While many business partnerships fail when oversized egos get in the way, Gooseberry Patch owners Vickie Hutchins and JoAnn Martin say partnering is what makes their company work.
I dont know that either of us would have hung in here this long if we were by ourselves, says Hutchins.
Sixteen years ago, the duo started the Delaware mail order business from a mutual love of country decorating and antiques. With an initial investment of $5,000 apiece, they took no income for three years. In 1990, they hit the $1 million sales mark, and the company grew at about 30 percent a year after that. They expected sales to reach nearly $15 million at the close of the fiscal year last month.
As in most successful partnerships, Hutchins and Martin have complementary skills. Hutchins handles the creative aspect of the business, particularly catalog design and cookbooks, while Martin manages more of the day-to-day operations. Yet each crosses over from time to time, and neither is territorial when it comes to getting things done.
We can divvy up the crummy jobs and the fun ones, says Martin.
And neither gloats over a good decision nor plays the blame game over a bad one like the time they tried to sell the bowl with the floating candles.
Weve still got quite a few of them, says Martin with a chuckle.
Maybe it was because the candles were shaped like rocks, adds Hutchins. Weve been trying to donate the bowls to schools to use as terrariums, but you really cant donate them because theyre so breakable.
But the pair thinks theyre on target most of the time when it comes to picking just the right products for their customers typically well-educated women between the ages of 35 and 55. And they contend theyre selling more than simply products in their whimsical catalog pages.
I think the catalog is about comfort, family, friendship and sharing, says Hutchins. It brings to peoples lives a little something theyre missing.
The duo also has a shared commitment to providing extra-friendly service to their customers. Gooseberrys personal shoppers, telephone operators whose numbers swell to 25 in the months before Christmas, are given extensive training not only in taking orders in a chatty way, but also in becoming experts in Gooseberrys cozy product line from layered cookie mixes to bubble lights. Each year, the catalog features about 200 new products.
The pair, winner of Ernst & Youngs Columbus and Central Ohio Retail Entrepreneur of the Year Award in 1995, says the newest challenge is finding enough creative people to add to their in-house staff of illustrators, copywriters and graphic designers. They say Gooseberrys laid-back atmosphere, replete with scented candles and potpourri, may be difficult for those who prefer a corporate ladder.
A lot of people cant go with the flow and be flexible and spontaneous, says Martin. The lack of creative talent is determining our growth, which gets frustrating because we have so many ideas and so much we want to do.
But Hutchins and Martin are confident that theyll continue to build their business in the relaxed, non-competitive way they always have.
I dont think weve ever lost sight of what it is were here for and what it is we want to do, says Hutchins. I dont think its ever changed; its evolved.
Muntaqima Abdur-Rashid is a Columbus-based free-lance writer.
You frequently mention that you should avoid telling prospects about the features and benefits of your product or service and focus instead on asking the right questions. Can you tell me what types of questions to ask early in the selling process?
I am frequently asked by clients to spell out the questions they should be comfortable asking on a sales call. This is a dangerous task, because it presupposes that every prospect is the same and every sales call is going to go perfectly.
Good salespeople have a system for selling that encompasses a specific strategy and set of tactics designed to further that strategy. However, the manner in which that system is implemented is more of an art than a science.
Most entry-level salespeople are taught a set of scripted or canned closes. While they are easy to learn, they are often ineffective. Effective selling strategies and tactics are more difficult to learn, but they are far more powerful than canned scripts and closes.
Remember also that how you ask is often more important than what you ask. Questions by themselves can be abrasive. Make sure you sprinkle your questions with plenty of nurturing statements and have an empathetic tone in your voice.
With these precautions in mind, here are 24 fundamental questions which you need to be comfortable asking during the early stages of the sales process to begin to master the art of selling. The questions are part of what I call "Lewis' Essential 44" -- the 44 fundamental questions you need to consider asking.
The initial phone call
1) Does my name or company sound familiar? (To be used when making a sales call to get the prospect to disengage from what he or she was doing before you called.)
2) I know you weren't waiting for my call and you're very busy, but if you will give me 30 seconds, I can tell you why I am calling and you can decide whether we should continue this conversation. Will you give me 30 seconds? (To gain permission from the prospect on a cold call before delivering your 30-second commercial.)
3) I am a (fill in the blank) specializing in (fill in the blank). Typically I work with successful (fill in the blank) just like you, who are basically very happy with (blank), but they are frustrated or concerned that (blank, blank or blank). I don't suppose you share any of those concerns?
This is your 30-second commercial, designed to describe what you do in terms of the problems you solve to determine if you can do anything for the prospect.
4) And you've never had a problem with (fill in the blank)?
5) Nobody is perfect, not even us. If there was one area in which you would like to improve on your current situation, what would it be?
6) Would it make sense for you to invite me in to talk with you about these issues in greater detail to see if I can help you in these areas? (To get the appointment.)
7) How much time have you set aside for our meeting?
8) What would you like to accomplish during our time together?
9) Would it be okay if I asked you some questions first?
10) If, in the course of our meeting, you don't see a fit between what you need and what I offer, would you be willing to tell me "no?"
Uncover pain and create a sense of urgency
11) Why am I here? What caused you to invite me in?
12) Tell me more about that ...
13) Can you be a bit more specific? Can you give me an example?
14) How often does this happen?
15) How long has it been a problem?
16) What have you tried to do about this?
17) Did that work?
18) What impact is this having on your company?
19) How does this affect you personally?
20) How does this make you feel?
21) What were you hoping I could do?
22) Is there anything else you would like to tell me about these problems?
23) How important are these issues?Are you really committed to fixing these problems?
Next month, Larry Lewis will address the remainder of the 46 questions. Larry Lewis is president of Total Development Inc., a Pittsburgh-based consulting firm specializing in sales development and training. Send your comments and questions via fax at (724) 933-9224 or see his Web site at totaldevelopment.com. Reach him by phone at (724) 933-9110.
The Himalayan Mountain range between Nepal and Tibet includes the world’s highest elevation, Mount Everest, at 29,028 feet.
Climbing it is considered one of the world’s greatest challenges. For many businesses, getting their computer systems and databases to work together is almost as difficult of a challenge.
I have worked with businesses on this Herculean task for more than three decades, first at industry leaders IBM and Xerox and now at my own company, Everest Data Research Inc. Since 1988, our firm has been developing databases and computer systems for Fortune 500 and Fortune 1000 companies.
Although our company specializes in the technical side of business, our focus is on people: our customers and employees. We realize that if a person cannot use a database or an operating system, it is not helpful. Additionally, we work to foster creativity in our employees through their workspace and their hobbies. We have musicians, artists and white-water rafters on staff. This creativity is reflected in the work we do for our customers.
Our office workspace is considered nontraditional for computer companies. It is not rows of boxy cubicles, but more open, with higher ceilings and other features. We’ve been in our new building on Dorchester Square off Schrock Road in Westerville for almost two years and have more than doubled our space.
We secured financing for our building with a Small Business Administration 504 loan through Columbus Countywide Development Corp., the area’s largest nonprofit small business lender. Columbus Countywide worked on the loan with our bankers at Delaware County Bank. We made a 10 percent down payment, a lot less than what is required with most other loans. Delaware County Bank financed 50 percent of the loan and Columbus Countywide the remaining 40 percent.
The SBA 504 loan program is designed for healthy, growing small businesses like ours that need long-term, fixed rate financing to buy real estate or construct a new building. Columbus Countywide also has several other loan programs for small businesses, with financing from $1,000 to $1 million.
Because of our new building, we were able to expand our business, offering on-site training for customers to learn more about their new systems and programs.
Our goal at Everest Data Research is to help your company climb to the top and reach the summit of success. Columbus Countywide is helping us and many other businesses do just that.
Since 1981, Columbus Countywide has helped more than 1,100 small businesses obtain financing and has approved more than $190 million in loans, which have created more than 11,000 jobs and stimulated more than $500 million in new investments in the 13 counties it serves.
For details on Columbus Countywide’s loan programs visit www.ccdcorp.org or call 645-6171 in Franklin County or (888) 756-2232, toll-free, from elsewhere. Margaret Fenton is president of Everest Data Research (www.everestdr.com) in Westerville.
In reality, some may be checking out what perks you offer before they even walk through your door and using that information to decide where to shop.
If you already participate in the Golden Buckeye Card program, the Ohio Department of Aging now has your company and your discount listed on its Web site, www.state.oh.us/age/Buckeye.htm.
If youre not participating but want to, the site tells you how.
It might be worth your while. Consider the following, courtesy of the Web site:
- Americas older adult population will more than double between now and the year 2050.
- By that year, as many as one in five Americans will be older than 60.
Looks like seniority really does rule.
When WNCI-FM disc jockeys talked on-air earlier this year about which celebrities they looked like, the station asked listeners to call in their own stories.
Callers made what the DJs thought were outrageous claims about looking like some of the big stars of today. So one DJ asked a listener to e-mail him a photo.
That viewer complied as did many others.
The response to the radio bit grew so extreme, the DJ decided to post each of the photos on the World Wide Web. That way, the radio audience could check out other listeners first hand on the WNCI Web site (www.wnci.com).
Thousands of people went to the Web site to see if people really looked like [the stars], says John Potter, general manager for WNCI-FM. What mainly drives traffic to our Web site is when our personalities talk about whats on the site.
Drawing radio listeners to the Web is increasingly important for stations like Potters. A PC Data Online Reports poll shows 16 percent of people spend less time listening to the radio now and are surfing the Web instead, says Will Poole, vice president of digital media for Microsoft Corp., who discussed this issue at a National Association of Broadcasters convention this spring.
But recapturing those listeners is only part of the goal in setting up and promoting a Web site. After all, the more traffic an organization can drive to its Web site, the more money it can make down the road.
Although Potter says WNCIs Web site is profitable, I think theres an opportunity for it to be more profitable. After all, as listeners visit the stations site more frequently, there will be a greater opportunity to sell advertising at a higher price with the same amount of overhead, he explains.
Thats why WNCI puts everything from school closings to news stories on its Web site. When the station posts school closings, Potter notes, it gets such a response, the server practically shuts down.
WNCI, like many companies with an Internet presence, makes money through banner advertisements on its Web site. The Center of Science and Industry, commonly known as COSI, is among WNCIs Web advertisers. Larry Meyer, public relations director for COSI, says the general marketing exposure his organization gets through the Web can increase interest in COSI and translate into increased revenues.
When Internet surfers visit a companys site and see that it either improves their lives or entertains them regularly, they are more likely to do business with that particular company, Meyer explains.
Our on-site Web visits have tripled since we opened our new building, he says. People want to come visit.
To build upon that excitement, Meyer says COSI will be launching a new online exhibit this year which will showcase information available only on the Internet. He hopes this will create a more active interest in the center and be a reason for people to return to the site.
According to Microsofts Poole, any business looking to make its Web page more effective should:
- Create compelling content.
- Team with other organizations to create a more powerful and dynamic site.
- Interact with customers.
- Use Webcasting to complement the companys services.
- Effectively post the companys logo or brand on the site.
Darrel Richter (DRichter01@aol.com) is a free-lance writer for SBN.
To save a few jobs after selling a second location, one Central Ohio businessman created what has become a model support system, allowing sales reps to reach more potential customers while still servicing existing clients.
The jobs Jim Dixon Sr. saved at Val-Pak of Central Ohio are now called sales coordinator positions, and the people who fill them help the sales reps at his nearly $6 million business increase sales, as well as customer satisfaction.
They do this by servicing existing customers which account for 80 percent of Val-Paks business while sales reps focus on building on the remaining 20 percent.
We expect them to bill at 10 percent more each mailing vs. the [same months] mailing a year earlier, explains Dixon, who owns the Columbus-based franchise that mails consumer coupons monthly to more than 500,000 homes in Franklin, Delaware, Fairfield, Licking, Madison, Marion and Union counties.
Dixon used to own a Val-Pak franchise in Dayton, which he sold in 1994, leaving him with extra support staff in Columbus. This extra staff understood the business, Dixon says, so he didnt want to get rid of them. They were detailed people who could help a sales rep approve client coupon artwork, coordinate billing and collections, and answer client questions more quickly than a sales rep who is typically out of the office.
Sales reps are good at getting sales, Dixon says. But a highly detailed person is much better for the customer in the long term.
Its also proving to be better for Dixons company. The sales coordinator is part of a business plan that has allowed Val-Pak of Central Ohio to double its sales in six years.
When we made the change, we were at about $2.5 million in sales, Dixon says.
Last year, the company reached $5 million in revenues. This year, Dixon is expecting to boost that total by another million.
Dixon has also increased the frequency of Val-Paks mailings since 1994, going from eight to 12 times a year without increasing his staff. Only now is he beginning to hire more sales reps and sales coordinators.
Dixon says his Val-Pak franchise sales are double that of any sister franchise now.
I have to attribute a lot of that to our sales coordinators, he says. We have such good sales reps, but they can do so much more because of the sales coordinators. Our sales reps are twice as productive.
Heres how he does it.
Affording a coordinator
Dixon determined that once a rep was producing $35,000 a month in sales, that person would be assigned a sales coordinator. Generally, one coordinator assists two sales reps. It takes 3 percent of the reps total monthly sales to cover the coordinators salary. If a rep with a sales coordinator cannot increase sales beyond $35,000 a month, then the rep loses the coordinator.
The objective is for both sales reps to sell in the neighborhood of $50,000 a month each, he explains. When the sales coordinator handles more than $70,000 a month, the coordinator benefits with a 3 percent commission on the additional sales. Coordinators can make up to $40,000 a year on this plan, he adds.
Initially, Dixons reps were hesitant about using sales coordinators.
They were extremely nervous about allowing anyone else to talk to their customers, he says. They were afraid about losing customers. If the sales coordinator says the wrong thing, they might lose the sale. Sales people, in general, are paranoid and have difficulty accepting any change.
It was difficult to turn them over initially, but now they know it makes the relationship stronger.
Jennifer Mills has been a sales rep with Val-Pak since January 1996. After 18 months, she qualified to work with a coordinator.
I still do a lot of the [ad] layouts and getting proofs approved and collection calls, Mills says. But my sales coordinator helps to organize everything and finds more efficient ways of getting things accomplished.
It has made a big difference in my business just from stress management alone, she adds, noting she has 117 active accounts that mail almost on a monthly basis. Mills also is working outside the office four days a week.
My billing has always continued to increase significantly from year to year and I attribute a large proportion of that to the help I get with a sales coordinator, she says. Its pretty essential to managing a large account base effectively.
That doesnt mean sales reps leave all customer care to the sales coordinators. Dixon says his franchise hosts golf and ski outings where sales reps and customers see each other and sales reps still stop by their clients businesses when theyre in the area and its convenient.
It will vary, Dixon says, but at least every six months we want the rep in there saying, Hello, and making sure the customer is happy.
Dixons business model using the sales coordinator position is so successful that it is replicated at other Val-Pak franchises, which number more than 300 in North America.
Obviously, as a company, it gives [us] a more solid relationship with the account, he says. If the sales rep leaves, we have another person still on the account and in a relationship. For the rep, the dividends are greater and more immediate.
How to reach: Val-Pak of Central Ohio, valpak.com or 486-7168, ext. 135
Andria Segedy (firstname.lastname@example.org)is a free-lance writer for SBN.
Given its large number of electoral votes, Ohio has always been an important state in presidential politics.
As the 2000 campaign comes to the forefront, it seems to be developing into an important swing state in determining who will be our next president. In keeping with its mandate to promote the open discussion of issues affecting businesses, Ohioans for Better Business (with SBN affiliation) would like to host a two-part forum in September that will provide the Republican and Democratic nominees for president separate opportunities to discuss issues of concern to business owners and to explain their plans for creating a strong pro-jobs environment in Ohio and the nation.
We spearheaded the creation of Ohioans for Better Business because of our experiences during the past 10 years as the largest chain of business-to-business publications in Ohio. In our business dealings throughout the state, an increasing number of business leaders voiced their interest in creating a forum to discuss taxes, health care, the environment, labor relations, campaign finance reform and other issues of importance.
I have aired many of these issues in my column, which reaches more than 300,000 readers -- most of whom are presidents and owners of companies ranging in size from 20 to 500 employees. Few topics bring as much feedback as those that have a political focus to them, because politics can affect whether a business is successful or not.
A simple change in an environmental law can have a huge impact on business. An administrative ruling can mean the difference between a business surviving or failing. Too many times laws are enacted or changed without proper input from business owners and leaders. It's time our representatives in Congress and the White House hear our side of the story.
In short, business owners care about what happens in Washington, which is why we created Ohioans for Better Business. We believe the work of the federal government clearly dictates the future of Ohio's business climate, for better or worse. Ohioans for Better Business is dedicated to promoting the open discussion of issues impacting our business communities.
While more than just a business advocacy group, we will be supporting the advancement of federal, state and local legislation that will support successful Ohio businesses and make the climate here business-friendly.
Each of our two proposed forums will be by invitation only and include business owners and members of top management from companies throughout the state. This will be a great opportunity to talk to other owners who have similar concerns and to hear first-hand what our representatives are doing to improve the business climate. If you are interested in attending these events, please contact us.
We also want to encourage any feedback on issues you might have. It is very important that we hear from you about the issues that affect your day-to-day operations.
What can political leaders do to make your business more successful, generate more jobs and make the community a better place to live? Now is the time for your voice to be heard. We need your support. Many people don't bother to get involved because they don't feel they can make a difference. However, our goal is to create a unified voice for business owners and leaders and bring attention to the issues that affect them. Synergy is where the sum of the parts is greater than the whole. Without you, we are missing a very important part. Fred Koury (email@example.com) is president and CEO of SBN.
Imagine running a firm with 68 owners. Imagine trying to agree on a strategic direction. That's a constant challenge for me -- and one which hit a critical juncture a couple years ago.
At that time, my firm decided to survey the 68 U.S. and Canadian companies that own us to prioritize several potential strategic directions. To my disappointment, expanding our international capabilities came in 10th of the 12 options. My instincts told me international expansion was more important than that.
So with the support of another director, I persuaded our board to ignore the survey results and aggressively expand our international distribution.
Doing so significantly strengthened our competitive position and a majority of owners has benefited. Without the support of my board, however, this opportunity would have been missed.
As CEOs of private companies, we struggle over strategic issues. We often feel the need for individuals with relevant experience to test our decisions and provide counsel. That's a role outside advisers and directors can play.
They can take a fresh look at our plans and performance. They bring us back to reality -- supporting our intuition or steering us from a bad decision. They can also lend credibility to our organization.
It has become difficult, however, to find qualified people to sit on a board of directors due to increased litigation. Advisers, on the other hand, do not have the fiduciary duty of directors. Advisers, like directors, can be seasoned business executives. They will listen and critique your ideas, explore strategic options and help shape your vision. There are a few key decisions only a board of directors can make, but for many firms, advisers provide a deep reservoir of outside expertise.
Why would someone want to serve on your board of advisers? It's not for the money; many private companies pay as little as a few thousand dollars a year to an experienced director or adviser. Look at this opportunity from their perspective. A member of your board of advisers can pick up new ideas, as well as new contacts, that might benefit his or her own organization. Being an outside adviser also offers the chance to see problems from different perspectives.
When looking for directors or advisers, make sure they have:
1. Knowledge and successful experience in functional areas in which you need help. If your background is in sales, for example, look for people experienced in finance, engineering or production.
2. The ability to ask the right questions -- ones that test your assumptions or shed light in areas in which you are uncertain.
3. A willingness to make time for you. Learning about your company and attending meetings can be time consuming. If you do not have quick access by phone or e-mail, they are not good candidates.
4. A track record or name recognition that would be helpful with clients, suppliers or sources of capital.
5. A value system that complements the values of your management team.
What about asking your attorney or accountant to serve on your board? The disadvantages far outweigh the advantages. They seldom have operating experience in business and they already serve in advisory capacities. Don't complicate these relationships with a seat on your board.
Having outsiders as directors or advisers shows you are serious about growing your business with controls and accountability. There are always issues the CEO cannot discuss inside the company. Not only do I rely on my board of directors to help me with such issues, but I've been a member of a professionally facilitated group of CEOs called The Executive Committee (TEC) for six years.
These outsiders have helped me become a better CEO. Tom Harvey (firstname.lastname@example.org) is president and CEO of Columbus-based Assurex International, a global organization of commercial insurance brokers. He reports to and serves on a board of 14 directors. He also serves on the boards of three other firms where he interacts with 22 other directors.
If you think you're having problems filling your job openings now, brace yourself.
While unemployment rates have hit the basement, Ohio this month begins working under the Workforce Investment Act to ensure we're not buried by the job glut in years to come.
Mike Summers, chair of the Governor's Workforce Policy Board, says business owners are facing a new era of scarcity.
"The old era was a scarcity of jobs," he says. "This era is 180 degrees from that, so we are clearly on new turf here. All of the existing public infrastructure is geared toward the old model."
Consider the following: Between 1996 and 2006, annual employment openings will increase by more than 46 percent in the business services sector, according to a ranking earlier this year by the Ohio Bureau of Employment Services.
If you're in the transportation services sector, you'll face a similar scenario at nearly 44 percent, and openings will jump more than 30 percent in social services, engineering and management services, auto repair services and parking, and security and commodity brokers, according to the bureau.
The bureau, in fact, was affected by one of Gov. Bob Taft's first moves to consolidate state work force development programs. It merged with the Department of Human Services, forming the Department of Job and Family Services.
Other efforts start now. As of July 1, the federal Workforce Investment Act of 1998 officially replaced the Job Training Partnership Act, which means Ohio has five years to develop a new streamlined work force investment system that is locally administered and driven by the private sector.
Work on the issue began last year when Taft appointed his Workforce Policy Board to oversee the act's implementation in Ohio.
"As business owners, we have an interest as taxpayers to make sure our tax money is spent toward legitimate issues," says Summers, who is the third generation of his family to own and run Summers Rubber Co. of Cleveland, a 60-employee, $10 million operation. "But the bigger issue is we need help. We cannot meet these challenges without a public entity to provide support and infrastructure."
The Workforce Policy Board, a panel of 57 leaders representing business, labor, education, government, social services and other entities, basically has three goals, Summers explains.
"We will actually increase the number of Ohio workers -- that's a quantity issue. Second, we will increase the quality of the worker -- the skills and performance," Summers says. "Third, we will create an efficient matching system to allow employees and employers to find each other."
The board's plan to meet these goals was approved in June by the U.S. Department of Labor.
Meanwhile, Summers says, the board is working on three short-term objectives:
- Supporting OhioWorks.com, a free, state-sponsored Web site that helps local employers and job seekers find each other. The site allows job seekers to create and post online resumes and employers to create online job orders. Local job market information also is available.
- Getting all of the existing training programs in the state in alignment to eliminate duplications and identify gaps in training. "All state departments are producing an inventory with an analysis as to the scope of their programs, source of funding and comment about effectiveness today," Summers says. Those reports are due this summer so the board can begin to determine what changes must be made. One of the main focuses, Summers predicts, will be to work on technology training for those already in the work force.
- Supporting the governor's new Commission on Student Success, which -- by the end of the year -- plans to recommend academic expectations and assessments; propose actions to guarantee that students, teachers, parents and the public understand what schoolchildren are expected to know and be able to do; examine what already is working in Ohio and elsewhere; and make sure these parts fit together for an effective education system.
"Roughly 30 percent of the Ohio population is students; therefore, they represent our future work force," Summers says.
The board will push to advance education while making sure efforts represent the needs of employers.
"Specifically, we want to maintain the accountability and measurability piece," Summers says. "That gets to the heart of proficiency test issues. We agree there needs to be proficiency outcomes; we can modify the measurement ... but let's not walk away from where we've gone so far."
Local boards throughout the state are forming to help meet the goals on their level.
"Our goal is to have every employee reach their career potential, whatever that may be," Summers says, "and have all Ohio employers find employees to help them meet their objectives as well." How to reach: Ohio Workforce Connection, www.ohioworkforce.org; www.ohioworks.com; Governor's Workforce Policy Board, (614) 728-8107
Joan Slattery Wall (email@example.com) is an associate editor and statehouse correspondent for SBN.
By David Bittner
Something that immediately caught my attention about Chocolate Works is the owners' willingness, and even desire, to place equity with directors and partners.
Partnering with Gerald Stevens seems like a smart move. Chocolate Works will gain wide distribution while aligning with a complementary product having a parallel brand image.
Borrowing from the real estate adage, most folks in the venture community agree the three most important factors affecting the success of a new venture are: 1) management, 2) management, 3) management. A strength of Chocolate Works is that Barry and his team have been there, done that. As their venture unfolds, they'll know which opportunities to pursue and where the pitfalls lie.
Chocolate Works appears to have researched its market thoroughly and has a well-thought-out marketing strategy. The varied arsenal of distribution weapons is powerful so long as the company can steer clear of channel conflict.
One clear weakness is that the company has no proprietary products or technologies, resulting in low barriers to competitive entry and downward pressure on margins.
In addition, new ventures in vogue with investors today are business-to-business plays. Chocolate Works, on the other hand, is a business-to-consumer play. Consumers are less attractive customers because of the expense of locating and keeping them and the limited purchasing power they have.
Another fashionable business concept is dot-com. However, Chocolate Works is not com. Though the company does intend to use the Web as a promotional tool, sales of impulse, sensory-driven food products aren't likely to benefit as much from the e-commerce wave as planned, nonfood products like books or collectibles.
Be that as it may, Chocolate Works may be able to take advantage of its low-tech nature by appealing to investors who have experience in traditional businesses and are wary of the volatility and the reality of all things "e."
All companies ought to espouse a certain method of producing a return for their founders and investors. If not, they risk never achieving their financial objectives. They should pursue an exit strategy for which there is industry precedent for attractive returns. I suspect the return to the owners of Chocolate Works might most readily and productively occur as a result of a sale to a strategic buyer like Godiva or a channel partner like Gerald Stevens.
The company might do well to consider adopting a more specific intent for its use of capital. More thorough financial planning up front leads to more effective deployment of resources later.
I suspect there are a number of companies in this market that offer similar products. If not now, there will be more competition when and if Chocolate Works is successful. The owners should differentiate their product from competitors' as much as possible while they're in the formative stages so the distinction is clear when the stakes are higher.
Many investors shy away from family-run businesses due to the domestic pressures that compound the professional challenges. Barry and his team may have to convince investors that he can turn this into an advantage.
Rapid growth of more than 300 percent between 2000 and 2001 is quite steep. There's the obvious issue of generating enough volume to accomplish that goal, but there's also danger that the management and fulfillment infrastructure may not be able to keep pace.
By Beatrice E. Wolper
Chocolate Works' plan incorporates both a solid history and the chance for exciting growth.
When going to the market, it may be beneficial for Chocolate Works to emphasize that several members of the family work at the company; therefore, it is a "family-owned business" -- which translates into strong values, ethics and loyalty. Family-owned businesses have done well in the marketplace.
In order to reach the desired growth outlined in the summary, the company may wish to focus on how to strengthen the family business relationships by having a family business plan. This should assist the company in expanding on the national level, since the plan should incorporate the concepts derived from scenario planning, which is often necessary for such growth.
What will the company be like in three years, five years, 10 years and 25 years? Will people still be eating chocolate? (I will!) Will the family be involved? Cousins? Grandchildren? Will people only be buying through the Internet? The scenarios would analyze the company's strengths, weaknesses, opportunities and threats for each alternative.
It appears that to grow to the national level expressed in the summary, a clearer definition of who the customer is needs to be established. The list of corporate customers is extremely impressive. After stating all the great name customers of the company, it is surprising to read that the target customer is a female purchasing from a retail store.
It appears that the main customers for the corporate sales department should be similar to those listed, and the target customer for the retail sales department would be such a female. There needs to be two distinct marketing strategies -- selling different concepts to different entities.
Development of why the chocolates are unique may facilitate the desired national growth. What makes the company's products unique? Why are these chocolates and private label gourmet boxes different than those of competitors?
Teaming with a national partner is a positive move toward aggressive growth. The company's financials should be detailed enough to account for many outcomes: worst and best case. Since Gerald Stevens is new to the market, the financials need to reflect what happens if it takes longer than planned for the Gerald Stevens expansion. All in all, a tremendous opportunity, but one that needs to consider various timetables.
In conclusion, the company sounds very solid, with excellent growth opportunities. And, who wouldn't like chocolate?