The Business Expert

SUPPLIER
SURVI
By Sara Lavenduski
VOR
Are these new supplier
companies – all in
business for less than a
year – moving forward
on the right track?
We asked a small
business expert to
offer her advice as we
follow their progress
throughout 2016. Will
they survive and thrive
or wither and die?
SUPPLIER SURVIVOR
Supplier: Onara Enterprises LLC
Location: Saint Charles, MI
Cindy Wright began her career in promotional products at Karlen
Manufacturing in 1997, working her way up from customer service to
sales. After three acquisitions and experience managing all aspects
of the promotional division, including sourcing, pricing, vendor and
customer development, sales and marketing, Wright bought the
company and began operations as Onara Enterprises LLC.
The
Business
Expert
Melinda F. Emerson, the “SmallBizLady,” is a small-business expert and
internationally renowned speaker
on startups, business development
and social media marketing. A former social media columnist for The
New York Times, she is the host of
#Smallbizchat, the longest-running
live chat on Twitter for small-business owners. Forbes magazine also
named her the number-one woman
for entrepreneurs to follow on Twitter. She publishes a resource blog at
succeedasyourownboss.com, and is
the author of Become Your Own Boss
in 12 Months and the ebook How to
Become a Social Media Ninja.
O
nara Enterprises LLC opened its
doors in April 2015 and now has 13
employees. They currently specialize in
the manufacturing and printing of lanyards and bracelets, as well as ID swipes
and eyewear retainers. Staff numbers are
expected to stay consistent until June
through August when seasonal employees
are brought on for the summer rush.
“Our sales should be approximately
$600,000 by the end of 2015, since we
haven’t quite reached a full year in business and weren’t at full capacity until
June,” says Cindy Wright, sole owner of
the company. “Our sales slowed down
from November through January, but
hopefully with our increasing product
line, we can increase sales to reach our
goal of $1 million for 2016. Over the next
six months, we want to hit $400,000,
and our goal for 2017 is $1.3 million.”
Among the challenges the company
is currently facing, says Wright, is keeping prices economical so that customers
will keep coming back for domestic-made
products. “If clients are looking for a cheap
lanyard, they can import them, but they’ll
get what they pay for,” she explains. “Our
lace is two-ply and prints and wears nicely,
so they’ll be kept after repetitive use.”
The Business Expert Says: “This
company is just humming along. Their
goal of $1.3 million by 2017 seems very
realistic. But they do have to be very cautious when it comes to hiring employees.
Adding workers kills revenue. In fact, at
this point, 13 employees is a lot of overhead, especially since these are low-cost
items being produced and they’re looking to hire even more people come June.
The other challenge is keeping the cost
of the products affordable since Onara
Enterprises is going to have to compete
with foreign manufacturers. They’ll have
to make sure they keep their operation
very lean.
“As far as their marketing goes,
they’re doing it well. They really seem
to know their audience, especially since
they can already comfortably strive for
$1 million by the end of 2016. A company’s own website is its number-one
sales tool. I would make sure theirs is
full of great, high-resolution photos,
glowing testimonials and special offers.
They might also want to consider some
pay-for-click advertising. Overall, they
should keep doing what they’re doing,
because it seems to be working.”
Supplier: Snappy Towels Inc. Canada
Location: Toronto, ON
Dan Wood is the former manager of Surround Integrated Marketing,
a digital marketing agency, where he gained experience in everything
from sales and account management to online advertising, creative
campaigns and Web and mobile app development. After establishing
Snappy Towels in 2015, he discovered the promotional products industry
and found it to be an excellent distribution channel for his new product.
S
nappy Towels Inc. Canada began
business in the spring of 2015, and
continues with just one employee and
consultants and contractors as needed.
The company currently specializes in the
Snappy Towel, a patent-pending premium
wearable sports towel made of a durable,
waffle-weave microfiber that is compact
and super-absorbent. It’s a full-size towel
that folds into a quarter of the size of a
cotton towel and is 30% lighter. “It folds
up to about the size of a book,” says President Dan Wood, “so it easily fits in any
bag or jacket pocket.” The towel also features six pairs of snaps that turn the piece
into a poncho, cape, hooded towel or
cover-up. Recently, the Snappy Towel has
been chosen as the official lifeguard towel
by the Lifesaving Society of Canada.
When first designing the towels, the
company did deep research into materials and fabrics. “We eventually designed a
waffle-weave microfiber that fit all of our
requirements for comfort, absorbency,
durability and portability,” Wood explains.
“It’s unique in the marketplace, and works
really well with water-based ink in screen
printing, digital printing or sublimation.”
The company spent most of its first
six months on product development,
intellectual property, learning about
the industry, vetting the supply chain,
SUPPLIER SURVIVOR
“It became apparent in the third quarter
of 2015 that we needed to add staff,
especially in our production division.”
ROBERT RUSSELL, STRIKE PROMO
developing relationships, and marketing, including website development, brochures, photo shoots and social media.
“We’ve come a really long way in a short
time,” says Wood, “and we’re looking forward to significant growth in 2016.”
A challenge Wood has now is marketing his company effectively and getting
the word out about his product. “We
have a superior product, a strong pricing
strategy and a reliable supply chain, so
it’s a matter of building relationships and
growing awareness,” he explains. “One
of the reasons we chose the promotional
products industry as our sales channel
is because it offers an established distribution network that is potentially highvolume. Our product is adaptable to so
many markets, so we’re looking for the
right distributor agencies that have connections in these spaces already.”
The Business Expert Says: “It
sounds like for the first months, they’ve
been building their product and doing
market research. It’s a unique product
that’s entirely theirs. I also think it’s
super smart to pursue the international
licensing deal. I would recommend putting together an infomercial, maybe partner with a home shopping network to
give the item more traction, because it’s
cool. I want one! They should certainly go
after sports teams, but I think if they also
had a retail line in addition to the wholesale product, that would be a smart move.
This is a really versatile product, with a
lot of licensing opportunities. I think
45,000 units by 2016 is doable, though
they’ll have to fully flesh out their sales
channels and figure out who will be selling this item. They’ll also need to have
significant inventory soon.
“Hiring contractors is common for
startups, but when they’re looking to hire
full-time employees, the rule of thumb is
to have six months of their salary in-hand
before making an offer. With salespeople,
it’s a little more flexible because often
they’re at 100% commission at first. To
get the word out, a cool, funny YouTube
clip would be the best move. This product
is ripe for a viral video, maybe a Snappy
Towel-wearing superhero who rescues you
from bad towel experiences at the beach.”
Supplier: Strike Promo
Location: Chicago, IL
Before Strike Promo, Robert Russell spent five years as CFO for Home
Run Consultants (asi/226330), a small marketing & product development firm owned by his father. While there, he was responsible for the
company’s finances and directed the domestic ad specialty division.
Previously, Russell worked in season ticket sales for the Chicago Blackhawks and corporate sponsorship for Major League Baseball.
I
n January 2015, Strike Promo started
operations in Chicago, IL, with a factory and decorating facility in Ningbo,
China. Four months later, in May 2015,
they joined ASI as a supplier member. As
of this writing, they have 10 employees,
as well as two outside sales representatives. “It became apparent in the third
quarter of 2015 that we needed to add
staff, especially in our production division,” says owner & CEO Robert Russell.
“We attended the ASI Show Chicago in
July, which resulted in a dramatic increase
in our daily sales volume.”
Strike Promo’s entire product line
is comprised of items that have been
designed and patented by members of
its ownership team. “We deliberately
avoid offering products that distributors
could acquire from other suppliers in
the industry,” says Russell. “We strive to
design, generate and market innovative
products that give distributors a chance
to present their clients with something
new and exciting. To date, all of our original products have used LED lighting and
custom engraving, which includes new
items for 2016.”
A current challenge is how to offer
more in-person viewing of the wristbands, which has been crucial to a
positive response to the product. “The
SUPPLIER SURVIVOR
A challenge Dan Wood has now is
marketing his company effectively and
getting the word out about his product.
manner in which our wristbands are
viewed can either diminish or enhance
the impact they have,” Russell explains.
“When viewing our product in person,
the excitement is palpable, the interest
is evident and the demand that follows is
tangible evidence that in-person viewing
is pivotal.”
Nowhere was that more evident
than the ASI Show Chicago in July 2015.
Strike Promo completed and delivered
300,000 wristbands in the weeks after
the show, which brought the number
of units sold by the end of the year to
approximately 500,000.
At the company launch, Russell
was confident the company would sell
250,000 wristbands by the end of 2015.
In fact, they had reached that number
by the third quarter of the year, and continued to sell in the fourth quarter. “Our
office currently focuses on daily, weekly
and monthly goals rather than looking at
the year aggregately,” he explains. “We
have a bell in the front of our office that
rings for every 2,000 wristbands sold
that day. The desire to hear it ring naturally fosters an intrinsic motivation in
our staff on a daily basis, something that
yearly goals don’t accomplish.”
The Business Expert Says: “This
company already has a facility in China,
which is really smart, but they have to
make sure they keep fleshing out the
roles of the employees here and overseas. There are so many different ways
to sell this item. I picture these being
given out at a concert, and the headliner tells everyone at the same time to
light up their bracelets. I appreciate that
they prefer to look at monthly revenue,
because if you know what you’re mak-
ing in a month, you know what you’re
making in a week, in a day. I also like the
2,000-unit bell and the scoreboards, so
that employees are involved in the goalmaking process. They were ahead of
their own projections, so they do a good
job with measuring. Their employee
numbers also look solid.
“I would recommend a video to
address the challenge of in-person viewing. It can be two minutes or fewer, and
they can show it on a loop at the tradeshow booth while the sales reps have
tablets that show the video wherever
they are. They could have footage of a
dark stadium, and then all the bracelets light up at the same time. Even if
they have to give away the bracelets, it
would be worth it. This would be priceless marketing footage. Then they can
repurpose the video on YouTube, Instagram and Facebook.”
Stay tuned for the next update on the
three suppliers in SGR’s Survivor series in
the May/June issue.
Sara Lavenduski is associate editor of SGR, and its sister
publications, Counselor, Advantages and Wearables.