The Joplin Globe, Joplin, MO

Business

November 16, 2012

Small business owners reinvent to survive and grow

NEW YORK — One of the most painful moments small business owners can face is when they realize: It’s not working.

It could be a product that’s not succeeding, business that’s taken away by a competitor, or changes in the economy that threaten a company’s survival.

When something has gone awry and sales are taking a hit, company owners have to make big changes to turn things around — and they usually can’t afford to waste time. Large companies often have enough revenue coming in from a variety of products and services that they can weather a problem in one area of their business. Smaller companies typically don’t have that cushion.

Reinventing a company, large or small, is not an easy task and it can’t be done overnight, but many business owners have been able to pull it off.

—————

ALMOST SOCKED BY OVERSEAS COMPETITION

Cabot Hosiery Mills had great success its first 20 years, making what are called private label socks for retailing chains. It only made socks that carried the names of the stores that sold them such as J.C. Penney and Gap.

But in 2000, sales began falling as stores began buying cheaper socks from Chinese vendors, says Ric Cabot, co-owner and son of the company’s founder.

“We weren’t paying as close attention to our financial indicators as we should have,” he says.

By 2003, sales were down by more than half. Cabot was forced to cut his staff of 70 down to 30.

“We needed to create a product that would basically save us,” he says.

Cabot didn’t have to look far to find a market niche his company could fill. An avid hiker who is also active in several sports, he had a hard time finding high-quality socks for those activities. And he knew how to make socks that were comfortable and durable.

So Cabot combined survival, know-how and personal interest and Darn Tough Vermont, a line of socks for outdoor activities and sports was born.

Well, it wasn’t that simple. There were some things about socks that he didn’t know, like how to make ones that appeal to style-conscious hikers, skiers and runners. So he had to hire someone who did.

It took about two years for the socks to hit the market. Now they can be found in many stores that sell outdoor gear. The brand has been successful enough that the company has grown to 150 workers and annual sales have quadrupled from the low they hit in 2003. Cabot still has a small private-label operation.

Cabot says he has learned a lot from the experience.

“Almost going out of business, if you leverage it properly, is one of the best experiences to emerge from because you see the mistakes, the warning signs a lot sooner,” he says. “You try to take a longer-term view of the business— not just what I need to do today, but what will ensure the best tomorrow?”

—————

A DRINK COMPANY GETS FOCUSED

Arnulfo Ventura and his business partner, Jose Domene, decided while getting their MBAs at Stanford University to start selling aguas frescas, beverages made from plants like tamarind and hibiscus, that are popular in Mexico. The partners called the drink Bonadea and ordered the first batch of 3,000 bottles from a manufacturer by the time they graduated in June 2008. The found several customers: Six delis and natural food stores in the Palo Alto, Calif., area.

Over the next year, the duo attracted enough money from investors to increase production, working their way up to a run of 15,000 bottles. They got a distribution company in the Los Angeles area and Bonadea was in hundreds of convenience and small grocery stores. Things seemed to be going well.

But Bonadea, priced between $2.49 and $2.69 a bottle, didn’t sell as well as hoped. Sales were up by hundreds of percentage points from the first batch, but Ventura expected an increase in the thousands by then.

“We just weren’t getting serious attention. The brand wasn’t moving off the shelf,” he says. “I wasn’t sure if it was the price point or the marketing.”

In January 2010, Ventura and Domene showed Bonadea to focus groups. Based on the feedback, the partners realized they had to change the way the beverage was packaged and marketed. One problem was its name, which had no real meaning. People didn’t connect with it. And the 16-ounce bottle looked too much like the ones that contain Snapple, one of the top-selling iced tea and juice drink brands in the country.

Over the next nine months, they considered many names and label designs and eventually came up a new name, Coba, a Mayan city on the Yucatan peninsula and decorated the labels with images of flowers and fruit. In March 2011, they took Coba to a trade show in Anaheim, Calif. On the show’s last day the organizers surprised the partners by announcing that they had picked Coba as the best product in the show. Coba also caught the interest of retailers.

The partners began producing their new beverages — but soon came another worry: Nestle, the world’s largest food and beverage maker, was introducing its own aguas frescas. And there was competition from natural soda maker Hansen. Ventura hurried to Whole Foods’ headquarters in Austin, Texas with a shoulder bag filled with Coba on ice. He met with an executive just hours after Hansen’s representatives visited, made his pitch and showed his product. The company decided to carry the beverage in some of its locations.

Coba is now sold in Whole Foods stores in Florida and the West. It’s also at delis, convenience stores and restaurants, priced between $1.99 and $2.50. Sales are up five times from Bonadea’s best levels.

—————                                                                                                                  DESIGNING A COMEBACK

In May 2008, Lauren Rottet bought back the architecture and design business she founded in 1990. She and her partner had sold the company to a larger engineering and construction firm in 1994 and continued working there. At the time, she believed it was a good strategic move. But years later, Rottet wanted more autonomy and bought the business back.

Her timing wasn’t great. The slump in the construction market was under way. A month after the deal to buy back Rottet Studio closed, the firm’s biggest client put all its projects on hold. Then the financial crisis hit.

Clients who were still seeking her services scaled back. Instead of winning big, lucrative projects like redesigning a law firm’s new office, she would get less expensive projects like renovations of a company’s reception area.  

“Instead of managing eight big (projects), you were managing 25 little ones,” she says. “A small project can be as much work as a big one.”

Rottet, who had offices in Houston, Los Angeles, San Francisco and New York, had to think differently about how she ran her business. Instead of having a team work on a project, one staffer would handle it. “We quickly started to cross-training to make people more adept at doing more things,” Rottet says. So an employee whose specialty was interior design learned how to do architectural drawing. Architects learned about selecting furniture and fabrics.

Rottet also took on new types of clients. Before the pullback in the construction business, 90 percent of the firm’s work consisted of projects like corporate offices. Rottet’s new clients included hotels and homeowners.

That meant convincing new clients she could adapt to their needs. But she was able to make the transition — she’s even signed deals to design rooms for cruise lines. The result: Business has more than doubled since 2010, the worst year for the company’s revenue.

 

1
Text Only
Business
  • Oil Prices.jpg Oil on 2-week slide even with Mideast turmoil

    The price of oil fell for the ninth straight day Wednesday as global supplies continue to flow despite unrest in the world’s most important oil-producing region.

    July 9, 2014 1 Photo

  • Business Alcoa helps lift market after 2 days of declines

    Corporate earnings season got off to a positive start Wednesday, helping lift the stock market after two days of declines.

    July 9, 2014 1 Photo

  • Britain Rolls Royce 1.jpg Luxury Rolls-Royce car sales soar worldwide

    They are rolling symbols of wealth and excess, starting at $263,000 a pop, with most buyers choosing custom options that can easily double the price. And they are more popular than ever before.

    July 9, 2014 2 Photos

  • Corinthian Colleges seeking to reassure students

    A for-profit education company sought to reassure nervous students Tuesday that they’ll be able to finish their degrees even though their campuses were being closed amid concerns from the Education Department about its practices.

    July 9, 2014

  • Business Dow tops 17,000 after strong jobs report

    A strong jobs report pushed up the stock market higher Thursday, with the Dow Jones industrial average crossing 17,000 for the first time.

    July 3, 2014 1 Photo

  • US, China vow to improve cooperation

    The United States and China vowed Wednesday to improve their economic and security cooperation, saying they wouldn’t let persistent differences over maritime claims, cyberhacking and currency hamper a relationship critical to global peace and prosperity.

    July 9, 2014

  • Economy.jpg US employers added robust 288k jobs in June

    U.S. employers accelerated their hiring last month, adding a robust 288,000 jobs and helping drive the unemployment rate to 6.1 percent, the lowest since September 2008.

    July 3, 2014 1 Photo

  • Business Stocks creep up after 2 days of losses

    Stocks inched higher in early trading Wednesday, reversing a two-day decline, as the quarterly earnings season got underway with some positive news from the giant aluminum company Alcoa.

    July 9, 2014 1 Photo

  • Business Stocks fall for a second day; Nasdaq slumps

    Investors unloaded all manner of stocks Tuesday as they wait for corporate earnings reports to help them determine whether a recent run-up in the market is justified. Internet companies bore the brunt of the selling.

    July 8, 2014 1 Photo

  • Joplin council hears update on job expansion programs

    Economic development projects underway should bring about 500 new jobs to Joplin by year’s end, Rob O’Brian, president of the Joplin Area Chamber of Commerce, members of the Joplin City Council on Monday.

    July 8, 2014

Poll

Missouri Gov. Jay Nixon has vetoed legislation that sought to increase the tax credits available for donations to organizations providing food to the poor and aid to pregnant women, saying it would have eroded government funds needed for education and other services. Do you agree with the veto?

A. Yes.
B. No.
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Argentina to Face Germany in World Cup Final Service Held for 200 Whose Bodies Went Unclaimed Kim Kardashian Hits Up Valentino Show in Paris "Hotwives" Spoofs Reality TV Israeli Offensive Escalates in Gaza Attack Dozens Gain Citizenship As Debate Continues Dodgers Found Partly Responsible in Fan Beating Children of Deported Parents Speak Out GOP: Immigration a 'human Rights Issue' Raw: 10-year Sentence for Ex-New Orleans Mayor Raw: Fans Gather for Argentina-Netherlands Match Froome Crashes Out on Bumpy 5th Tour Stage Obama Talks Economy, Slams Republicans Police: Prostitute Accused in Overdose Death Tornadoes Kill Four in Central New York McCaskill: Campus Assault Survey Is Wake Up Call Raw: Obama Shoots Pool in Denver Typhoon Nears Japan's Main Islands Day After: Brazil Reeling in WC Loss Weaver Reprises Ripley Role for 'Alien' Game