 in 1998, based on an average of three customers a day. About 75 percent of Smiths sales are in the Akron area; the rest are in Stark County.
Wig wearing is growing more popular, Smith says. About half her customers have insurance to cover the costs.
Already this spring, shes sold two franchises at $10,000 each, including training, the operations manual, vendors pricing and support. Barb Sabat, a former Cleveland Clinic nurse, purchased the first franchise in March. A Columbus businesswoman bought her franchise a month later.
The franchisees must buy their own $1,000 start-up kits from Smith, who obtains the kit for the same price. They also take care of their own phone lines, business cards and related expenses.
Smith plans to charge royalties totaling 5 percent of sales once theyre doing well, she says. Theres no written time frame for that, she shrugs, explaining she doesnt feel right charging royalties in the start-up phase.
My husbands been giving me a hard time, Smith chuckles. He said you did this initially with prices and now youre doing it with the franchises.