6. Form a partnership or strategic alliance. With two successful
locations, a proven brand and $2 million in sales, Newport Beach,
California-based
Wonderland Bakery was ready for the next step in expansion.
Mother-daughter team Sondra and Allyson Ames became a strategic partner and
exclusive vendor for
Errand
Solutions, a Chicago-based company that offers on-site concierge services
for more than 300 corporations, hospitals, residential communities and hotels
nationwide. Services range from car washing and dry cleaning to watch repair,
gift cards, gift baskets--and Wonderland's baked goods.
Errand Solutions receives a percentage of the revenue Wonderland generates.
"So for a very small incremental cost," Sondra says, "we're able to expand
without liability or overhead."
Wonderland established its first Errand Solutions outpost just before
Valentine's Day at Allergan Inc., a national pharmaceutical and medical
technology company in Irvine, California. The holiday proved Errand Solutions'
busiest since it arrived at Allergan a year ago.
"There was a constant line of people buying the baked goods," says Lynnda
Purcell, the concierge manager. She said foot traffic through the lounge
increased 200 percent as buzz about the baked goods lured curious employees to
ogle the new products.
Since then, Wonderland Bakery has premiered at five Errand Solutions
locations in California and seven locations in New York. Sondra says she plans
to open eight to 10 sites a month through the end of the year.
7. Go public and buy a complementary company.
Vertical Branding
Inc. began in 2001 as a beauty-products company, retailing its goods on the
internet, on home-shopping TV channels and through a Netflix-type program that
delivered products to customers every 30 or 60 days. Needing an infusion of
capital, the company was acquired by a publicly traded company in 2005. With the
money raised, VBI purchased the assets of a retail distribution company, Adsouth
Partners Inc., in August 2006.
"It had five product lines we really liked and vendor relationships with
major retailers," VBI founder and CEO Nancy Duitch says.
VBI began marketing the Hercules Hook--an easy-to-install hook that holds up
to 150 lbs.--even before the asset purchase was completed. By August 2006, the
product was achieving multimillion-dollar sales.
8. Go Global. "In today's marketplace you always have to reinvent
yourself," Duitch says. Late in 2007, VBI decided to go global.
"It's expensive, and it requires lots of compliance," Duitch says. "But in
the long run, the benefit will outweigh the hassles."
Duitch finds that her products translate well to other countries, including
Korea, Japan, China, Egypt, Spain and Italy. The key for VBI is focusing on
useful products that are relatively inexpensive and environmentally friendly,
such as ZorbEEZ, which reduces the need for paper towels.
Sales were approximately $37 million in 2007, and Duitch expects them to
reach $47 million to $50 million this year.
Her success tip: "Small public companies have always got to be looking at the
environment and how to get the benefits of what's going on in the world. If you
take a look at what's happening today in the world as opposed to tomorrow,
you'll never win in the long run. That's why we're always taking a look at
what's happening in six months, in nine months."
Questions to consider: What's going on in the world? What's the government
subsidizing today? What products sold well in the last economic downturn?
9. Be responsive to customer needs. Liz Neumark was a fledgling
photographer in 1979 when she started
Great Performances
as a staffing firm specializing in the catering industry to support herself and
other women in the arts. Today, Great Performances is a $35 million catering and
events company with exclusive contracts with many of New York's finest cultural
and artistic institutions. Clients include Brooklyn Academy of Music, Sotheby's,
Jazz at Lincoln Center and The Plaza. Neumark has more than 200 full-time
employees and a part-time wait staff of 500.
Neumark shifted from being primarily a staffing company to being primarily a
catering firm when clients began asking her to supply the food as well as
waitresses. By 1992, she had a 22,000-square-foot commercial cooking facility in
SoHo. At the same time, Great Performances was focusing heavily on what Neumark
calls "venue relationships" with cultural institutions that were producing
special events for financial reasons. A few years later, as venues began seeking
exclusive relationships with banquet partners, Great Performances was in a
perfect position.
Great Performances' major growth occurred in 2000, when it landed its first
exclusive contracts. At the same time, the company also bought out a competitor
who didn't want to manage his business any longer.
In 2007, Great Performances had to bring in an investment partner. Says
Neumark, "It required a big investment to operate the Plaza Hotel's banquet
spaces," which opened in January 2008.
The company is also benefiting from
Katchkie Farm, an
organic farm it owns and operates in upstate New York. Customers appreciate the
fresh produce, Neumark says. What's more, the site has become a venue for
corporate events and weddings.
Neumark says there are two pieces involved in growing a company: "The first
is doing the homework, the projections--everything your banker and your lawyer
tell you to do. The second thing is to follow your dreams. And dream big."