When meeting entrepreneurial moms through my business and while researching
my newest book, Secrets of Millionaire Moms, I was surprised to learn
about the many different ways entrepreneurs structure their businesses. For most
of these women, company structure was not something formal, pre-planned or
learned in business school; mostly, their business structures grew out of
necessity or an effort to keep up with demand for their product or service. I'd
like to share a few of their approaches to inspire you and get you thinking
about structuring, or restructuring, your business.
Franchising
Franchising companies license the right to operate their business concepts,
using their recognized brand and marketing approach. For some of the
entrepreneurial moms I've interviewed, franchising their business concept helped
them grow much faster and more effectively than they could have on their own.
For example, Jennifer Curtin and Maureen Herrmann realized soon after
founding their business, Ageless Remedies, that franchising would allow them to
grow at a rapid rate without outlaying all the time and money themselves.
Franchising would also allow the business--a medical spa with a retail
component--to keep its core concept in place, with specific criteria for store
structure and design.
Curtin and Herrmann hired franchising experts who helped them develop a
strategic growth plan that will allow for 20 or more store openings per year
while continuing to support existing locations, which now total 11. The women
report that their projected sales for 2007 are $5.2 million, more than double
their 2006 sales.
Direct Sales
Direct sales is the concept popularized more than 40 years ago by
Tupperware, in which sales are predominantly made via home parties. It's a
structure that continues to thrive, with companies like Silpada (silver
jewelry), Pampered Chef (kitchen goods) and Creative Memories (scrapbooking)
being some of the top performers in this category.
Direct sales allow consumers to feel, see and experience the benefits of a
product in a relaxing environment among friends--which can really promote sales.
It's also a relatively simple way to extend your sales network, creating a
far-reaching web of sales representatives who work on commission and who are
motivated to encourage others to host parties for them in return for incentives
and rewards, which are usually products. Lane Nemeth started her first company,
Discovery Toys, based on this structure, and grew it to more than $100 million.
She has since launched a new company, Petlane, which also uses a direct-sales
approach.
Online Sales
Compared to opening a store and the costs associated with it--rent, displays and
salaries, just to name a few--the internet offers a relatively low-cost forum to
sell goods and services to a limitless audience. The key is ensuring people know
your site exists and creating a shopping experience that's comfortable and
convenient.
Amazon.com is probably the biggest success story, with more than $10 billion
in annual revenue, but there are plenty of smaller sites that thrive as well,
selling everything from baby products to apparel to home goods without ever
investing in a brick-and-mortar store or having to deal with distributors or
retail sales channels. Tomima Edmark, who launched and sold her first company,
TopsyTail, for millions, now runs two successful online stores that sell women's
and men's undergarments, HerRoom.com and HisRoom.com.
Home Shopping Channels
There are many highly successful entrepreneurs whose only sales outlet is QVC,
HSN or another shopping channel. With the right products and a great live sales
presentation, this can be an extremely effective way to make your mark and build
your sales.
For instance, Jeanne Bice, who founded The Quacker Factory, a line of apparel
for women, doggedly pursued QVC to carry her products. Her outgoing personality
and comfort with the medium, plus products that appealed to QVC's target
audience, made this an extremely successful way for her to structure her
business, which is now estimated to generate more than $50 million in sales per
year.
Licensing
Licensing can be a great way to launch an already-successful concept into the
big leagues. For example, Rachel Ashwell started her company, Shabby Chic, with
one retail store in California, offering repurposed furniture that she scouted
and refinished herself. Demand for her products quickly overwhelmed her ability
to supply them. After opening nine more stores and getting manufacturing help,
she decided to diversify on a national level, creating a licensing agreement
with Target stores, offering them an exclusive brand--Simply Shabby Chic--and
reaching a mass audience at an affordable price point with her line of bedding
and other home goods.
So get creative and don't feel limited by one type of structure. Pursuing
options other than what you may have initially envisioned may be the road to
phenomenal business growth.